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12/05/2006 Archived Entry: "Medical sticker shock/dependency culture"
MEDICAL STICKER SHOCK AND THE CULTURE OF DEPENDENCY. Until last month, I had managed to avoid doctors for 16 years. Then, in rapid succession, I had to get medical treatment for a persistent ear problem and I landed in the emergency room with a broad, deep gash in my thumb.
The former wasn't so bad. Paid cash. Got a big discount for that. Very reasonable.
The latter wasn't all that painful either -- until I got the bill.
You hear about high medical costs. But until I actually saw myself facing charges like $40 for a piece of nylon thread (packet of sutures: $3.00 x 1300+ percent markup), it really didn't hit me. But in the end, it wasn't the bill that rattled me. It was the whole culture built around the medical way of business.
I had naively expected six stitches at a tiny rural hospital to cost maybe $250 max. Adding the reasonable charges ($18 for Xylocaine to numb me) to the unreasonable ($94 for a $10 sterile kit two separate steep charges for the doctor's services), the bill for my hour in the treatment room equalled roughly three weeks of my income.
I've since learned that that's absolutely nothing compared with some of the hospital horror stories that can be Googled on the Net. But it sure gave me a case of sticker shock.
I understand, in a sense, what the hospital is doing. By contract or by law, they give extremely low rates to insurance companies, and to Medicare and Medicaid (anywhere from 20 percent to 60 percent of "retail" cost). In addition they must, by law, treat indigent or negligent ER patients who simply suck up services and walk away from their bills.
Somebody, somewhere, has to cover the real costs.
So instead of giving discounts to cash payers, as other businesses might do, they load up every possible charge -- all those expenses not paid by government insurance, high-leverage private insurors, and walk-away patients -- and heap them into the bills of cash patients like me. Then they hope you'll just whip out the credit card, shut up, and pay.
How long would Wal-Mart stay in business if it put 1300 percent markups on merchandise? But the hospital doesn't have to compete in the market, of course. Nor does Wal-Mart have the cost of its wares artifically controlled by government regulations.
So what hospitals do is understandable. But still, IMHO, unjust. And I can't see how it can be sustainable as a business model in the long run.
Worse: Since cash payers, for the most part, are exactly those people who can't afford health insurance, the result is a system that expects the honest people on the bottom of the heap to cover the expenses of those higher up the social and economic ladder. (On TCF, penguinsscareme, who's trying to keep his family afloat after a medical crises stripped them of everything, writes about how economic realities actually seem designed to keep people on the bottom at the bottom. It's an interesting discussion.)
The poor should get no special breaks. But to expect them to bear the rich -- and the government -- on their backs is an outrage.
What astonished me more, however, was what happened when I went to the hospital business office hoping to negotiate the bill downward. Everyone was nice and sympathetic. But as I worked my way from the window clerk to the decision-makers, every single person I spoke with tried to get me to apply for tax-paid charity.
I'd say, "Look, this markup is outrageous."
They'd say, "We offer financial assistance on a sliding scale. If you'll simply submit your income figures ..."
I'd say, "I'm not asking for charity and I don't see what my income should have to do with the cost of services. I merely want a bill in the realm of reality."
Then I'd have the same conversation all over again with the next person.
So we have a system -- at least here at this hospital, and from what I've seen and heard, I suspect it's pretty common -- that is really a sort of dependency game. The hospital staff knows its charges don't reflect the actual cost of services. It knows those charges are beyond the means of ordinary folk. But hospital administrators feel they have no choice but to try to recoup costs the big guys aren't paying. The cash patient, in turn, is expected to play her role in the game by pretending that out-of-the-ballpark charges are normal -- but to deal with them by prostrating herself and begging for charity to help pay the bill.
Yes, we all know about the high cost of medical care. But this is well and truly a game. A game of depencency. The person who accepts the sliding-scale financial aid might end up paying 50 percent (or whatever) of the billed amount. And maybe 50 percent is a more reasonable cost for the services rendered. Or maybe it's not. But everyone in the game agrees to disconnect themselves from market realities -- whatever they may be -- and to participate in a cycle of habitual overcharges mitigated by the grinding degredation of tax-funded charity.
I'm sure there are many things I don't understand about this system. Medical professionals and financial professionals will probably step up to point those things out. I'm going by my own experiences, the similar experiences I've Googled, and information my vet (who first clued me in about the actual costs of those highly marked-up items -- and who has never billed $40 for 12 inches of suture material in her life).
But I do understand that this is a warped way of doing business. I don't blame the hospital staff -- all of whom were wonderful to deal with. But the wrongness of this whole transaction left me shaken and feeling vulnerable.
Posted by Claire @ 10:45 PM CST