One who intends to leave others better off for his having existed.

1/17/12

Healthcare Ethics: "The anatomy of a ripoff": If Ed Cone is on the board of Cone Health, and Jim Melvin thinks the merger is a great idea, how do they feel about this?

"...my teenage son was rushed by ambulance
...to Good Samaritan Hospital in Suffern after choking on a piece of turkey.

The care he received was appropriate; the bill was anything but.

The charges, in fact, were mind-boggling.

A statement the hospital sent to my insurance company
...showed that Good Samaritan billed $22,214.92
for a four-hour emergency room visit that included a physical exam,
sedation, endoscopy and extraction of the stuck food.

...it’s easy to think that he was seen less as a patient
and more as an ambulatory cash machine...

We must tear down the entire medical system in this nation
and imprison virtually all of the financial folks involved in it
-- especially Hospital-affiliated entities.

Karl

Even more astonishing, Aetna agreed to pay only $2,885.67 for the services
— just 13% of the bill — and the hospital settled for that amount.

...my son had a second choking episode two weeks after the first,
and the charges for his treatment at Somerset Hospital in Pennsylvania
were included on the same ...statement.

So I was able to compare bills for similar procedures at two emergency rooms.

What I learned was that the numbers printed on hospital bills
often bear no relation to reality.

That hospitals grossly inflate their charges,
expecting insurance companies to radically cut the bills
while hoping to wring bigger fees out of the uninsured.

That the bill inflation can include double-charging for procedures.

This sort of game-playing, where the intent is to catch "uninsured" people
and "gotcha" them into bankruptcy,
would be felonious in virtually any other line of business.

Karl

...consider Ondansetron HCl,
an anti-nausea medication that both hospitals administered to my son.

Good Samaritan charged $439.90 for the drug;

Aetna allowed $77.63.

Somerset charged $6.52;

Aetna paid $3.26.

Medicare pays 17 cents per dose.

...multiple, conflicting prices for each medication and procedure.

"The entire medical system in this country is a racket.

It is a scam designed to play on your fear of mortality or morbidity
to rob you.

In any just society where the rule of law meant anything
this sort of "billing system" and "practice" would lead to felony criminal charges
and everyone involved would be sitting in a prison cell...

If you want to know why our government is going broke
and our financial system is headed for collapse within the next several years
the reason is found right here.

This entire portion of our economy
has become so imbued with graft, cost-shifting and scams
that it is literally bankrupting everyone.

Karl

There are the sky-high costs that a hospital will claim reflect its expenses,
and the much lower fees it accepts under contract with insurance companies.

What’s missing from this complex web
is any hint of what the services a patient received actually cost.

The driving force behind all this, according to Aetna,
is the way hospitals and the government do business.

The rates that insurance companies pay are negotiated
based on what they believe a hospital’s true costs are.

But then those rates are jacked up an average of 30% to 50%
to make up for money that hospitals lose
in treating patients who don’t have private insurance...

So to make up the difference,
they overcharge patients who are insured.

This practice is called cost-shifting.

...upward of half the patients are covered by Medicare and Medicaid
– neither of which pays the full cost of treatment.

Another 10% to 15% of patients are uninsured;
maybe they can afford to pay,
but more likely they’re broke and can’t cover their bills either.

Any profit the hospital makes must come out of the remaining 40%
— patients with private insurance.

So whatever rate Good Samaritan’s contract with Aetna called for,
my son’s bill was still inflated beyond his fair share.

...the only people who are actually billed such astronomical sums are the uninsured,
and hospitals know they’ll likely never get it.

But if an uninsured patient can pay even a fraction,
it will still far exceed the cost of treatment.

So hospitals will gladly settle for a lesser amount
— and may even helpfully offer a payment plan or high-interest loan.

Good Samaritan billed Aetna $900 for an upper GI procedure
and $1,000 for an operative upper GI,
even though the major procedure is supposed to include the cost of the minor one.

The hospital also billed separately for $7,335.64 worth of equipment and supplies
-- simple anesthesia, sterile needles, saline solution for hydration, X-rays, etc.
-- that are supposed to be included in the cost of the treatment
and the room where it was administered.

For administering Glucagon HCl,
...Good Samaritan charged $901.16.

Aetna’s rate was $159.03.

For the same medication two weeks later,
Somerset Hospital charged $216, of which Aetna allowed $108.

A state-run drug discount web site
...posts a price of $121.09 for Glucagon; Medicare, $97.38.

...Insurance companies have an idea what hospitals’ costs really are
and bargain accordingly.

But the consumer has no idea,
and no way to find out.

...patients can’t comparison-shop.

This sort of collusive behavior by entities that have market power
is illegal in virtually every line of business
under the Sherman Act, among others.

So why haven't these firms all been prosecuted?

...they went to Congress, "lobbied", and got special dispensation
to be able to screw you blind in both eye sockets
through business behavior that would land you or I in prison for 20+ years were we to try it
-- including the collusion required to enforce this sort of ridiculous differential in billing
-- in essentially any other line of business.

Karl

...there are no financial incentives
for a hospital to follow best practices...

...if a patient has to be treated for a relapse or an infection,
the hospital gets to bill all over again.

Beverly Weintraub

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