For
too many people in the United States, the scariest part of a hospital visit can
have more to do with anxiety about the potential bill than with their
precipitating health problem. Will my insurance pay? How much will this cost?
Can I even afford to be here? Will I need Chapter 11 because I am uninsured?
Fortunately
for me, at age 72 I’ve never had any really serious health issues. After going
on Medicare seven years ago, however, I’d been constantly wondering about the
coverage and the costs. As a career journalist I’m the curious sort by nature.
And, as a retired journalist, I had plenty of time for analysis when I recently
got the chance to dissect a hospital bill for myself. I’ve found the exercise
to be both enlightening and confusing, in some ways raising more questions than
it answered. Nevertheless, the dissection of my hospital bill might be
interesting to others who have had similar concerns.
My
issue occurred January 31, 2019, when I visited a neighborhood emergency room
for what must be a fairly common concern. I had some chest pains I could not
understand, and, given my family history of heart ailments, I decided to err on
the side of caution. My concerns turned out to be a false alarm, but I did
spend a night under observation before a cardiologist concluded I likely had
only strained some chest muscles lifting weights earlier in the day. I know I
received an IV line, some blood work, several electrocardiograms, a chest
X-ray, aspirin and breakfast.
In discharging me, the doctor advised, “Go ahead
and order breakfast before you leave. You paid for it.”
Uh-oh,
I thought. Is he hinting about a bill for me?
“OK,”
I said. “I’ll have the omelet.”
Once
my bills arrived, I had what I suspect is the normal reaction for most of us:
Checking the bottom line for the amount I would owe. I breathed a sigh of
relief when I saw my total due to the hospital—a $50-copay. Then I did
something that might not be so routine. I reviewed the amounts above my tab.
Total charges: $15,344. Insurance discounts: $14,495.23. And, insurance
payments: $798.77.
Intrigued,
I called Methodist Hospital and requested an itemized statement. I could see
$800 as a fairly reasonable cost for my night of observation in the ER. But I
had trouble imagining what they had done to generate $15,344 in ER services. I
also wondered why they would just discount so much of that total for me.
A
separate bill from the ER doctor prompted a similar moment of curiosity. That
bill totaled $1,992 but left me owing just $106.56 after deductions for
insurance discounts. Altogether, the doctor received a little less than $200
for observing me, and that seemed like a reasonable fee to me as well.
Of
course, my itemized statement from Methodist listed a number of alien codes and
multi-syllable words that made little sense to a layman. But I deciphered them
well enough to satisfy my curiosity, plus I called the billing department with
a few questions. The associate on the phone was polite but also a tad confused
herself about why I would want to know anything beyond my $50 bottom line.
“I’m
just trying to be a savvy consumer of health care services,” I told her.
The
largest single item on my bill was $4,336 for something called a “CTA chest
noncoronary,” which she described as some sort of a scan. The next largest
charge was $2,480 for the ER visit at a Level IV facility. Next in line was a
$792 fee for 12 hours of observation.
They
charged $754 for the chest X-Ray and another $704 for 100 ML of 300 MG Iodine
solution. They hit my account for three EKGs at a cost of $657 each—or, $1,971.
A pair of comprehensive metabolic panels rang another $582 apiece—or, $1,164.
And they charged $335 for a “B Natriuretic Peptide.”
From
there the charges decreased to amounts less than $300 for a variety of things,
including $174 for a 0.4 MG Nitroglycerin tablet.
I
concluded that both Methodist and Medicare had taken very good care of me. And
I was impressed to see that Medicare chopped that bill down to a more realistic
$798.77 by extracting a 95-percent discount. I’ll say that again: Medicare received
a 95-percent discount! Medicare can do
this NOT because it is a bully to the
hospitals but because it knows the actual cost of all things medical and refuses
to give hospitals more than a reasonable upcharge.
“Medicare
collects troves of data on what every type of treatment, test and other service
costs hospitals to deliver,” wrote Steven Brill in A Bitter Pill—his meticulously
researched article comparing a number of hospital bills in detail to determine “how
outrageous pricing and egregious profits are destroying our health care.”
He
wrote: “Medicare takes seriously the notion that nonprofit hospitals should be
paid for all their costs but actually be nonprofit after their calculation.”
Under
the law, Brill noted, “Medicare is supposed to reimburse hospitals for any
given service, factoring in not only direct costs but also allocated expenses
such as overhead, capital expenses, executive salaries, insurance differences
in regional costs of living and even the education of medical students.”
After
all, Medicare cannot survive itself if it runs the hospitals and doctors out
of business by undercutting their actual costs. And the hospitals cannot
survive without the huge amount of money generated from treating Medicare
patients like me. In every sense, it seems like one of the business world’s purest
examples of a symbiotic relationship.
The
associate in Methodist’s billing department told me that patients receive
different levels of discounts depending on the negotiations by their respective
insurers. Because I carry supplemental insurance, my deductible is small. But I
have friends with employer insurance who now pay deductibles as high as $5,000
or more. The billing associate told me those deductibles also figure into
negotiations.
But
I also have friends who are uninsured, even in the age of the Affordable Care
Act. And statistics show that the uninsured generate about 20 percent of all ER
visits. What about them? I asked. Calling them the “self-insured,” she said
Methodist gives them a 50-percent discount. For a “self-insured” in my case,
she said, the bill only would have been $7,672. But I also wondered if a
“self-insured” patient would have received the same level of tests and
procedures. I’m sure some corners might be cut, but I also see my services as
being pretty basic for a night in the ER.
I’m
still mystified by the Voodoo accounting that allows a hospital to claim a bill
so large it can grant a 95-percent discount without a whimper. But I remain
more convinced than ever that adoption of Medicare-style single-payer health
care financing or Medicare-For-All ranks as the most efficient system to keep
our society on a level playing field with a medical industry that grows more
technologically complex on a daily basis.
“Why
should a trip to the ER for chest pains that turn out to be indigestion cost
more than a semester in college?” asked Brill in his article. “Why does simple lab
work done during a few days in the hospital cost more than a car?”
He
called today’s medical industry a “gold rush” for firms that provide everything
from wonder drugs to that CT scanner that rang up the single largest, $4,336-charge on my tab. Brill’s research showed hospitals usually recover investments
on that technology in the space of a year.
With
the entire population in a single insurance pool, a single-payer plan would
have the power to pay only the real costs of prescriptions, care and
hospitalization. I certainly saw Medicare demonstrate that kind of power after
my night in an ER.
I
realize my example stands only as an “anecdote”—a tree in a large forest of
data that may or may not provide an accurate picture of the business of health
care. For anyone curious about the broader view of that forest from 10,000
feet, however, I’d encourage a review of Brill’s article and a visit to the web
site of a group called Physicians for a National Health Program. They have
charts and historical documents that should answer all remaining questions.
But
the real question in my example should focus on the true value of the services
I received. Medicare believes they were worth $798.77. For the uninsured,
Methodist believes they were worth $7,672. Or, should we look at the showroom
price like it’s the Memorial Day sale at a furniture store: $15,344?
For
the record, during the course of my working life I paid a total of $26,456 into
the Medicare program while my employers added another $17,508 for a total lifetime
contribution of $43,964 on my behalf. In addition, I’ve paid about $300 each
month since 2012 for supplemental policies to ensure full coverage.
It
won’t take many more hospital visits for me to outpace my payments into the
system. But I’m still expecting Medicare
to cover my final hospital bill whenever that arrives. And we all know that
last bill is usually the whopper. So, thanks again to all you working youngsters
for your monthly payroll deductions under the Federal Insurance Contributions Act
(FICA). I’m going to need them. I’m betting you will, too.
