The Confusion of Hospital Pricing

[MachineGhost]

When Augie Hong awoke with severe abdominal pain nearly two years ago, he went to the hospital emergency room closest to his home in San Francisco. The diagnosis was acute appendicitis, and doctors removed his inflamed appendix.

Mr. Hong had health insurance, so he wasn’t too worried about paying. Then the bills started to arrive.

“That’s when I got nervous,”? said Mr. Hong, 36, who has insurance through his job at an investment firm.

In all, Mr. Hong was charged $59,283, including $5,264 for the doctors. According to the Healthcare Blue Book, that amount is six times the fair price for an appendectomy in Northern California, which is $8,309 (including a four-day admission) for the hospital and an additional $1,325 for the doctor. Even after Mr. Hong’s insurer paid the hospital $31,409 and Mr. Hong paid the doctors $4,034, the bills kept coming.

http://well.blogs.nytimes.com/2012/04/2 ... l-pricing/

[Pointedstick]

Nobody should have to labor under the delusion that we have anything approximating a free-market in health care, and articles like this are great for pointing it out.

[lazyboy]

This is sick, literally. Can you imagine going in for an emergency appendectomy and going through this? The article suggests a few fixes but none account for the fact that in an emergency how likely would you be able to negotiate a fixed price?  Should you bring a medical lawyer with you to draw up a contract? This whole situation is beyond absurd.

[WiseOne]

NPR is running a story on this same topic, and they set up a facebook page to collect stories.  They're also complaining about quality of care, but it would more helpful if they asked physicians about that, not just patients.  Hospitals and large medical centers do indeed have insane billing practices.  What happens is that they set prices high because some insurance companies will pay a fraction of the charged price, rather than a set price.  Then they go after patients for the balance, unless expressly forbidden to do so by law which only applies to Medicare.  And, they know that they won't collect in the majority of instances - average collections as a fraction of what is billed are in the 30-40% range.

The free market idea of shopping around for best prices in health care works great for people who have something minor, but it's absurd to expect that of people with urgent conditions, or a chronic serious condition where continuity of care is important.  Not sure what the solution is.  Maybe extending Medicare's law to cover private insurance, and establishing a fair market rate for people who are uninsured (who get completely shafted because they only see the full-price bill).