
After Surgery, Surprise $117,000 Medical Bill from Doctor He Didn't Know - jeswin
http://www.nytimes.com/2014/09/21/us/drive-by-doctoring-surprise-medical-bills.html
======
danbmil99
Health care -- where Libertarian, free-market ideology goes to die.

The free market simply doesn't work when there is zero price transparency, 3rd
parties are often responsible for payment, and purchasers are often in great
distress right when they need to be able to negotiate.

Laissez faire market philosophy fails in this case for the same reason it
fails during major crises and disasters. Purchasers are nearly powerless but
have needs that they must meet immediately; vendors can price-gauge and make
out like bandits. A climate of scarcity and desperation prevail over
hypothetical rational actors participating in a stable market at equilibrium.

~~~
NoMoreNicksLeft
There is no free market here.

This isn't a price transparency thing either. This is about having created a
culture where every doctor in the country is constantly hustling, committing
borderline fraud.

Sociologically, the idea that doctors and medical care workers are always
looking out for what's best for their patients helps to mask the idea that
they might be doing so from a health perspective but are ignoring any other
consideration. And so bringing in a friend who's also a surgeon so he can get
a little kickback doesn't really raise any ethical alarms.

But this isn't the fault of the libertarians.

Government has meddled in this industry and even with the ideas that the
typical Americans think about for so long that this was inevitable. Nor can
government fix it now... the AMA and other quasi-unions won't stand for it.
They'll negotiate.

And, as usual, our politicians will sell us down the river.

If you want to fix this (and every other problem), the answer is simple
(though not particularly libertarian): outlaw all health insurance. Make
everyone pay for their own care. Make them pay out of pocket.

In such a nation at that, none of these shenanigans could continue. Not that I
expect anyone reading this to get it. You cry "But NoMoreNicksLeft, how could
that man afford $117,000 out of pocket!"

And the answer is that he couldn't. The doctor (if he billed after the fact)
might sue, but winning a lawsuit doesn't make someone magically capable of
paying. If the doctor insisted on payment up front, then the man would just
forgo his particular service (which, since he was unaware that he needed it
and it sound like bullshit... wouldn't have mattered).

There aren't enough rich people who can afford to pay the current prices out
of pocket for 100% of the doctors to continue to bill/earn what they do
currently. Maybe just enough for 1% to continue like that... the other 99% are
going to have to shape up, and in a hurry.

They can't hold out prices where they are now (we can't pay that out of
pocket), nor can they spitefully punish us and refuse to do it at lower
prices. They have bills to pay just like the rest of us, they have mortgages,
they need to buy groceries, etc.

Nor will they decide to become plumbers and HVAC repairmen so that they don't
have to give away their surgeries for less.

But again, this is lost on anyone I've ever explained it to. You all think it
will result in millions of deaths and untold suffering.

> Laissez faire market philosophy fails

Bullshit. There hasn't been a laissez fair in the healthcare industry in the
United States in 100 years.

~~~
danbmil99
> Bullshit. There hasn't been a laissez fair in the healthcare industry in the
> United States in 100 years.

True. But why did health care turn away from a completely free-market
approach? Why does almost every other industrialized society now support some
sort of single-payer system, at least for those who cannot afford private
boutique care?

The answer is simple: as a society, we do not accept the results of a truly
free-market health care system. 100 years ago, it was accepted that you could
become ill at any point in your life, and very possibly die. Being rich was
not really a lifesaver, because many if not most major disease categories were
at that time untreatable, or the treatments available were palliative at best.

Now, we live in a world where we all know fully well that with enough access,
many medical situations that used to be fatal are now treatable with excellent
chances of full or near-full recovery. Steve Jobs gets a liver; Dick Cheney
gets a heart. My wife's uncle just died of a heart condition similar to
Cheney's. Somehow, there was no transplant available for him.

In this world, most people find it unacceptable that your health outcome is
directly related to your wealth and social status. The world you suggest --
where everyone simply pays out of pocket -- would be socially regressive in a
way that I believe is abhorrent to most civilized people, with the glaring
exception of around 50% of the US voting public.

Insurance was developed as a reasonable fair-market way to ameliorate this
issue of health care access disparity. If you can afford insurance -- in the
US, this typically was through getting a decent job that provided a large risk
pool and could therefore negotiate reasonable premiums -- you could at least
theoretically rest assured that a major medical crisis would not totally
bankrupt you.

But for those outside of the pool of large employers, the insurance companies
started doing bad stuff (from a customer's POV) -- dropping the sick, refusing
to cover previous conditions etc. In their defense, insurers had the problem
that without some sort of mandate, people could just go uninsured until they
got sick. So the individual market was destined to be over-represented by
older, sicker people.

If you really believe in laissez faire, free-market medicine, you (as a
society) have to accept the following:

* People who treat themselves like shit for years and get sick (obesity-related diabetes is a great example) can simply drop dead if they can't afford expensive care and medication.

* If some idiot on a motorcycle without a helmet spins out and breaks their skull, and is not rich, shovel his body to the side of the road, wait for him to die, and call sanitation to remove the body

* If your parents get old and sick, and they fucked up their retirement planning, slip them some clonazepam or watch them wither away painfully over a period of months or years. Be prepared for someone in the family to quit their job and become a nurse, or let Grandma wander around until she falls down and hopefully dies on the spot.

That was basically where everyone was throughout most of history. Only
difference is, now we know it can be better. But in a ruthlessly free-market
society, only the rich and well-connected would ever have a chance of getting
the best possible care.

~~~
adventured
Healthcare didn't voluntarily turn away from a market approach. The US
Government invaded the industry in a massive way and began manipulating and
regulating it from top to bottom. That has only gotten worse over time.

~~~
seehafer
Amen. The collective argument behind our current system forgets the history,
namely that our current backasswards way of paying for healthcare originates
with a reaction to wage controls during WW2.

------
sachingulaya
Ugh. Got hit by this. My insurance company listed a hospital as covered. I
took my daughter to the ED...then got a $400 bill in the mail for a physician
we saw for 2 minutes. The rest of the visit was covered. He wasn't. Apparently
all doctors who work for the hospital are covered by the insurance...but he
was a visiting physician. I hate health insurance.

------
zaroth
There are a lot of really interesting things happening that this article looks
at from exactly one angle -- the billing. What I want from NYT is an article
which really examines the situation, and not just sensationalizing numbers.

For example, Medicare would have paid only 1% for the assistant's work; that's
the market rate that they set. This has all sorts of implications... I assume
doctors must have some reason to accept those rates, other than out of some
ethical responsibility. It sounds like private insurers are hugely subsidizing
Medicare by paying 100x the price. If everyone paid the same rate, Medicare
would have to pay a lot more, or there would be a lot less of these
procedures.

On the other hand, anyone who actually pays that list price is giving the
doctor a gift. If they explained the median price patients pay the doctor out-
of-pocket, I wonder if the examples would line up.

It is interesting to read about some patients who went to extraordinary means
to discover ahead of time what their costs would be, only to be basically
assaulted with an outrageous bill in the end. For a _planned procedure_ and
even for an emergency, I think the doctor performing the work should find a
way to work with their patient's insurance plan. And insurance plans should
have reasonable coverage and customary payment terms which are accepted. The
doctors shouldn't get to fleece the insurance companies either.

The level of price discrimination is completely out of control, but I think
the legal framework is in place, right now, to protect patients and insurers
both from these bills. It's a tax on the rich and middle class, since the
doctors collect some small fraction of total billings. It's like a lose-lose
double lottery.

~~~
dalke
"What I want from NYT is an article which really examines the situation, and
not just sensationalizing numbers."

Steven Brill, in Time, wrote an excellent article on just that topic. The
subscriber access is at [http://time.com/198/bitter-pill-why-medical-bills-
are-killin...](http://time.com/198/bitter-pill-why-medical-bills-are-killing-
us/) while a no cost version is at
[http://www.uta.edu/faculty/story/2311/Misc/2013,2,26,Medical...](http://www.uta.edu/faculty/story/2311/Misc/2013,2,26,MedicalCostsDemandAndGreed.pdf)
.

See also an interview with him at [http://www.pbs.org/newshour/bb/health-jan-
june13-healthcare_...](http://www.pbs.org/newshour/bb/health-jan-
june13-healthcare_02-25/) .

Brill's thesis is that with most medical care it is impossible to do the
comparison shopping that you emphasize should be possible "even in an
emergency."

You hypothesize that "private insurers are hugely subsidizing Medicare by
paying 100x the price." As
[http://www.medscape.com/viewarticle/521175_2](http://www.medscape.com/viewarticle/521175_2)
comments, "U.S. hospitals now receive abut [sic] 31 percent of their net
revenues from Medicare." Moreover, if you start to read about the US system
you would realize that Medicare is prevented, by US law, from negotiating drug
prices. Private insurers, on the other hand, can do so. The Brill piece covers
that detail. Since your hypothesis doesn't match reality, it must be
incorrect.

I am not well informed of this topic, and my knowledge is mostly limited to
the popular press. I cannot therefore point to any critical research. There
was a recent posting here on HN, at
[https://news.ycombinator.com/item?id=8304019](https://news.ycombinator.com/item?id=8304019)
, concerning "The Cost of My Mother’s Cardiac Care in the United States and
India."

The actual article is at
[http://www.annfammed.org/content/12/5/470.long](http://www.annfammed.org/content/12/5/470.long)
, which starts "When my mother fell ill while visiting me in the United
States, I had the opportunity to compare costs of surgical cardiac care in the
United States and India. I faced challenges in making well-informed decisions
in the United States due to the lack of cost transparency and the minimal
flexibility offered in choice of care, whereas in India costs are readily
available and allow most people to freely choose their preferred type of
care."

It sounds like you are saying that NYT should, in every piece about a topic,
give the full details to justify its arguments. That's not how newspapers
work. They often give many different pieces; some of which examine the
situation, and others which help flesh out details. This is one of the latter.
You are supposed to read the newspaper over time to get a better sense of the
whole.

Otherwise, you need to look towards the specialist literature, like review
papers on the economics of the US health system, to get the answers you're
looking for.

BTW, you like the word "should" \- you used it three times. The many
observations show that the US health care system isn't the way you think it
should be. There is no legal framework like what you asserted. This suggests
you are basing your opinions more on wishful thinking, rather than trying to
understand what is actually a quite complex and well-discussed issue. I hope
those links I gave help provide a beginning for you.

~~~
zaroth
In the article they cite an example where private insurance paid 100x the
Medicare rate. That's not to say private insurers pay, overall, 100x the
Medicare rate. It's closer to 2x per procedure in the aggregate. I don't
understand why a private insurer would _ever_ pay 100x the Medicare rate in
any case.

The article went on to say how Dr. Mu, despite his title as Chief of
Neurosurgery, does "probably not very lucrative" work due to low Medicaid
rates. So this is a case where private insurance is subsidizing the public
system.

Cost shifting is well known in the industry. The 30% of the revenue paid by
Medicare corresponds to significantly more than 30% of the services/cost.
Operating a hospital is analogous to operating an airline, where you can sell
30% of seats at a price that would be grossly unprofitable if the whole plane
sold that way. My hypothesis is that as more care becomes public, the price
per procedure that Medicare (or whatever it's called then) will be
dramatically higher, because there won't be anyone left to shift the costs
onto.

I was able to find some data which demonstrates this; 'Aggregate Hospital
Payment-to-Cost Ratios for Private Payers, Medicare, and Medicaid, 1992 -
2012' \-
[http://www.aha.org/research/reports/tw/chartbook/2014/chart4...](http://www.aha.org/research/reports/tw/chartbook/2014/chart4-6.pdf).
There's a subtle point that this data hides, that the article shows, which is
although private payments exceed costs, in aggregate, by ~150%, the billing is
highly selective. So some private payers may pay close to the Medicare rate
(85% of cost) where some private payers are paying 10,000% the cost, like in
the case in the article with Dr. Mu.

It's exactly this highly selective billing which I think people _should_ be
protected from. Both from an Dr/ethical standpoint, to the necessary
legislation which could more clearly protect against this, rather than relying
on more general statutes.

I don't really care to discuss "how newspapers work" but I do think while NYT
is trying to tell a story about an industry, all I hear is anecdotes.
Anecdotes are important, but in a story about industry billing practices, I
also need to know if these anecdotes are crazy outliers, or everyday
occurrences. You need to anchor your anecdotes with something if you want to
tell a story bigger than the anecdote -- I think that's basic reporting, but
yes, perhaps too much to expect.

~~~
dalke
"They cite an example where private insurance paid 100x the Medicare rate"

Is that the line "If the surgery had been for a Medicare patient, the
assistant would have been permitted to bill only 16 percent of the primary
surgeon’s fee"?

If so, Dr. Mu received the $117,000 as a private check from Mr. Drier, and not
from a private insurance company. There's nothing which says that Dr. Mu
wouldn't have accepted the lower Medicare rate, or that someone else would
have been the assistant if Dr. Mu's primary interest was the extra income, or
that a private insurance company would had other preconditions in place to
prevent a $117,000 bill. It's hard to have an idea in part because Dr. Mu did
not respond.

The only other 100x I can find is the out-of-network vs. in-network bills for
a muscle and skin graft. But that's not the Medicare rate.

"Probably not very lucrative" is quite far from "subsidizing the public
system." If the doctor makes $120K/year with Medicare patients only, and
$500K/year with only non-Medicare patients, and the hospital is profitable
both ways, then where's the subsidy? While an extra $380K/year is very
lucrative.

If what you are saying is true, then there should be a mass wave of hospitals
and doctors which don't accept Medicare. While some hospitals and clinics
don't accept Medicare, they are relatively few. In fact, hospitals and medical
centers will advertise that they accept Medicare. For example, this billboard
for a clinic - [http://www.yourwestvalley.com/topstory/article_73ac64db-
fc44...](http://www.yourwestvalley.com/topstory/article_73ac64db-
fc44-5574-8c2e-cd66059bfa6f.html?mode=image&photo=0) .

It's very hard for me to accept that the payment-to-cost ratio chart you
linked to is meaningful. That appears to be the average cost across everyone.
A better chart would be the cost of Medicare treatment vs. the reimbursement
by Medicare, and the same for the private insurers. Otherwise, this could be
showing that Medicare does a better job of cost containment than private
insurers, so that private insurers end up paying for more medically needless
but profitable procedures than Medicare. (For example,
[http://content.healthaffairs.org/content/22/2/230.full](http://content.healthaffairs.org/content/22/2/230.full)
argues that Medicare is better at cost containment than private insurers.)

Instead, I find papers like "How Much Do Hospitals Cost Shift? A Review of the
Evidence" at
[http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3160596/](http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3160596/)
more persuasive than that chart.

> Most of the analyses and commentary based on descriptive, industrywide
> hospital payment-to-cost margins by payer provide a false impression that
> cost shifting is a large and pervasive phenomenon. More careful theoretical
> and empirical examinations suggest that cost shifting can and has occurred,
> but usually at a relatively low rate. Margin changes also are strongly
> influenced by the evolution of hospital and health plan market structures
> and changes in underlying costs.

Regarding newspapers, I'm saying that you are getting peeved because you don't
understand how newspapers work. The old phrases are "if it bleeds, it leads"
and "When a dog bites a man, that is not news, because it happens so often.
But if a man bites a dog, that is news." and "You never read about a plane
that did not crash."

People read a newspaper in part because they want crazy outliers. The good
papers try to fit it in a larger context, biased of course by the overall
ideology of the editors and writers. (Eg, the WSJ is pro-market.) But
complaining about the lack of complete context and details in a newspaper
article is like complaining that the sky is blue.

~~~
zaroth
Dr. Mu _did not_ received the $117,000 as a private check from Mr Drier.

"When Mr. Drier complained to his insurer, Anthem Blue Cross Blue Shield, that
he should not have to pay the out-of-network assistant surgeon, Anthem agreed
it was not his responsibility. Instead, the company cut a check to Dr. Mu for
$116,862, the full amount."

"If the surgery had been for a Medicare patient, the assistant would have been
permitted to bill only 16 percent of the primary surgeon’s fee. With current
Medicare rates, that would have been about $800, less than 1 percent of what
Dr. Mu was paid."

So at least we should agree that this is a perfect example of cost shifting /
price gauging.

> If the doctor makes $120K/year with Medicare patients only, and $500K/year
> with only non-Medicare patients, and the hospital is profitable both ways,
> then where's the subsidy? While an extra $380K/year is very lucrative. If
> what you are saying is true, then, there should be a mass wave of hospitals
> and doctors which don't accept Medicare

Well, that's the very definition of subsidy, so I don't know quite how to
respond. Where's the subsidy? Right there! Very few people become chief
neurosurgeons for $120k per year. A lot more become chief neurosurgeons for
$500k per year.

As I a said, running a hospital has massive fixed costs, so like an airline,
taking on patients which pay 85% of cost is still better for the bottom line,
as long as your hospital is running below capacity. So Medicare is an overall
good deal for the hospital, even though it pays below cost, as long as it
doesn't exceed a certain percentage of the overall patient population. If the
patient population was entirely Medicare, then the hospital would _not be
profitable_.

> "It's very hard for me to accept that the payment-to-cost ratio chart you
> linked to is meaningful. That appears to be the average cost across
> everyone. A better chart would be the cost of Medicare treatment vs. the
> reimbursement by Medicare, and the same for the private insurers."

The better chart you ask for--the cost of Medicare treatment vs. the
reimbursement by Medicare, and the same for the private insurers--is exactly
what this chart shows. It shows separately for Medicare, Medicaid, and Private
Insurance, what percent of the cost of the procedures is actually paid.
Medicare has lately been covering 89% of costs, while private insurance has
ballooned to 150% of cost. Here's the full set of charts;
[http://www.aha.org/research/reports/tw/chartbook/ch4.shtml](http://www.aha.org/research/reports/tw/chartbook/ch4.shtml)

> Otherwise, this could be showing that Medicare does a better job of cost
> containment than private insurers, so that private insurers end up paying
> for more medically needless but profitable procedures than Medicare.

Quite clearly Medicare does a fantastic job of containing _its_ costs. You can
strike the "medically needless" part from that, since I think it's
unsupported. Private insurers absolutely pay for more profitable procedures,
as indicated by the chart; private insurance pays 150% of cost overall. But
obviously ACA legislation setting a lower payment rate does not inherently
make the procedures being paid for actually cost less to perform. But it does
certainly force the hospital to search for ways to make up the difference.

> Instead, I find papers like "How Much Do Hospitals Cost Shift? A Review of
> the Evidence

I'm somewhat confused by this paper, since it reads like an op-ed. After a bit
a searching, it appears Frakt has quite a few editorials claiming hospitals
lack the market power to meaningfully shift costs to private insurers, despite
abundant and uncontroversial data showing Medicare pays below cost.

Frakt himself has the following to say, quite amusingly, in a editorial titled
'The End of Hospital Cost Shifting and the Quest for Hospital Productivity';

"The ACA will permanently reduce the Medicare payments hospitals would
otherwise receive. Its ‘productivity adjustment’ will scale payments downward
by the average rate at which private nonfarm businesses’ productivity
increases. That rate has been estimated to be 1.1 percentage points per
year…Actuaries for [CMS] have estimated that by year 2040, Medicare payment
rates to hospitals will be half those of the commercial market, and lower
still thereafter."

That's _payments rates_ not total payments. I trust the CMS to know exactly
how much it's underpaying. [http://www.cms.gov/Research-Statistics-Data-and-
Systems/Stat...](http://www.cms.gov/Research-Statistics-Data-and-
Systems/Statistics-Trends-and-
Reports/ReportsTrustFunds/downloads/2011TRAlternativeScenario.pdf)

I didn't know that the ACA puts downward pressure on rates equal to the
average rate at which private nonfarm business productivity increases. Since
that productivity rate increases significantly higher than the historical
productivity gains in _healthcare_ , and is expected to do so for some time,
CMS states this will require new legislation to fix, or else payment rates
will be so low as to significantly effect availability and quality of
services. That's pretty scary, to have built a failure mode like that into the
system.

~~~
dalke
"Dr. Mu did not received the $117,000 as a private check from Mr Drier."

You are correct. I misread it.

I agree that it's price gouging.

"that's the very definition of subsidy,"

A broad definition of subsidy could include a bribe. For example, one
interpretation is that people won't become chief neurosurgeons unless you
bribe them. In any case, it was an example to illustrate the difference
between subsidize and not very lucrative. I'll change the numbers to $500,000
with only Medicare patients (this is about what they make in the UK, so surely
enough that people will decide to be chief neurosurgeons) and $3,000,000 with
only non-Medicare patients - a very lucrative income indeed.

I see that part of my confusion in understanding the topic is that there are
multiple definitions of "cost-shift". In economics - I earlier quoted from an
economics paper - it's a "dynamic response by hospitals to a reduction in
Medicare payments, in the form of a fully or partially compensating increase
in prices charged to private insurers. In the policy debate over Medicare
payments, however, cost shifting is defined broadly as payments that fall
short of the costs incurred by hospitals in the treatment of Medicare
beneficiaries, as measured through negative hospital margins on those
patients." (Quote from
[http://content.healthaffairs.org/content/30/7/1265.long](http://content.healthaffairs.org/content/30/7/1265.long)
)

I was talking about the former, which excludes price discrimination. The chart
you link to shows the latter, which is a broader category. Indeed, the paper I
just referenced, titled "Hospitals Respond To Medicare Payment Shortfalls By
Both Shifting Costs And Cutting Them, Based On Market Concentration" goes into
the details. It's quite a lovely paper.

> [Abstract:] The study presents empirical evidence that, faced with
> shortfalls between Medicare payments and projected costs, hospitals in
> concentrated markets focus on raising prices to private insurers, while
> hospitals in competitive markets focus on cutting costs.

> ... Payment rates from Medicare to hospitals have lagged behind the growth
> in hospital costs over recent years, leading to negative hospital profit
> margins on publicly insured patients.1,2 These negative Medicare margins
> have reignited the long-standing debate over whether the public insurance
> program is partially responsible for the high prices charged to private
> insurers, as hospitals seek to offset losses on one set of patients with
> profits from another.3–7

> Recently, however, the Medicare Payment Advisory Commission (MedPAC) staff
> has proposed an alternative explanation for negative Medicare margins, one
> that reverses the direction of causality and interprets Medicare payment
> slowdowns as a means toward the reduction of hospital costs rather than a
> shifting of costs from public to private payers.8

As I understand it, the MedPAC model gives an explanation of why the chart you
pointed out _isn 't_ an example of cost shifting in the economics sense of
subsidy. The paper then assesses the viability of the two models and finds
they are complementary strategies. The key factor to choose one over the other
is the "degree of concentration or competition in the local hospital market."

I liked the observation about the non-economic factors that go into raising
revenue rather than lowering cost:

> It generally is more desirable, from a hospital management perspective, to
> increase revenues than to reduce costs, because the former merely alienates
> insurers, but the latter alienates employees, physicians, and potential
> patients. The cost-shift perspective highlights the revenue-enhancement
> hospital response to Medicare payment shortfalls.

The economic model of Frakt and others, which says that in a competitive
marketplace there is no cost-shifting in the subsidy sense is not new, so you
needn't track down more from that author to investigate any specifically
unusual personal bias. See for example
[http://www.ebri.org/pdf/briefspdf/1296ib.pdf](http://www.ebri.org/pdf/briefspdf/1296ib.pdf)
for a similar paper from 1996, which says:

"Rather than cost shifting [in the subsidy sense], the existing evidence
points to hospital competition limiting the provider's ability to raise
prices. Whatever market power hospitals once enjoyed is disappearing—and with
it the ability to cost shift."

Under this model, the payment shortfall charts are actually a measure of how
competitive the hospital environment is.

I read some of the CMS paper you linked to. It comments how "When the Medicare
inpatient hospital prospective payment system was introduced in 1984, Congress
applied reductions of 0.4 to 3.8 percentage points to the annual payment
updates for most of the first 20 years of operation without causing hospital
bankruptcies or withdrawal from the Medicare market."

I think that's a very good indicator, though perhaps not the best socially. I
therefore think it's odd that they use "Hospitals have been pushing back in
recent years against payment reductions aimed at further reducing
inefficiency, a signal that much of the achievable gains may have already been
made" as a more recent indicator. I know from the 1996 paper that there was a
large debate on the topic already in the 1990s, so how does the Office of the
Actuary judge if the pushback now is stronger and more meaningful then 20
years ago. Shouldn't they be using the same measure? Has there been an
increase in the number withdrawals from the Medicare market?

In any case, I agree with the overall tone of the paper. I agree that there
will have to be changes in the Medicare system some time in the next 50 years.
I don't agree that the lack of a perpetually effective system is of great
concern. If we could do that, we wouldn't need any legislative branch.

------
interpol_p
This almost feels like an Onion article where all the costs are multiplied by
20. What justifies such huge bills?

The article makes it sound like a doctor walked in to ask "How are you
feeling?" and then charged $20,000 for doing so.

I've had a few private operations quoted in Australia and the full cost of the
operation is usually in the $500-$2000 range. Even a pregnancy through a
private hospital was quoted to us at about $4000. (Although we ended up having
our first baby delivered for free through a public hospital, which was
fantastic.)

~~~
kamaal
>>doctor walked in to ask "How are you feeling?" and then charged $20,000 for
doing so.

It would have happened, why would you doubt it?

It would have been like he was called in just in case any issue came up. The
doctor walks in and asks the most obvious question to the patient "How are you
feeling?".

The operation ends without needing any inputs from him. But regardless he
would have billed the patient for his time.

The attitude is, he wouldn't have given any inputs but he did give them their
time, _which would otherwise be used else where to make the same money_ so you
have to pay even if the actual value added by him was zero.

~~~
interpol_p
I understand the doctor gave her time — that's fine. It's that the cost for
that time seems ludicrous. As I said, the pricing seems multiplied by 20.

------
deepsun
By the way, in xUSSR free healthcare system multiple doctors _often_ discuss
serious cases, unlike US. That's not something special for xUSSR doctors to
discuss in a concilium complicated cases -- that's daily routine. That's their
way to share expertise and improve professionally. In US you may have some
chronic disease and one doctor would treat you as she/he believes is right,
not discussing it with colleagues, and if you find another doctor, he/she
might change the treatment, not even talking with previous doctor.

So it's kinda strange to hear from famous US people that they "found an
awesome doctor". I would prefer to find an awesome clinic, and have multiple
doctors to discuss my case. That happens, of course, but money keeps that from
being natural routine here.

~~~
nobullet
Being a son of a physician from former USSR country I can say with the certain
degree of certainty that this is not true in our times: you are lucky not to
die in a line of 67 patients before you see a doctor in a state clinic. Not
mentioning the MRI or X-Rays where patients wait up to 3-4 months in lines in
order to get simple diagnosis. Money gives you the ability to go to private
clinics and have these things done faster, often by more professional
specialists. Doctors in state clinics are underpaid, often unprofessional and
with lack of experience (graduated students).

------
ar7hur
To fellow startups claiming to "change healthcare": this is not about nicer
online forms. This is about destroying this.

~~~
drdeadringer
> this is not about nicer online forms. This is about destroying this.

Thank you for clarifying this.

~~~
drdeadringer
... not sure why an honest 'thank you' is downvote material, and am open to
being educated on the matter.

------
HorizonXP
So this practice is made more obvious in the US, simply because individuals
are left with the bill. Although having a single-payer (i.e. universal health
care) system might help to identify these patterns and reduce costs, the fact
is that it occurs all the time, even in these systems. I'd be willing to bet
that it happens more often in single-payer systems, simply because it's easier
to justify and get away with. When I volunteered in the ER, I saw it all the
time.

In fact, I remember when I was preparing to apply for med school in
Canada/Ontario, I had to read a number of articles, journals, and books about
medical ethics, and one thing that stood out was the consistent push to have
future physicians account for the impact of their decisions on the system as a
whole. So not only was it imperative to promote patient health, but it was
also important to balance that with the overall cost. A good example is a
simple blood test. A full spectrum blood test may help identify potential
problems in a patient, but it costs OHIP a lot of money to run those tests
(especially since they're done in private for-profit labs). That's why your
family doctor should really only order the required tests.

~~~
jjoonathan
> the fact is that it occurs all the time, even in [single payer] systems

The "single payer" has a hell of a lot more leverage than individuals in the
US which, as far as I can tell, don't need to consent in any way (hell, they
can even explicitly refuse to consent) and get stuck with the bill regardless.
That trick wouldn't work so well on an organization the size of the
government.

~~~
HorizonXP
I completely agree, but how likely is it that big government will be able to
accurately audit whether a procedure was actually required or not? In fact,
I'd prefer if big government would stay out of it and just pay for my
healthcare to keep me healthy & alive. I am not an expert on the procedures I
need, and neither is big government. We put our trust in medical practitioners
to make those decisions for us. The problem is that they benefit financially
from those decisions.

If you ask me, the answer is to stop conducting these services as fee-for-
service. Pay physicians a salary. Pay them well, but keep costs somewhat
fixed.

~~~
DanBC
Turns out medical practitioners are not experts either. There are plenty of
health situations where you can get treatment A or treatment B and the only
thing deciding that choice is the doctor's personal preference and that might
have nothing to do with best patient outcomes.

You need organizations like Cochrane or NICE to provide evidence based
guidance.

[http://www.cochrane.org/](http://www.cochrane.org/)

[http://www.nice.org.uk/](http://www.nice.org.uk/)

------
grizzles
It's a racket. There is one and only way of solving this problem for good.
It's for your life insurer to also be your doctor. I wrote an article about it
about 4 or so years ago (linked here):
[http://housecall.md](http://housecall.md)

~~~
richmarr
While I think the subscription idea has some merit it's hardly "one and only
way of solving this problem".

I could maybe believe "one and only way of solving this problem without
challenging preconceptions and accepting some nuance into free market
ideology".

~~~
grizzles
Of course, you are right. There are other solutions, but I think this one is
the best one. It's Google for health care.

As an aside, I'm really glad Google is getting back into the field with Calico
because cheap long tail health care (an obvious externality of the idea) is
the ultimate positive use case / justification for their company's total
information awareness philosophy / strategy.

------
arjie
How interesting. The patient is not in a position where consent is meaningful
but is charged an exorbitant amount. At least a little unethical, I think.

~~~
seanflyon
I would say that not only was this unethical, but also not a valid contract.
Without some reasonable semblance of an agreement how can someone say that you
owe them $117,000? I would bet that a court would disagree and would be
interested to hear why.

~~~
milesskorpen
In the header of the article, it mentioned he signed many forms. Probably one
of them agreed to this practice. Enforcement could still be tough though.

~~~
seanflyon
I get that, but if I sign a contract to buy a car and somewhere in the fine
print is says that I owe an extra $117,000 that I am not aware of, that is not
a valid contract.

------
raquo
It's sad that the only surprising part is "He Didn't Know", not the actual
price.

------
torbit
what a pile of shitty mess. tl;dr the assistant surgeon,whom he never meet,
charged him separately and the price went from 6,200 to 117,000. why? because
the assistant was an out-of-network doctor.

" Insurance experts say surgeons and assistants sometimes share proceeds from
operations, but Dr. Tindel’s office says he and Dr. Mu do not. Dr. Mu’s office
did not respond to requests for comment."

before you talk to anybody in a medical building yell "Are you in my
network!?!?!"

~~~
joesmo
That isn't enough. Most doctors have disclaimers that you sign stating that if
it turns out they don't take your insurance, even if they say they're in your
network, you are still responsible for out-of-network costs. You need to
consult with your insurance company and get it in writing, ideally.

------
bambax
The other weird thing is the billing happens after the fact with no visibility
before hand.

If you're building a house you don't start by saying «let's build a house» and
then wait for bills from various contractors you've never met to arrive once
the house is built. That would be considered crazy.

Why is it acceptable in health care? What prevents praticians from
establishing a budget? What prevents patients from demanding one?

~~~
jonlucc
I had a recurrence of a medical complaint and have a high deductible
insurance. I called around to several odficesbro find out what it would cost
to treat if I was correct that it was a recurrence. In every case it took 30
minutes or longer for them to decipher their own costs.

------
anoirt56
>“The notion is you can make end runs around price controls by increasing the
number of things you do and bill for,” said Dr. Darshak Sanghavi, a health
policy expert at the Brookings Institution until recently.

.. like promoting and charging for unnecessary and damaging surgery on baby
boys, robbing them of bodily integrity and killing ~200 infants a year from
complications.

------
peteretep
Tangential but hopefully interesting: how much an extra year of life is worth
to the NHS:
[http://m.bbc.com/news/health-28983924](http://m.bbc.com/news/health-28983924)

------
Shinkei
Yet another example of the ridiculous arms race between payers and providers
with patients caught in the middle.

------
verroq
Shadowban test

------
cookiecaper
The US health system is FUBAR'd, but the right answer isn't a blank check from
the government.

~~~
chasing
Thank god nobody has actually proposed giving the healthcare industry a "blank
check."

~~~
cookiecaper
That's effectively what Canada et al have done. Yes, I understand the
government "negotiates great rates" for the citizens, but it's effectively the
same thing as a blank check. It just takes a bit of shenanigans behind the
scenes to sell the bureaucrats on your latest rate hikes. If you think pricing
is bad now that the big insurance companies have to "negotiate great rates"
for their clients, think how it'll be when there's only one party there.

Government-negotiated rates places the pricing totally outside the realm of
necessity or reality and makes it a purely political matter, and politics is a
messy, fickle thing built on personal favors and tit-for-tat. Not having your
political activity interpreted as corruption or bribery mostly depends on not
pissing off someone with more power than you.

Health care costs so much because of the insurance leech. The only way to
restore sanity is to restore real competition and make the consumer pay
directly. Doctors will have to charge reasonable fees to the patients,
suppliers and vendors will have to charge reasonable fees to the doctors, etc.
It will break the cycle of exorbitant cost in health care. That may be, in
some senses, a painful transition, but it's the only sustainable thing in the
long term. The cycle will not be broken by saying "Wow, health care sure costs
a lot of money. Let's just get the government to print some extra cash and
take care of that for us."

Insurance is typically a highly regulated industry because when insurance is
involved, people get screwed. The incentives are misaligned; the insurance
company only makes money when they _don 't_ give you what you're paying for.
Insurance only works in events that are very unlikely. It's extremely likely
that everyone will go to the doctor or need medical assistance. Insurance is a
very, very bad model for this service.

~~~
DanBC
> Government-negotiated rates places the pricing totally outside the realm of
> necessity or reality and makes it a purely political matter, and politics is
> a messy, fickle thing built on personal favors and tit-for-tat. Not having
> your political activity interpreted as corruption or bribery mostly depends
> on not pissing off someone with more power than you.

You might want to read how England does it. A national organisation (NICE)
gives guidance about what care pathways and treatment should look like. Local
CCGs (clinical commissioning groups) decide what they're goong to pay for.

Your description isn't even close to reality in England.

~~~
cookiecaper
From Wikipedia:

>Groups will have, in addition to GPs, at least one registered nurse and a
doctor who is a secondary care specialist.

Doctors and clinicians deciding just how much they're going to get paid. Not
subject to any kind of market or competitive force that may work toward an
equilibrium based on supply and demand. The government has said "Here's a
massive amount of money, fight among yourselves about who gets how much, good
luck".

Politics _is_ very much at play here, as it is in any system where the prices
are determined by committees or small groups instead of the free market. This
includes the current system in the US, which is effectively controlled by a
handful of paper pushers in the insurance industry, leeching billions out of
our system each year without providing any value and ever-inflating the costs
for the patient.

There's no reason health care has to be a distorted market. Free market
principles are applicable in health care as they are in any other field. While
it's true that people _need_ medicine to survive in many cases, people also
need food and groceries to survive, but we haven't had to nationalize a
grocery chain heretofore. There is enough competition in the space to keep
prices low. There would be ample competition in the medical space if we could
break the insurance cabals that currently exist.

The powers that be rather like our current system, and they _love_ it now that
the ACA has made it a crime to not purchase their product. They would
certainly also enjoy the "print money til the doctors are happy" system
proposed by many left-leaning persons. The one thing they're most afraid of is
the one thing that restores equilibrium and stops their ability to gouge,
which is real competition and a true free market undistorted by unfair
practices and insurance company leeches.

Non-catastrophic medical insurance should be outlawed and clients should have
to pay their doctors directly, forcing doctors to charge a reasonable amount
of money or have no clients, forcing suppliers to charge a reasonable amount
of money or have no customers, forcing medical schools to charge a reasonable
amount of money or have no students. We can't just keep saying "The expensive
way of doing this is easy and great, so let's just have the government pay for
it." Things must be self-sufficient.

~~~
dalke
I don't want a free market in my health care.

I am not competent enough to judge if the pills I purchase actually contain
penicillin and only the inert ingredients listed on the label. We know from
the less regulated dietary supplement industry that many manufacturers lie
about the contents. I have no reason to believe that the pharmacological drug
industry is fundamentally more honest.

There used to be a free market for health care. The FDA started as a political
response to the adulteration and misbranding of food and drugs in that market.
The early 1900 saw the rise of popular patent medicines containing radium,
with so-called "radioactive quackery."

A true free market would have no restrictions on Doramad Radioactive
Toothpaste, on the sale of snake oil made of petroleum, or of Bonnore's
Electro Magnetic Bathing Fluid as a cure for cholera. The free market of that
era produced Elixir sulfanilamide, which killed more than 100 people. The
owner of the company justified it because they were "supplying a legitimate
professional demand." A free market needs no more justification than that.
Anything else is politics, yes?

I don't want to return to that sort of free market. What is your most
convincing evidence or argument that your proposed free market will lead to an
overall improvement in health consequences? Especially knowing the history of
bad actors in the health care era.

You commented that "people also need food and groceries to survive, but we
haven't had to nationalize a grocery chain heretofore." You omitted that we
have nationalized oversight of the food production system supplying the
grocery chains. Again, the FDA started because the free market system of the
late 1800s couldn't handle the food safety concerns. People did die because of
the adulterated food they ate.

They still do, as you know from various E. coli outbreaks, or the 2008 Chinese
milk scandal with an estimated 300,000 victims.

Your argument regarding grocery chains therefore at best means that
governments shouldn't own hospitals, not that the state and federal
governments should get rid of the 'committees or small groups' which develop
the regulations for the hospitals.

All of the examples you gave appear to assume that only the current actors -
licensed doctors, regulated medicines, hospitals with government inspections -
will be part of the free market system. However, an apolitical free market
system must allow anyone to claim to be a doctor, anyone to claim to produce a
medicine, and any barbershop, plumber, or auto shop to provide hospital
services.

How does an apolitical free market prevent these known historical problems,
including deaths, from becoming more common again? Why didn't the free market
of the late 1800s come up with a free market solution?

~~~
rokhayakebe
A free market does not mean impunity. You are a free to purchase a gun, but
you cannot kill without consequences.

~~~
dalke
How does that answer or even address any of my questions?

~~~
rokhayakebe
I was addressing your definition of true free market in which you make it
sound as if in a true free market anything would go down. Free market still
has provisions to protect consumers. The market you describe is not a free but
anarchic.

~~~
dalke
The context is "Politics is very much at play here, as it is in any system
where the prices are determined by committees or small groups instead of the
free market."

My point is that politics is always at play. The only way to remove politics
is to have an anarchic free market.

It's 'committees or small groups' which made it illegal to buy radium
toothpaste. It's 'committees or small groups' which made it illegal to put
drugs on the market without testing. It's 'committees or small groups' which
put into place federal meat inspections.

Could you tell me how a free market has provisions which are more effective in
terms of health outcomes, than, say, the Nordic or Japanese models? And why it
was that those provisions weren't effective in the free market of the late
1800s? Since my reading of history is that the failure of free market to
provide protections is what lead to the protectionist system we have today.

~~~
cookiecaper
>It's 'committees or small groups' which made it illegal to buy radium
toothpaste. It's 'committees or small groups' which made it illegal to put
drugs on the market without testing. It's 'committees or small groups' which
put into place federal meat inspections.

You're missing the operative element of my statement, which was "any system
_where prices are determined_ ". It refers to the specific corruptibility of
artifical governmental price fixing and its devastating effects on a free
market. It is true that there will always be some element of politics
affecting the marketplace, unless there is no government in place. It's OK to
have a government that is interested in neutrality and takes all reasonable
precautions to ensure things remain free and fair for both the supply and
demand sides of the marketplace. Yes, small committees will have some
decisions to make, and yes, they would also be subject to possible corruption
or bribery, but as long as the government stays roughly within its provisioned
and proper sphere (and it's our job to ensure they do so), it shouldn't have
such painful direct ramifications.

I was going to reply with the same thing rokhayakebe did. Regulation and
government still exist in a free market. If the vendor intentionally
misrepresents the contents of his product, he has committed fraud and should
be held criminally liable. There's nothing fundamentally incompatible about a
standards and testing body and the free market.

Free markets have rules to keep the playing field even and fair, and to
prevent the balance of power from tipping too far in any one direction. A
market is not free if it is impossible to enter due to monopolistic forces,
and a market is not free if the consumers are mislead or otherwise deprived of
the information needed to make an informed purchasing decision. Free markets
are not anarchy.

~~~
dalke
I was considering that "illegal to purchase" is equivalent to setting the
legal market price to infinity, along with possible illiquid aspects like jail
time.

Of course, in practice business will spread over to the illegal marketplace.
However, I think you also were excluding the illegal marketplace. Consider
that if a committee or small group sets the price of wart removal to, say,
$20,000, there will still be an illegal marketplace for that procedure. Vice
versa, if the price of heart surgery is set to $1, then there will be no
public marketplace for it, but it will still be available in the illegal
marketplace.

So in truth there is no such thing as a committee or small group which can
absolutely set the price. That said, I, like you, am only considering the
public, legal marketplace.

You say "devastating effects on a free market" like it's a universal bad
thing. The things I pointed out - the regulation of food and drugs - in truth
did have devastating effects on the patent medicine market. I think that's a
good thing.

Government price controls on the polio vaccine, and the nearly complete
eradication of that disease, caused a collapse of the iron lung manufacturing
marketplace. I do not cry over that loss. I don't even think the producers of
those iron lungs were seriously distressed about their economic losses.

So I absolutely agree with you that some controls can be devastating. That's,
um, why the controls were put into place.

Thus, I think you need to describe specific devastating effects on a specific
market, and not make a blanket statement that covers the entire market. I'm
happy that the market for 9 year old coal miners has been devastated. (Yes,
this was done by prohibition. We could get the same effect by fixing the price
of child labor to $1 million/hour.)

"If the vendor intentionally misrepresents the contents of his product"

As I pointed out with Elixir sulfanilamide, which killed 100 people, the
producer did not really misrepresent the contents of the product. Quoting from
[http://www.fda.gov/%20AboutFDA/WhatWeDo/History/ProductRegul...](http://www.fda.gov/%20AboutFDA/WhatWeDo/History/ProductRegulation/SulfanilamideDisaster/default.htm)
"Selling toxic drugs was, undoubtedly, bad for business and could damage a
firm's reputation, but it was not illegal."

Read it, to see how difficult it was to track down the 240 gallons of toxic
elixir. The only crime, by the way, was the use of the word "elixir". Had they
used "solution" instead then the "FDA would have had no legal authority to
ensure the recovery of the drug and many more people probably would have
died."

You say "There's nothing fundamentally incompatible about a standards and
testing body and the free market". Obviously the standards and testing body
has to set certain rules. How are those rules determined? Aren't they equally
determined by a 'committee or small group' and as corruptible as the Medicare
payouts are now?

For example, various states are trying to prohibit the Constitutional right to
an abortion by the round-about means of making it extremely difficult and
expensive to operate a medical center which carries out abortions. This is
done under the guise of improving safety standards at those centers and making
sure that the women getting the abortion are fully informed of the details and
have had the time to reflect on the decision.

This seems like a prime example of how a standards body can block the free
market, even without price controls.

To make up an example using a less sensitive topic than abortion, consider if
every purchase of a beer required sitting through a 2 hour video on the
negative effects of alcohol, including video of car crashes caused by driving
while intoxicated and surgical footage of liver surgery due to liver
cirrhosis. It makes sure that consumers are neither mislead nor deprived of
information - and yet it's a burden on the free market, no?

So I don't see the difference. One is a financial limit, another is a
regulatory limit, but both are limits to a free market.

How does a free market with a standards and testing body supposed to work, and
also be significantly less subject to free market manipulation than what we
have now?

Lastly, you used the phrase "provisioned and proper sphere". Such a sphere is
only defined by politics, because your sphere and my sphere can be very
different. Consider a law like the 14th Amendment, Section 4, which says that
reparations for "any claim for the loss or emancipation of any slave" were
null and void. Why can't an ex-slaveholder say that taking property isn't part
of the proper sphere, and insist on getting compensation? Wouldn't that be the
'neutral' position of the market?

------
dmishe
Wait did I miss it, he did not have insurance? Otherwise he wouldn't pay 117k.
Unless it is one of those EPO plans, but even then you can argue that you
could not have known about the oon doctor. It is likely to take a couple of
months though

~~~
danbmil99
His insurer agreed to pay -- but the guy was just bothered by the ridiculous
unethical situation and balked at reimbursing the overcharging physician.

Read to the end bro!

~~~
dmishe
Ah thah crap missed that one paragraph, thanks

------
theworst
Reasons I am dubious of the author's agenda, based on the structure of their
arguments:

1\. anchoring to high numbers, without contextualizing how big this issue is:
"This contributes to the nation’s $2.8 trillion in annual health costs." How
much does it contribute?

2\. unequal metrics -- when discussing the expected charges: "Mr. Drier was
prepared when the bills started arriving: $56,000 from Lenox Hill Hospital in
Manhattan, $4,300 from the anesthesiologist and even $133,000 from his
orthopedist, who he knew would accept a fraction of that fee." When discussing
the out-of-network bills: "Two plastic surgeons billed more than $250,000 to
sew up the incision, a task done by a resident during previous operations for
Ms. Kaufman’s chronic neurological condition." Now we're thinking $133k isn't
so bad b/c he'll only pay part of it, but the $250k is frightening because
there is no mention of an expected discount. As a counterpoint, the author
mentions the insurance company pays the full amount to Dr. Mu for the other
anecdote in the story.

3\. fearful language -- 'He was blindsided, though, by a bill of about
$117,000 from an “assistant surgeon,” a Queens-based neurosurgeon whom Mr.
Drier did not recall meeting.' Sounds like a 24-hour-news-cycle headline:
"Patients billed by doctors while under anesthesia".

4\. mentioning there are marketing firms who specialize in helping maximize
billing with insurance, as if it's an unethical business. This happens every
time a provider of a service or product interacts with a bureaucracy -- there
is a whole layer of these services for defense contracting, for example.

5\. they mention how the US has more neurosurgeons per capita, then link that
(by proximity in the same paragraph) to providing motive by mentioning how
neurosurgeon compensation has decreased recently. A more honest article would
have given absolute numbers about how the costs of neurosurgery relate to
overall health care costs, rather than making the niche appear large relative
to the story, so the reader implicitly compares that impact to the $2.8
trillion number.

Medical billing is absurdly complex and byzantine. I'm don't doubt the
veracity of the anecdotes, but the structure of the presentation make me
suspect the intent of the author.

~~~
eli
I don't understand what you're getting at. What do you suspect the author's
agenda to be? What should we take away from this instead?

~~~
theworst
The takeaway from my comment is to consider the source and agenda for things
you read, especially regarding controversial issues. The biases in how the
author frames their points, as I outlined in my original comment, indicate to
me that the author may have an agenda.

Agendas are a big red flag to me -- they indicate the author is trying to
convince me of their P.O.V., rather than presenting the information and
allowing me to make my own decision.

Sure, everything has an agenda. But structural biases such as those outlined
above, serve to decrease my trust in the author.

That's all. I'm not suggesting a conspiracy. I think health care is incredibly
complex, and sometimes suffers from profiteering. I also suspect that the
likelihood is low to be screwed like the people covered in the article, but
the structure of the article is designed to make me fearful.

When I detect an agenda to create fear, I question the motives of the author.
In short, I cannot separate the useful information in the article from the
author's agenda, and am forced to throw the baby out with the bath water, so
to speak. (Apologies if that idiom doesn't make sense -- it just means that I
have to throw the signal out with the noise because the author doesn't seem to
be sufficiently unbiased.)

