The Opacity of Healthcare Billing Is a Feature, Not a Bug

A couple of years ago, I noted that a medical bill I received had some really bizarre prices:

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.

Recently, NY Times reporter Elisabeth Rosenthal described a similar experience (boldface mine):

Hospitals and medical clinics, for their part, often counter by saying that detailed bills are simply too complicated for patients and that they provide the information required by insurers. But with rising copays and deductibles, patients are shouldering an increasing burden. And if providers of Lasik and plastic surgeons can come up with clear prices and payment terms, why can’t others in medicine?

One recent study found that up to 90 percent of hospital bills contain errors.

Therese Meuel, a business consultant who volunteers as an Affordable Care Act patient navigator in the Bay Area, needed a kidney biopsy earlier this year….

For a simple needle biopsy that would require 24 hours of observation afterward, she spent hours verifying that the hospital, radiologist, pathologist and anesthesiologist were all in her network, to keep out-of-pocket expenses to a minimum. The hospital bill ended up being around $15,000, for which Ms. Meuel owed $665.46. There were also bills from the radiologist ($1,263) and pathologist ($3,799.25) for which she owed smaller amounts.

The explanation of benefits from Blue Shield listed a few line items that had been paid to the hospital labeled “hospital,” “miscellaneous” or “labs.” All further explanation appeared in CPT codes. Only the explanation of payouts to the pathologist was given in words: “tissue exam special status group 2” ($372.75), “immunofluorescent study” ($1,748.25) and “electron microscopy” ($1,328.25). Not very helpful.

The itemized bill the hospital sent at her request offered minimal elucidation, containing items like: “1. 25030731 HC RT OXYGEN DAILY CHARGE — $2,132.25.”; “2. 0305 30516895 LAB HCT-CHRG ONLY — $104.81”; “3. 35033106 HC CT GUIDED NEEDLE PLCMNT ASP BlOP — $1,828.50.”

(My translation: 1. The supplemental oxygen delivered into the nose after surgery, a routine precaution at many hospitals. 2. A blood test for anemia. 3. The use of a CT scan to guide the biopsy needle into the kidney.)

While much of the online commentary has focused on the lack of clarity in the billing, what jumped out at me what the supposed cost for supplying supplemental oxygen. While it’s not as ridiculous as my $676 bag of saline (I’m not alone in that, by the way), it seems awfully expensive given the services rendered. But as long as most people can’t even figure out what the problem is, there obviously won’t be an attempt at a solution.

A cynic might conclude that is the desired outcome.

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2 Responses to The Opacity of Healthcare Billing Is a Feature, Not a Bug

  1. Gingerbaker says:

    As I understand it, hospitals charge these outrageous and indefensible charges because they accept pennies on the dollar as full payment by the insurance companies. Meanwhile, we consumers are on the hook for 100% of these inflated prices when the insurance doesn’t pay.

    I would suggest that, when presented with a thousand+ dollar bill by the hospital, consumers call up accounts receivable and offer to pay the hospital off at the same discount rate as the insurance company, say, 20 cents on the dollar. I might even offer the opinion that I would encourage them to bring suit against me in court, so they could enjoy the opportunity to explain to the world exactly how billing charges are settled with insurance companies vs how they are settled with individuals.

    What we need at this point is cost-plus billing, with only one rate of bill settlement – 100%

  2. coloncancercommunity says:

    Does anyone recall if saline was on the CDC’s list of critical shortages? Last year I had a dog with severe lyme disease. (No $10 co-pay is allowed for my Siberian Husky – even though I think of Jade as a family member) Anyway, there was a critical shortage in the height of dear tick season. To avoid paying $450 for a single round of doxycycline, my vet arranged to get it from a compounding pharmacy for a bit less than $100. I then started looking at what other shortages there were and its enough to make your eyes pop! I think sterile saline in a bag was among the items in short supply

    Anyway, apparently these artificial shortages are a way to make common drugs etc., that are generally not considered costly more expensive and more profitable. I wonder if this issue is a contributing factor to the $676 bag of saline?

    Just putting it out there.

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