Back in November, I began my journey through weight loss. As part of the initial diagnosis and evaluation, I was given a stress test. I still had my COBRA benefits at the time, my 18 months not being over yet, and so I spent a couple of VERY uncomfortable hours. I didn't have a treadmill test, I had the injection stress test.
Then I saw the bill. Close to $6000. I had an awesome plan while I had my COBRA benefits which covered just about ALL the expenses. I got lucky. More on my COBRA towards the end.
The real reason I'm writing this is not to talk about COBRA, but to talk about the system in general and what I think are the main deficiencies.
As my title suggests, we in this country have a Twisted System.
The twisted-ness begins with the actual Insurance System. As it was developed, ANY insurance is basically gambling. You are betting on one outcome, and the insurance company is betting on the opposite happening. Take Home Insurance. You pay a premium (your wager) because you believe that sometime in the future a disaster will strike your house. The insurance company bets that it won't and will get to keep your money. The process works the same with car insurance.
However, it's much different with health insurance. When you buy health insurance, it's really not hedging and betting you'll have a health issue. It's so you can AFFORD health care. So the insurance company is not acting like the casino, but rather as a "community chest", where everyone puts money in a pool, and it gets paid out as needed. And for most people, they get semi-annual physicals, regular blood work, and the like. Some have more chronic conditions that need more visits and work.
With routine care as part of the coverage, the system itself slowly becomes unsustainable. Insurance companies, being businesses, need profit and dividends to survive. And they turn to gaming the system, squeezing every last dime out of patients, finding and creating loopholes to avoid paying out claims, and lobbying Congress to keep meaningful reforms from passing.
Reforming the system was needed, and needed desperately. We made a start at forcing the insurance companies to be more responsible. But what we DIDN'T do was address some of the REASONS the insurance companies act the way they do. Here are a few examples of these reasons, courtesy of a few minutes at a search engine:
A simple x-ray can cost anywhere between $50 and $2000, depending on what's being x-rayed, and how many exposures you get. Source: remakehealth.com
An MRI can cost anywhere between $1100 and upwards of $2800, depending on what is being scanned. Source: costhelper.com
Depending on the type of exam, an ultrasound examination can cost between $400 and $1500. Source: newchoicehealth.com
A cardiac stress test can cost between $1100 and $11,000, depending on where you live. Source: newchoicehealth.com
Many times, health insurance companies, because of their negotiating power, are charged a discounted price for services, procedures, and the like. Those costs are passed on to those who aren't "in-network" or are uninsured. The following was taken from an article on Time.com written back in 2004. I don't think much has changed today.
You've heard of the $10 aspirin? It's that pricey because hospitals mark up costs an average of 232%--as much as 673% at the 100 priciest institutions, according to a recent study by the Institute for Health and Socio-Economic Policy. Hospitals do this largely because insurers negotiate discounts off the list price, creating incentives to inflate charges. That expensive aspirin also subsidizes other items and services--a widespread practice.
Yet the uninsured are typically the only ones forced to pay sticker price. The lawsuits complain that hospitals then aggressively pursue patients for the full charge, sometimes garnishing wages, placing liens on homes, and in some cases lumping the bad debt into their calculation of charity care, a controversial accounting practice. "There's nothing charitable about it," contends Scruggs, noting that medical debt is a leading cause of personal bankruptcy.
In 2001, Laverne Dumas, one of the plaintiffs in a suit against Provena Mercy Center in Aurora, Ill., went into the hospital for a severe sinus infection and was sent a $12,338 bill that included $650 a day for the room and $6 for each ibuprofen pill. Uninsured and living mainly on her husband Joe's $800-a-month pension at the time, she says she tried to negotiate a payment plan, but the hospital refused. Provena won a judgment, and today the couple pays $100 in monthly installments, with scant hope of paying off their $27,000 in hospital bills (owed not just to Provena). Says Joe, 63: "We didn't go in expecting charity, but we didn't expect exorbitant prices either."
This comes from an article at USA Today.com, again in 2004:
Hospital sticker shock is hitting the USA.
It isn't just $5-a-pill aspirin. Daily room charges exceed $5,000 in some New Jersey hospitals. An appendectomy in California, including about two days in the hospital, has an average list charge of $18,000. Nationally, federal data show the median charge for treating a heart attack is more than $20,000.
We've all heard stories like this about hospitals. Like $500 ashtrays, they have permeated the zeitgeist of American culture.
This I think was the biggest mistake of the whole Health Care debate. Unless ways can be found to decrease actual costs of procedures and products, costs will continue to rise. Insurance companies will have excuses to raise premiums. Short of nationalizing the whole system and setting arbitrary prices on things, this will be the biggest challenge of ensuring all Americans have access to affordable health care.
This is from an article by Clark Howard from 2007. As you will see, things haven't changed much since that Time.com article:
50 million Americans have no health insurance and are getting price-gouged by hospitals. One of the medical journals did a study that compares the prices for service paid by the insured vs. the uninsured. Those with coverage might get a bill that's $5,000 for a certain service. Typically they'll also have 20 percent co-pay, so that's an additional $1,000, for a combined $6,000 price tag. However, if you don't have coverage you will be billed $12,500 for the same procedure -- that's more than twice the price! What happens is that the big insurance companies cut deals with hospitals to reduce the amount they have to pay. Then they pass some of those saving on to their customers. But people without insurance don't have the same negotiating power and get stuck with the bill that's twice as large.
One great suggestion has been to actually have easy to read and understand PRICE LISTS covering each procedure, service, and pill.
Here is the money quote from Clark Howard's article:
"Medicine suffers from lack of financial transparency -- you can't comparison shop because you don’t know the price of any of the services you're going to receive."
That's it in a nutshell. This is a HUGE loophole for the insurance companies to game the system and raise premiums outrageously and be able to defend them to the approval board set up in the HIR bill.
Requiring full transparency for prices where everyone can see them will make big gains in driving costs down. AND, as a bonus, being able to "comparison shop" for procedures and services is "good free-market philosophy" because it "encourages competition".
And Republicans know it. And they HATE it. From the Time article again, this is then HHS Secretary Tommy Thompson:
The AHA says hospitals must set the same charges for everyone. Secretary of Health and Human Services Tommy Thompson wrote to the AHA in February, however, saying the suggestion that hospitals must charge list prices "is not correct and certainly does not accurately reflect my policy." A Texas hospital administrator is blunt about why hospitals pursue the medically indigent: "The driving force is to badger them so they don't come back."
Finally, there has been talk all during the Health Care debate about simplifying test result analysis so that seven different doctors don't charge you for looking at the same test results. Or something like that. Here's what happened during my stress test as an example:
I walk into the examination room and a nurse preps me--taking off the shirt, laying on the bed, putting on the leads, etc. In the room with me will be the nurse to monitor the IV, a tech to follow the ultrasound, a tech to follow the EKG (which was part of the test), and the cardiologist to supervise. The nurse does a couple of bad sticks, and finally gets what she thinks is a good stick. Everything is all set to go and the introduce the buterol (or whatever drug) to get my heart rate going. I feel a severe burning in my arm. Turns out that it was a bad stick and the drug is leaking out of my vein into my arm. they have to quickly withdraw the needle and inject me with something to dilute and make the leaked drug go away. I'm cautioned if my arm around the stick turns hard to immediately go to the hospital. They proceed to call in an IV specialist who puts a good stick in. They continue. My heart rate isn't going up as far as they want, so I get two, count em two, doses of adrenaline which ultimately does the job. After all that torment, the cardiologist RIGHT THERE WATCHING ME just says "everything looks good" and then leaves as I come down and recover. I was like W. T. F. Although I did press him and he admitted that if there was anything bad I would have been admitted right away. What a relief. Not. After all of that I get billed 6 large for just about 2-3 sentences of diagnosis.
And now, as promised, more on COBRA. A quick proposal we should be considering, besides the excellent diaries on extending the subsidies, is to make COBRA more permanent. Right now the benefits last 18 months. If you like your plan (and I did, very much so), after you leave that job, you should be able to carry that policy UNTIL YOU WANT TO CHANGE. Meaning if you land a job without health benefits, you should be able to stay on your previous job's plan AS LONG AS YOU WANT. I'm not sure if this is in the HIR law, but it's a DAMN good idea.
THIS is what COMPREHENSIVE means. We fix EVERYTHING. We've taken and ARE TAKING steps to fix the insurance industry. Now it's time to fix everything else as well. None of it works until it ALL works. Like it or not, it's the system we have now, until (and IF EVER ) we can find the best way to phase in a new one.
Let's make it the best system we can. Before it's too late.