UPDATE: To underscore the opacity of the present system, its greed, and the way patients are overcharged, read this NYT article from May, “She was told that surgery would cost about $1,300. Then the bill came: $229,000.” Lisa Melody was charged the “chargemaster” price, even though she didn’t agree to that and her insurance company told her otherwise. When she wouldn’t pay that outrageous price for spinal fusion surgery, the hospital in Colorado sued her. A jury found for Melody, and her final bill was only $767. (h/t Enrico)
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In 2020, when I had hernia surgery, I posted the bill that my insurance company received from the University of Chicago Hospitals. It was nearly $64,000! Europeans and Canadians were properly shocked at these prices, which indicated a big profit for the hospital. Now I didn’t pay nearly that much, as I have a good insurance plan, but the insurance company had to pay it (sometimes employers themselves foot part of the bill); but Americans without insurance would have be billed at that full price.
Shockingly, until last year, there was no way to find out these prices in advance so you could do comparison shopping. As I said in the earlier posts, almost no hospitals publicize the costs of their services or the medications they give you, so you don’t know what the bill is until after you’ve been treated. As I wrote at the time:
Now, can you know these prices in advance so you can comparison shop among hospitals? The answer is NO. While hospitals differ drastically in their costs, it would be nearly impossible to get a figure for the entire operation in advance. Some hospitals, like the Surgery Center of Oklahoma, will quote you a flat price (and for them, my redo surgery [the hernia operation had to be redone] would have been free), and that price, for hernia surgery similar to mine is, I’m told, about $4,500: only 7% of what the bill was above. Nor are these cheaper hospitals worse at what they do: there seems to be little correlation (or even a negative correlation) between the price of a procedure and the quality of the facility and the doctor. (My doctor at the U of C, by the way, was excellent and has a superb record, but more on doctor-shopping later.)
What about the costs above? Are those the sticker costs that then get discounted when billed to the insurance companies (i.e. are they they the so-called “Chargemaster list prices” for each item), or are they the already-discounted costs given to my insurance company? I have no idea. It’s as if you went to the grocery store and there were no prices on the food items, and then after a month you get a bill saying, “This is what you have to pay for groceries.
At the post above, Dr. Lickerman answered many readers’ queries (just search for “Lickerman”), which explained more about how dire health care prices were. Of course, other countries have single-payer insurance, but in many cases that results in a parallel series of private insurance because patients don’t want the long wait associated with many national single-payer systems. When I snapped a tendon in my finger in New Zealand, for instance, I could get treated for free, but it would be at least a five-hour wait in the hospital, or I could pay out of my pocket and get reimbursed in the U.S. I chose the latter, and fortunately my insurance company reimburses for medical treatment overseas.
The lack of transparency in pricing did two things: it prevented consumers from comparison shopping to find the cheapest price (especially important if you are paying out of your pocket or have a high deductible), and it generated huge profits for hospitals, which can adjust its “MSRP” prices as well as the discounts from those prices that are given to insurance companies.
This was supposed to be rectified when in 2020 Congress passed The Health Care PRICE Transparency Act, requiring hospitals to disclose the prices of 300 “shoppable” procedures as well as the billing costs for many drugs. It was supposed to take effect on January 1, 2021, and there were fines for violations.
As of today, almost no hospitals are complying, there is almost no transparency, and fines aren’t even being imposed. I heard about this on the NBC Evening News last night, and decided to see what’s going on. What’s going on is that hospitals, greedy for $$, are ignoring the law. And the Biden Administration isn’t doing anything about it. For laws can be enforced by the executive branch of the government.
Hospitals have four tiers of pricing, and all of these prices should be disclosed for each drug and service. I quote my doctor, Alex Lickerman, here about these tiers:
Charge master price = this is like sticker price on the car. No insurance company expects to pay this. Hospitals create this because they know different insurance companies will be willing to pay different percentages of their charge master price. When insurance companies advertise that they have the biggest “discounts,” what they mean is reductions down off a hospital’s charge master price (which hospitals historically haven’t disclosed). So BCBS might get a 50% discount. Medicaid might get a 95% discount off the charge master price. Medicare might get an 80-85% discount. (I’m making these discounts up).
This is what the uninsured patient pays, and if they don’t pay (they must be treated), they will be dunned and their credit ruined.
The minimum negotiated price = this is the greatest discount, and therefore the lowest price, a hospital gives a third-party insurance payer.
The maximum negotiated price = this is the lowest discount, and therefore highest price, a hospital gives a third-party insurance payer.
Cash price = the price a patient would pay without insurance. Ironically—and horribly—this is often the full charge master price; that is, the price for the service WITHOUT a discount, which is then charged to people to have the least ability to pay it, i.e., the uninsured.
1). There’s a tremendous variation in prices among hospitals that do list them. The New York Times article from last summer is the best source of information:
The data show that the charge for a joint replacement can range from a low of $5,300 at a hospital in Ada, Okla., to a high of $223,000 at a facility in Monterey Park, Calif. Or within the same area, charges range from $21,000 to $46,000 to treat heart failure in hospitals in Denver, Colo.
Here are some disparate prices from that NYT article, and you can see more examples from the paper. Note that the vertical lines show four times what Medicare pays the hospital (for a colonoscopy) and TEN times what the government pays (for an MRI scan). Almost no insurance company pays anything near as low as what the government pays:
It holds for drugs too, which are often particularly inflated in price. This is for a rabies drug (text from the NYT):
Prices were still secret when Brian Daugherty went to an emergency room near Orlando, Fla., for a rabies shot after a cat bite last summer.
“I tried to get some pricing information, but they made it seem like such a rare thing they couldn’t figure out for me,” he said.
He went to AdventHealth Orlando because it was close to his house. That was an expensive decision: It has the highest price for rabies shots among 24 hospitals that included the service in their newly released data sets.
The price there for an adult dose of the drug that prevents rabies varies from $16,953 to $37,214 — not including the emergency-room fee that typically goes with it.
Mr. Daugherty’s total bill was $18,357. After his insurer’s contribution, he owed $6,351.
2.) Few hospitals are complying with the law.
“One year after this law making hospitals show prices came into effect, unfortunately, we found that only 14.3% of our country’s. . . hospitals are complying with this law,” PRA founder and CEO Cynthia Fisher said.
The NBC News last night reported only 15% compliance.
The law required hospitals to post prices for all services, including gross charges and discounted cash prices.
In addition, the rule requires the information to be available in two formats, a machine-readable file that contains pricing data for third parties to compare between hospitals and a shoppable service list that displays specific services offered at the facility.
And the fines:
Under the final rule, for hospitals with thirty or fewer beds, the minimum civil monetary penalty will increase to $300 per day. For hospitals with more than thirty beds, the minimum civil monetary penalty will be $10 per bed per day, capped at $5,500 per day. This means the minimum amount for noncompliance with the rule would be $109,500 annually while the maximum amount is $2,007,500 annually. CMS is also requiring that the machine-readable files with pricing information be accessible to automated searches and direct downloads.
In response to a reader’s question after my post about why the bills were so much higher when insurance was involved, Dr. Lickerman said this:
Great question! The answer is, many providers will charge a lower cash pay price because payment is immediate. The bill is higher when insurance is involved because providers create a “chargemaster” which has prices that are like an MSRP when you’re buying a car. It represents a ceiling price–an initial price–in a negotiation that almost no one pays. Providers inflate their chargemaster prices because they know they’ll be forced to negotiate different discounts with insurers. So while private insurers get maybe a 50% discount off chargemaster rates, Medicaid takes maybe a 90% discount (which is why most medical systems consider Medicaid to be “bad” insurance: it reimburses them for a given service at the lowest rate). This is why, paradoxically, if you’re uninsured, you may pay more than even large insurance companies. For reasons that defy logic, medical systems will sometimes quote the uninsured their chargemaster rates–the highest price–rather than a true cash pay rate.
If you’re getting care from a small provider (vs. a large hospital system), you’re much more likely to find a reasonable cash pay rate that ends up being cheaper than going through your insurance (depends on your yearly out-of-pocket max and how far into it you’ve already spent).
Large hospital systems likely raise their chargemaster rates to meet revenue targets. Contrary to what you’d expect, insurers are happy to pay these rates because it enables them to increase premiums, which they want to increase because Obamacare imposed a medical loss ratio of 20% on most insurance plans. That means insurers must spend 80% of their revenues (premiums) on healthcare claims. If you’re limited to only 20% of the pie to make profits, what do you do? Find a way to make the pie bigger so that the absolute dollar amounts you bring in goes up. This is what the insurers have done, and it’s why premiums have gone through the roof since Obamacare was enacted. The unit cost of most medical care has increased mostly with inflation. Healthcare prices set by providers have increased by far more.
Even employers find it hard to determine what they will pay for an insurance plan, as they must hire lawyers and consultants to get around the great wall of secrecy. And sometimes even then it doesn’t work, so they’re buying a plan for their employees whose benefits they don’t know and, since employers must sometimes pay some benefits, they don’t even know how much they would be liable for.
This is greed, pure and simple, and it hurts everyone. Many Americans are impoverished by the cost of healthcare and their inability to do comparison shopping.
There are multiple solutions: Single-payer health, Obamacare for everyone, with government help in paying for private insurance, enforcement of transparency, negotiation of drug prices and so on.
Everyone usually prefers the system they have now, unless they have no insurance. I’m wary of the single-payer system just because it hasn’t worked out well in many places. Here’s what Dr. Lickerman said about it on my earlier post, and at the risk of reader ire in Canada and the UK I’ll present it anyway:
Great question. The idea of having a single payer for all healthcare (the government) definitely has its supporters here in the U.S. But it would likely lead to what we see in Canada (the system outside the U.S. I know best), which is untenable wait times for anything other than emergent care, which is all handled by already-burdened ERs. You won’t go broke getting healthcare in Canada like you can in the U.S., but you won’t have appropriate access to healthcare either. The single payer system there has resulted in a dearth of primary care physicians that’s even worse than in the U.S.
But whatever the solution, it’s not what the U.S. has now, and countries like Canada and the UK do have nearly free single-payer care, which does deal quickly with emergencies. Here’s what the NYT got when it solicited “explanations” from hospitals in its article last August. Look at these Scrooges!
At the Biggest U.S. Hospitals, Few Prices Are Available
Six months after the new rules took effect, the Times reached out to the highest-revenue hospitals that had posted little or no data about their negotiated rates or cash prices. Here’s what they had to say:
“We will not be providing a statement or comment.”N.Y.U. Langone has not published its negotiated rates or cash prices.
“Services that do not have a fixed payer-specific rate are shown as variable.”Stanford Health Care has not published its cash prices. Of more than 300,000 possible combinations of insurance and medical treatment in its data file, it includes prices for 479.
“We do not post standard cash rates, which typically will not reflect the price of care for uninsured patients.”Cedars-Sinai Medical Center, in Los Angeles, has not published its cash prices. The hospital initially posted a 2.5 GB data file composed almost entirely of more than one million lines that contained no data. After The Times inquired about the large file size, the hospital reduced it to a 1.4 MB file.
“We have listed the fixed rates where possible and, where that is not possible, have listed them as ‘variable.’”
U.C.S.F. Medical Center has not published its cash prices. Of more than eight million possible combinations of insurance and medical treatment in its data file, U.C.S.F. includes negotiated rates for 346. (U.C. Davis, which is part of the same system and has also not published its cash prices, sent an identical statement.)Penn Medicine is committed to transparency about potential costs.”The Hospital of the University of Pennsylvania added cash prices to its price transparency file after The Times inquired about why that data was missing.
“The resources we provide ensure that our patients know what kind of assistance is available to them and, ultimately, what a procedure will cost them — not us.”Montefiore Medical Center, in the Bronx, has not published its negotiated rates or cash prices.
“V.U.M.C. offers a toll-free number which consumers can call if they have questions about what they may be charged for services.”Vanderbilt University Medical Center, in Nashville, has not published its negotiated rates or cash prices.
“Orlando Health has worked hard over the past several years to deliver helpful pricing information to its patients.”Orlando Health has not published its negotiated rates or cash prices.
“We are continuing to work on the machine-readable file that includes payer-negotiated rates. … It involves analyzing a daunting number of data points.”Long Island Jewish Medical Center has not published its negotiated rates or cash prices.
The largest hospitals were chosen based on gross revenue reported to the Centers for Medicare and Medicaid Services in 2018, the most recent year with full data available.
If you’re an American, you should be plenty mad about this, be you Democrat or Republican. Everyone needs healthcare, and the fat cats are bilking the government and medical patients, all the while knowingly and insouciantly violating the law.
What a hideous, capitalist, wicked ‘system’, long live our NHS*.
*in its current form, not what capitalist interests are on the horizon…
I can think of a REALLY simple way to fix this. Just amend the law to state that, in addition to the civil penalties under the “ENFORCEMENT” section, no provider who is out of compliance can collect on any bill for services.
Not saying politically navigable–just simple.
Nah. Make it a criminal offence.
Directors of hospitals that do not comply will serve time in prison. After all, not complying with this law facilitates fraud and extortion.
I am really deeply utterly shocked. I have seen my share of money making schemes in German medical care, but there is really no comparison, so much worse is the American system. I’ll just say one thing: Looked up the price for a rabies shot in a typical German institution that does rabies shots. It’s 74 Euros for those who pay out of their own pocket. If they charge extra for giving you the jabs, this will be in the range of 20 Euros or thereabouts, and they will of course tell you that at your first phone call if you ask.
https://www.reisemedizinpraxis.de/preise/
Charging 64 000 for a hernia operation (without even telling you beforehand) or 16 000 for rabies shots is not medicine, it’s an extortion scheme.
Still hoping I misunderstood something or misread cents for dollars. Can it really be this bad? And can it really be that student activists go on and on about systemic racism and incorrect pronoun use at their Universities, in a country where even an insured low income person has to pay thousands for banal medical treatments?
Nope, you haven’t misunderstood. It really is that bad.
It’s pretty much always been this way, in my personal experience of not being able to afford health insurance until the ACA was passed.
You have misunderstood
$16k is the minimum price.
The NBC Nightly News covered this last night. Start at 12:40:
https://www.youtube.com/watch?v=hU_BhHxSi5M
The HHS Sec’y, Xavier Becerra, was interviewed (14:56) and was asked whether anything was going to be done. I must say that his response was lukewarm considering that he campaigned on this issue. He seems like a real weasel though I suppose he has limited powers to go after all these hospitals that aren’t complying. When asked if fines have been imposed, he referenced some process that they had to go through before that would happen. So, is it the typical case where federal oversight is weak due because its laws are toothless or is it a failure of the HHS Dept. to apply the laws it is supposed to uphold?
Watched this. The man was charged 6500 Dollars for stitches. Don’t know how large the wound was, but if you are uninsured in Germany you will pay between 8 and 30 Euros depending on the size of the wound.
https://www.praxis-wiesbaden.de/gebuehrenordnungen/goae-2000.php#l1
PS: Sorry, I forgot the price will be tripled if it’s for private payers or private insurance. THis will still be below 120 Euros and most probably below 30 for most wounds. It’s a whole other ballpark.
I am mad about this. The DOJ needs to get on the ball with those who aren’t complying.
In the UK private medical treatment is readily available, and not very expensive. I have gone that way when I wanted a problem sorted out more quickly. What is more, it is pretty well integrated with the NHS, and relationships are generally good. This morning I was discussing future possibilities for a chronic condition with my NHS doctor and he referred to the private consultant whom I had seen previously as [paraphrased] “highly respected”. During this conversation it became obvious that there had been considerable and constructive communication between the NHS and the private hospital. Single payer systems do not preclude flexible and appropriate options.
I suspect private medical treatment works better in the UK than the US because it must compete with the NHS. The US system is impenetrable. The relatively new law was supposed to make for greater competition but it hasn’t worked for the most part. Not unexpectedly, the industry has fought against any kind of competition. There are so many with their hands out to take a patient’s money that it is impractical to navigate it. Everyone is a victim twice over: once from the medical problem and once from the industry that’s supposed to help with it.
Free market capitalism indeed. No free market there at all. How can US politicians stand for it?
My wife had some issues, and decided she needed to go to the ER. She is fine, but we got an interesting bill this week. It was from a specialist unrelated to her visit, who she does not know. The wife works for a clinic owned by the same hospital system as the ER, and she has privileges at that hospital. Throughout the whole ordeal, she was conscious, alert, and absolutely aware of what was going on around her.
The bill this guy sent is for a non trivial amount, but lacks any detail about what services he claims to have rendered. We are investigating.
This is a fair illustration of one of the major flaws in our current system. A person gets some sort of treatment, and they pay their insurance deductible when they check out. Then, random bills start showing up. There is no reasonable way to predict what the amounts will be, or even what the bills will be for.
Yes, and quite often these charges are various kinds of “mistake”. Everything needs to be questioned. One of the hidden costs of this kind of healthcare system is the time loss dealing with it and the aggravation that comes along with it. And so many people go bankrupt due to medical expenses. These costs go way beyond just the high price of healthcare in the US. If we had a system like most other countries, it would be a boon to our economy and overall health.
I have another one about my wife, and the same hospital. She was hit head on by an uninsured crackhead several years ago, and when the bills started arriving, we discovered that our insurance was being billed for the crackhead’s ambulance ride. They did not pay, and the hospital tried to pass the bill on to us.
Most of US medicine seems to be owned by giant financial companies, who trade hospitals with each other like chips at a poker game. They work relentlessly to buy up small private medical practices, or make it impossible for those who will not sell to remain in business.
My wife went to med school in Texas, and afterwards went to work for a small town hospital where she had done part of her residency. A giant financial group campaigned in the community for support in their taking over the hospital, claiming it would improve care and bring more jobs. Of course, they closed the hospital and sold off the assets within a year. They own the nearest big city hospital, so the people in the small town have to travel quite a way for treatment, and have to patronize the people who shut down medical care in their community.
We moved to be closer to our family, and she went to work for a private clinic. It has been sold several times in the last five years, and she now works for the people who shut her down in Texas.
Medical costs continue to increase, but that is not reflected in physician or staff salaries. It is all about the giant financial companies, who siphon off most of the money, but do not add anything to patient care. Patients ask my wife what things will cost, and all she can do is give them a number to call. Billing takes place from another state, and nobody in her clinic even has access to the cost information.
It is sort of like some neighborhoods where the business owners have to pay protection money to mafia or gang members, and can only pass on the cost to customers. People who do not produce anything and have no skills related to the business are able to just siphon off vast sums of money.
I read somewhere a speculation that some empires fail when the administrative or managerial state grows so large that the productive side can no longer support it.
It is hard to know how the US will end but the business of medicine has definitely gotten worse in my lifetime. It has changed so much. When I was young, doctors made house calls.
A doctor once woke up to in the night to find water leaking from a pipe and flooding his bathroom. He called a plumber and when the phone was eventually answered he asked him to come and deal with the crisis. The plumber grumpily said it was three o’clock in the morning and he was in bed and it would have to wait until the next day. The doctor replied that this was unreasonable and that if the plumber had a health problem during the night he would expect him to come out and see him no matter what the time. Faced with this argument the plumber reluctantly agreed to come over to the doctors house and a short while later he arrived. He asked the doctor to show him to the bathroom and when he got there he threw a couple of aspirins into the toilet, said “If it’s not better in the morning give me a call” and returned to his car.
I overheard one case that was maybe similar, where a doctor who wasn’t part of the group tasked with working on a patient just pops in, checks a chart, and … then that becomes a non-trivial part of the bill.
As in most things, there is more to this story. For example, discounting fees for services provided to private pay patients is considered fraudulent by Medicare. Not aggressively collecting co-pays is considered fraud and abuse. Federal contracting agencies generally require that no one pays less than they do for medical services. If they find that someone has, they can retrospectively go back and sample audit your records. If they find 2 issues out of a sample of ten, then they can fine you against 20% of your total practice. If Medicare is slow to pay you can’t re-bill them because if the two bills intersect in the mail it’s fraud and abuse.
Community or county hospitals also may carry a big burden of uninsured care. When I was in trauma, our practice routinely wrote off 45-50% of our billings depending on the year. The hospital had to write off its costs for those patients as well. It was part of the cost of doing business.
FWIW, I just got an email the other day from Northwestern asking me to sign a new document–and it was about transparency in billing. I read the whole thing assuming it would have a catch somewhere, so if I signed and admitted I’d read it, I’d be agreeing to pay for out-of-network crazy prices in the ER or something. But as far as I could tell, they were literally saying patients would never pay more than the deductible if an out-of-network doctor participated in care. Unless I missed something.
We Americans are so WILDLY ripped off with our non-capitalist, CRONY CAPITALIST gangster system. It is what happens when you let politicians sell themselves so the companies make the laws.
Here’s a fun experiment: find a tourist from any OECD country and ask them “What is medical bankruptcy?” Odds are they’ll have no idea, yet here everybody knows and it is the biggest cause of bankruptcy in the country. My own horror stories would curl your toes.
D.A., J.D.
NYC
I am all for enforcing the publication of pricing.
Now, there is a lot of gnashing teeth here about “greed” being the driver behind rising prices. The assumption being, hospital (systems) and insurance companies are prioritizing shareholder value over keeping prices down. There certainly is greed behind some of the big privatized conglomerates, and as noted, the ACG directly addressed insurance profiteering. But true underlying healthcare costs continue to rise, for many reasons. This affects pricing even in smaller hospitals, where profit is not a key driver. Just one factor being, new technologies and treatments that have some degree of proven benefit are just more expensive to produce and administer.
Just be aware this is a real underlying problem. Transparency will be useful, and is a necessary step. But this, and even (the fantasy of) removing the profit motive from healthcare management, won’t magically solve the problem of actual rising costs.
I would venture to say that capping excessive profits is the one thing we can do to reduce healthcare costs–much more so than allowing companies to reap profits from new technologies. For chrissake, look at my hospital bills. For my sinus operation some years back I was way overcharged for technologies that have been around for years, including ketamine, which has been used for fifty years. Even my anesthesiologist was shocked when I told her how much I was charged for a drug that she herself had purchased from the pharmacy for about 20% of the price I was charged (and that was just for the drug, not for the services of the anesthesiologist.
I would be afraid that capping profits would lead to market distortions and cheating. Companies have an easy time hiding profits by moving money around within the company and by doing “creative accounting”.
I believe the key is enabling a fair market. Health care in the US isn’t a fair market, partly because competition doesn’t work like it does in other markets.
And there are so many other impediments to a smoothly operating market. Displaying pricing and outcome statistics are just the tip of the iceberg. Another problem is that there are barriers making it hard to switch providers because moving your records is not as easy as it should be. As with posting prices, there are new laws and procedures that are supposed to fix it but it’s still a big problem.
But, as with gun control, we have other first world countries to measure ourselves against. They get roughly the same level of care, as measured by outcomes, but pay much less. I’m sure they also see themselves in a fight to control prices.
Correct. Medicare-for-all will eat you alive unless you can control wages and prices. You might get a windfall if you put the insurance companies and the investor-owned hospitals and clinics out of business without buying out their equity (assuming they will let you, which they won’t) but it will be rapidly eaten up by a feeding frenzy of doctors and health-worker unions seeking to make sure the bonanza goes to them. This happens even in Canada, land of low expectations, every time the government injects another huge tranche of cash into the system “to fix healthcare for a generation!” Doctors, nurses, and floor-cleaners all get more pay—after all, they’re entitled after years of cost restraint—but waiting lists don’t shrink. (They will eventually as the Boomers die off, or get too old to want surgery.)
Other countries have lower healthcare costs because they rigidly control wages, prices and volumes. All except Canada can offload some costs to the private sector by telling people who can afford it to pay modest bills out of pocket. (Canada prohibits this for ideological reasons.) Canada’s system is the second-most expensive per capita in the OECD even though we totally ban private payment for doctors and hospital care, and our over-all results are only middling. We fall down on access to primary care, drug coverage, fancy imaging, and scheduled surgery for things like joints because we have made a decision (not publicized to the voters) that we are constraining volumes to control costs. We can’t control the wholesale price of drugs, else they won’t be sold here, and we have some control over doctors groups but not over non-physician unions (because they will strike effectively) so we concentrate on things we can control. It’s rationing by queue.
We have lots and lots of data from other countries, most with healthcare outcomes better than the US, on what healthcare could cost. True underlying healthcare costs rising for legitimate reasons doesn’t begin to address the insane state of healthcare costs in the US. Nor does the burden of uninsured care, which is actually a great example showing how screwed up our system is. Nor does the “But the US develops most of the new cutting edge medical technology that the whole world benefits from” argument, even if it were true. Not even all of those put together do.
What does explain it is the system being thoroughly gamed by those with the money, as usual, insurance companies, hospitals and drug companies. Healthcare is big business that everyone must have to survive.
As a Norwegian living in a country with free healthcare, I am truly shocked that Americans have to live in a country with such absurd high prices for health care. But to compare the American system to a country which is very different from either Norway or USA: Colombia.
https://www.wolftourscolombia.com/en/blog/16/colombia-has-a-better-healthcare-system-than-the-us-and-canada
Hard to believe? Well listen to this: My wife is a Colombian (now living in Norway). When she lived in Colombia, she had to pay little for health care insurance. How much? well, about 30-40 US dollar a month which insured herself and also her mother and father (they were poor self employed farmers).
When her mother got cancer and had to go through extensive treatment (radiation, chemo) for several years, there were no problems to get treatment at a good hospital without paying anything extra ( a little red tape they had to deal with). Unfortunately, she died after several years despite the treatment, but most importantly, they were not ruined financially by this treatment
The father, still alive, struggles with several health problems, but he gets the necessary treatment, again, covered by this inexpensive insurance
I lived in Medellin in 2002 and had to remove my gall bladder after a serious infection which would have killed me if not treated. I had a travel insurance form Norway and a Colombian friend took me to a good private local hospital
https://en.wikipedia.org/wiki/Pablo_Tob%C3%B3n_Uribe_Hospital
The total cost for gall bladder removal (two days in the hospital with private room) at this excellent and by Colombian standard, expensive hospital was around 1200-1500 US dollar (paid by my Norwegian insurance)
Bjorn’s experience as related above is fascinating and salutary.
The dear old NHS is creaking at the seams. The post-Covid pressure on A&E and GP services is causing a lot of stress for both patients and practitioners. Waiting lists for cancer and other chronic diseases are not getting any shorter.
And yet…My grandson had a number of fainting events recently. His GP referred him to a local specialist department, where he had an MRI scan (and got a badge for being brave and lying still). The results are positive, helpful and reassuring; and the whole process was completed in three months. And all of it free. I wonder what it might have cost in the US.
On a more humdrum, not to say sordid, level, the NHS stopped doing some routine procedures a few years ago. One of those was earwax removal, for which one now has to go to a private practitioner. The prices of all such practitioners are easily found online: the going rate is £40 for one ear, or £60 for two. The consumer chooses. If even UK can manage this, why not others?
I wonder how real your $64,000 bill actually was. When, a few years back, I had a stent inserted in one of my arteries, the hospital submitted a bill for $50,000 to my insurance carrier. The carrier, however, “negotiated” the price down to $5,000; I later learned that this was the price my carrier paid for all uncomplicated stent procedures. In other words, my hospital submitted a bill for ten times the amount that it already had agreed to accept.
I asked my doctor what was the purpose of this charade. His answer was that very occasionally an extremely wealthy patient, without insurance — a Saudi prince in his example — would be willing and able to pay the full fantasy price. Whether or not this is a complete explanation for a very strange billing practice, it suggests that the amount of a hospital’s bill may far exceed the amount it already has agreed to accept.
Which is likely why they are unwilling to be transparent on pricing. Some laws are passed without any intent whatsoever to enforce them. There may not even be any money appropriated to fund the enforcement effort.
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Another circumstance likely more common than Saudi sheiks is foreign tourists. Any Canadian who visits the United States wants to be insured for out-of-province emergencies, which our single payers will cover only at Canadian prices. Have a heart attack or a car crash 100 feet from the border, the American ambulance is going to take you to a local American hospital. Snowbirds who spend their allowed 180 days in the sunny south have to budget this substantial expense. The insurance companies, in making these policies attractive, have to promise that they will pay up front, no questions asked, whatever the hospital and doctors charge for treating the emergency. A sick visitor doesn’t want to get caught in the middle between a predatory hospital and a baulking insurance company. And they don’t want to have bailiffs preventing their evacuation to their home country because the bill hasn’t been paid. Snowbirds are a great deal for American hospitals.
For American residents, hospitals and insurance companies organize themselves into networks. As Jerry describes, hospitals agree to offer insurance companies very large discounts on their charge master rack rates in order that the insurance company will steer its policy-holders to them for elective, scheduled care — that’s the lucrative stuff. They don’t want gunshot wounds and complications of drug addiction but of course they have to provide the care, for free usually. The margins on the lucrative care, albeit discounted, help pay the weeks in the ICU for the uninsured trauma victim, who isn’t worried about his credit rating. If the ambulance takes you to an out-of-network hospital in an emergency, the understanding is that the hospital will transfer you to your network hospital ASAP. That’s the only way these discounts make sense: to encourage the kind of business the hospitals want the insurance companies to send them. And they communicate those discounts to the insurance company to it them what a great deal they are giving them in return for their business.
Foreign visitors aren’t customers of American health insurance companies. The policies are written by international assistance companies specializing in travel and evacuation insurance. They are first-dollar, no-deductible, no-copay, no-limit policies for emergency care only. (You can’t go to the States and get your hip done with travel insurance.) These insurance companies have no leverage over American hospitals to claim discounts as there is no lucrative elective care in the bargain. The American hospitals can quote their rack rates to the insurance company who has no choice but to pay up in full at time of service…and of course it sets the premiums with this knowledge. The travel companies do require that their covered patients have to cooperate with the efforts of their case managers to get them home to Canada as soon as medically stable enough to travel. It is obvious that there could be conflicts of interest here, but the alternative is not to travel at all.
Canadian patients returning home love to show off their bills that run to many pages — yes, $50 for a Bandaid — and often over $100,000 that they say the insurance company paid without blinking….”and they paid for our air ambulance flight home to Canada, too!” They invariably praise the care they got in the U.S. hospital, just glad they didn’t have to pay a cent for it.
”Of course, other countries have single-payer insurance, but in many cases that results in a parallel series of private insurance because patients don’t want the long wait associated with many national single-payer systems.”
Perhaps in some places, but probably in the majority of single-payer systems, waiting is a non-issue and quality is fine.
How would you know this?
Canada is the only country in the world* with a mandatory single-payer system where private payment (by insurance or out-of-pocket) for medically necessary services is prohibited by law. In all countries except Canada, people are required or strongly incented by queuing-avoidance to take out private insurance. The incentives vary from place to place. The indigent who can’t afford insurance (or healthy young men willing to take their chances) still get rescue care socially but may not be able to see certain specialists or go to certain hospitals which don’t accept social patients because the remuneration is so low. Or a doctor who will see social patients may see only the minimum required by law, so as to protect her private practice. Most of the time this works out just fine for people not chronically ill with complicated diseases.
Of course, if prices are low enough, the cost of private insurance is modest and affordable to all but the poorest.
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*Wags say that Cuba and North Korea don’t allow private health insurance, either, but no one seriously thinks that party nomenklaturaline up in a clinic with a dirt floor to wait their turn with the proletariat.
Having worked in both the UK and Canada, I have to say the UK has the approach to private medicine just about right (even if arrived at by accident; when Bevan set up the NHS the hospital specialists would not join until he “stopped their mouths with gold” – his phrase – by allowing them to do private work on the side). And while the NHS is an object of almost religious veneration in the UK, Canada, arriving later to the medicare concept, has got stuck at the First Commandment and says ‘you shall have no other healthcare before me’. This allergy to private medicine is probably harmful to waiting lists etc. In the UK, a consultant wanting to do private practice is contractually obliged to make up for it with extra time in his NHS work, and limited in percentage of time spent doing private work. It seems to work quite smoothly.
While we don’t have the price-gouging in Canada, except for the costs of medical supplies which are outrageous, we do have two huge issues that cripple our system.
-When medicare was introduced most provinces introduced a healthcare sales tax to pay for it. It was 10% here, and for a long time it was our only sales tax and the funds were ‘ring-fenced’ – to be used for healthcare only. It easily paid for a decent system. Sadly, governments soon decided to pour that money into the general pot and spend it on other things.
-The proliferation of administration and lawyers, which makes the issue in universities seem puny. Two examples: my regional hospital had 4 admins, and 90 beds when I came. Now has 74 admins and 45 beds. My own village hospital had 29 beds and one admin in 1985, but now has 7 beds and 14 admins. We now spend far more of our budget on non-clinical expenses than on patient care. In the same time, we went from 24/7 ER, lab, and x-ray, to ER open 8am to 4pm most weekdays, and usually closed at weekends, and limited to what a nurse practitioner can do, with no lab, and x-ray during daytime three days a week by appointment only. And how they all rolled their eyes when this old dinosaur kept bringing it up at the vast number of meetings I was expected to attend unpaid!
I spent about 10 years in the US, but never succeeded to see a doctor (for severe flu cases), although I had health insurance with my job. Things were different with dentists, we had a quite good one in NY. One day he asked us to give him the canceled checks we used to pay him. It seemed that his secretary had deposited all checks he received in her own account for over a year. Surprisingly she kept her job with the dentist. That is NY!
I had hernia surgery about 3 years ago in England. It involved a general anaesthetic, and a supervised lift home afterwards. I have no medical insurance (if I had, through my employer, it would have happened sooner and in a private hospital 5 minutes from my house) but this is unnecessary with our wonderful National Health Service.
It cost me – wait for it – absolutely nothing. £0.
The US is screwed.
Anthony
A big reason for the white-collar crime wave we’re having, of which this is a good example, is lack of enforcement. It’s easy to pass laws but, unless you hire or reallocate personnel to enforce them, they are meaningless. The situation gets worse when there are a critical mass of lawbreakers that can totally overwhelm any enforcers. Prime example: phone scams.
Jerry’s right to point a finger at the Biden Administration. Those people really need to learn to walk and chew gum at the same time, starting with Biden delegating, and his delegates doing likewise.
Rather than $37K, a rabies vaccine in Kenya costs $16. Seems to be a case of “You’ll die if you don’t get this shot! How much am I bid?”