Monday, October 5, 2015

The Screwy, Secretive World of Health Care Pricing

Perspective: Try, just try, to find out how much a procedure costs.

Posted By on Mon, Oct 5, 2015 at 10:00 AM

Although I respect the writing of Richmond Times-Dispatch columnist A. Barton Hinkle, I rarely agree with him. But on Sunday he hit one out of the park.

Hinkle explores how it’s impossible to find out from a hospital just how much a procedure will cost. Or, try to find out from a doctors’ office how much a routine checkup will cost. It’s often impossible because of proprietary and secretive pricing deals that the health care companies cut with Big Insurance.

Hinkle tells a story of David Fleming, who needed to take his 14-year-old son to the emergency room at Henrico Doctor’s Hospital after getting a minor injury in a laser-tag accident in June. He needed three stitches.

The bill, originally stated by Henrico Doctors Hospital, operated by for-profit behemoth HCA, was $1,897. And then the amount changed -- upward. Coventry, Fleming’s insurer, claimed that it had an “agreement” with the hospital that sets the contracted rate for the procedure at $4,221.

Fleming was asked to pay the balance of his $4,000 deductible along with a percentage of charges over the deductible. He protested and the hospital agreed on a lower payment.

Good for him, but the issue shows just how screwy the health care billing system is. What riles me (I believe in a single payer system) is how we’re handed this nonsense that we must keep the “free market” in health care.

The system is anything but free market, because an essential ingredient for this to work is transparency in pricing. You wouldn’t buy a car if the seller didn’t quote you a price, would you? With essential pricing information, the “Magic of the Market” simply is unattainable. But that’s what Big Health asks us to do all the time.

Prices and fees traditionally have been set in confidence at meetings between hospitals and insurance companies. Then the prices are given a set of impenetrable codes with a zillion variants.

Can you go to a doctor’s office to find out what something costs? Maybe, but you have no leverage because medical practices are being scarfed up left and right by Big Health. It doesn’t matter if they’re for profit or nonprofit.

The Affordable Care Act (Obamacare) is much criticized by many, including those who claim it is creeping socialism. My biggest beef with Obamacare is that it actually is a mangled government program retrofitted over a dysfunctional old system that was anything but free market in the first place.

Experts say that that the screwy pricing dates back to Medicare in 1965 and that may be true. But Obamacare isn’t the solution because it is designed specifically to keep old ways in place to the greatest extent possible.

So what can a patient do? Other than not vote for politicians who claim they want the free market in medical care but constantly vote the opposite way by doing Big Health’s bidding, one might take a very hard line with health care firms when it comes to pricing. Insist on knowing. Require them to explain.

One kicker in this is that the very same Big Health companies such as HCA and nonprofit Bon Secours spend millions of dollars on marketing to tell us how great their care is. They even have electronic billboards telling us what the wait times are at emergency rooms.

I’ve always wondered what I should do if I’ve been in a car wreck with a collapsed lung and a double compound fracture of my femur. Would I travel around shopping ER wait times?

Maybe they should put up how much an ER visit costs. “Special today: Only $1,000!”


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