MD Anderson, Yale New Haven Hospital, you name any major, respected non-profit hospital or medical center in America and the truth is that they are ripping off the most vulnerable of Americans -- the uninsured -- and, at the same time, doing their best to force Medicare and private health insurers to pay absurdly inflated prices for everything from warm blankets to blood tests to hospital managers making hundreds of thousands of dollars more than Barack Obama. Oh, and don't you dare ask the hospital billing department to see the Chargemaster. No, seriously, don't you dare!
This is an article that will require a good half hour -- or more -- to savor, but I'll include some best hits below:
Nonetheless, Sean was held for about 90 minutes in a reception area, she says, because the hospital could not confirm that the check had cleared. Sean was allowed to see the doctor only after he advanced MD Anderson $7,500 from his credit card. The hospital says there was nothing unusual about how Sean was kept waiting. According to MD Anderson communications manager Julie Penne, “Asking for advance payment for services is a common, if unfortunate, situation that confronts hospitals all over the United States.”But, wait, there's more:The first of the 344 lines printed out across eight pages of his hospital bill — filled with indecipherable numerical codes and acronyms — seemed innocuous. But it set the tone for all that followed. It read, “1 ACETAMINOPHE TABS 325 MG.” The charge was only $1.50, but it was for a generic version of a Tylenol pill. You can buy 100 of them on Amazon for $1.49 even without a hospital’s purchasing power.
One night last summer at her home near Stamford, Conn., a 64-year-old former sales clerk whom I’ll call Janice S. felt chest pains. She was taken four miles by ambulance to the emergency room at Stamford Hospital, officially a nonprofit institution. After about three hours of tests and some brief encounters with a doctor, she was told she had indigestion and sent home. That was the good news.Yeah, about those mythical chargemasters?The bad news was the bill: $995 for the ambulance ride, $3,000 for the doctors and $17,000 for the hospital — in sum, $21,000 for a false alarm.
Janice S. was also charged $157.61 for a CBC — the complete blood count that those of us who are ER aficionados remember George Clooney ordering several times a night. Medicare pays $11.02 for a CBC in Connecticut. Hospital finance people argue vehemently that Medicare doesn’t pay enough and that they lose as much as 10% on an average Medicare patient. But even if the Medicare price should be, say, 10% higher, it’s a long way from $11.02 plus 10% to $157.61.
The price is the problem. Stamford Hospital spokesman Scott Orstad told me that the $199.50 figure for the troponin test was taken from what he called the hospital’s chargemaster. The chargemaster, I learned, is every hospital’s internal price list. Decades ago it was a document the size of a phone book; now it’s a massive computer file, thousands of items long, maintained by every hospital.And, in the headline, I said I sort of feel sorry for health insurers. Well, yes and no. Health insurers are now spending thousands to orchestrate a 'Time for Affordability' campaign to wage war against high health care costs. But, why are costs so high? Because providers are consolidating and making it harder than ever for insurers to negotiate low rates for policyholders:Stamford Hospital’s chargemaster assigns prices to everything, including Janice S.’s blood tests. It would seem to be an important document. However, I quickly found that although every hospital has a chargemaster, officials treat it as if it were an eccentric uncle living in the attic. Whenever I asked, they deflected all conversation away from it. They even argued that it is irrelevant. I soon found that they have good reason to hope that outsiders pay no attention to the chargemaster or the process that produces it. For there seems to be no process, no rationale, behind the core document that is the basis for hundreds of billions of dollars in health care bills.
Insurers with the most leverage, because they have the most customers to offer a hospital that needs patients, will try to negotiate prices 30% to 50% above the Medicare rates rather than discounts off the sky-high chargemaster rates. But insurers are increasingly losing leverage because hospitals are consolidating by buying doctors’ practices and even rival hospitals. In that situation — in which the insurer needs the hospital more than the hospital needs the insurer — the pricing negotiation will be over discounts that work down from the chargemaster prices rather than up from what Medicare would pay. Getting a 50% or even 60% discount off the chargemaster price of an item that costs $13 and lists for $199.50 is still no bargain. “We hate to negotiate off of the chargemaster, but we have to do it a lot now,” says Edward Wardell, a lawyer for the giant health-insurance provider Aetna Inc.Ok, so basic economics. If I'm buying 100 people dinner at the local steakhouse, won't I have a bigger chance of getting 10% off the bill than if I'm buying dinner for 20? You bet. And that's why in sane, civilized countries the government takes the health care industry 'bull by the horns' and negotiates with providers and drug companies for the entire population -- all at once. Medicare For All isn't just about covering everyone, it's about a massive, powerful entity -- the government -- fighting the good fight against providers -- who have all the power in the world to set prices for the things that will prolong and save our lives -- to ensure that their citizens have access to affordable health care. If you have Cigna, Aetna, WellPoint and Humana -- no matter how big and powerful they are as corporations -- separately waging this war, of course the discounts will be lower, and the prices higher -- or, in the case of America, absolutely insane.
This is a good place for me to stop -- this diary could continue for ages, and I'll be sure to post updates of what you, dear readers, discover if you are kind enough to comment on what outrages you most.
Sit down, pop a $1.50 generic aspirin, and start reading.