All men are created equal (but some bits just cost more)
May 28, 2013 6:52 AM   Subscribe

As part of the Affordable Care Act, The Centers for Medicare and Medicaid Services has released data that show significant variation across the country and within communities in what hospitals charge for common inpatient services. (via)
The data showing the range of hospital bills does not explain why one hospital charges significantly more for a procedure than another one. And Medicare does pay slightly higher treatment rates to certain hospitals — like teaching facilities or hospitals in areas with high labor costs.

Mr. Blum, the Medicare official, said he would have anticipated variations of two- to threefold at the most in the difference between what hospitals charge.

However, hospitals submitted bills to Medicare that were, on average, about three to five times what the agency typically pays to treat a condition, an analysis of the data by The New York Times indicates. And variations between what hospitals charge may be even greater.


Hospital Billing Varies Wildly, Government Data Shows
Meanwhile, a recent projection shows that Medicare spending has fallen by $500 billion or even up to $711 billion.
On a per enrollee basis, premium growth is expected to reach 7.1 percent in 2014, up from 4.1 percent in 2013, as a result of more generous health plans being offered to people eligible for government subsidies. For 2015-21, growth in private health insurance premiums is projected to slow somewhat and to average 5.9 percent annually, in part due to an expectation that some large employers of low-wage workers will discontinue coverage, resulting in their employees gaining coverage through Medicaid or the exchange plans. Further, in 2018, a provision from the ACA imposes an excise tax on high-cost private health insurance plans. This is expected to lead to affected enrollees shifting from more generous plans to lower cost plans that have tighter utilization requirements, narrower networks, or higher cost-sharing.

CMS's National Health Expenditure Projections 2011-2021
posted by dubusadus (69 comments total) 17 users marked this as a favorite
 
If gas stations didn't show you what you were being charged for gas, and you were presented that information only after you'd filled your tank, there would be wild variations in billing, even in gas stations right across the street from one another.

This is certainly important to report, but should come as no surprise whatsoever.
posted by mcstayinskool at 7:12 AM on May 28, 2013 [19 favorites]


If gas stations didn't show you what you were being charged for gas, and you were presented that information only after you'd filled your tank, there would be wild variations in billing, even in gas stations right across the street from one another.

A couple more points to complete the analogy: you would definitely have to fill your tank (no fair buying 1 gallon just to comparison shop), relatively few people would ever need to buy gas* (so there's little market for a price comparison service), different cars would have to be restricted to different brands of gasoline, and cars would need to lack any information about fuel economy, gas tank size, or the level of gas in the tank, so drivers couldn't plan ahead when they needed to buy gas. Instead, they would often have to buy gas from a handful of gas stations close by, further limited to those brands their car accepted.

* Just about everyone needs health care at some point, but relatively few people need any given significant service.
posted by jedicus at 7:21 AM on May 28, 2013 [3 favorites]


If gas stations didn't show you what you were being charged for gas, and you were presented that information only after you'd filled your tank, there would be wild variations in billing, even in gas stations right across the street from one another.

Gas insurance!
posted by goethean at 7:22 AM on May 28, 2013 [5 favorites]


I would like someone to use this data to make an iPhone app that tells people, based on their location, which hospital they should go to to get the cheapest service. It wouldn't have much practical benefit, but would be a nice piece of programming theater.
posted by Going To Maine at 7:24 AM on May 28, 2013 [16 favorites]


And if your car has certain features or pre-existing problems then you get to wait to pay to be towed to a service station that would like to deal with you.
posted by iamkimiam at 7:25 AM on May 28, 2013 [2 favorites]


And every time you fill up, you'd have to fill out a 12-page form describing every maintenance activity that has ever taken place on your vehicle, which would then be entered into a computer by a mechanic while they talk to you about it.
posted by RobotVoodooPower at 7:29 AM on May 28, 2013 [5 favorites]


This data tells me one thing: I fucking love living in Massachusetts.

Universal health care.
Cheap prices.
Some of the best hospitals in the country.
posted by Peevish at 7:32 AM on May 28, 2013 [6 favorites]


Until now, these charges were competitive secrets in the industry.

How's that? "Don't tell Medicare that we charge twice as much?" is only a competitive secret in that it results in some hospitals undercharging the government.

Now that the truth is out and these hospitals know how much they are being taken for, doesn't everything now get more expensive for Obamacare? It would seem optimistic, to say the least, to expect that Manhattan clinics are gonna start charging Alabama prices.
posted by three blind mice at 7:36 AM on May 28, 2013


Transparent pricing should be required. If we want the market to come up with solutions for driving down prices in healthcare (we really don't) then the consumer needs to have the ability to make informed choices about their treatment.

But healthcare is definitely one area where you generally don't have a choice when seeking it out (because you generally don't want to die) and you have no real understanding of the relative value of treatment. Hell the person across the hall from you being seen by the same doctor's could be paying a completely different price.

Going to a model where pricing is transparent and their is a nominal charge for treatment similar to the French model would generate massive savings.
posted by vuron at 7:38 AM on May 28, 2013 [2 favorites]


"injuries sustained from a turtle," "walking into a lamppost" and "injuries sustained from burning water skis."

I can't imagine why there is a discrepancy.

As the article points out, there are currently 18,000 medical diagnostic codes. Obviously, not every medical diagnosis is going to have the exact right code, so hospitals will make the diagnosis fit a code. Also, the people putting in the code probably do not give a crap if they input a code correctly or not.

This will only get worse, and funnier.
posted by otto42 at 7:39 AM on May 28, 2013 [1 favorite]


Best joke I heard recently:

"The Canadian version of Breaking Bad is really boring and lasts just one episode. Walter White gets his cancer treated. The End."

Blew me away to think that this critically acclaimed series hinges on our unspoken, collective understanding and acceptance of a healthcare system we all know to be unfair and inhumane.
posted by Cool Papa Bell at 7:40 AM on May 28, 2013 [119 favorites]


Now that the truth is out and these hospitals know how much they are being taken for, doesn't everything now get more expensive for Obamacare?

In theory, prices fall because more people are added to the insurance pool -- this is why people are being required to buy insurance.

But if the prices are transparent and flat, like you say, then hospitals double down on their competition based on quality and availability of service. Not a bad thing.
posted by Cool Papa Bell at 7:45 AM on May 28, 2013


Going To Maine: "I would like someone to use this data to make an iPhone app that tells people, based on their location, which hospital they should go to to get the cheapest service. "

Trust me - thanks to the Medical Loss Ratio rebates implemented as part of ACA, insurance companies are already going to start doing this for you.
posted by MCMikeNamara at 7:47 AM on May 28, 2013 [1 favorite]


From the NY Times:

Data being released for the first time by the government on Wednesday shows that hospitals charge Medicare wildly differing amounts — sometimes 10 to 20 times what Medicare typically reimburses — for the same procedure, raising questions about how hospitals determine prices and why they differ so widely.

It seems a bit silly to act like this data is surprising or somehow raises questions that we didn't have before. While we may not have had this specific data set, the general idea of varied payments is not new. This is pretty basic stuff.

Putting aside the (very real, very important) facts that the receiver of benefits is not usually the person who sees and pays for the bill and frequently the bill is not discussed until after the fact, the government's stance on medicare payouts tends to be to respond to a bill with a percentage of what is asked. Simple bargaining tactics thus arise, wherein hospitals ask for significantly more than they could ever hope to be paid, assuming that if they really want $10k they'll ask for $50k and allow the government to "argue them down" to their real price.

This is also why medical coding departments are becoming so important to hospitals. A variety of things that were already happening and the costs of which were just assumed as cost of doing business are being quantified in bills to medicare, pretty much to reverse the effect of reductions in payments for the big ticket items on the bill. To do this, you need much better coding practices than many institutions previously had.

It's not really that different from airlines reducing ticket charges due to pressure from customers, and recouping it by charging fees for checked bags.
posted by tocts at 7:48 AM on May 28, 2013 [1 favorite]


So, basically Philly and southern Cali are screwing the rest of us.

I read recently that the rise of startups analyzing medical data was one actually one of the best effects of Obamacare. Is that because there is language in the legislation making available this data, which was previously kept secret, or just that there's more of an incentive to care about cost now that we're (collectively) footing more of the bill?

three blind mice: "Now that the truth is out and these hospitals know how much they are being taken for, doesn't everything now get more expensive for Obamacare? It would seem optimistic, to say the least, to expect that Manhattan clinics are gonna start charging Alabama prices."

I would expect (hope) that the result of this information coming out is that Medicare/Medicaid takes closer scrutiny of charges, if not implements a standardized rate card.

Going To Maine: "I would like someone to use this data to make an iPhone app that tells people, based on their location, which hospital they should go to to get the cheapest service. It wouldn't have much practical benefit, but would be a nice piece of programming theater."

The main reason this discrepancy exists is because patients don't pay their bills directly. They have no incentive to pick their provider based on cost.
posted by mkultra at 7:50 AM on May 28, 2013 [1 favorite]


Walter White gets his cancer treated.

Or not. Same short season however.
posted by three blind mice at 7:51 AM on May 28, 2013


This data tells me one thing: I fucking love living in Massachusetts.

Universal health care.
Cheap prices.
Some of the best hospitals in the country.


Thanks again, Mitt! (Well, thanks to the Dems, too)
posted by filthy light thief at 7:52 AM on May 28, 2013


I would expect (hope) that the result of this information coming out is that Medicare/Medicaid takes closer scrutiny of charges, if not implements a standardized rate card.

But Medicare already knows this right? They've been paying the bills.
posted by three blind mice at 7:53 AM on May 28, 2013


"The Canadian version of Breaking Bad is really boring and lasts just one episode. Walter White gets his cancer treated. The End."

I laughed, I cried, and then I continued to cry because, oh god, this is so depressing.
posted by C'est la D.C. at 7:57 AM on May 28, 2013 [2 favorites]


Walter White gets his cancer treated.

Or not.


Perhaps I missed the part of the show where he was dying for a knee replacement. You could instead refer to Wait Times in Canada—A Comparison by Province, 2011, in which the wait time benchmark for radiation therapy to treat cancer was "within four weeks of patients being ready to treat." Most provinces were within 90% of that target, with Manitoba meeting that benchmark 100%, though Nova Scotia and New Brunswick were at 85% and 87%, respectively.
posted by filthy light thief at 7:59 AM on May 28, 2013 [28 favorites]


Or not. Same short season however.

Nopeitty nope nope. There's a reason you see hip and knee replacements on scare lists like that: they're not critical or life-saving.

Cancer shit gets done fast. My mother in law went from initial diagnosis to Whipple in about a month, and IIRC could have had it earlier, and was on chemo and radiation as soon as she had recovered enough to tolerate it.

That said:

I haven't watched more than a couple of episodes of Breaking Bad. But I don't remember Walter's motivation being "I need money for cancer treatment" but rather "I have untreatable cancer and am going to die soon, and I want to leave my family a pile of money, so I have crazily decided to sell meth to generate the money to leave them."
posted by ROU_Xenophobe at 8:01 AM on May 28, 2013 [18 favorites]


I once had to have emergency surgery while visiting friends in another state. I was worried about what my insurance would pay so far from home, and the doctor said, "Your insurance company will thank you for having it done here where it costs so much less than at home." I didn't find the exact procedure on the charts in the link, but yowza. It looks like most procedures cost 3-4 times as much in my state than in his.
posted by The Underpants Monster at 8:02 AM on May 28, 2013


Now that the truth is out and these hospitals know how much they are being taken for, doesn't everything now get more expensive for Obamacare?

I dunno. Is that how it works in Sweden?
posted by rtha at 8:02 AM on May 28, 2013


Even within the same community, what a hospital needs to charge Medicare to make ends meet is not always the same thing. Most of these are non-profits. They are not bilking the government to line someone's pockets, they are trying to stay open in a really difficult economic and regulatory climate.

The one system in my area that bills above-average is, I think not coincidentally, the one that seems to be doing halfway decent and is not constantly understaffed and falling apart.
posted by Sequence at 8:12 AM on May 28, 2013 [2 favorites]


Healing America is a fantastic survey of healthcare models across the globe. I recommend it highly for those engaging in the back and forth over whether Canada/Sweden/France/UK/Switzerland/Taiwan/Germany/Japan has a better system than the U.S. (spoiler: none of them are perfect, strong argument that most or all are better than the U.S., all are better than India and the third world; also, I like France the bestest)
posted by mcstayinskool at 8:13 AM on May 28, 2013 [3 favorites]




Hi I used to work in medical insurance! One reason for price variation is that every insurer negotiates contracts with every provider. Doctor X signs up with United and they say "We'll pay you $X for X procedure!" Doctor X might then be approached by some other insurer who says "We'll pay you $X+1 for X procedure!" And so on. When insurers don't offer enough, doctors will threaten to drop out. Lawyers are involved. It is extremely expensive.

Insurers also do this with entire hospitals, though, as we all know, many procedures come under billing through hospitals versus through an outside lab (different contract) or anetheseologist (almost always a different contract), thus giving you all the fun of receiving 20 bills for tiny aspects of that one procedure you had done.

And we haven't even gotten to padding bills, overcharging in general, or, at the verrrry bottom, whether a procedure was a) the best one to get and b) had a good outcome.

To say coders are "becoming important" is a vast understatement. Coding is a finely-tuned machine for denying, reducing, and tracking coverages and payouts of every tiny aspect of every medical procedure. There are specialists who come into hospitals and look into every aspect of their coding to see how they could be coding better to get more money; the insurance companies have their own, competing specialists to prevent anything being coded in a way they don't want it to be coded.

And in the middle are the private companies buying coverage for their employees, who are exerting their own demands to keep payouts cheap, in addition to strong-arming their least healthy employees into weightloss, smoking cessation, and other initiatives. Or outright finding ways to fire them (this does happen, especially in small companies when it's clear which sick employees are driving up your premiums).

In short: we need universal, government-managed and funded coverage yesterday, because what we have is a fustercluck of proportions far vaster than most of us even imagine.
posted by emjaybee at 8:31 AM on May 28, 2013 [37 favorites]


But I don't remember Walter's motivation being "I need money for cancer treatment" but rather "I have untreatable cancer and am going to die soon, and I want to leave my family a pile of money, so I have crazily decided to sell meth to generate the money to leave them."

Remember how a major part of Walter's motivation was that Walter Junior would have serious medical issues for the rest of his life? Yeah, Canada would basically pay for those too.
posted by mightygodking at 8:32 AM on May 28, 2013 [1 favorite]


A family member of mine started their own medical practice (reconstructive/plastic surgery) and is having a very tough time. He makes medical decisions based on his best training (most of his work is repairing skin cancer damage, but he's done facial reconstructions and even re-attached a completely severed finger) without knowing if he will get paid. The insurance companies can always decide they will not pay for the service after the fact. Being new, they don't really know how their competitors manipulate the insurance companies. If medicare mandates a fixed price for a certain procedure that is too low to support his practice, it may not be worth it to him to do the surgery, and surgeons wouldn't be able to charge more for better talent/performance.

He goes on call at all the nearby hospitals, and often does surgeries where he doesn't get paid because the patients are uninsured (if he worked for a hospital he would have a regular salary, but as a private practice working on call he has to get paid by the patient's insurance).

They also seem convinced the medical system is headed for a major catastrophe, and ACA has only made the situation worse.
posted by Golden Eternity at 8:37 AM on May 28, 2013


Remember how a major part of Walter's motivation was that Walter Junior would have serious medical issues for the rest of his life? Yeah, Canada would basically pay for those too.

Also paying for treatments with fat stacks of cash.
posted by Artw at 8:38 AM on May 28, 2013


Actually, ICD9/10 coding is a billing kludge, not a finely tuned anything. It was designed for epidemiology in the early 50's. The gold standard for a coder - that is, the analyst who reads the your clinical notes and applies ICD codes to them - is 80% accuracy...whatever that means.
posted by klarck at 8:44 AM on May 28, 2013


But I don't remember Walter's motivation being "I need money for cancer treatment" but rather ...

... "that I am a professional joke-stepper-onner! What's that, Lassie? Timmy fell into a well and doesn't know the difference between Genghis and Kublai Khan? Quickly, to the JokeStepperOnnerMobile!"
posted by Cool Papa Bell at 8:46 AM on May 28, 2013 [1 favorite]


Another Piece of Obamacare Is Working as Extravagant Insurance Plans Are Pared Back
The upside to this is that by creating a substantial incentive for companies to offer health insurance plans to their employees, we create a situation in which most Americans find themselves through happenstance in a decently sized risk-pool. If you eliminated this tax subsidy for health insurance, risk pools would unravel.

The downside is that the tax code creates a bias toward people overconsuming health care services and underconsuming everything else that money might buy. The bias is especially large when it comes to high-income people, for whom tax subsidies are very large due to their relatively high marginal income tax rates.

Most economists and policy analysts have, therefore, long favored either eliminating the tax subsidy for employer-provided insurance to replace it with something else, or else capping or phasing out the tax subsidy. Since the idea of the Affordable Care Act was to be small-C conservative and gradual in its impact, the natural thing to do would have been to cap the subsidy and then phase it out over time as the economy adjusts to the new exchange model. But doing so would have violated Barack Obama's unwise campaign pledge to avoid any tax hikes on any middle-class Americans, so his team instead came up with the slightly kludgy idea of an "excise tax" (like on tobacco or alcohol) to be levied on unusually expensive health insurance plans. It's a bit of a silly workaround, but functionally it works the same way as a phase-out.

Conservative ACA critics in their scorched earth campaign against Obamacare have been insisting that this, like every promising cost-control measure in the law, is doomed to failure and/or will never be implemented. The story today about actual employer and insurer response to the Cadillac tax indicates that, no, it is beginning to have an impact. Note that this is not the first piece of good news about health care spending aggregates, and that by and large we should expect the press' understandable and inevitable negativity bias to underestimate Obamacare.
posted by zombieflanders at 8:47 AM on May 28, 2013 [2 favorites]


The GOP’s dangerous Obamacare strategy
In today’s New York Times, Jonathan Weisman and Robert Pear report on a peculiar problem faced by the Affordable Care Act: Republicans who’re unable to repeal it also refuse to permit any tweaks or technical correction that would help it work better. In fact, they’re creating new problems by withholding implementation funds.

This is a real problem for the law, and for the country. Back in January 2011, I called it the biggest danger for health reform, and I still think that’s right: If it persists, “what America will get is not the Affordable Care Act, and nor will it be repeal of the Affordable Care Act. It’ll be a hobbled version of the Affordable Care Act, where what works isn’t expanded and what fails isn’t replaced. And though that might be better than nothing for the uninsured, it will be pretty terrible policy.”

There’s both a strategy and a principle at play here. The GOP really, truly hates Obamacare. They believe that their best chance to repeal it is to make it as big a mess as possible. Anything that makes it easier to live with makes it harder to get rid of. But they know that the chances of repeal are pretty slim. That’s where the politics come in. They think their best chance to retake the Senate in 2014 is to make Obamacare as big a mess as possible and then ride the outrage in the midterms.

They may be right about that, or they may be very wrong. But this is a theory that requires Republicans to knowingly damage America’s health-care system on the off-chance the damage is severe enough to help them accomplish a much larger policy goal. It’s a theory that requires them to choose to let problems fester because the pain is more politically useful than the cure.

There’s an emergent argument, and some strong evidence, that Obamacare is going to work much better in 2014 than Republicans realize, at least in the states that are actually trying to implement it. Whether that argument is right, few analysts, in my reporting, think the law won’t be figured out by 2015 or 2016. And even under the most optimistic possible future for the Republican Party, they don’t have anyone in the White House willing to sign repeal until 2017 — by which point it will likely be far too late.

The question then is when the GOP makes sufficient peace with Obamacare that they can begin engaging with it constructively and passing bills that fix the parts they and their constituents don’t like. Those laws can, of course, be framed as victories for the Republican Party and admissions by Democrats that Obamacare is imperfect. That’s politics, and it’s fine. What’s dangerous is if the heighten-the-contradictions strategy the GOP is currently previewing persists after 2014, or even after 2016. At some point, if they can’t repeal Obamacare, they need to learn to live with it.
posted by zombieflanders at 8:47 AM on May 28, 2013 [2 favorites]


Ft. Wayne (IN) schools to cut part-time workers hours.
One of the stated reasons is to avoid having to provide healthcare coverage, saving the schools $10 million.
posted by Thorzdad at 8:51 AM on May 28, 2013


Brill's Time Magazine article Bitter Pill: Why Medical Bills Are Killing Us is a fantastically researched story on the problem of insane US hospital billing. All the more impressive because he did it without useful access to this data; instead he collects anecdotes from patients and tries to get hospitals to talk to him on the record about billing (spoiler: they don't want to). Forcing price transparency is one of the smartest parts of Obamacare. One of government's roles is to create fair markets.
posted by Nelson at 8:54 AM on May 28, 2013 [1 favorite]


But this is a theory that requires Republicans to knowingly damage America’s health-care system on the off-chance the damage is severe enough to help them accomplish a much larger policy goal.

Class assignment: explain how this is not literally terrorism
posted by theodolite at 8:56 AM on May 28, 2013 [16 favorites]


Why is this a surprise? The Time Magazine article by Steven Brill answered this question quite effectively I think.
posted by Seymour Zamboni at 8:58 AM on May 28, 2013


One fact that gets downplayed in these discussions is that for the most part "hospital charges" are a ficition that mainly serves hospital administators who want to complain about how many millions in lost charges their hospital has when it serves their purposes. They will also talk about how financialy healthy, whith health budget surpluses, the same hospital is when it serves their purposes.

From the NYT link:
Medicare does not actually pay the amount a hospital charges but instead uses a system of standardized payments to reimburse hospitals for treating specific conditions. Private insurers do not pay the full charge either, but negotiate payments with hospitals for specific treatments. Since many patients are covered by Medicare or have private insurance, they are not directly affected by what hospitals charge.

Experts say it is likely that the people who can afford it least — those with little or no insurance — are getting hit with extremely high hospitals bills that may bear little connection to the cost of treatment.


As Obamacare expands the number of people with insurance those getting hit with the full charge will be fewer and fewer. Even today the people who get charged full price rarely pay, if for no other reason than they simply don't have the money and as the saying goes, you can't get blood from a stone.
posted by TedW at 9:13 AM on May 28, 2013


Most of these are non-profits. They are not bilking the government to line someone's pockets, they are trying to stay open in a really difficult economic and regulatory climate.

Not quite true.
posted by gottabefunky at 9:21 AM on May 28, 2013


They also seem convinced the medical system is headed for a major catastrophe, and ACA has only made the situation worse.

You'll get no argument from me on the first part of that sentence (I think the health care "system" in the U.S. is completely insane), but the second part is entirely nonobvious and requires elaboration.
posted by Steely-eyed Missile Man at 9:25 AM on May 28, 2013 [2 favorites]


If we're going to talk about the price of medicine in the US, we should probably keep in mind this FPP on the one good report ever to appear in Time Magazine.
posted by Rustic Etruscan at 9:25 AM on May 28, 2013 [1 favorite]


This article reminds me of the time I asked a chiropractor how much they charged for a deep-tissue massage if I walked in off the street and paid in cash ($80) versus how much he charged my insurance for the same treatment ($240, exactly 3x) and explained the added cost was his employee time to deal with hassles and paperwork.
posted by mathowie at 9:29 AM on May 28, 2013 [1 favorite]


for the most part "hospital charges" are a ficition that mainly serves hospital administators

That's not really true, those "fictions" regularly drive people into bankruptcy. As Brill's Time article I linked above describes in excruciating detail. Insurance companies and Medicare never pay the chargemaster price, but individuals without insurance are typically billed the full amount. The fact that the hospitals consider it a starting point for negotiation and/or settlement doesn't really make the price insanity any better.

The medical market had no price transparency. Obamacare is forcing that. It's a significant win for the free market.
posted by Nelson at 9:36 AM on May 28, 2013 [2 favorites]


You'll get no argument from me on the first part of that sentence (I think the health care "system" in the U.S. is completely insane), but the second part is entirely nonobvious and requires elaboration.

Three words: Kenyan Muslim socialist.


No. I'm not that close, but I don't think he is very political, though probably a bit on the conservative side. Actually, they lived and worked in New Zealand for a few years (which has basically socialized health care as I understand it), and apparently want to go back partly because the quality of life was so much better, which the grandparents are not happy about.

I'm not that close with him and didn't want to push a political conversation. I think he was concerned that he would have an even bigger problem being forced to provide services at or below cost (or have even more situations where he doesn't get fully reimbursed by insurance companies after the fact). It sounds like his practice is barely profitable and he was massively overworked, and being a private practice if he were ever injured or unable to work he would go bankrupt quickly.

If there is a fundamental problem that health care costs are too high in the U.S. and the money is not always going to the highly trained, highly indebted medical staff, but to administrators, lawyers, and insurance companies, then it is possible that ACA will put a real squeeze on the entire situation by pushing prices down and perhaps some doctors and other hospital workers will suffer as a result? I don't know, I certainly hope ACA is a success.
posted by Golden Eternity at 9:43 AM on May 28, 2013


If there is a fundamental problem that health care costs are too high in the U.S. and the money is not always going to the highly trained, highly indebted medical staff, but to administrators, lawyers, and insurance companies, then it is possible that ACA will put a real squeeze on the entire situation by pushing prices down and perhaps some doctors and other hospital workers will suffer as a result? I don't know, I certainly hope ACA is a success.

Is it possible? Sure, but the intent is that the ACA should make things at least somewhat better for your family member. Right now, he winds up treating a significant number of uninsured patients and generally doesn't get paid for it. Under ACA, many of those patients will be able to get insurance (and as the penalties kick in, will be encouraged to do so), meaning that he'll start to get compensated for more of these procedures.

Victory here doesn't mean that US health care costs have to actually decrease. If we can simply "bend the curve" and lower the health care inflation rate, that's a huge success toward ensuring that a massive proportion of our future GDP isn't wrapped up in health care costs, for which we receive health outcomes no better than nations spending far less.
posted by zachlipton at 10:28 AM on May 28, 2013 [2 favorites]


Most of these are non-profits. They are not bilking the government to line someone's pockets, they are trying to stay open in a really difficult economic and regulatory climate.

There is a common misunderstanding that non-profit equals charity. Nothing could be farther from the truth.

A for-profit hospital tries to make as much money as possible in order to enrich their outside shareholders. A non-profit hospital tries to make a much money as possible in order to enrich the hospital insiders. The only difference is where the money goes -- to outsiders or insiders.

All that non-profit means is that you aren't permitted to distribute money to shareholders.
posted by JackFlash at 10:39 AM on May 28, 2013 [8 favorites]


I wonder if insurers could pay travel expenses and move people with minor problems to cheaper, better facilities and still come out ahead. Ship the dude in Houston who needs a joint replacement to the Mayo Clinic and shave $90k off his bill.
posted by miyabo at 10:48 AM on May 28, 2013 [1 favorite]


That requires 1) insurers care to deal with managing patient travel, and 2) other hospitals have capacity to treat a significant influx of patients.
posted by filthy light thief at 11:11 AM on May 28, 2013


Gee, I wonder if this is related to the for-profit nature of healthcare and insurance in America?
posted by blue_beetle at 11:18 AM on May 28, 2013


Ship the dude in Houston who needs a joint replacement to the Mayo Clinic and shave $90k off his bill.

Better yet, Costa Rica.

Actually, there was an AP article in 2009 reporting that major insurers were considering this. I'm sure they'll figure out how to make this happen one day in their quest for 7% annual growth. (i.e. the new World Plan includes exotic destinations and premium resort stays!)

But some of the prices are so low in comparison you may as well just pay for it yourself. I wonder if I might be forgetting the memory of my next colonoscopy with a drink in a coconut under a palm tree.
posted by RobotVoodooPower at 11:35 AM on May 28, 2013


I wonder if insurers could pay travel expenses and move people with minor problems to cheaper, better facilities and still come out ahead.

There are anecdotes of Canada's provincial healthcare programs doing exactly this when Canadians get seriously injured while travelling in the US. They have arranged to have patients transported hundreds of miles by medivac helicopter back to Canadian facilities because it's cheaper than accruing a five or six figure medical bill for spending a week in an American ICU.
posted by ceribus peribus at 11:39 AM on May 28, 2013


There are anecdotes of Canada's provincial healthcare programs doing exactly this when Canadians get seriously injured while travelling in the US. They have arranged to have patients transported hundreds of miles by medivac helicopter back to Canadian facilities because it's cheaper than accruing a five or six figure medical bill for spending a week in an American ICU.

It's not like the insurance plan is footing that bill; the patient is. OHIP, for example, won't pay more than $400 per day for an ICU outside the country, and won't pay for physicians' services in excess of the going rate in Ontario. Private insurers may find it cheaper to fly people back to Canada, but there's no pressure for OHIP to do so.
posted by one more dead town's last parade at 12:10 PM on May 28, 2013


I think the CEO pay is a derail. There are larger forces in play that affects that, not the least of which are the forces of the free market and the interconnectedness of the chief executives and the board that exists in nearly every major US corporation these days. There has to be a better way of governing a corporate entity, but I'm not sure anybody has found it.

That being said, it's also a bit weird to discuss Medicare reimbursement values with chargemaster prices, and then not even bring up the concept of the innumerable ways of actually billing the patients.

For example, the non-profit healthcare corporation that I work for knocks 20% off of the chargemaster price for self-payors (read: uninsured and underinsured). There's another 20% off if you pay up front... leading to a total discount of 40% from the chargemaster. Every hospital organization can have a different policy for that, but it's hardly ever mentioned.

We also have several clinics that charge a flat fee per visit, regardless of what procedures are done or how long it takes. These clinics are typically ambulatory in nature, so think of typical check ups and urgent care visits. I don't know the exacts, but it's less than a hundred bucks. There are even a few companies locally that utilize that type of healthcare provider for their "insurance" plan. One of our clinics of has been doing it this way for nearly 75 years (although I'm sure the prices have changed a bit since they started).

And let's not even get started on the confusion that ICD10 is going to bring.

tl;dr: Healthcare billing is a mess. If someone is offering you a simple solution, then they're selling you something.
posted by Blue_Villain at 12:18 PM on May 28, 2013


Best joke I heard recently:

"The Canadian version of Breaking Bad is really boring and lasts just one episode. Walter White gets his cancer treated. The End."


Relevant
posted by jnnla at 12:32 PM on May 28, 2013 [1 favorite]


For example, the non-profit healthcare corporation that I work for knocks 20% off of the chargemaster price for self-payors (read: uninsured and underinsured). There's another 20% off if you pay up front... leading to a total discount of 40% from the chargemaster.

And even after that discount, the charge is often still twice the insured rate. Chargemaster prices are so absurd that trivial discounts mean nothing.

Healthcare billing is a mess. If someone is offering you a simple solution, then they're selling you something.

Actually it is quite simple. Every other developed country in the world has figured out how to do it better. The only reason these simple solutions aren't used in the U.S. is because the vested interests in the healthcare industry resist the simple solutions.
posted by JackFlash at 12:33 PM on May 28, 2013


Private insurers may find it cheaper to fly people back to Canada, but there's no pressure for OHIP to do so.

Ahh, that makes sense. I recall Blue Cross / Blue Shield being involved somehow.
posted by ceribus peribus at 12:41 PM on May 28, 2013


The paper calculates that the recession accounted for about 37 percent of the slowdown in health costs from 2003 to 2011. Declining private insurance coverage and cuts in payments by Medicare, (USBOMDCR)the government health plan for the elderly and disabled, accounted for another 8 percent and the remaining 55 percent is “unexplained,” Cutler wrote. That’s where the structural changes come in, he said.

So, basically, americans got at least 45% less medical care because of the recession, and these fuckos are celebrating because they think that they can ascribe the rest of the "bend" in the growth curve to unknown structural factors.

Killing people with numbers.

The medical market had no price transparency. Obamacare is forcing that. It's a significant win for the free market.

Health insurers, the people who write the checks for most healthcare, certainly know what it costs. There is no free market for health care and you should know that.
posted by ennui.bz at 2:24 PM on May 28, 2013


Does anyone know if the ACA requires providers to simplify billing for patients? There's no logical reason for a patient to get multiple bills for a single procedure. That responsibility clearly belongs to the hospital or practice doing the billing. If I order a pizza online I don't expect to get separate bills from the flour company, tomato farmer, etc. It's outrageous.

For example, every time I go to my pain clinic to refill my meds (every 2 months) I get a bill from the clinic and then a different bill from an anesthesiology provider (even though no anesthesiology is being done). And when I had back surgery I nearly had to go back to grad school in math to figure out what the hell was going on.
posted by freecellwizard at 2:40 PM on May 28, 2013


"injuries sustained from a turtle," "walking into a lamppost" and "injuries sustained from burning water skis."

I can't imagine why there is a discrepancy.

As the article points out, there are currently 18,000 medical diagnostic codes. Obviously, not every medical diagnosis is going to have the exact right code, so hospitals will make the diagnosis fit a code. Also, the people putting in the code probably do not give a crap if they input a code correctly or not.

This will only get worse, and funnier.


Rand Paul Mocks Obamacare For ‘Turtle Bite’ Diagnostic Codes Ordered By The Bush Administration
On Monday, several news outlets highlighted comments that Sen. Rand Paul (R-KY) made to the Iowa Republican Party earlier this month in which he mocked an Obamacare provision for being burdensome and silly. Paul ridiculed the health law for forcing doctors to use 122,000 new medical diagnostic codes for describing Americans’ injuries to the government, including for “injuries sustained from a turtle” and “walking into a lamppost.”

The new codes do, admittedly, exist. There’s just one problem with Paul’s claims — they were adopted by the George W. Bush administration, long before Obamacare was even being debated.

Paul is referring to the transition from the ICD-9 — the current system of medical code classifications that originated from the World Health Organization (WHO) — to the far more detailed ICD-10. That’s a change that was mandated by the Bush White House in its waning days and is reflective of changing international standards for coding care. Many countries have been using the updated codes for over a decade.

In a press release from August 15, 2008, Bush’s Department of Health and Human Services (HHS) wrote that it had issued rules to implement “a long-awaited proposed regulation that would replace the ICD-9-CM code sets now used to report health care diagnoses and procedures with greatly expanded ICD-10 code sets, effective Oct. 1, 2011.”

Several medical groups, including the American Medical Association (AMA), balked at that timeline, arguing that it was too short a window for implementing such a large, complicated change to the way that hospitals code Americans’ procedures, injuries, and diseases. The Bush HHS listened to those concerns, delaying ICD-10 implementation to October 2013. The Obama administration sustained that postponement, and then delayed implementation even further to to October 2014 at the request of the health care industry.

It’s possible that Paul’s confusion stems from the shifting timeline, since much of Obamacare also goes into effect in 2014. But the health law has nothing to do with the specific codes that Paul mocked in his speech — and as the Bush HHS release shows, the decision to shift to the ICD-10 started before President Obama even took office.
posted by zombieflanders at 4:26 PM on May 28, 2013 [2 favorites]


Like that matters.
posted by Artw at 4:29 PM on May 28, 2013 [1 favorite]


The only reason these simple solutions aren't used in the U.S. is because the vested interests in the healthcare industry resist the simple solutions.

The actual healthcare industry, the providers, probably don't care all that much. Who cares are the administrator types and the insurance industry, who get to skim off the top of every dollar that we spend on healthcare.
posted by gjc at 6:51 PM on May 28, 2013


The actual healthcare industry, the providers, probably don't care all that much.

Oh, the providers care plenty. In the U.S. general practitioners earn 50% more and specialists earn 100% more than providers in the rest of the developed world. Doctors through the AMA and other lobbyists tightly limit the number of medical school slots and severely restrict foreign doctors in order to control competition and keep their incomes high. Doctors per capita is the lowest in the developed world.
posted by JackFlash at 7:07 PM on May 28, 2013 [1 favorite]


What are the chances that Walter White's fictional cancer would have been caught before it became inoperable in Canada? In the US? How about if he were homeless instead? How about if he'd had a very lucrative career in chemistry with dozens of patents to his name instead of being a noble high school teacher?

Where are numbers for that?
posted by fragmede at 9:49 PM on May 28, 2013


I don't think people are allowed to be that angry in Canada.
posted by Artw at 10:13 PM on May 28, 2013 [1 favorite]


Brill's Time Magazine article Bitter Pill: Why Medical Bills Are Killing Us is a fantastically researched story on the problem of insane US hospital billing.

Previously: We are powerless buyers in a sellers’ market
posted by homunculus at 1:53 AM on May 29, 2013


Health Care and Social Justice
[I]f you look at a map of which states are refusing the Medicaid expansion, and then look at this report from the Urban Institute, a troubling (if predictable) trend emerges. Approximately a fifth (about 18 percent) of all people who will remain untouched by the Medicaid expansion are black. When you start drilling down to the states where those black people tend to live, it gets worse. In Virginia and North Carolina, 30 percent of those who are going to miss out are black. In South Carolina and Georgia, the number is around 40 percent. In Louisiana and Mississippi, you are talking about 50 percent of those who would be eligible for the expansion but who will go uncovered.

You look at Latinos and get a similar (and to some extent worse) picture. Nationally, Latinos make up 18 percent of those who stand to get health coverage. But in Arizona -- where the legislature is fighting Jan Brewer's effort to expand Medicaid -- Latinos make up 34 percent of those who stand to gain coverage. In Florida, they make up 27 percent, and in Texas they make up 47 percent. Texas has the highest rate of uninsured in the country. The majority of people there who are going to miss out on care -- over 60 percent -- are black and Latino.

This is one reason why color-blind -- "lift all boats" -- policy so often falls short. When you have a country grappling with the deep vestiges of bigoted policy, you do not need "colored only" signs to get "colored mostly" effects.
posted by zombieflanders at 8:12 AM on May 29, 2013 [4 favorites]


The $2.7 Trillion Medical Bill
Whether directly from their wallets or through insurance policies, Americans pay more for almost every interaction with the medical system. They are typically prescribed more expensive procedures and tests than people in other countries, no matter if those nations operate a private or national health system. A list of drug, scan and procedure prices compiled by the International Federation of Health Plans, a global network of health insurers, found that the United States came out the most costly in all 21 categories — and often by a huge margin.

[...]

While the United States medical system is famous for drugs costing hundreds of thousands of dollars and heroic care at the end of life, it turns out that a more significant factor in the nation’s $2.7 trillion annual health care bill may not be the use of extraordinary services, but the high price tag of ordinary ones. “The U.S. just pays providers of health care much more for everything,” said Tom Sackville, chief executive of the health plans federation and a former British health minister.
posted by dubusadus at 3:34 PM on June 2, 2013 [1 favorite]


Er, excuse the human interest angle in that story. Only someone like Lena Dunham could consider renting out their summer home on Fire Island a measure of frugality.
posted by dubusadus at 9:41 PM on June 2, 2013


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