Care costs a lot and it’s not straightforward what the cost is

Up until last May, my experience of medical costs was limited to the $100 per month premium I contributed towards my employer-sponsored insurance and the nominal co-pays associated with well-child checkups and generic prescriptions. There was never any hesitation in seeing a doctor or filling a prescription. That all changed when went I back to school.

I blindly signed up for the school-recommended family insurance and naïvely assumed myself, my wife, and my two young children would receive whatever health care we needed at a relatively small co-pay. The upfront premium of $10,000 was high, but I believed that this would cover whatever life threw at us. However, two experiences woke me up from my ignorance: my wife’s endoscopy and a visit to the pediatrician.

In July, my wife was sent by her doctor to get an endoscopy to determine the cause of her stomach pain. In the weeks following her procedure, we started receiving statements from our insurance company. The statements declared that we were responsible for the full amount. We received the following explanation from our insurance company, “We don’t cover preexisting conditions.” As we argued with the insurance company, the hospital bills started trickling in: $1200 from the outpatient center, $200 from our family physician, $400 for the anesthesiologist and $200 from the lab. We received six bills demanding $2600 for one procedure. As I examined the bills I was shocked by the redundancy—why is the cost for the anesthesiologist not included in the outpatient center bill? Why do I need to pay my family physician twice (the initial visit and the follow-up) for a procedure she ordered us to do? Besides feeling hung-out-to-dry by my insurance company, I felt taken advantage of by the medical system. It seemed as if everyone in that hospital wanted to include something for our visit. After fighting tooth and nail to get our insurance to cover my wife’s endoscopy, they finally relented. Still, we were left with $700 to pay. For an unemployed student, $700 is not a small co-pay.

I studied the coverage booklet put out by my insurance, and I still do not understand what is covered and what is not. What I found was something similar to how we were billed for my wife’s endoscopy: the procedure itself is covered one way, labs are handled another way, and prescriptions are an entirely different matter. How am I supposed to know what labs or prescriptions are associated with an endoscopy?

Compared to my wife’s endoscopy, my daughter’s first visit to the pediatrician should have been straightforward. A fever that lasted three days followed by a rash was a simple diagnosis for her experienced pediatrician. What is not simple is the billing and insurance struggles we are facing. Our insurance company decided that my daughter’s fever was a preexisting condition, and as we fought with them to fulfill their responsibility, the pediatrician’s office contacted us that the $115 fee is actually $321. Again, the feeling of being taken advantage of is overwhelming. It could be that our doctor’s office is honest in their error, but I have never received services or products charged to me like this. In other words, when I go to the store, I know exactly how much a pound of apples will be long before I get to the cashier—and there are no “preexisting” conditions that add hidden costs at the register.

I’ve learned a lot about medical cost of care; that is, care costs a lot and it’s not straightforward what the cost is. I know that we have paid $11,021 for an endoscopy, a visit to the pediatrician and spotty coverage for the rest of the year. It’s not merely that medical care is expensive, it’s also that I have no estimate of what my costs will be. Getting new brakes on my car is expensive, but the mechanic is very careful to give me an itemized estimate before the repair is made. Recently, my wife, after a particularly exhausting week, started experiencing pain in her chest and a tingling sensation in her arm. Being a nurse, she knew exactly the tests that would be ordered if she went into the hospital.

Despite my attempts, she refused to go to urgent care knowing that the cost of the visit, even if our insurance company cooperated, would be enormous. There’s now a hesitation to use our medical resources that was never there before.

Samuel Yang is a patient.

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  • Personal Failure

    Your wife isn’t the only one avoiding care because of cost. Tens of millions of Americans refuse or delay treatment purely due to cost, myself included, often resulting in greater injury or even death. Yet this website will, every day, publish another article about why any system but the one we currently have is wrongity wrong wrong wrong.

    • Betsy

      I think that’s a bit unfair. As someone with no insurance (and who probably pays for the shortfall from those people who have it), this site has given me some useful information for dealing with the medical-industrial complex in terms of seeking out cash-only practices and negotiating a fair price. The high-tech way is not the only way to health – lots of conservative care and self-care is possible, saving funds which would have been squandered on health insurance to cover a real emergency.

  • Kim Ellison

    This is the dirty little secret of healthcare for patients: variable pricing.  Most people like the author of this post have only experienced employer sponsored insurance, which is cheap, straightforward and uses economies of scale to minimize the patient costs by spreading it across the whole group. 

    Welcome to private/cheap insurance/no insurance land where you don’t know the price of services, have limits on doctors visits, get surprised by the lack of coverage, have multiple bills, high deductibles, and need a law degree to understand the policy.  The sad part of all of this is that purchasing medical insurance is often a price driven decision not a risk avoidance decision.  The buyer/patient bases the purchase criteria on how the insurance cost will impact the monthly or yearly budget – not a realistic view of what the insurance will be usually used for, yearly preventative care and event-based medical services (accidents, major illness).  BTW, healthcare insurance is rarely sold with messaging that truly reflects how the buyer will impacted.  “Just buy a policy, and your healthcare is assured.” – A naive assumption only recognized when the policy is actually used.  Rationing care becomes a necessity and exceeds most of household dollars allocated to medical expenses.  Anger at those who bill for services is displaced. If patients had a much better understanding of what they were buying in an insurance policy, and then what they were paying for in actual services some of the dissatisfaction and distrust with healthcare would dissipate.  Healthcare is the only industry where the price of services is unknown before purchase, which hurts the ability to make informed decisions by the purchaser, the patient.  A fix will involve a shift in perception of cost and changes in financial management methodology used by hospitals and doctors to improve pricing, invoicing and ultimately payment, and in market demand/pressure and government mandates in regard to quality of insurance policies. – that however is another conversation.

  • Anonymous

    This all is based on good ol free market economics.

    For the uninformed out there, here is how things work.

    When doctors/hospitals sign a contract with an insurance company they agree to a reduced price for their services in order to have access to a large group of the insurance companies customers. (avg Joe with private insurance from employer).

    Each time the contract is up for renewal from the insurance company, they try to decrease their costs by reducing payments paid by the physicians/hospitals. The Hospitals/physicians then inflate their costs as much as possible anticipating this. Then wv hen they agree to a price cut, etc they are actually still ahead.

    The problem is when an average Joe without insurance wants to pay cash they pay the artificially inflated price. The hospitals/physicians can’t easily discount them, because if so the insurance companies will call foul and demand that reduced price.

    So the uninsured pays more.

    What’s the fix? I have no idea, but something has to change.

    • Anonymous

      You describe a charade! It’s the reason why we need to introduce some very serious and very robust competition to make insurance companies and insurance brokers much more accountable and force them to not continue with the absurd pretense you describe. What’s the fix? It’s pretty darn obvious, isn’t it? Find a way to offer something other than the traditionally abusive insurance model. We need to force the insurance companies and the insurance brokers to compete! A single-payer option will do just that! We need a single-payer option that does not use insurance companies and insurance brokers. AHIP has had it their way for far too long at the expense of consumers. AHIP and the insurance companies/brokers bring absolutely no value to the health care market. If anything, they make our health care system more expensive. Insurance companies and insurance brokers are simply the middlemen that connect providers to consumers and while doing so, they take a huge margin for themselves. This is not a value-added model. When the exchanges go into effect in 2014, health care consumers need a public option that does not include any form of insurance. In my view, along with the traditional insurance model, the state exchanges should offer Medicare to everyone regardless of age. Those under age 65 could choose between the current broken model, or Medicare. Those under age 65 would pay a premium. Adding a public option like Medicare for all would begin the process of forcing the providers in our health care system to be much more transparent for consumers. It would begin to end the charade and absurd pretense we see in the current broken health care model.

  • marc

    $11,021 for an endoscopy? What did they do, coat the esophagus in gold?

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