

The Man Who Was Treated for $17,000 Less - sonabinu
http://online.wsj.com/article/SB10001424127887324139404579017113415486176.html?mod=hp_opinion

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cromwellian
A month ago, I was traveling in Germany with my family and my daughter had an
emergency, so I had to go to a German hospital in the middle of the night.
Within 1 hour, they had given my daughter an ultrasound and two doses of
medicine to treat her problem, the cost to me: $130 euro, and I didn't even
use my health insurance (which does cover international emergencies)

3 years ago, I had a gallbladder attack in Shanghai. I didn't know what was
happening at the time, it felt like a heart attack, like I was dying. Went to
a Chinese hospital, they did an ultrasound, chest x-ray, CT scan, EKG, blood
and urine tests within 2 hours, plus gave me morphine and antibiotics. The
cost was on the order of $200.

I don't think the problems with the US healthcare system can be boiled down to
capitalism vs socialism alone, it's much more nuanced than that.

Also, comparing a highly automated, elective procedure, that takes 1-2 people,
and on an out-patient basis from a private office to something like a heart
bypass or hernia surgery I think oversimplifies the situation.

If a doctor tells you that you need to have an MRI and a biopsy, how are you,
an untrained "consumer" supposed to know a) whether or not it's really needed
or excessive and b) how to shop around for it. c) if you can't afford it, and
it's not an emergency, but it could save your life later, what then?

If someone gets routine upper GI endoscopies if they have a high genetic
potential for esophageal cancer, and they can't afford these procedures,
should they just wait until they are chocking from cancer and go to an
emergency room so the state can pay for much more expensive late stage cancer
treatments?

I'm all for comparison shopping, but there's still an element of right-to-
healthcare for preventative care for those that can't afford it, and there's
still the issue that people can't be expected to reason properly about risks
and costs when their life is on the line. If a doctor prescribes a test,
chances are, you'll want to do it out of fear alone of what might happen if
you skip it.

~~~
JPKab
I used to be on a High Deductible Health Plan, which is designed to be just
like the author suggests: only for catastrophes. For anything else, you use a
Health Savings Account (a tax free account you put money into) and use it to
just pay cash prices.

IT WAS HORRIBLE. The concept of course, is great. But the problem is one of
chicken and egg. Because the entire system is set up for 3rd party payment,
NOBODY, and I mean NOBODY, has a clue what they charge for anything. Go ahead,
take the challenge. Ask a receptionist or even a doctor how much they charge
for a procedure. They have no idea.

The effect was that going to any medical appointment was a crap shoot. I had
no clue what I was going to be paying until AFTER treatment. The amount of
friction in just getting a price was so painful that shopping around was
impossible. Since "shopping around" is the whole basis behind "price clearing"
in markets, the current system of HSAs implemented by Bush is bullshit. Had he
gone all the way, and just forced every insurance company to only offer HDHPs,
then it would be different. Medical providers would have been forced to share
pricing information.

~~~
felideon
Is it possible to pay cash prices without an HSA? I'm under the impression
that if you have health insurance (high deductible or not) you are required to
use it.

The one time I asked for a cash price for a shot at a hospital, it was pretty
quick for the receptionist to give it to me. (Incidentally, $150 cash vs. the
$300 bill that came in the mail later, since I used my insurance. For a shot
of Rhogam.)

~~~
EvanAnderson
That depends. Some providers are contractually bound (and in some
jurisdictions laws also apply) into "preferred provider contracts" that
_require_ the provider to bill your insurance and disallow them from taking
cash.

~~~
ams6110
Yes. You can look for doctors that run cash practices. There aren't a lot of
them, but they do exist.

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bmmayer1
"Take the examples of Lasik eye surgery or cosmetic surgery. These services
are not covered by insurance. Providers compete on the basis of quality,
outcomes and price. And prices have continually dropped as quality and
services have improved—unlike the rest of health care."

Sadly, most people forget this. They think that healthcare is somehow immune
from the laws of economics, that it is "special."

~~~
baddox
Many people will unabashedly say that they believe healthcare to be special.
It's not uncommon to hear people say that they don't believe profit motive has
any place in healthcare. I don't buy it. I don't see how healthcare is any
more special than, say, food production (both are obviously vital to health),
yet I think most people have come around to recognizing that profit motive is
a spectacular way to organize the production and distribution of food.

~~~
jbooth
Of course healthcare is special, it's not a normal market because of extreme
demand inelasticity. Food is special too, but it manages to function as a
market because we have a food surplus, a plethora of replacement goods within
the food category and it's much less specialized to produce.

This doesn't mean that people don't deserve to earn a living. The doctor in
the article managed to find a way to make the man's procedure happen without
taking a loss on it.

But it's an inaccurate simplification to consider healthcare a market like any
other -- inaccurate simplifications hurt any system and that's why our current
'market' system has more bureaucratic red tape, higher prices and worse
outcomes than actual socialist systems in the rest of the western economies.

~~~
AlisdairSH
Emergency medicine is inelastic and not conducive to price shopping and other
research.

But, what percentage of medicine falls into that category?

For example, I currently have a shoulder injury. I'm meeting with an ortho
specialist next week. And it will likely require surgery to correct.

So, while I "need" the surgery, there's no real hurry. I could take an extra
week to meet with several providers and ask about pricing.

Of course, I won't do that, because my medical plan is paying the vast
majority of the cost. I'll just get nickle-and-dimed with co-pays for the next
6 months.

~~~
neltnerb
As another example, I'm very likely going to be switching to a medication that
costs $60,000/year for a variety of reasons.

It's slightly elective (my mother has the same issue, but has been okay) but
highly probabilistic (my situation could be much worse if I don't take it).
There are alternative medications, but they involve injections weekly or daily
(which I've been doing), don't cost much less, and produce side effects that
make it very difficult to work.

The kicker? The active ingredient is DMF, which I can buy in bulk for 1000x
less. I've looked up the pricing, so I feel like I am applying some amount of
analysis in determining that it's worth the cost. But it does feel like, even
accounting for need to recover expenses of doing medical trials, this is a bit
ridiculous.

------
JohnTHaller
There are some interesting tidbits in the article, but it falls apart in the
last paragraph when we see the true motive of the article: "Sadly, we are
heading in the exact opposite direction. ObamaCare expands the role of the
third party and practically eliminates the role—and the say—of the patient in
the delivery of health care. Will they ever learn?"

And then you see the writer's bumper at the end: "Dr. Singer practices general
surgery in Phoenix, Ariz., and is an adjunct scholar at the Cato Institute."

So it's a Cato Institure article (Koch brothers) on the Wall Street Journal
(News Corporation/Fox News/Murdoch) designed to end with an anti-'ObamaCare'
message. How far the Wall Street Journal has fallen since Fox bought them in
2007.

~~~
bmmayer1
So what? Is a medical surgeon not qualified to have an opinion on ObamaCare?
Or are you suggesting he is not permitted to be against ObamaCare?

~~~
jacobolus
You would be rightly skeptical of an athlete’s endorsement of a brand of shoes
they are being paid to sponsor, even though a disinterested athlete would be
well qualified to comment, as a professional.

Similarly, in this case “paid for by the Koch brothers” is the most relevant
part of his qualification here, not “surgeon”.

~~~
bmmayer1
Just because he is allied with the Koch brothers doesn't mean he's wrong.

~~~
JohnTHaller
But it does mean his facts are more likely to be wrong. Or lacking the full
story and the other facts that disprove his point and are conveniently left
out. Remember, the Cato Institute (Koch brothers) and News Corporation
(Murdoch) are _intentionally_ biased organizations that design studies and
stories to make specific points that further their agenda. This
anti-'ObamaCare' piece in the WSJ carries about as much weight as a
pro-'ObamaCare' piece in a left-biased rag.

~~~
millstone
It carries no weight. The article casts aspersions on Obamacare, but does not
give a single example of how Obamacare has or will affect this patient.

We are told that this patient chose a low-cost health insurance policy due to
his financial situation. He is exactly the sort of person who is likely to
benefit from Obamacare when the subsidies kick in.

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munificent
God, what a terrible article.

    
    
        So we canceled the surgery and started the scheduling
        process all over again, this time classifying my patient
        as a "self-pay" (or uninsured) patient.
    

Yeah, how well does that strategy work when you're having a heart attack and
are moments from death?

    
    
        I quoted him a reasonable upfront cash price, as did the
        anesthesiologist. We contacted a different hospital and
        they quoted him a reasonable upfront cash price for the
        outpatient surgical/nursing services.
    

And what would have been his recourse if the doctors all came back and said,
"Sorry, $20,000 is our best offer. Pony up!"?

It's not like you can typically elect not to get medical care without dire
consequences, so the demand structure is totally broken for an efficient
market.

And, of course, we're taking the doctor at his word that his price was
"reasonable". How on Earth is a layperson supposed to know what a "reasonable"
price for a medical operation is? I don't even know what a reasonable price
for having a plumber come over and fix a leaky drain is!

~~~
Ensorceled
How does that make the article terrible?

He's not saying that this is a good thing he's using this as an example of how
broken the medical system is. Did you read to the end? Or did you just get
annoyed after the first few paragraphs and write this screed?

~~~
alex-g
No, the author's argument is that this kind of negotiation is what ought to
happen all the time; his example of brokenness is that insurance rules distort
the marketplace and drive up prices. Far from objecting to haggling, he thinks
it should happen more often. This is a fairly typical free-market argument.
The parent post by munificent advances the counter-argument that patients are
not always in a position to haggle over prices.

~~~
Ensorceled
Ah, I thought of the surgeon wanting a free market similar to car pricing.
There's the MRSP that is high but not crazy; you can haggle but, overall,
prices would go down so you wouldn't _have_ to haggle in order not to die or
go bankrupt ...

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coofluence
In India, "health insurance" has very little impact. It is essentially for
hospitalization. This is the ideal situation as per the article: let
healthcare negotiate with patients.

But look at the downsides: no standardization of procedures or facilities,
price gouging is common and doctors+hospitals controlling prices.

The fallacy here is that the patients can shop and bargain for care they need.
It isn't so in so many situations due many distortions in free market utopia.
Perhaps, someone needs to hack a new solution to insurance.

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rayiner
So what do you do if you don't have $3,000 to pay for what can be a life-
threatening operation (a hernia)? The Cato Institute answer, let the person
die, is economically nonsensical. The economic value of that person's lost
labor is almost certainly worth way more than $3,000.

~~~
TDL
Could you provide the link to where the Cato Institute says that letting the
person die is an acceptable option?

~~~
rfnslyr
Read HN like I do. Take every statement as fact! I call it _truth hacking_.

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rkangel
The system in the UK, while not perfect, is actually pretty damn good. It's a
national pass-time to be rude about the NHS, but when Obamacare was in the
press* we all suddenly remembered how good we've got it.

There are all sorts of criticisms one can level at the US Health "system" (as
well as the UK NHS), but it fundamentally has to come down to efficient use of
resources. In the UK, we pay money to the NHS (via tax) and the NHS spends it
on our healthcare, in the form of people's wages and equipment costs etc.
Internally, the NHS is set up to get the best healthcare result overall for
the entire country, with the money it has.

In the US, there's an extra party - the insurance company. You pay your money
to them, and then they pay _some of_ that to the hospitals etc. for your
healthcare. The key is some of - they're a business, with costs to pay, and
profits to extract. You're making less efficient use of the money overall.

Capitalism, when used properly, is a great way of getting efficiency. For
consumer goods lower costs means lower prices so more sales, so more money.
Capitalism working perfectly, so the consumer is paying as little as possible.
But the insurance companies aren't incentivised to produce efficient
healthcare, the very opposite. They're not evil (mostly), that's just how the
market is.

* Possibly still my favourite quote from any newspaper ever, was a sadly ill-informed "Investor's Business Daily" trying to be rude about the NHS, saying "if Stephen Hawking were British, he's be dead". Stephen Hawking IS British (I've seen him in Cambridge), and has been well cared for by the NHS to live to the ripe old age of 70 - very rare for someone with Motor Neurone Disease.

~~~
GFischer
We have a state system in Uruguay too, and it's amazingly better than the one
in the U.S. as well.

One difference, I think, is that it reduces the imbalance of power between
consumers and providers. The state can and does force prices down.

It sucks if you want the absolute best healthcare, but you can get that by
paying (it's not forbidden), but the healthcare we do get is "good enough".

It's also lacking in preventive medicine, quality of life and cosmetic, but
I'll take that over the U.S. system anytime.

We have private emergency systems, and they work extremely well for the
consumer, my girlfriend had a burn from scalding water and was treated by a
doctor within 5 minutes, for U$ 15. Doctors at those emergency services are
criminally underpaid, though (as little as U$ 500 per 6 hour-shift monthly)

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EvanAnderson
In my experience having a high-deductible health insurance policy that that I
purchase myself I think this bit of the article can't be understated.

"I explained that just because he had health insurance didn’t mean he had to
use it in every situation. After all, when people have a minor fender-bender,
they often settle it privately rather than file an insurance claim. Because of
the nature of this man’s policy, he could do the same thing for his medical
procedure. However, had I been bound by a preferred-provider contract or by
Medicare, I wouldn’t have been able to enlighten him."

My wife and I have run into multiple cases in the last two years where our
providers would have offered substantial discounts for paying cash, however
because of the provider's contractual obligation (and state law, to boot) they
are unable to accept cash payment and are required to bill our insurance at a
higher rate than their cash discount. Since I have a high deductible I end up
paying for the procedure out-of-pocket at a higher rate than if I could have
just paid cash. It's maddening.

~~~
umsm
I'm not a health-care professional, so I don't know: But wouldn't you be able
to not tell the hospital that you have insurance? Pretend like you don't have
any from the beginning? Or can this backfire?

~~~
EvanAnderson
The practices we had our issues w/ were an imaging clinic and a pediatrician.
I kinda expect that telling either one of them that we didn't have insurance
would have resulted in them refusing to take us as patients. My wife and I
talked about trying it with the prospective next provider, actually.

------
millstone
I entered in thinking it was journalism, and it wasn't until the end that I
realized I had been reading an editorial. That colored what I had just read,
but it's my fault for missing the "Opinion" category at top.

The anecdote was interesting and informative. If nothing else, Americans
should remember to ask about "cash discounts" at health care providers.

The conclusions, though, are pure whargarbl:

    
    
        "the only way to make health care more affordable
        is to diminish the role of third-party payers."
    

Really? The ONLY way? That's how all other countries do it?

    
    
        "ObamaCare expands the role of the third party and
        practically eliminates the role—and the say—of
        the patient in the delivery of health care."
    

This patient lowered his bill by exercising his "role and say," and that
illustrates that Obamacare has eliminated the role and say of patients. Wait,
what?

If this patient had been negatively affected by Obamacare in any way, I'm sure
the author would have gleefully pointed it out.

------
ars
If you choose to buy partial insurance (for example high deductible, AKA major
medical insurance) make sure you buy one with very good negotiators!

The value you get from paying below list price will likely be more than the
value from the insurance payments.

The patient in this article didn't have such a plan, they have essentially a
HSA, they paid a premium to have some cash paid toward procedures, but the
"insurance" company didn't do any work on his behalf to lower the premiums -
because they have no reason to, they pay a fixed amount.

------
roc
> _" Most people are unaware that if they don't use insurance, they can
> negotiate upfront cash prices with hospitals and providers substantially
> below the "list" price."_

Substantially below list, but still well above what insurance providers pay.

Even when you _can_ self-insure in the US, if you actually find yourself
needing medical care, it would have been cheaper not to.

Except on the short-term scales and/or when you're young and may well not need
to see a doctor for several years at a go.

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Friedduck
Until we're able to remove the emotion from the discussion I don't see a
resolution to the issue in the States. To me it's the number one challenge to
our ability to compete. The cost of health care is often the deal breaker in
our decision to hire someone domestically or farm that work overseas.

We pay far more money than anyone else, and for a poorer outcome. I only hope
that others read something like this and grasp the importance of finding a
solution.

------
abat
For a lot of stuff, the idea of pre-negotiating price between patient and
provider sounds great. I'm not sure how emergency care can work well though
without some third party to help set fair pricing.

You get taken to a hospital out of your control, and they're allowed to decide
what services to provide and as well as the price they're going to charge you.
After the fact your only leverage to negotiate the bill down is declaring
bankruptcy.

~~~
angersock
Here's a wild idea: emergency care should be handled by the state, and just
accepted as the cost of living in a modern civilized society.

~~~
lightbritefight
I agree with you, but that ripples outward. If I don't have to pay for
emergency care, then why pay for insurance at all? I can just go hang out in
the emergency room and they will take care of me. I realize a large sum of
people do that right now, but that just reinforces how broken our current
system is.

We have to fix healthcare in total before we can say thats a done deal, but it
is the right direction.

~~~
angersock
Honestly, I think that the final answer really ought to be state-run hospitals
that provide intensive and emergency care for free, and state-run doctor
practices that serve as GPs and whatnot for communities. Private practices can
exist, but they get to play in the market normally and price accordingly.

The problem is the metric crapton of Americans who will grind the system down
as they fall prey to the beetus and obesity, and the number of wrongheaded
bozos who think that letting the .gov handle this is somehow automagically a
bad idea.

------
umsm
On a similar note: many hospitals can and will negotiate your bill after the
fact. A family member has had procedures performed that cost in excess of
$20k, but was able to negotiate the bill to less than $5k. Although I am not
sure if this is the norm.

------
masonhensley
Sorta related side note, my experience has shown that dentists don't accept
cash discounts for higher ticket procedures.

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jamesjguthrie
This just seems so broken to me and it makes very grateful that we have the
NHS here in Scotland.

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moron4hire
It's as if there were a monopoly on health care and the monopoly is charging
whatever they think they can get away with. I am shocked. Shocked I tell you!

Sarcasm aside, I didn't know about these "preferred provider" contracts.
That's just some good-old, down-home, anti-competitive behavior, right there.

Instead, we have a DOJ more interested in chasing after and "making an example
of" young men who violate a university network use policy. Damn, I bet
Rockefeller wishes he were still alive.

------
javajosh
There is no such thing as a free-market in health-care. Period.

Patients are not customers. We don't shop. And you know what the biggest tell-
tale about that is? Hospitals don't advertise. Sure, you see ads for a handful
of elective procedures like teeth whitening and boob jobs - but when did you
see an ad for hernia surgery?

Now, it would be an interesting world where there was indeed some sort of
marketplace for healthcare, where when you're doctor tells you you need
something, from medication to a test, you can punch it into an app to get the
best price. Providers could compete with each other on price.

But here's the thing: do we really want to buy healthcare based on price? I
don't. And I know too many people in other parts of the world (Canada and
Australia, to be exact) who have nothing but good things to say about their
socialized healthcare.

I believe in capitalism's power to generate wealth, but I also believe that
healthcare should be socialized in the US. It is horrible the way people are
overcharged for procedures, and that happens because there is NO MARKET.

~~~
alex-g
Where I live (Philadelphia) I see a lot of advertisements for hospitals, and
for treatments for serious conditions like cancer. Not so much "we'll do it
for $whatever", but certainly language like "we are the best hospital in the
region for (issue)".

