There is an interesting whistleblowing thread going on at reddit http://www.reddit.com/...
I wanted to share my post here as well.
I worked in a doctors' office. We did clinical research on the side, and I want to explain the billing process at a hospital or clinic through an anecdote:
I had just started and had no idea how much anything in medicine cost, yet part of my job was negotiating the budget with the pharma companies. The company (big ones like Pfizer or small, obscure ones) would send us an itemized budget for all the procedures we would have to do over the course of the study for each patient: $90 for an EKG, $50 for a physical exam, $1000 for an MRI, etc. These prices are from circa 2005-8.
The first time I negotiated a budget (and this was my strategy ever since), I simply requested 4x what was initially proposed and also added a bunch of extra expenses. They accepted my counter offer immediately, so I thought I did a bad job.
After my "screw-up," I asked the girl in billing what the doctors charged for a 15-minute, physical exam. She said, "$400." That didn't seem weird to me since I was asking over $800 for a routine check up in the research budgets. But still, I thought I was low-balling it, because these visits would take longer than typical visits.
Later the officer manager called me into her office to talk about the budget I just negotiated. She was ecstatic! Apparently, we BILL the insurance company $400 for a 15-minute appointment, but they only REIMBURSE us $80. Add the patient's $20 copay and that means we make $100 per 15-minute appointment. So if the doctor wanted to be a jerk, he could tell the patient that they still owed $300. Doctors don't do that though, because they don't want to explain to people how much their appointments cost or why they won't take self-pay patients. A hospital, however, DOES occasionally see self-pay patients without insurance, and it makes them pay dearly:
If someone without insurance goes to a hospital and gets an MRI, the hospital charges the patient the premium price of $4000 - same price that gets billed to the insurance company. But when someone with health insurance gets that same MRI, the healthcare company pays as little as they can - typically 90% of whatever medicare does. The hospital then "eats the cost" of what they don't get from the premium $4,000 price rather than going after the patient for more.
I know this is getting long and there are lots of numbers involved, but the point is - research is the most profitable thing a hospital or a clinic does and it's just one more thing that's driving up the cost of healthcare and drug research. We would make up to $40,000 on a single patient over the course of a year, and we always had about 5-10 patients per study. I usually had 6 studies going at once, so yeah - we had some pretty awesome x-mas parties after I got started there. There was/is seemingly no ceiling for clinical research medical costs. Most of the time, they accepted whatever crazy budget we wanted.
The doctors I worked for wanted me to help them expand into Phase-I testing (healthy people), but I quit and went to grad school instead. STUPIDEST financial decision I ever made!
TL;DR - doctors and hospitals set the prices for healthcare and are also to blame for the cost of it. They charge more to 3rd party payers with deep pockets, so it makes health care more expensive to people who can't negotiate with a team of lawyers. If you ever have a $4,000 bill for an MRI, get your doctor to write the hospital a letter asking them to charge you a fair price. Also, give your doctor a hard time about not taking self-pay patients. The system needs to change.
10:46 AM PT: Update: it should also bother you that the doctor is getting $40,000 from the drug company, while you might be getting placebo...
Some places compensate patients for their time. We never did. The doctor said this was because it's unethical, "they're not volunteers if they're paid." I bought that then because he has a point. We don't want these people to do something potentially dangerous to their health because of money. But some of these patients joined the studies because they didn't have health insurance, and maybe wouldn't have "volunteered" if they did. So if we're going to offer incentive to one group (the uninsured), we may as well bias the rest of the groups the same way (by giving patients $50 or so per visit).
Wed Aug 21, 2013 at 6:46 AM PT: In response to some comments regarding placebo. I'm not saying there shouldn't be a placebo group in clinical trials. Duh - it's a basic element of science. In fact, if I was a doctor I'd probably use placebo in practice because patients seem to do quite well on it. =P