The reason why market forces will never work with healthcare
I recently underwent a preventative procedure at a local hospital. I thought it might be instructive to follow it through from start to finish, just to see how the system actually works, or doesn't work, as the case may be.
My visit began with a routine examination at my primary physician. After determining that I just turned 50 he told me that it was time to schedule a colonoscopy. Yikes, I thought, but if it was good--or bad--enough for Katie Couric then I guess I could put up with it too.
So, after giving me the name of a specialist, I called and made an appointment. Pretty simple. He advised me on what was going to happen and why it was important, what to expect and so forth. He gave me a prescription for MoviePrep and I went to the pharmacy. Being a pharmacist myself, I already knew all about the stuff so I just went to pay for it. $50! Yes, the MD had kindly given me a coupon, but that still made the total out to be $30. (Note: one month later I still haven't received the rebate.) My outlay so far totaled $22 MD visit Primary Care, $22 specialist office visit, $50 medication. $99 total (minus the $20 rebate, but I'm not holding my breath there from past experience).
Then the day of reckoning. The procedure is by far the easiest part of the whole thing. If you can get the MoviePrep (or Colyte, or GoLytely, or PEG Sol'n) down you're already pretty much done with it. They give you some valium and the opiate of choice and you're in La-La land.
Then the difficulties will start. My insurance--yes, I know, many of you won't have insurance and I hope you know by now after reading my blog that I'm a fierce advocate of Medicare-For-All--is supposed to pay 100% of any preventive care procedure like this. Of course, to an insurance company "100%" can mean so many things. You'd think it would include office visits too("100%" actually translates mathematically to "everything" after all). But such isn't the case. Does it include deductibles? It should but not necessarily.
Now let's experiment a little here. Let's suppose we're market people, capitalists all who feel that all we need to do is have low cost catastrophic insurance along with HSA accounts. That's where the employer or government puts money into an account and you can draw on that for medical bills. Sounds great. I used to think so. I lobbied for HSA's for years. Then I got one and found out that it is actually impossible to shop around for care. That is the whole idea of HSAs, to empower patients to shop around for the lowest cost, but highest quality care.
So let's say that instead of my insurance I have an HSA. I call up my doctor and ask how much the colonoscopy is going to cost. He tells me $1500. Wow, I think. I'm going to call up a few other people. Turns out they all are about $1200 to $1800. My guy is right in the middle, and what do I know about how good this guy is? He was recommended to me, but I have to honestly say I have nothing to go on but my gut (so to speak).
My HSA has about $3000 in it so I'm just going to go for it. I'll still have enough in there for the dentist and some more visits to the doctor in case I need them.
But what I didn't know was that I'd receive a bill for the Recovery Room. Hadn't thought of that. Didn't even know there was a billing for special rooms. Got a bill for Medical Supplies too. Another for those cool opiates. The one I really like, my favorite of favorites, is called "Other Hospital Services." Turns out that that one was almost the greatest amount, too. The next time someone tells me HSAs are the answer I'm going to ask him how the heck you're supposed to shop around for "Other Hospital Services." If I'd had an HSA I'd be out of luck, as the total wasn't the $1500 I'd shopped around for, but over $3000 for the "Other Services" etc.
So, you ask, what is the upshot? About 2 hours ago I received a bill from the hospital. A bill, say I? It's supposed to be free. So I dutifully call the insurance company and ask about the $300 "free" bill. I call the number on the back of the card and speak to Andrew. Andrew seems a pleasant fellow, so I with-hold my rising frustration. He tells me he's having trouble locating my ID number. I had inputted it into the ridiculous phone tree, but I tell him again. Nope, he says, I can't find it. "That prefix is for [company name XYZ], right?" he asks. Right, I say. Well, we don't handle that here. What number did you call? I told him the phone number and that it is listed on the back of the card. "Something must be wrong with their phone system," he says, pleasantly enough. I can tell he is a bit perplexed himself. "But what is your problem and maybe I can be of assistance," he offers anyway. So I tell him. It is supposed to be a free preventative service, yadayadayada. "Yeah," he says. "And I see that we paid them more than what they billed for." Well, ain't that interesting, I think.
He advises me to wait two hours and call the number again. Maybe the phone system will work then.
I call them back and this time they--Sherri, actually, this time--find me. They also locate the problem. The balance due, which should have been nothing, came out as $285 and they put that through toward my deductible. The hospital, in other words, feels they are owed this amount, even though it is a routine preventative "Wellness" procedure. So now the insurance company--actually the benefit manager for the insurance company--is going to go ahead and re-bill it again, as the customer service rep couldn't get the amount fixed over the phone. I have the option to call the hospital and basically tell them I don't owe them a thing and to wait about ten days for it to clear the insurance, or just do nothing and hope I don't get billed again in the mean time. I elect the latter, knowing through experience that healthcare billings are routinely inefficient and it will take about a month before anyone notices. At least.
So if I was the type who didn't know the system, didn't trust the company, didn't know the hidden inefficiencies, then I might just have figured I owed another $285.
Lesson: Never assume the bill is correct. Never assume even the insurance reps know what is going on. Never, ever, ever assume you will even have a clue as to what will eventually be billed.
And never believe simplistic solutions like HSAs will solve our problems. You'll just get burned.
We basically have two options: Stay with our current tinkering (and ObamaCare, while a vast improvement over the existing "non-system" is still tinkering) or go with an overhaul such as Medicare-For-All. I vote strongly for the latter.
My visit began with a routine examination at my primary physician. After determining that I just turned 50 he told me that it was time to schedule a colonoscopy. Yikes, I thought, but if it was good--or bad--enough for Katie Couric then I guess I could put up with it too.
So, after giving me the name of a specialist, I called and made an appointment. Pretty simple. He advised me on what was going to happen and why it was important, what to expect and so forth. He gave me a prescription for MoviePrep and I went to the pharmacy. Being a pharmacist myself, I already knew all about the stuff so I just went to pay for it. $50! Yes, the MD had kindly given me a coupon, but that still made the total out to be $30. (Note: one month later I still haven't received the rebate.) My outlay so far totaled $22 MD visit Primary Care, $22 specialist office visit, $50 medication. $99 total (minus the $20 rebate, but I'm not holding my breath there from past experience).
Then the day of reckoning. The procedure is by far the easiest part of the whole thing. If you can get the MoviePrep (or Colyte, or GoLytely, or PEG Sol'n) down you're already pretty much done with it. They give you some valium and the opiate of choice and you're in La-La land.
Then the difficulties will start. My insurance--yes, I know, many of you won't have insurance and I hope you know by now after reading my blog that I'm a fierce advocate of Medicare-For-All--is supposed to pay 100% of any preventive care procedure like this. Of course, to an insurance company "100%" can mean so many things. You'd think it would include office visits too("100%" actually translates mathematically to "everything" after all). But such isn't the case. Does it include deductibles? It should but not necessarily.
Now let's experiment a little here. Let's suppose we're market people, capitalists all who feel that all we need to do is have low cost catastrophic insurance along with HSA accounts. That's where the employer or government puts money into an account and you can draw on that for medical bills. Sounds great. I used to think so. I lobbied for HSA's for years. Then I got one and found out that it is actually impossible to shop around for care. That is the whole idea of HSAs, to empower patients to shop around for the lowest cost, but highest quality care.
So let's say that instead of my insurance I have an HSA. I call up my doctor and ask how much the colonoscopy is going to cost. He tells me $1500. Wow, I think. I'm going to call up a few other people. Turns out they all are about $1200 to $1800. My guy is right in the middle, and what do I know about how good this guy is? He was recommended to me, but I have to honestly say I have nothing to go on but my gut (so to speak).
My HSA has about $3000 in it so I'm just going to go for it. I'll still have enough in there for the dentist and some more visits to the doctor in case I need them.
But what I didn't know was that I'd receive a bill for the Recovery Room. Hadn't thought of that. Didn't even know there was a billing for special rooms. Got a bill for Medical Supplies too. Another for those cool opiates. The one I really like, my favorite of favorites, is called "Other Hospital Services." Turns out that that one was almost the greatest amount, too. The next time someone tells me HSAs are the answer I'm going to ask him how the heck you're supposed to shop around for "Other Hospital Services." If I'd had an HSA I'd be out of luck, as the total wasn't the $1500 I'd shopped around for, but over $3000 for the "Other Services" etc.
So, you ask, what is the upshot? About 2 hours ago I received a bill from the hospital. A bill, say I? It's supposed to be free. So I dutifully call the insurance company and ask about the $300 "free" bill. I call the number on the back of the card and speak to Andrew. Andrew seems a pleasant fellow, so I with-hold my rising frustration. He tells me he's having trouble locating my ID number. I had inputted it into the ridiculous phone tree, but I tell him again. Nope, he says, I can't find it. "That prefix is for [company name XYZ], right?" he asks. Right, I say. Well, we don't handle that here. What number did you call? I told him the phone number and that it is listed on the back of the card. "Something must be wrong with their phone system," he says, pleasantly enough. I can tell he is a bit perplexed himself. "But what is your problem and maybe I can be of assistance," he offers anyway. So I tell him. It is supposed to be a free preventative service, yadayadayada. "Yeah," he says. "And I see that we paid them more than what they billed for." Well, ain't that interesting, I think.
He advises me to wait two hours and call the number again. Maybe the phone system will work then.
I call them back and this time they--Sherri, actually, this time--find me. They also locate the problem. The balance due, which should have been nothing, came out as $285 and they put that through toward my deductible. The hospital, in other words, feels they are owed this amount, even though it is a routine preventative "Wellness" procedure. So now the insurance company--actually the benefit manager for the insurance company--is going to go ahead and re-bill it again, as the customer service rep couldn't get the amount fixed over the phone. I have the option to call the hospital and basically tell them I don't owe them a thing and to wait about ten days for it to clear the insurance, or just do nothing and hope I don't get billed again in the mean time. I elect the latter, knowing through experience that healthcare billings are routinely inefficient and it will take about a month before anyone notices. At least.
So if I was the type who didn't know the system, didn't trust the company, didn't know the hidden inefficiencies, then I might just have figured I owed another $285.
Lesson: Never assume the bill is correct. Never assume even the insurance reps know what is going on. Never, ever, ever assume you will even have a clue as to what will eventually be billed.
And never believe simplistic solutions like HSAs will solve our problems. You'll just get burned.
We basically have two options: Stay with our current tinkering (and ObamaCare, while a vast improvement over the existing "non-system" is still tinkering) or go with an overhaul such as Medicare-For-All. I vote strongly for the latter.
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