Mon
Mar 6 2006
10:57 am

Local community activist Lisa Starbuck and her husband Scott gave powerful testimony in an interview with Dan Rather for a CBS 60 Minutes report last night on hospital charges. Theirs was one of two featured cases highlighting the disparity between what hospitals charge the insured versus the uninsured, or more accurately, what payment they will accept. The full transcript is here.

In the Starbuck's case, they were charged $19,000 for two artery stents U.T. Hospital used to treat Scott's mild heart attack. The manufacturer says the list "retail" price of the stents is $2300 each. The Starbucks had a total bill of $50,000 for a 72 hour stay with no complications.

I was shocked. Some of these practices seem criminal. And it's the opposite of my own personal experience from several years ago. Although I'm not uninsured, my deductible was so high that I was basically a self-pay patient. When I told a hospital in Florida I would be paying cash because of this, they charged me half of what they would have charged an insurance company for some tests.

According to the CBS report, it now seems hospitals are charging the uninsured four or five times what they would charge an insurance company. Or, as the report said, they are willing to accept lower payments from Medicare/Medicaid and insurance companies but hold the uninsured's feet to the fire for the full, and according to the report sometimes outrageously inflated amount. And according to the report, this is a fairly recent practice. (This also seems related to the recent discussion of prescription discount cards.)

I guess what this means is that big insurance companies have been successful in "keeping costs down". Except now it seems hospitals are trying to make up the difference by charging the uninsured more (or, not accepting less as the case may be). Which if you think about it doesn't make any sense, because a) there aren't as many uninsured people, and b) they don't generally have a lot of money or they would be insured. Except for the "uninsurable", of course, who are one medical crisis away from bankruptcy.

What a mess.

P.S. The simple solution to the whole mess is to open up Medicare to everybody. All it would take is a simple Act of Congress.

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Andy Axel's picture

In the Starbuck's case, they

In the Starbuck's case, they were charged $19,000 for two artery stents U.T. Hospital used to treat Scott's mild heart attack. The manufacturer says the list "retail" price of the stents is $2300 each. The Starbucks had a total bill of $50,000 for a 72 hour stay with no complications.

And the Bush Administration would have you believe that the cause of the upward spiral of health care cost is tort liability.

Funny, that. Only about 2% of health care spending in the US is attributable to malpractice insurance cost.

I wonder what percentage is markup. Or, as I like to call it, the hammer-stroking of the customer. I mean, it's not like you can negotiate price effectively when someone's got a cathether running up to your heart...

____________________________

If we heard mortar shells, we'd cuss more in our songs and cut down on guitar solos

redmondkr's picture

Mr. Bush's answer to the

Mr. Bush's answer to the problem . . . tougher bankruptcy laws.

nill illigitimi carborundum

Justin's picture

There was an article in the

There was an article in the WSJ last week (cant remember what day) that focused on the Amish in PA. Since they pay cash for everything the local hospital agreed to discount all services to the same rate as what a medicaid patient would pay (they got into trouble for going lower than what they were charging .gov). They also had to agree not to file malpractice suits but since they (Amish) never sue anyone it didnt really matter.

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