By now, you might have come across this Time article by Stephen Brill about the completely ridiculous price scheme in our medical non-system. Here’s one example (boldface mine):
The top billing categories were $73,376 for Scott’s room; $94,799 for “RESP SERVICES,” which mostly meant supplying Scott with oxygen and testing his breathing and included multiple charges per day of $134 for supervising oxygen inhalation, for which Medicare would have paid $17.94; and $108,663 for “SPECIAL DRUGS,” which included mostly not-so-special drugs such as “SODIUM CHLORIDE .9%.” That’s a standard saline solution probably used intravenously in this case to maintain Scott’s water and salt levels. (It is also used to wet contact lenses.) You can buy a liter of the hospital version (bagged for intravenous use) online for $5.16. Scott was charged $84 to $134 for dozens of these saline solutions.
In the wake of this article, David Dobbs recounted his recent experience with the vagaries of medical pricing, and that led me to think about mine:
What’s crazy about the billing is how the costs were appportioned. The ciprofloxacin (an antibiotic) cost $2.79. The urology and bacteriological/microbiological lab work ran to $206 ($174 for the bacteriology, $32 for the urology). Given that it was a serious infection**, they told me there were going to test for antibiotic resistance, this isn’t unreasonable (I’ll get to that). There were also charges for “laboratory services” of $119 and the chemistry lab of $174, presumably for the bloodwork.
Then there were the big ticket items. “ED level D”–the emergency room–cost $1,514. But this is what will make your eyes boogle out of your head:
IV therapy cost $676.
Yep. Saline. In a bag. With a needle. $676. I once had a pain-free root canal, a surgical procedure involving expensive equipment, for about the same price.
$134 sounds like a real bargain.
In all seriousness, Brill conflates the ludicrousness of hospital pricing schemes with revenue generation. Hospitals have to recover expenses–if you make prices more ‘realistic’ in one area, they’ll just charge more somewhere else. That said, Brill hints at, but doesn’t really come out and say that there must be a real discussion about how much profit all of the players in the system should receive (and some shouldn’t receive any), and how of that profit is predatory.
mikethemadbiologist
I’d love to hear an argument about how it is ethical for a hospital to charge private pay customers – typically the un- or under-insured – much more for materials and procedures than they accept from insurance companies.
The ridiculous mark up prices on materials and services that you saw on your bill are not paid by insurance companies – the hospital always settles for pennies on the dollar with insurance companies. Those prices – wink, wink – are for the rubes. But they expect payment in full from individuals, or there will be bloody hell to pay.
This is obviously unethical. It should be illegal.
Liked the TIME article, but I think that Brill let private health insurance companies off too easy. They act as enablers for those who overcharge. If government negotiated all prices for health care products and services in this country, those costs would be reduced substantially (as they are for Medicare).