
U.S. health care's widespread overbilling problem - msrpotus
https://www.axios.com/health-cares-widespread-overbilling-problem-2454995957.html
======
projectramo
I know this will attract a lot of people who have suggestions for healthcare.

Let me add my big one: price transparency.

I had a simple test the other day. I could not get a price. I could not get a
price with my insurance, or without it. I called at least 9 times. I got 5
call backs from people who asked me to schedule the procedure but no price.

On the 10th call, I finally got someone to tell me what the out-of-pocket
price would be without insurance. She told me a range! It was $96-$115. This
was close to the range that google says was about average for the procedure.

So this was not a case of over-charging, or unfair pricing. I really did not
know if the test was $10,000 or $100 till this call.

If they just made the pricing transparent, I think a lot of the problems would
evaporate.

(Although I think the profit centers would suddenly become the emergency
medicine section of the hospital.)

I know this article focuses on fraud, but the non-fraud part of the healthcare
is just as broken, and probably costs more.

~~~
EvanAnderson
An an anecdote: I've been on a high-deductible plan for nearly 13 years. I
have been regularly met with shock and incredulity that I could possibly want
to know the cost of a procedure. My wife and I have spent, collectively, hours
on the telephone trying to get answers. It's particularly galling when we get
"guilt trip" treatment for asking about costs for procedures for our young
daughter. We have been met with both tacit and stated insinuations that we're
placing a monetary value on her "health" by asking what procedures or drugs
might cost.

I don't think price transparency will fix much, though. The average person I
know has employer-provided insurance and doesn't think a bit about the costs
of procedures. Price transparency combined with individuals having to pay for
their healthcare expenses would help, but there's blame enough to go around
for _every_ player in the system, too.

~~~
yellowstuff
My dental hygienist once told me to get 3 cleanings a year. I told her my
insurance covered 2. She told me that it was like chemotherapy- you should do
what's medically necessary whether or not your insurance covers it.

~~~
Spooky23
That's probably good advice. The extra $80 for a cleaning is cheaper than many
of the dental procedures that many folks will need.

~~~
extra88
I find it hard to believe that a two month difference between cleanings (4
months vs. 6 months) is going to prevent any more serious dental procedure.

~~~
dghughes
I have GERD but before diagnosis the acid from coughing was terrible on my
teeth.

My dentist with many years experience diagnosed it. I went to the doctor who
confirmed it was GERD.

I lost my job but when I was working the insurance paid for two cleaning per
year. I chose to keep the insurance but it's a lesser plan that only covers
one cleaning every nine months.

Twice per year was good for me since I got lazy about three or four months
after visiting the dentist. I needed the twice yearly pep talk.

And I should also say that 75% of people who are diagnosed with IPF a fatal
lung disease have GERD. My father has IPF and GERD I have GERD but I hope I
don't develop IPF. My grandfather died of emphysema at 52 I really hope
there's no connection! So yeah a dentist could point you in a direction that
may help you more than you realize.

------
maxxxxx
To me hospitals are basically scam operations. My girlfriend has had several
surgeries in the last two years. In addition to already outrageous standard
prices ($40000 surgical center cost for a surgery where we spent in total five
hours at the center) pretty much every bill had mistakes. Then after a few
months a collection agency will try to collect for something that never got
billed and never has happened. I can accept a mistake from time to time but
this seems to be pervasive.

~~~
paulpauper
but you have to also take into account that a lot of people don't pay (charity
care)

~~~
maxerickson
Some non payment is also considered bad debt (they expect the patient to pay,
the patient doesn't pay). With charity care, the bill is explicitly forgiven.

The hospital industry claims non payments total around 6% of hospital
expenses.

[http://www.modernhealthcare.com/article/20120106/BLOGS01/301...](http://www.modernhealthcare.com/article/20120106/BLOGS01/301069983)

I do wonder if they calculate that 6% on what they bill though, rather than on
what things actually cost. The margin on an unpaid bill isn't really a cost.

~~~
maxxxxx
I remember reading that the 6% are from the billed prices, not the cost. The
same when they claim to do things for poor people. They do a few procedures
for free and claim the billed price so they can have nice PR for cheap.

~~~
creaghpatr
Also for tax reasons, although different hospitals have different tax
classifications.

------
mnm1
I think this is a great argument for a single payer system. Let the government
and hospitals duke it out. When it's the government's money that is being
lost, the government might actually care and start negotiating with these
providers. Even if it doesn't, at the very least, patients lives won't be
ruined by bills for services that they had no control over or knew the cost of
beforehand. Not only that, but the government can afford it. When they're
losing trillions of dollars on the defense side, I'm certain they can pay for
every medical procedure in the country and still have plenty left over. This
whole idea that the government doesn't have money to pay for healthcare and
other necessary social services is such fucking bullshit when they have the
ability to lose trillions in defense and just shrug it off. That's not even
mentioning the money that isn't lost on the defense side. Unfortunately, I
don't think people have the capability to push their government to spend that
money correctly. But that's a different problem altogether.

~~~
arrty88
Since when has government cared about losing money?

~~~
mnm1
That's my point. They don't care that much. And if they decide to care at some
point, they have the resources to fight it out. Let these abstract entities
(gov't, healthcare providers) fight it out on their own so that people don't
have to die.

------
mfoy_
It's also telling when the hospital gives you different bills depending on if
you're insured or not. If you're insured they charge waaay more. They give you
a more "realistic" bill if you are uninsured.

It's a ridiculous system.

~~~
firebird84
My experience is the opposite. The uninsured receive absurd bills because the
hospital doesn't actually expect them to pay. The sell the debt to collections
and get a big tax writeoff with little relation to reality.

~~~
maxxxxx
You are probably right but this invites and rewards unethical behavior. If you
pay the bill you are a sucker. You have to be a deadbeat.

------
trey-jones
At the risk of spiking my blood pressure I will write a few words on this
topic. I will start by saying this:

 __The whole system is fucked. __

I am referring to the system that facilitates American residents getting
healthy and staying that way.

What is the basis of my claims? I admit that I am a healthy 33 year old white
male and I probably have only seen that tip of the iceberg. I am also a father
of 3. My oldest daughter was born with a chronic health problem, diagnosed at
19 weeks gestation.

Since her birth, a little over 7 years ago, we have received a bill from the
hospital that provided her care at least once per week. This continues today,
despite not having had _any_ services provided in almost a year.

If I paid all of these bills, bankruptcy would be my only recourse. I try to
communicate with my insurance provider (employer provided), to determine
what's legitimate, and what should be covered. In the end, I'm mostly left to
my own devices to pay for _the services that I think I received._ Every year
we pay the deductible, and every year we get billed for significantly more.

As another example, not along ago, my third daughter was born. Due to the
complications of my wife's first pregnancy we received care from two different
OBGYN facilities, one local to us, and one at the delivering hospital.

Though the local facility was only responsible for less than 10 checkups, they
claimed that we still owed our entire deductible to them, prior to delivery.
We paid half.

A week prior (this much is hilarious in itself) to delivery by a doctor from
the other facility, we received a bill for the full deductible amount, due to
them also.

When the delivery actually happened, it took less than 2 hours, and we stayed
one night. We also had 3 checkups at this other facility. Our bill of course
is the same as everybody else's, regardless of whether they had a C-Section
and stayed for 5 nights, or had 30 hours of labor. I could actually be OK with
this (I'm onboard for socialized healthcare), if they could get the billing
part right.

Again:

* I am constantly billed directly by healthcare providers over and above what my insurance policy says I should pay.

* I pay almost 25% of my yearly earnings in insurance premiums.

* I end up deciding what I will pay and what I will not pay. I admit that this is probably not the best situation for anyone.

The whole system is fucked.

~~~
jrs235
A family friend had twins. One born before midnight, the other after
(different birth days). When they got their bill(s) from the hospital they
noticed they were charging room fees for both infants starting the day of the
first born. The second child wasn't even "alive" (born) for the first day they
were trying to charge for! What's also absurd is that the first child wasn't
in the receiving room until after midnight anyways (since all three, two
infants, and mother were in a delivery room until the wee AM hours)!

~~~
ashark
Can confirm. Three births, hospital/insurance _both_ effed up the billing on
_all three_. If we hadn't been vigilant and wasted hours, and hours, and
hours, on the phone and in one case gotten our state rep and the state
insurance board involved we'd have been out several thousand dollars that we
shouldn't have had to pay. I hate to think how much we _didn 't_ catch.
Similar stories from others, plus tales from non-pregnancy major medical
procedures that shake out similarly, though are even harder to sort out.

Everything that touches healthcare billing is scammy, incompetently managed,
and often outright fraudulent. Good luck getting any compensation or justice
other than what you were originally entitled to, though.

------
mfoy_
"The United States remains one of the only advanced industrialized democracies
in the world without universal coverage.

While this in and of itself is not a problem, the United States also spends
more on health care as a percentage of GDP than any other advanced country in
the world and has worse health outcomes – with lower life expectancy, higher
infant mortality and higher obesity rates than comparable countries like
Australia, Canada, the United Kingdom, Germany, France and Japan." \-
[http://theconversation.com/three-reasons-the-us-doesnt-
have-...](http://theconversation.com/three-reasons-the-us-doesnt-have-
universal-health-coverage-67292)

~~~
camiller
I think this is because we choose to live less healthy lifestyles rather than
the quality of medical care.

Super size that...

~~~
nucleardog
I don't think the lifestyles are all that different between Canada and the US,
and the healthcare expenditures in Canada are significantly lower.

~~~
virmundi
I grant this is anecdotal, but you might want to learn about the Canadian
system from the point of view of sick people in Canada.
[https://www.youtube.com/watch?v=q2jijuj1ysw](https://www.youtube.com/watch?v=q2jijuj1ysw)

~~~
nucleardog
Thanks. I live in Canada and have first hand experience with the healthcare
system.

------
alphanumeric0
I would like to ditch insurance and find a doctor who would allow me to pay a
monthly subscription fee, much like a gym membership, for preventative care.

Isn't the primary purpose of insurance for exceptional and accidental
situations? If that's true, then why am I using it for predictable monthly
expenses?

~~~
Dove
What you are looking for is called Direct Primary Care. It exists in nearly
every major city in the US at this point, and is very affordable.

[https://www.youtube.com/watch?v=bGZaRnC1wNg](https://www.youtube.com/watch?v=bGZaRnC1wNg)
to hear one doctor talk about how this works out in practice.

Google Direct Primary Care + your city/state to see what's available. It's
SERIOUSLY better than the mainstream option. I've been doing it for nearly a
decade now, and would never go back. Combine it with a cost sharing plan (NOT
insurance) such as [https://www.libertyhealthshare.org/3-program-
options](https://www.libertyhealthshare.org/3-program-options) to achieve
superior care at lower cost.

~~~
alphanumeric0
Wow that's great, thanks for the tip.

------
code_duck
My friend's wife resigned from a nursing position over this issue. A superior
asked her to falsify billing records to say they were providing a higher level
of care than they actually were, and she refused.

~~~
AngeloAnolin
Instead of resigning, wouldn't it have been better if she exposed the
malpractice? Or would the consequences on her part damage her so much that
their lives would be destroyed? Ethics would dictate she would fight
otherwise.

~~~
code_duck
Due to the corruption and other factors, she didn't wish to work for them any
longer. I don't recall all the specifics, but I believe she did file a
complaint with the state. Hopefully the company was investigated.

------
arielweisberg
They don't even mention the harm caused by fraud that involves inventing
conditions and treatments out of thin air. Those doctor's notes follow you
around forever when you go to do things like purchase disability insurance or
seek treatment.

Suddenly you are no longer a healthy individual you are an individual with a
history of condition X and Y which you have never even heard of. And because a
doctor wrote it down it's now a reality and the patient is a liar!

------
rdudek
There are so many variables that affect healthcare cost here in the US.
Looking from outside, things are different than looking from inside. There is
something really wrong with current US healthcare system, and it's really
difficult to put a blame on one or two things.

Side note, I work IT in healthcare, so I sometimes view "interesting" things
to say the least. A while back I stumbled upon a document that was
accidentally shared. It showed accounts receivable in collections agencies for
one hospital in our system. Between 2009 and 2012, there was $154m dollars in
collection agencies from delinquent accounts. Remember, this is just one
hospital that is actually in a more upscale location. We have some hospitals
who are always in red due to their locations.

Then you deal with inflated prices for services and drugs. I really don't even
know if they can ever fix this part.

------
virmundi
Another issue not mentioned, but associated with the same pool, is that
hospitals get dramatically more money for the same procedure than a private
practice doctor. Not even upcoding.

Fortunately, Medicare is looking at this problem now.
[http://www.compassphs.com/blog/health-navigation/medicare-
to...](http://www.compassphs.com/blog/health-navigation/medicare-to-stop-
paying-more-to-doctor-office-if-owned-by-hospital-system/)

------
chiph
I would love to go to a doctor that had a price board hung in their waiting
room so I'd know up front what the cost would be.

    
    
          Well-baby checkup: $120 
          School sports physical: $150  
          Blood tests: $80 
          Minor broken bone: $400
          Major broken bone: $1200

~~~
jrs235
"But we don't know [major vs minor] until we look at it!..."

So add what all car shops say:

Hourly rate: $100 / hour.

And begin with a 30 minute to 60 minute diagnostic estimate (providing
findings at 30 minute increments).

~~~
mac01021
But then they wouldn't be able to bill $1350 for a 15 minute visit.

------
Moshe_Silnorin
Healthcare will always be overpriced so long as we allow this guild system to
limit the supply of doctors for its own member's profit. Everything else is
window dressing.

~~~
rscho
Coming from a country where the number of MDs per capita is 100x that of the
US, I am sorry to tell you that this would not have the impact you think it
would have. As of now, no first world country seems to have found a real
solution to healthcare prices. My personal opinion is that doctor salaries
have a minor impact on prices. Healthcare system structure and culture (as in
how much do insurance companies control, and how readily you perform expensive
tests) is much more important, I think.

~~~
camiller
According to the WHO the country with the most MD's per capita is Cuba with
7.5 per 1000, while the US has 2.5 per 1000. So at best you come from a
country with 3x that of the US, not 100x.

Edit:
[http://gamapserver.who.int/gho/interactive_charts/health_wor...](http://gamapserver.who.int/gho/interactive_charts/health_workforce/PhysiciansDensity_Total/atlas.html)

~~~
rscho
Indeed, I was misinformed. The ratio is much lower than I thought. I think my
point still holds, though.

------
sixdimensional
For more information about the rough guidelines by which pricing works in the
US (or doesn't work), check out the often referred to term "usual and
customary" (UCR) charges. Read about it and then form your own opinion - I'd
rather not bias too much by offering mine.

[https://en.m.wikipedia.org/wiki/Usual,_customary_and_reasona...](https://en.m.wikipedia.org/wiki/Usual,_customary_and_reasonable)

~~~
tcj_phx
There was a reform, maybe sometime around 1985, that replaced "usual,
customary and reasonable" with 'what should this procedure actually cost'.
Your wikipedia links to this page:

Resource-based relative value scale - [https://en.wikipedia.org/wiki/Resource-
based_relative_value_...](https://en.wikipedia.org/wiki/Resource-
based_relative_value_scale#History)

It took the government 20 years to figure out that they couldn't give the
medical system a blank check.

/methinks a helpful medical reform would be to get insurance-paid doctors on
fixed salaries. Under the present status quo, some doctors bill insurance
companies for as much as they can get away with.

~~~
sixdimensional
Actually, I used to work in health insurance, so I have a bit more insight
into this than most, although I've been out of it for a while (10 years or
so).

If you look into how the RBRVS are calculated, there is effectively a
privately run panel that determines input variables and factors that are used
in the RBRVS calculations. At some point, someone has to determine the portion
of the calculation that represents "physician value added". While it is true
that RBRVS is an alternative system to pure UCR rates, I can assure you that
UCR rates still play a major role in many health insurance lines of business
and calculations.

By the way, RBRVS aren't the only system that organizations have tried to use
to figure out how to bill/cost services - there are also DRG groups
(diagnostic related groups), ASC groups (ambulatory surgical center) groups
and others.

RBRVS were mainly made to try to control physician office costs in Medicare
and are used by HMOs that offer Medicare plans. While other HMOs and private
insurers use RBRVS, there are a lot of them that still use UCR (calculated
internally) as well.

There was a huge problem around 2009/10 with a big company, Ingenix, that was
offering a commercial UCR database which was probably of poor data quality -
based on surveys of regional prices from doctor's offices. There were
lawsuits, etc. over that and many insurers moved away from commercial sources
of UCR and instead brought that in-house. Here's a link that talks a little
bit about that: [https://www.managedcaremag.com/archives/2009/5/ingenix-
after...](https://www.managedcaremag.com/archives/2009/5/ingenix-aftermath)

Price transparency could help (if it could be achieved), but there are a lot
of for-profit organizations who actively try to keep their strategies
internal. Transparency might not be enough without pricing controls, but
exercising control would be extremely difficult for legal/political/profit
motive reasons as well. For that matter, coming up with singular pricing
systems that govern controls at scale is incredibly difficult.

~~~
tcj_phx
Thanks for your insights. I have family in the medical field, so I've heard a
lot of complaints about the system. It seems like most people don't appreciate
how much "complication" in the medical industry derives from third-parties
paying for almost everything.

I have a doctor who gives his patients a receipt that they can use to "try" to
get reimbursed by insurance. He takes cash or check, has all the patients he
wants, and zero employees.

------
rev_null
I think that people always want to look for the worst in every situation.
America's healthcare system may not be up to first world standards for
treatment. And it bankrupts hundreds of thousands of people a year. But, it's
the most profitable healthcare system in the world, and that's the metric that
investors really care about.

------
ridgeguy
I guess it won't hurt to offer my own anecdata point about idiot medical
billing.

Stanford hospital billed us for an IVF procedure. However, we were in Paris at
the time they claimed my wife was undergoing the procedure.

It took going down to the billing office with our ticket stubs and pitching a
fit to get it zeroed out.

I agree there's lots of room for improvement in medical billing.

------
makecheck
Generally it is really hard to negotiate fair pricing if one side knows the
other side has tons of money. "Oh gee, government contract? That'll be $15,000
more for no good reason." Perhaps anonymizing all billing would help so that
negotiations simply cannot know what the other side can afford.

~~~
skummetmaelk
Whereas it's really hard to negotiate pricing with people who are going to die
or be physically impaired for the rest of their lives if they don't pay
whatever you ask?

------
microcolonel
Because there's too much coverage, and effectively no choice (due to excessive
standardization), the insurance companies are forced not to operate as
insurance companies at all.

No choice, no competition, no money left when they're done with you.

------
craigvn
This is what happens when you make the health care system capitalist. Despite
rumours to the contrary, capitalism doesn't reduce prices, that would make no
sense for a company trying to make a profit.

~~~
coredog64
French outpatient care runs in a capitalist manner. You pay full price at the
office, and your insurance reimburses you at 80% of "reasonable and
customary". You are free to choose any Doctor, and it is up to you to decide
how much any conveniences or perceived quality is worth.

~~~
craigvn
Can't say I am an expert on the French system, but a quick Google says that
the insurance is pretty tightly regulated by government.

------
mfoy_
Just to be clear... the "grown up" conversation you wish Americans could
stomach is the one that involves socializing medicine and not the one that
involves letting random people die needlessly, right?

~~~
EvanAnderson
I am an American.

When I'm particularly exasperated with the healthcare system (usually in the
weeks/months following some kind of medical engagement) my answer would be "I
don't give a damn which we choose. Let's just make a decision to either
socialize medicine completely or let people die."

(My mood is unreasonably caustic after dealing with anything medical. The
stress of dealing with healthcare billing, health insurance, and the
patriarchal attitudes of medical practitioners raises my blood pressure and
gives me near panic attacks.)

When I'm in a more calm and normal mental state my answer would lean toward
socializing as much of the healthcare system as possible.

Literally _nothing_ is a bigger fear-factor in my life than medical expenses.
The fact that the entirety monetary value of my life's work could be destroyed
in a moment by a medical issue freaks me out. The fact that I cannot, in any
financially viable manner, insure against this kind of event amplifies that
fear.

I feel comfortable in saying that, at least in an abstract way, I am less
afraid of death than of leaving my family destitute as a result of unforeseen
medical expense.

~~~
arethuza
"fear-factor"

Worth noting that the book describing the principles of the UK NHS by its
founder was called _" In Place of Fear"_:

[https://en.wikipedia.org/wiki/Aneurin_Bevan](https://en.wikipedia.org/wiki/Aneurin_Bevan)

Medical emergencies are stressful enough when there is no money involved - I
have no idea how people cope when there is a stressful financial situation
added on top as well.

~~~
EvanAnderson
Thanks for that link. I'm looking forward to reading about Bevan and, in
particular, finding this book.

