A while ago, I obliquely mentioned that I had some surgery (Kidney stones. All better now–thanks for asking!). As a result, I came down with a severe UTI that forced me to go to an ER in Boston. While my health insurance covered just about all of the cost (minus $50 for a co-payment*), the bill worked out to $2,725.79. For four hours. Bascially, I was admitted, looked at by an registered nurse and a physicians assistant, given saline, had blood and urine specimens taken, and given two ciprofloxacin (and a prescription). In at around 11am, out by 2:30pm, give or take.
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.
But actually, this isn’t so outrageous. When I described how much things cost, I was really describing the price, and these are two separate things. Because the actual cost of the consumables (the bottle I peed in, lab supplies, changing the bedsheets, the saline, and so on) is pretty small. What you’re paying for is the infrastructure. All of the informatics that provide computerized records? Expensive. The doctors, nurses, and other staff? Expensive. Maintaining surge capacity? Definitely inefficient (you don’t want a ‘just-in-time’ ER when a train accident happens and you have to handle dozens of patients at once). Supporting trainees? Gotta pay ’em. Of course, buildings need to be maintained, utilities paid, etc. And having the support staff to handle dozens of different insurance plans is also expensive.
All of these costs acrue even if no one walks in the door. I hate using business jargon, but hospitals do have a ‘burn rate.’ It’s voracious. Now, I don’t claim to understand why the charges were dumped into the IV therapy category, and not into the general ER expenses category, but if you slashed the reimbursement for the IV, they would charge more elsewhere. They must. Even a non-profit hospital (and this one is) can’t run at a loss. Cutting personnel sounds easy, but is very difficult: if you have a ten percent decrease in ER admissions, you’re not going to cut the staff (a fifty percent decrease, perhaps). Cutting salaries and wages isn’t easy, to say the least–and, given that we do nothing to combat extreme income inequality, probably not good policy***.
It’s difficult. This is why capping insurers’ profits (which is essentially what Obamacare does) is an improvement over the current system. It’s low-hanging fruit, and will save money.
*I don’t understand the logic behind co-payments. If you have good health insurance (which also means a low co-payment), you typically have a decent-paying job. You can afford the cost of ‘just-to-be-sure.’ For people with crappy health insurance typically have higher co-payments and lower salaries, the co-payment can be so punititve, that this is actually discouraging them from getting services they need.
**It was a serious infection: the day before I went to the ER (on the doctor’s orders), after walking a block, my temperature spiked about 1.5 degrees F and I was exhausted and utterly drained (when healthy, I hit the gym most mornings). I had no appetite and, in retrospect, I realize my judgement was beginning to become impared (more so than usual, anyway)–the latter can be a symptom of a severe infection. If you want to know why I didn’t seek attention sooner, the expected post-surgery symptoms mimic the initial stages of a UTI. And for the wonks who argue patients have to manage their care, I am an expert on UTI, and I missed the symptoms for at least a day (in hindsight, it was embarassingly obvious). What chance would most non-experts have?
***Obviously, medical professionals are paid well in most cases. But compare their salaries to the financial sector, and not so much. And this gap has widened.
“I don’t understand the logic behind co-payments… For people with crappy health insurance typically have higher co-payments and lower salaries, the co-payment can be so punititve, that this is actually discouraging them from getting services they need.”
Seems to me you understand it perfectly. It is explicitly to discourage using the service. Insurance companies do not exist to provide care; that is what hospitals are for. Insurance companies make money by denying care. And if they can’t do that, then discouraging care.
I had Cellulitis in one leg (for the third time this year) and spent 6 days in the hospital in mid-November. The bill was $43,000, not including doctor charges. Since I am a heart patient, some of the time after the ER was spent in the cardiac unit as precaution (my blood pressure dropped very low), but most of the stay just involved IV with massive doses of antibiotics. I have private insurance which paid for this stay, but something is seriously wrong with the system.
My wife had very serious surgery in a for-profit hospital, covered just about completely by our insurance. For various reasons we had to switch rooms a few times. Every time we did, they gave us a set of plastic bowls, pitchers etc.
A year later, she went to NIH at government expense (part of a research project, as I understood it). We didn’t get the Dollar Store bowl assortment this time.
My proposed explanation for this difference is that hospitals recover some costs by charging insurance companies ridiculous prices for throw-away plastic bowls.
This is why we give thanks for Nye Bevan and the NHS, medical treatment free at the point of consumption.
The business of business is profit. Insurance companies profit by taking as much money as they can and refusing to cover whatever they can. Taking all your money and providing no coverage is an insurance company CEO’s wet dream. There is no ‘doing well by doing good’ in this. CEOs have a fiduciary responsibility to maximize shareholder profits. They have even rigged the legal system so that your family can’t sue your insurance company if a delay in treatment caused by refusal of the insurance to pay causes you to die.
Co-pays are just another way to discourage people from going to a doctor. And if the patient waits too long and dies on the way to the doctor the insurance company pockets the cash. Insurance companies are parasites sucking blood out of the healthcare system. They make the entire system less efficient.
On the other hand they are great investments and being an executive in a large insurance company is certainly one of the better jobs on the planet. Particularly if you have a sociopathic streak and like kicking people when they are down, and expensive lunches with legislators.
People are not dying because they lack insurance. They die because they lack health care.
So glad I don’t live down there. I’ve had 5 or six trips to the ER in the last two years, along with 12 or so scheduled paracentesis procedures. Then the liver transplant…
I would be quite dead, I think.
I have had good care down here. I had a week in hospital Jan 10 for cardiac arrest (CPR From my wife) and 3x for cellulitis in 2011. But total cost over $250K.
I’m sure the care is good, but the price tag would have killed me – I simply could not afford to pay for two weeks in the hospital, along with the numerous tests and prior procedures. And there’s no way I could have maintained employment for the two years I was ill…
Your bill worked out to $2,725.79, but what do you think it was settled for, ie, what did your insurance company actually pay the hospital? Thirty-three cents on the dollar? Twenty five cents on the dollar?
Too bad you didn’t get a 66-75% discount on your $50.00 copay. More importantly, those of us with crappy insurance would be receiving the full inflated hospital bill for $2,725.79 and we would be expected to pay it. We don’t get the 66-75% discount routinely offered to insurance companies.
You know what? We shouldn’t pay it. I’d love to see their reaction if they threatened legal action, and I told them what my legal defense would entail.
Hey Mike – glad you are feeling better. Thanks for the interesting explanation. To you, NewEnglandBob and others – we’ve been talking a bit about hospitals bills at healthcaresavvy.wbur.org and would love to have your input. Here are a few links:
Perhaps the question is why the overhead/infrastructure costs have to be bundled with an identifiable line item. Reading this, I sort of thought that “ED level D” would be the dump zone for such things.