Add it up

Here's the ethereal Angie, which somehow seemed to fit today's screed.

Regular readers will recall my gallbladder surgery escapades last month, and now time has come to pay up. Fortunately, I have insurance, albeit with a rather high deductible. In general, I'm pretty healthy, so this is the first time in 13+ years my insurer has actually had to pay money out on a claim. The reason I bring it up is that I received "explanation of benefits" statements for the surgery billing, and the math on the statements is both comforting and disturbing. I believe the paperwork I received reflects the bulk of the process--hospital charges, surgeon fee, ultrasound. As I'd expected, the standard charges total around $14,000, however due to being in the "network," the charges were "repriced" to about $2200, most of which I'm responsible for to meet my deductible. Now, I'm grateful for the discount, but it also got me wondering. Does this mean there is $11,800 worth of "wiggle room" or mark-up in the standard charges? I presume the numbers mean that they can do the operation for $2200 and still make money.

Now, if I didn't have insurance, the amount probably would not get repriced, and I'd owe $14,000 for this surgery, right? WTF? I suspect that the extra dollars are padding for a couple reasons... if I could in fact afford to pay, the additional $11,800 would go to cover the expenses of 5 other uninsured people who did not have insurance whose fees would be written off. But also, if I could not afford to pay, and the hospital would have to write off the bill, they want it to be a huge amount, presumably as a tax-deductible business expense. This seems like a real shell game to me, and the people hurt most are those who are uninsured but who intend to pay their bills. Chances are if you have no insurance, you're not a high-earner, and $11,800 represents about a full year's earnings at a full-time minimum wage job, so no wonder medical costs are a leading cause of personal bankruptcy. Yet, somehow it's OK to charge astronomically higher fees to those least able to pay them.

So, the hospital and the surgeon and everyone already have their fees dictated by arrangements with my insurance company. The hospital may even receive some payment for being part of the network to offset the repriced amounts, which would come out of my premium payments. So, why not just have the fees dictated by a non-profit government agency, such as Medicare, and offer these lower prices to everyone? Instead of paying thousands of dollars a year into insurance premiums, if that were shifted to taxes, it wouldn't cost me any more, but less money would go to corporate profits and lawyers eager to dispute claims. In fact, I bet if the insurance company profits were redirected to actually providing patient care, we could provide basic medical coverage to everyone. This is how the system works in most developed nations in the world. It's been said as a whole, the US is paying for universal health care, but we're just not getting it. I guess that's true... lots of people just don't get it.