9 ms·

Bill of the Month: A $48k Allergy Test

95 points by georgecmu 8y ago

2trill2spill 8y ago
This whole practice should be illegal, why can't hospitals list the materials they used, their cost and how many hours doctors and nurses worked and what they bill hourly? The cost for a hospital to do a procedure doesn't changed based on my insurer, so they shouldn't be able to charge differently.
- refurb 8y ago
  Cost accounting. Hospitals are terrible at it. Even if you asked the hospital, how much does it cost to take an x-ray? Personnel, capital costs, material costs, everything. Most hospitals couldn’t tell you. They tend to measure based on service lines. “Our stroke unit is profitable”. Beyond that, they are pretty hopeless from what I’ve seen.
  - derefr 8y ago
    It'd be interesting to build a private hospital from the ground up to run on a cost-plus business model (and then refusing to negotiate with insurers because your rates are already reasonable; or, alternately, after figuring out what you "want to" charge, setting a 30x top-line multiplier on that so that insurers can't complain that they don't have the cheapest rate; and then giving everyone besides them an automatic 30x "negotiated" discount, with the negotiation occurring between the hospital and a patient ombudsman before the patient ever arrives.)
    - nicoburns 8y ago
      I wonder if you could even sell your own direct to consumers insurance. That would be one way to shake up the US healthcare market, but it need a hell of a lot of initial investment.
    - pg_bot 8y ago
      I started a healthcare company and we set up the business so that patient tests, and procedures are not profit centers for the company. We make money off of a recurring subscription model, (direct primary care) and publish all of our prices upfront. We negotiate rates with local providers on your behalf and do not mark up their pricing. People need to stop expecting that their insurance should cover literally everything. Medical billing is usually around 40-50% of the total overhead for running a clinic. You can get rid of that entirely if you switch to a cash model.
      - derefr 8y ago
        > People need to stop expecting that their insurance should cover literally everything. Well, yes; in countries with public healthcare, there's still stuff that your coverage doesn't pay for (e.g. voluntary stuff like removing a mole.) But that uncovered stuff, in those other countries, still tends to be far less expensive than the equivalent service costs at even private "cash only" clinics in the US.
        pg_bot 8y ago
        We tend to treat a lot of things as equivalent just because we have some statistic that we can use for comparison. I know it may sound shocking to some, but paying more does not necessarily mean that something is wrong. If I want a private hospital room, I want the services of a doctor that is in high demand, I want to use the latest technology, or I want something done faster and am willing to pay freely shouldn't I be able to? All of those things cost money, but are not accounted for when we are looking at the stats. You have to break things down into smaller pieces and figure out why things are more expensive before you can truly make an accurate comparison.
  - 2trill2spill 8y ago
    That's 100% the hospitals fault, no other profession would get away with not knowing how much the service they provided you costs and then making up a number to charge you.
    - kazen44 8y ago
      how come the US is so opaque about pricing? Any other country i have been to (national insurance or not) has been absolutely transparent about pricing of healthcare. Including a GP in a tiny village in france who didn't speak english who sew back the skin on a finger after a nasty cut. (i had to pay a fee because i am not a french person, and the EHC doesn't cover "mundane" injuries like a deep cut in your finger.) the healthcare system in the US seems like total chaos to me.
      - vidanay 8y ago
        We aren't even transparent about the cost of buying a candy bar at the convenience store.
    - refurb 8y ago
      Agreed! If you asked a Vision Correction clinic or cost metic surgery clinic the same question, I’m sure they could give you an exact answer. Simpler business model albeit.
  - rendall 8y ago
    "Cost accounting. Hospitals are terrible at it." Which is the more reasonable explanation? A hospital does not tell a patient the cost of an x-ray upfront because: a) the hospital is terrible at accounting OR b) the hospital makes a higher profit by withholding or obscuring that information until after the procedure.
    - wswope 8y ago
      I work in a hospital radiology department, and the main part of my job is cost accounting. Getting estimates of cost for medical procedures is surprisingly difficult and expensive. It takes many people many hours of work to figure out how much a specific set of procedures costs. Bureaucracy also makes the job far harder than it should be, but "moving fast and breaking things" can lead to people dying, so it's understandable why hospitals don't tend to be innovative enterprises. There is value in it, but at the same time hospitals don't have much incentive to lower costs. My job probably only exists because medicare/medicaid bundled payment schemes are finally forcing hospitals to look at costs. Basically, it's both A and B.
- prostoalex 8y ago
  > doctors and nurses worked and what they bill hourly Those guys are typically salaried, and that's likely one unknown. Another one is the legislatively imposed obligation that they provide [expensive] ER services to anyone who walks in regardless of insurance coverage requiring the hospital to potentially eat up the cost.
  - thaumasiotes 8y ago
    Doctors are typically salaried; it was my impression (my mother is a doctor) that nurses are typically hourly. At least, she always quotes nurse rates as hourly.
  - amanaplanacanal 8y ago
    I wonder how much those free ER services actually cost. It comes up in conversation, but is it 1% or 50%?
titusjohnson 8y ago
I don't understand why this isn't treated as predatory.
- deleted 8y ago
  [deleted]
- 51lver 8y ago
  Because the predators made the rules.
  - moate 8y ago
    And have other large predators (lobbyists) protecting everything.
megaman8 8y ago
Absolute insanity. This should be made illegal... seriously, if policians have enough time to deal with privacy issues and gdpr and they should have enough bandwidth to deal with stuff like this.
- kentosi 8y ago
  I'm pretty sure that GDPR is for Europe, whereas this article is about the US.
- craftyguy 8y ago
  US politicians apparently don't have time to deal with privacy issues and gdpr. They're too busy trying to keep people out of the country, give tax breaks to wealthy folks, repeal health benefits, prolong armed conflicts, and tweet about how great they are making america.
  - module0000 8y ago
    >> US politicians apparently don't have time to deal with privacy issues and gdpr. They're too busy ...trying to get re-elected. Every action they take is with that singular goal in mind.
    - craftyguy 8y ago
      Right.
    - stevenwoo 8y ago
      Or make rules and regulations for an industry for which they will transition into direct hire or lobbying after serving in Congress.
gowld 8y ago
> 119 tiny plastic containers of allergens were taped to her back over three days of testing > Winston's health insurer, Anthem Blue Cross, paid Stanford a negotiated rate of $11,376.47. > She made the argument that her doctor had told her the cost per allergen would be about $100 $48K is some phony list price that doesn't matter. Maybe that's higher than it should be, based on the comparison to averages and medicare, but I don't see where the shock comes from, as she (+insurance) was billed 99% of what her doctor told her it would cost.
- dpark 8y ago
  > $48K is some phony list price that doesn't matter. It does matter, though. These high list prices sacrifice the uninsured for larger chips at the insurance negotiation table. The uninsured don't have anyone negotiating rates for them so they end up paying the list price (or going bankrupt instead).
pettersolberg 8y ago
Business as usual
PHGamer 8y ago
it was only 3k though after everything was said and done. not as much scratch as the title is posted. yes the original charges pre insurance are ridiculous but thats everything.
- Pfhreak 8y ago
  > yes the original charges pre insurance are ridiculous but thats everything. Why do we do this? (I'm just as guilty as anyone, btw, not calling out you specifically.) Why do we acknowledge that the system is totally broken, then shrug and say, "Medical prices sure are weird, nothing we can do." It seems pretty rare to see the conversation turn towards, "It was only 3k after everything, but the original prices were way out of line with what they should have been. We should really try to fix that."
  - asdkhadsj 8y ago
    Perhaps it's an innate behavior to reduce items of discussion to actionable and in actionable? Ie, there's so many things to discuss these days and so much of it is wrong, broken, corrupt, etc; rather than labeling everything "we should really try to fix that" I think humans naturally ignore what they feel that can't change. I hope it's clear that I'm not choosing a side here, I'm simply discussing your question - why do we do that?
  - dpark 8y ago
    Providers do this because it's a bargaining chip when negotiating rates with insurers. An insurer will say "this procedure should only cost $100". The provider will counter by showing that their "list" price for the procedure is $1200. They'll compromise on $250 and some uninsured schmuck will go bankrupt trying to cover the "list" prices. It continues because 1) Having absurd prices is not illegal. Of course absurd prices are usually self-correcting. 2) It's politically infeasible to fix this because it means "someone" (aka the government) has to mandate what the prices should be.
pleasecalllater 8y ago
This one thing keeps me from moving to US. Here in Europe I can pay about $50 for a set of 10 allergy tests (if I go to a private clinic). I pay about $10 per month for a national health insurance for my whole family (I pay much more, but most of that is deductible from income tax - so when I calculated how much money would I have if I wouldn't pay this, it was $10). As my wife is sick, she needed some special treatment. For the first days in hospital she got antibiotics, 4 times a day, $300 per injection. I payed nothing. Then she got some more drugs, sometimes a box for 5 days was worth about $3k - I payed nothing. When our kids were born and spent the first 6 weeks in hospital on an ICU, the cost was about $150 - I payed nothing. When they had to get a special medicine for $4k - I payed nothing. And yes, my taxes are a little bit higher than in US, but come on, I'd go bankrupt if I had to pay for all that. Or rather: I wouldn't pay, I'd live on street, and we would be dead now.
- craftyguy 8y ago
  That is the one thing that keeps you from moving to the US? Granted, it is a pretty big problem, but I'd say it is far from being the only thing the US gets wrong that the EU generally gets right.
  - pleasecalllater 8y ago
    This is The Thing. The list is much longer. On the other hand there are many problems that are worse here as well. But for me the main thing is that in US people are dying or lose everything just because someone in the family got sick. This is sick!
    - craftyguy 8y ago
      Long prison sentences for non-violent crimes also ruin lives. Police indiscriminately killing unarmed citizens because they are armed and trained to shoot first also ruins lives. Non-existent support for mental health problems also ruins lives. Major homeless problems in all major cities with no long term solutions also ruins lives. Shall I go on?
Rafuino 8y ago
My company has been pushing a high deductible plan exclusively provided by Stanford. They would NEVER answer questions about pricing up front in the year I tried the program, so I switched back to another provider that does (Kaiser). Stanford is a complete racket as the article shows.
- codyb 8y ago
  I always pay extra when given the option for the low deductible plans and the one time I hurt myself snowboarding and needed physical therapy it paid off tremendously. Being on the hook for 5000 worth of care would have been a tremendous burden where as whatever I was on the hook for (maybe a fifth of that? Maybe less?) was not so much. There's also differences in fee scheduling which makes a huge difference. For instance if you're on a medicaid fee schedule they tend to charge less for a lot of things making it a lot more difficult to ever hit your deductible putting you on the hook for more charges over time. If you're on a standard fee schedule you'll hit your deductible faster. It's all incredibly confusing in the end and very hard to figure out and most people don't until something happens and then it's "oh shit I'm getting fucked aren't I?". Not a great system, and pretty pathetic for the richest country in the world to bring so much hardship (as noted, something like 50% of bankruptcies are due to healthcare costs) upon it's citizens in times when they're probably already in some of the most stressful situations of their lives.
sonnyblarney 8y ago
Everyone in the medical industry is complicit. Doctors, nurses - even if they are removed from it - they are essentially corrupt and responsible - they cannot wash their hands of it. This is a deep, deep social problem in the US - far bigger than many of stupid things they talk about in the press. It's probably bigger than prison reform, policing issues, privacy etc.. It might be the #1 social problem in the US given how many people it affects (basically everyone), and the vast sums in involved. 50% of bankruptcies are due to medical bills. In 100 years I think they will look upon this period as Dickensian. I think free markets are important but I'm not sure if any of this is free market at all ...
- mkirklions 8y ago
  Not nurses, not Doctors of Physical Therapy, not ocupational therapists. Physicians, Pharmacists, pharma companies, hospitals, insurance companies, and pharmacies are the corrupt ones. Source: https://www.opensecrets.org/lobby/top.php?indexType=s https://www.opensecrets.org/lobby/top.php?indexType=s These groups are lobbying the government to establish monoplies. The previously mentioned practices are not paid anywhere similar to the ones lobbying/bribing.
  - sonnyblarney 8y ago
    Doctors and Nurses I understand are not directly involved, but they reap the rewards and are close enough to be complicit. If Doctors guild's wanted this changed, they could. They have immense power. The problem might be that nobody knows what the answer should be: it may not be socialized medicine. But some basic things like price transparency, 'one price for all' (i.e. have to charge everyone the same price), requiring people to be informed ahead of time of the costs etc. might help.
- lettergram 8y ago
  > I think free markets are important but I'm not sure if any of this is free market at all ... For reference, I worked in a large medical billing office for years. It's not a free market, it's the opposite. Completely socialized, just in a very round about way. Medicare pays roughly 10% of any bill that's charged. It's a flat rate now (but remains about 10% of what insured people pay). Essentially anyone with insurance is "taxed" by having to pay 100% (then negotiated down by the insurance companies). You legally cannot not have insurance, if you make over a threshold (in part due to Obamacare), which has made the issue worse. The above combined with the inability to see prices beforehand and the way the U.S. foots the bill for the worlds medical research has made it pretty insane. IMO the ideal solution is to make insurance illegal. Hospitals then need to manage the cost and risk of running procedures. Yes, this means some people get worse treatment, however -- they also only get paid if you live and are happy. The incentives are then aligned, and the hospital manages the risk so better hospitals stay in business longer. There may be some middle ground there, but having worked in the industry, it's the only "good" solution I see.
zaroth 8y ago
I've commented on HN specifically about Stanford billing in the past. I will stick my neck out and say that I believe it is straight up fraudulent. I am convinced, although I have no evidence, that there is a kickback somewhere along the line back to the insurance company for approving the inflated bill, knowing that they can kick 20% of it over to the customer as co-insurance. I had my own Stanford bill for a child's ER visit which included a basic blood chemistry and a single shot of insulin that turned into a 5-figure bill of which they wanted me to pay 20%. They "coded" the visit as intensive care, even though my child never left a basic exam room, and the only treatment was a subcutaneous injection. The good news is that after a year of fighting they wrote it off and I paid nothing. But it took about 100 hours of calls, letters, and threats. Patients should not have to go through this. I blame the regulators. I blame the insurance company. But most of all, I blame Stanford Hospital. They should have their non-profit status revoked, because in fact, they are one of the most profitable hospitals in the country.
- pkaye 8y ago
  This is why I prefer the Kaiser Permanente system. It has its drawbacks but there is much better out of pocket cost certainty. When I go to ER, I know exactly what it will cost. $100 if not admitted or $0 if admitted. My blood tests are $20 per draw as are my doctor visits. I'm also on dialysis so use them a lot. However they set it up to exclude copay for 1 visit and blood draw per month. So my OOP costs are pretty low despite my health situation.
- mitchell_h 8y ago
  Check your credit. My second son was born a month early and spent 3 days in the NICU. 3 years later I was getting fresh bills from doctors I couldn't remember. Spent another year arguing with the hospital, the doctors and the facilities people(hospital and floor space and doctors all are different bills!!!!!). After a year they "wrote off the bills" what they actually did was stopped chasing me or accepting my calls, and put a knock on my credit report for the debt. it was another year of fighting those.
  - zaroth 8y ago
mbesto 8y ago
https://finance.yahoo.com/quote/UNH/financials?p=UNH https://finance.yahoo.com/quote/UNH/financials?p=UNH $201B last year, from one insurance company alone. That's how much money flows through just ONE healthcare insurance carrier in the US. JUST ONE. For the technical crowd out here, Amazon did $177B last year in sales. Americans are spending more money on healthcare insurance on the largest healthcare insurer than they spend on retail from the largest retailer in the US. The difference? Amazon: - I can freely decide to use them or not. I'm not penalized if I don't - I know exactly how much something is going to cost and can shop around online (at competitors even) UHC: - If I chose a doctor out of network, I get penalized - I have no idea what the pricing is and it can change at any moments notice
cryptonector 8y ago
> Her Stanford-affiliated doctor had warned her that the extensive allergy skin-patch testing she needed might be expensive, Winston said, but she wasn't too worried. After all, Stanford was an in-network provider for her insurer — and her insurance, one of her benefits as an employee of the state of California, always had been reliable. And here we have one of the biggest problems with the American health care system: a) no one knows the cost of anything (except insurers), b) customers feel no need to be cost-conscious. They tested her for 119 allergens, but from her symptoms they could probably have cut that way down, and tried an iterative process (trial and error) that should have cost much much less. But the patient "wasn't too worried" because the insurer "always had been reliable". If we went back to old-style insurance (think Blue Cross & Blue Shield), you know, you pay 100% until deductibles are met, then they pay 80% and you pay 20% up to some cut-off after which they cover 100% up to some large max... then patients would become cost-conscious. Doctors (or their assistants) would have to be able to quote prices on the spot. All the per-network variation in prices would be reduced or eliminated. Patients would be able to negotiate prices with doctors!! Imagine that, people negotiating prices. In a world where no one feels the need to negotiate, no one knows how to negotiate, and no one bothers to negotiate, and so when costs mount all we know how to do is complain. A free market needs pricing signals. The American health care market lacks pricing signals. The American health care market isn't functioning very well like a free market. Indeed, there's a ton of regulation too that, along with the HMO/PPO/everything-but-traditional-insurance system serves to increase costs and hide this from the consumer until it is too late. The most sensible reforms at this point would be those that make the system more transparent to the consumer before they consume. On top of all this we have tremendous protectionism: - it's too hard to become a doctor - it's too hard to build new hospitals (you need a "certificate of need" -- did you know about that bit of protectionism??) - FDA regulation makes generics manufacturing really difficult (my father tells me how he can't sell chemicals to generics manufactures even at 25% of what they pay someone else because the regulatory cost of switching sources is so high) Our system is practically designed to produce ever more cost inflation for health care. EDIT: Let's not overlook, either, the conflict of interest that the doctor in this (and every case) had! The practitioner in this case ordered practically every test without quoting the customer a price, thus ensuring a bigger payday for themselves. Sure, they said it might be expensive, and sure, the customer acquiesced without inquiring further, but the practitioner almost certainly didn't care whether the customer could afford this, and they didn't know the final price either. This conflict is unavoidable, naturally, but that doesn't mean that we cannot deal with it reasonably. Doctors should absolutely be required to quote prices to their customers prior to performing procedures or ordering tests, and generics substitution should always be permitted.
dmckeon 8y ago
> Total bill: $48,329, including $848 for the time Winston spent with her doctor. > Winston's health insurer, Anthem Blue Cross, paid Stanford a negotiated rate of $11,376.47. > Stanford billed Winston $3,103.73 as her 20 percent share of the negotiated rate. > ... > Winston ultimately paid $1,561.86 out of pocket. 48329.00 nominal bill 14480.20 R == ~30% of nominal bill 11376.47 ~80% of R - negotiated rate Anthem paid 3103.73 ~20% of R - billed to patient 1561.86 patient paid, negotiated So, the patient paid 3.23% - or about 50% of 20% of 30%. Imagine if other businesses charged like this. Imagine going into a restaurant, or a furniture store, or an auto mechanic, and being told "It's not expensive" without a specific price, and then finding out that the bill is supposedly 30x your typical expected monthly cost. Whoops, no, 10x. Oh, really 2x. Okay, 1x. If a billing process like this happened to a character in a movie viewers would describe it as farcical or unrealistic. But many people in the US accept it as normal. How did we get here? More importantly, how to we get to something better?
- mamon 8y ago
  The point is, in most EU countries the bill would be maybe 300-400 USD. Not just the patient co-payment, the whole sum. So the US healthcare is overpriced by the factor of 120x.
  - noonespecial 8y ago
    Seems like the $50k "bill" might just be sneaky way to get the patient to fork over the 1.5k instead of the 300. All the rest is a hand-wavy misdirection. Is it even possible to know if, after all the shells stop moving, the insurance company really "paid" anything like they said they did? Or was the real cost of service the 1500 and everything else just expensive theater funded by the insurance "premium"?
    - csomar 8y ago
      Yes.
    - cosmie 8y ago
      Health insurance companies in the US are legally obligated to[1]: 1. Spend 80-85% of premiums on medical spending (with a loophole that "quality improvement" initiatives count). That leaves 15-20% for overhead and profit. 2. Rebate you any excess they collect if they don't meet that medical spending requirement[2]. 3. Justify large rate increases. The insurance company really does pay those costs, rather than playing theater. They have absolutely no incentive whatsoever to limit inflated passthrough costs, and every incentive to justify as high of passthrough to providers as possible. Any attempt at cost control above the bare minimum will result in cannibalizing their own profit potential, because they're not allowed to keep that improvement. And the more inflated the passthrough costs, the more they can justify large rate increases (which then increases the absolute size of the 20% they're allowed for non-medical spending). But wait. Only their health insurance arm is subject to such profit capping. Now that "market rate" for various intermediate services has been established at such an excessive level within the environment of payers having no incentive to reign in costs, they can gobble up some of those middlemen and reap the benefit of those crazy profit margins. Because their insurance arm is complying with their 20% overhead mandate, but their newly acquired PBM has no such mandate on profit[3]. That way the profit transfer from one internal entity with a statutory profit limit to another without one is seen as kosher and not a run-around. So it is theater, in a sense. But it only works because it didn't start out as theater. They had to truly passthrough costs and get acceptable and normal market rates established, then start gobbling up the intermediaries in the value chain that they fattened up. If they hadn't done that, it would have looked like self-dealing from the outset and never would have been successful. Whereas now they're able to hand-wave it through regulatory approval with vague promises of efficiencies. [1] https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-... [2] Individual plans rebate to the individual. Group/Employer plans rebate to the employer, and don't have to pass it through to the employee if they can think of a way to "apply the rebate in a way that benefits employees". [3] https://www.hallrender.com/2018/03/16/the-wave-of-pbm-and-insurer-integration-continues-as-cigna-and-express-scripts-announce-a-merger-of-their-own/ https://www.hallrender.com/2018/03/16/the-wave-of-pbm-and-in...
crb002 8y ago
Somebody needs to start suing these providers for fraud like consumers did to RR Donnley publishing a few years back were they were caught regrouping their price schedules to maximize their profit while telling customers they were optimizing to give them the best cost. Consider McDonald's Dollar menu pricing. Same thing sold, how you group it matters on the bill.
usaphp 8y ago
And on top of that my insurance premiums for a family of 4 is constantly being increased by at least 20% year over year, and that considering that we have not visit any doctors with my wife in the last 3-4 years and only do regular checkups for kids once a year ...it’s getting ridiculous to pay 1300$/month for the cheapest possible insurance of family of regular size. And we still have to pay ~$100-120 for each visit and have a 7k deductible ...

95 points by georgecmu 8y ago

This whole practice should be illegal, why can't hospitals list the materials they used, their cost and how many hours doctors and nurses worked and what they bill hourly? The cost for a hospital to do a procedure doesn't changed based on my insurer, so they shouldn't be able to charge differently.

refurb 8y ago
Cost accounting. Hospitals are terrible at it. Even if you asked the hospital, how much does it cost to take an x-ray? Personnel, capital costs, material costs, everything. Most hospitals couldn’t tell you. They tend to measure based on service lines. “Our stroke unit is profitable”. Beyond that, they are pretty hopeless from what I’ve seen.
- derefr 8y ago
  It'd be interesting to build a private hospital from the ground up to run on a cost-plus business model (and then refusing to negotiate with insurers because your rates are already reasonable; or, alternately, after figuring out what you "want to" charge, setting a 30x top-line multiplier on that so that insurers can't complain that they don't have the cheapest rate; and then giving everyone besides them an automatic 30x "negotiated" discount, with the negotiation occurring between the hospital and a patient ombudsman before the patient ever arrives.)
  - nicoburns 8y ago
    I wonder if you could even sell your own direct to consumers insurance. That would be one way to shake up the US healthcare market, but it need a hell of a lot of initial investment.
  - pg_bot 8y ago
    I started a healthcare company and we set up the business so that patient tests, and procedures are not profit centers for the company. We make money off of a recurring subscription model, (direct primary care) and publish all of our prices upfront. We negotiate rates with local providers on your behalf and do not mark up their pricing. People need to stop expecting that their insurance should cover literally everything. Medical billing is usually around 40-50% of the total overhead for running a clinic. You can get rid of that entirely if you switch to a cash model.
    - derefr 8y ago
      > People need to stop expecting that their insurance should cover literally everything. Well, yes; in countries with public healthcare, there's still stuff that your coverage doesn't pay for (e.g. voluntary stuff like removing a mole.) But that uncovered stuff, in those other countries, still tends to be far less expensive than the equivalent service costs at even private "cash only" clinics in the US.
      - pg_bot 8y ago
        We tend to treat a lot of things as equivalent just because we have some statistic that we can use for comparison. I know it may sound shocking to some, but paying more does not necessarily mean that something is wrong. If I want a private hospital room, I want the services of a doctor that is in high demand, I want to use the latest technology, or I want something done faster and am willing to pay freely shouldn't I be able to? All of those things cost money, but are not accounted for when we are looking at the stats. You have to break things down into smaller pieces and figure out why things are more expensive before you can truly make an accurate comparison.
- 2trill2spill 8y ago
  That's 100% the hospitals fault, no other profession would get away with not knowing how much the service they provided you costs and then making up a number to charge you.
  - kazen44 8y ago
    how come the US is so opaque about pricing? Any other country i have been to (national insurance or not) has been absolutely transparent about pricing of healthcare. Including a GP in a tiny village in france who didn't speak english who sew back the skin on a finger after a nasty cut. (i had to pay a fee because i am not a french person, and the EHC doesn't cover "mundane" injuries like a deep cut in your finger.) the healthcare system in the US seems like total chaos to me.
    - vidanay 8y ago
      We aren't even transparent about the cost of buying a candy bar at the convenience store.
  - refurb 8y ago
    Agreed! If you asked a Vision Correction clinic or cost metic surgery clinic the same question, I’m sure they could give you an exact answer. Simpler business model albeit.
- rendall 8y ago
  "Cost accounting. Hospitals are terrible at it." Which is the more reasonable explanation? A hospital does not tell a patient the cost of an x-ray upfront because: a) the hospital is terrible at accounting OR b) the hospital makes a higher profit by withholding or obscuring that information until after the procedure.
  - wswope 8y ago
    I work in a hospital radiology department, and the main part of my job is cost accounting. Getting estimates of cost for medical procedures is surprisingly difficult and expensive. It takes many people many hours of work to figure out how much a specific set of procedures costs. Bureaucracy also makes the job far harder than it should be, but "moving fast and breaking things" can lead to people dying, so it's understandable why hospitals don't tend to be innovative enterprises. There is value in it, but at the same time hospitals don't have much incentive to lower costs. My job probably only exists because medicare/medicaid bundled payment schemes are finally forcing hospitals to look at costs. Basically, it's both A and B.
prostoalex 8y ago
> doctors and nurses worked and what they bill hourly Those guys are typically salaried, and that's likely one unknown. Another one is the legislatively imposed obligation that they provide [expensive] ER services to anyone who walks in regardless of insurance coverage requiring the hospital to potentially eat up the cost.
- thaumasiotes 8y ago
  Doctors are typically salaried; it was my impression (my mother is a doctor) that nurses are typically hourly. At least, she always quotes nurse rates as hourly.
- amanaplanacanal 8y ago
  I wonder how much those free ER services actually cost. It comes up in conversation, but is it 1% or 50%?

titusjohnson 8y ago

I don't understand why this isn't treated as predatory.

deleted 8y ago
[deleted]
51lver 8y ago
Because the predators made the rules.
- moate 8y ago
  And have other large predators (lobbyists) protecting everything.

megaman8 8y ago

Absolute insanity. This should be made illegal... seriously, if policians have enough time to deal with privacy issues and gdpr and they should have enough bandwidth to deal with stuff like this.

kentosi 8y ago
I'm pretty sure that GDPR is for Europe, whereas this article is about the US.
craftyguy 8y ago
US politicians apparently don't have time to deal with privacy issues and gdpr. They're too busy trying to keep people out of the country, give tax breaks to wealthy folks, repeal health benefits, prolong armed conflicts, and tweet about how great they are making america.
- module0000 8y ago
  >> US politicians apparently don't have time to deal with privacy issues and gdpr. They're too busy ...trying to get re-elected. Every action they take is with that singular goal in mind.
  - craftyguy 8y ago
    Right.
  - stevenwoo 8y ago
    Or make rules and regulations for an industry for which they will transition into direct hire or lobbying after serving in Congress.

gowld 8y ago

> 119 tiny plastic containers of allergens were taped to her back over three days of testing > Winston's health insurer, Anthem Blue Cross, paid Stanford a negotiated rate of $11,376.47. > She made the argument that her doctor had told her the cost per allergen would be about $100 $48K is some phony list price that doesn't matter. Maybe that's higher than it should be, based on the comparison to averages and medicare, but I don't see where the shock comes from, as she (+insurance) was billed 99% of what her doctor told her it would cost.

dpark 8y ago
> $48K is some phony list price that doesn't matter. It does matter, though. These high list prices sacrifice the uninsured for larger chips at the insurance negotiation table. The uninsured don't have anyone negotiating rates for them so they end up paying the list price (or going bankrupt instead).

pettersolberg 8y ago

Business as usual

PHGamer 8y ago

it was only 3k though after everything was said and done. not as much scratch as the title is posted. yes the original charges pre insurance are ridiculous but thats everything.

Pfhreak 8y ago
> yes the original charges pre insurance are ridiculous but thats everything. Why do we do this? (I'm just as guilty as anyone, btw, not calling out you specifically.) Why do we acknowledge that the system is totally broken, then shrug and say, "Medical prices sure are weird, nothing we can do." It seems pretty rare to see the conversation turn towards, "It was only 3k after everything, but the original prices were way out of line with what they should have been. We should really try to fix that."
- asdkhadsj 8y ago
  Perhaps it's an innate behavior to reduce items of discussion to actionable and in actionable? Ie, there's so many things to discuss these days and so much of it is wrong, broken, corrupt, etc; rather than labeling everything "we should really try to fix that" I think humans naturally ignore what they feel that can't change. I hope it's clear that I'm not choosing a side here, I'm simply discussing your question - why do we do that?
- dpark 8y ago
  Providers do this because it's a bargaining chip when negotiating rates with insurers. An insurer will say "this procedure should only cost $100". The provider will counter by showing that their "list" price for the procedure is $1200. They'll compromise on $250 and some uninsured schmuck will go bankrupt trying to cover the "list" prices. It continues because 1) Having absurd prices is not illegal. Of course absurd prices are usually self-correcting. 2) It's politically infeasible to fix this because it means "someone" (aka the government) has to mandate what the prices should be.

pleasecalllater 8y ago

This one thing keeps me from moving to US. Here in Europe I can pay about $50 for a set of 10 allergy tests (if I go to a private clinic). I pay about $10 per month for a national health insurance for my whole family (I pay much more, but most of that is deductible from income tax - so when I calculated how much money would I have if I wouldn't pay this, it was $10). As my wife is sick, she needed some special treatment. For the first days in hospital she got antibiotics, 4 times a day, $300 per injection. I payed nothing. Then she got some more drugs, sometimes a box for 5 days was worth about $3k - I payed nothing. When our kids were born and spent the first 6 weeks in hospital on an ICU, the cost was about $150 - I payed nothing. When they had to get a special medicine for $4k - I payed nothing. And yes, my taxes are a little bit higher than in US, but come on, I'd go bankrupt if I had to pay for all that. Or rather: I wouldn't pay, I'd live on street, and we would be dead now.

craftyguy 8y ago
That is the one thing that keeps you from moving to the US? Granted, it is a pretty big problem, but I'd say it is far from being the only thing the US gets wrong that the EU generally gets right.
- pleasecalllater 8y ago
  This is The Thing. The list is much longer. On the other hand there are many problems that are worse here as well. But for me the main thing is that in US people are dying or lose everything just because someone in the family got sick. This is sick!
  - craftyguy 8y ago
    Long prison sentences for non-violent crimes also ruin lives. Police indiscriminately killing unarmed citizens because they are armed and trained to shoot first also ruins lives. Non-existent support for mental health problems also ruins lives. Major homeless problems in all major cities with no long term solutions also ruins lives. Shall I go on?

Rafuino 8y ago

My company has been pushing a high deductible plan exclusively provided by Stanford. They would NEVER answer questions about pricing up front in the year I tried the program, so I switched back to another provider that does (Kaiser). Stanford is a complete racket as the article shows.

codyb 8y ago
I always pay extra when given the option for the low deductible plans and the one time I hurt myself snowboarding and needed physical therapy it paid off tremendously. Being on the hook for 5000 worth of care would have been a tremendous burden where as whatever I was on the hook for (maybe a fifth of that? Maybe less?) was not so much. There's also differences in fee scheduling which makes a huge difference. For instance if you're on a medicaid fee schedule they tend to charge less for a lot of things making it a lot more difficult to ever hit your deductible putting you on the hook for more charges over time. If you're on a standard fee schedule you'll hit your deductible faster. It's all incredibly confusing in the end and very hard to figure out and most people don't until something happens and then it's "oh shit I'm getting fucked aren't I?". Not a great system, and pretty pathetic for the richest country in the world to bring so much hardship (as noted, something like 50% of bankruptcies are due to healthcare costs) upon it's citizens in times when they're probably already in some of the most stressful situations of their lives.

sonnyblarney 8y ago

Everyone in the medical industry is complicit. Doctors, nurses - even if they are removed from it - they are essentially corrupt and responsible - they cannot wash their hands of it. This is a deep, deep social problem in the US - far bigger than many of stupid things they talk about in the press. It's probably bigger than prison reform, policing issues, privacy etc.. It might be the #1 social problem in the US given how many people it affects (basically everyone), and the vast sums in involved. 50% of bankruptcies are due to medical bills. In 100 years I think they will look upon this period as Dickensian. I think free markets are important but I'm not sure if any of this is free market at all ...

mkirklions 8y ago
Not nurses, not Doctors of Physical Therapy, not ocupational therapists. Physicians, Pharmacists, pharma companies, hospitals, insurance companies, and pharmacies are the corrupt ones. Source: https://www.opensecrets.org/lobby/top.php?indexType=s https://www.opensecrets.org/lobby/top.php?indexType=s These groups are lobbying the government to establish monoplies. The previously mentioned practices are not paid anywhere similar to the ones lobbying/bribing.
- sonnyblarney 8y ago
  Doctors and Nurses I understand are not directly involved, but they reap the rewards and are close enough to be complicit. If Doctors guild's wanted this changed, they could. They have immense power. The problem might be that nobody knows what the answer should be: it may not be socialized medicine. But some basic things like price transparency, 'one price for all' (i.e. have to charge everyone the same price), requiring people to be informed ahead of time of the costs etc. might help.
lettergram 8y ago
> I think free markets are important but I'm not sure if any of this is free market at all ... For reference, I worked in a large medical billing office for years. It's not a free market, it's the opposite. Completely socialized, just in a very round about way. Medicare pays roughly 10% of any bill that's charged. It's a flat rate now (but remains about 10% of what insured people pay). Essentially anyone with insurance is "taxed" by having to pay 100% (then negotiated down by the insurance companies). You legally cannot not have insurance, if you make over a threshold (in part due to Obamacare), which has made the issue worse. The above combined with the inability to see prices beforehand and the way the U.S. foots the bill for the worlds medical research has made it pretty insane. IMO the ideal solution is to make insurance illegal. Hospitals then need to manage the cost and risk of running procedures. Yes, this means some people get worse treatment, however -- they also only get paid if you live and are happy. The incentives are then aligned, and the hospital manages the risk so better hospitals stay in business longer. There may be some middle ground there, but having worked in the industry, it's the only "good" solution I see.

zaroth 8y ago

I've commented on HN specifically about Stanford billing in the past. I will stick my neck out and say that I believe it is straight up fraudulent. I am convinced, although I have no evidence, that there is a kickback somewhere along the line back to the insurance company for approving the inflated bill, knowing that they can kick 20% of it over to the customer as co-insurance. I had my own Stanford bill for a child's ER visit which included a basic blood chemistry and a single shot of insulin that turned into a 5-figure bill of which they wanted me to pay 20%. They "coded" the visit as intensive care, even though my child never left a basic exam room, and the only treatment was a subcutaneous injection. The good news is that after a year of fighting they wrote it off and I paid nothing. But it took about 100 hours of calls, letters, and threats. Patients should not have to go through this. I blame the regulators. I blame the insurance company. But most of all, I blame Stanford Hospital. They should have their non-profit status revoked, because in fact, they are one of the most profitable hospitals in the country.

pkaye 8y ago
This is why I prefer the Kaiser Permanente system. It has its drawbacks but there is much better out of pocket cost certainty. When I go to ER, I know exactly what it will cost. $100 if not admitted or $0 if admitted. My blood tests are $20 per draw as are my doctor visits. I'm also on dialysis so use them a lot. However they set it up to exclude copay for 1 visit and blood draw per month. So my OOP costs are pretty low despite my health situation.
mitchell_h 8y ago
Check your credit. My second son was born a month early and spent 3 days in the NICU. 3 years later I was getting fresh bills from doctors I couldn't remember. Spent another year arguing with the hospital, the doctors and the facilities people(hospital and floor space and doctors all are different bills!!!!!). After a year they "wrote off the bills" what they actually did was stopped chasing me or accepting my calls, and put a knock on my credit report for the debt. it was another year of fighting those.
- zaroth 8y ago

mbesto 8y ago

https://finance.yahoo.com/quote/UNH/financials?p=UNH https://finance.yahoo.com/quote/UNH/financials?p=UNH $201B last year, from one insurance company alone. That's how much money flows through just ONE healthcare insurance carrier in the US. JUST ONE. For the technical crowd out here, Amazon did $177B last year in sales. Americans are spending more money on healthcare insurance on the largest healthcare insurer than they spend on retail from the largest retailer in the US. The difference? Amazon: - I can freely decide to use them or not. I'm not penalized if I don't - I know exactly how much something is going to cost and can shop around online (at competitors even) UHC: - If I chose a doctor out of network, I get penalized - I have no idea what the pricing is and it can change at any moments notice

cryptonector 8y ago

> Her Stanford-affiliated doctor had warned her that the extensive allergy skin-patch testing she needed might be expensive, Winston said, but she wasn't too worried. After all, Stanford was an in-network provider for her insurer — and her insurance, one of her benefits as an employee of the state of California, always had been reliable. And here we have one of the biggest problems with the American health care system: a) no one knows the cost of anything (except insurers), b) customers feel no need to be cost-conscious. They tested her for 119 allergens, but from her symptoms they could probably have cut that way down, and tried an iterative process (trial and error) that should have cost much much less. But the patient "wasn't too worried" because the insurer "always had been reliable". If we went back to old-style insurance (think Blue Cross & Blue Shield), you know, you pay 100% until deductibles are met, then they pay 80% and you pay 20% up to some cut-off after which they cover 100% up to some large max... then patients would become cost-conscious. Doctors (or their assistants) would have to be able to quote prices on the spot. All the per-network variation in prices would be reduced or eliminated. Patients would be able to negotiate prices with doctors!! Imagine that, people negotiating prices. In a world where no one feels the need to negotiate, no one knows how to negotiate, and no one bothers to negotiate, and so when costs mount all we know how to do is complain. A free market needs pricing signals. The American health care market lacks pricing signals. The American health care market isn't functioning very well like a free market. Indeed, there's a ton of regulation too that, along with the HMO/PPO/everything-but-traditional-insurance system serves to increase costs and hide this from the consumer until it is too late. The most sensible reforms at this point would be those that make the system more transparent to the consumer before they consume. On top of all this we have tremendous protectionism: - it's too hard to become a doctor - it's too hard to build new hospitals (you need a "certificate of need" -- did you know about that bit of protectionism??) - FDA regulation makes generics manufacturing really difficult (my father tells me how he can't sell chemicals to generics manufactures even at 25% of what they pay someone else because the regulatory cost of switching sources is so high) Our system is practically designed to produce ever more cost inflation for health care. EDIT: Let's not overlook, either, the conflict of interest that the doctor in this (and every case) had! The practitioner in this case ordered practically every test without quoting the customer a price, thus ensuring a bigger payday for themselves. Sure, they said it might be expensive, and sure, the customer acquiesced without inquiring further, but the practitioner almost certainly didn't care whether the customer could afford this, and they didn't know the final price either. This conflict is unavoidable, naturally, but that doesn't mean that we cannot deal with it reasonably. Doctors should absolutely be required to quote prices to their customers prior to performing procedures or ordering tests, and generics substitution should always be permitted.

dmckeon 8y ago

> Total bill: $48,329, including $848 for the time Winston spent with her doctor. > Winston's health insurer, Anthem Blue Cross, paid Stanford a negotiated rate of $11,376.47. > Stanford billed Winston $3,103.73 as her 20 percent share of the negotiated rate. > ... > Winston ultimately paid $1,561.86 out of pocket. 48329.00 nominal bill 14480.20 R == ~30% of nominal bill 11376.47 ~80% of R - negotiated rate Anthem paid 3103.73 ~20% of R - billed to patient 1561.86 patient paid, negotiated So, the patient paid 3.23% - or about 50% of 20% of 30%. Imagine if other businesses charged like this. Imagine going into a restaurant, or a furniture store, or an auto mechanic, and being told "It's not expensive" without a specific price, and then finding out that the bill is supposedly 30x your typical expected monthly cost. Whoops, no, 10x. Oh, really 2x. Okay, 1x. If a billing process like this happened to a character in a movie viewers would describe it as farcical or unrealistic. But many people in the US accept it as normal. How did we get here? More importantly, how to we get to something better?

mamon 8y ago
The point is, in most EU countries the bill would be maybe 300-400 USD. Not just the patient co-payment, the whole sum. So the US healthcare is overpriced by the factor of 120x.
- noonespecial 8y ago
  Seems like the $50k "bill" might just be sneaky way to get the patient to fork over the 1.5k instead of the 300. All the rest is a hand-wavy misdirection. Is it even possible to know if, after all the shells stop moving, the insurance company really "paid" anything like they said they did? Or was the real cost of service the 1500 and everything else just expensive theater funded by the insurance "premium"?
  - csomar 8y ago
    Yes.
  - cosmie 8y ago
    Health insurance companies in the US are legally obligated to[1]: 1. Spend 80-85% of premiums on medical spending (with a loophole that "quality improvement" initiatives count). That leaves 15-20% for overhead and profit. 2. Rebate you any excess they collect if they don't meet that medical spending requirement[2]. 3. Justify large rate increases. The insurance company really does pay those costs, rather than playing theater. They have absolutely no incentive whatsoever to limit inflated passthrough costs, and every incentive to justify as high of passthrough to providers as possible. Any attempt at cost control above the bare minimum will result in cannibalizing their own profit potential, because they're not allowed to keep that improvement. And the more inflated the passthrough costs, the more they can justify large rate increases (which then increases the absolute size of the 20% they're allowed for non-medical spending). But wait. Only their health insurance arm is subject to such profit capping. Now that "market rate" for various intermediate services has been established at such an excessive level within the environment of payers having no incentive to reign in costs, they can gobble up some of those middlemen and reap the benefit of those crazy profit margins. Because their insurance arm is complying with their 20% overhead mandate, but their newly acquired PBM has no such mandate on profit[3]. That way the profit transfer from one internal entity with a statutory profit limit to another without one is seen as kosher and not a run-around. So it is theater, in a sense. But it only works because it didn't start out as theater. They had to truly passthrough costs and get acceptable and normal market rates established, then start gobbling up the intermediaries in the value chain that they fattened up. If they hadn't done that, it would have looked like self-dealing from the outset and never would have been successful. Whereas now they're able to hand-wave it through regulatory approval with vague promises of efficiencies. [1] https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-... [2] Individual plans rebate to the individual. Group/Employer plans rebate to the employer, and don't have to pass it through to the employee if they can think of a way to "apply the rebate in a way that benefits employees". [3] https://www.hallrender.com/2018/03/16/the-wave-of-pbm-and-insurer-integration-continues-as-cigna-and-express-scripts-announce-a-merger-of-their-own/ https://www.hallrender.com/2018/03/16/the-wave-of-pbm-and-in...

crb002 8y ago

Somebody needs to start suing these providers for fraud like consumers did to RR Donnley publishing a few years back were they were caught regrouping their price schedules to maximize their profit while telling customers they were optimizing to give them the best cost. Consider McDonald's Dollar menu pricing. Same thing sold, how you group it matters on the bill.

usaphp 8y ago

And on top of that my insurance premiums for a family of 4 is constantly being increased by at least 20% year over year, and that considering that we have not visit any doctors with my wife in the last 3-4 years and only do regular checkups for kids once a year ...it’s getting ridiculous to pay 1300$/month for the cheapest possible insurance of family of regular size. And we still have to pay ~$100-120 for each visit and have a 7k deductible ...