An example of our broken current health care system... and why Obamacare will do nothing to fix it
My biggest criticism of Obamacare is NOT the failed website or the increased costs for healthy Americans on individual plans, though I am critical of those, as well.
There are currently three big issues in American health care:
1) Inability for certain people to get insured due to pre-existing conditions, including minor ones.
2) Terrible cost structure, where some things are far too expensive compared to others, thus often rewarding doctors/labs for performing unnecessary tests, exams, and office visits, and reward actual useful treatment too little.
3) Highly confusing billing system where patient rarely understands the cost of his tests or procedures until after they are already completed. Severe penalty to those without insurance or with the wrong insurance, where costs to the patient for the same procedure can be up to 20 times higher.
Obamacare handled #1 (somewhat poorly, but it was at least handled), but not #2 or #3.
Now I will give you a real-life example which illustrates the whole thing perfectly.
Two weeks ago, Benjamin was running around and hit his head on a corner of a table. This resulted in a large, deep cut near his eyebrow, and it was clear he was going to need stitches. In situations like this, you always want a plastic surgeon doing the stitches. If you just get some scrub doctor doing it, it will look terrible. The scrub doctor is probably fine if it's somewhere like your hand, but you want a really good job done if it's on your face, for obvious reasons. This is especially important for kids, whose skin is tighter and scars show more easily.
This occurred on a Sunday at about noon. There were no plastic surgeon offices open at that time. Obviously our only choice was the ER. While there are cheaper "Urgent Care" options available, those do not have access to a plastic surgeon.
The ER did the following:
- Quick examination of the wound
- Put crude bandage over it
- Made us wait about 3 hours while they called in the plastic surgeon on duty
- Put him in a bed in a partitioned "room" (note it wasn't a real hospital room -- just an ER partition)
- Gave him a sedative so he could be worked on by the doctor (otherwise a 3-year-old would not sit still for this).
- Assisted the doctor with the ER's nurses.
- Allowed him to stay until the sedative wore off.
The doctor was an on-call plastic surgeon who did NOT directly work for the hospital. He billed us separately.
Both of the ER and the doctor were on our insurance plan. The ER we chose for that reason (it was also closest). The doctor we just lucked out that he was on our plan.
Each submitted their bill, and then the insurance company "charges off" (reduces) the bill to their "allowable amount", where the doctor is forced to accept the lesser amount as per their agreement. This is where you get a huge advantage by having insurance, as there is price control. Often your greatest savings are by money "charged off" rather than actually paid by your insurance company to the doctor.
The doctor was excellent and very knowledgeable.
We just got the explanation of benefits (statement from the insurance company regarding what was charged & paid). I was very surprised to see the way it broke down.
The ER billed $3048. The insurance company allowed most of it, and sent them a check for $2770.60! We are also responsible to pay $125.
The doctor billed $3600. The insurance company charged off most of it, and send him a check for $374.02. We are not on the hook for anything else. That's all the doctor will be making on this.
So, unbelievably, the ER is going to get paid $2895.60 for simply admitting us, giving Ben a sedative, and allowing 2 nurses to assist. The talented doctor who actually performed the surgery -- the most important part -- is getting a measly $374.02.
This is really amazing (and not in a good way), because the most difficult and important part of the treatment was worth about 13% as much as the very standard and easy-to-provide ER services.
Keep in mind that there was no ambulance involved or anything else complicated about the visit. The only "extra" needed was the sedative, due to Ben's age.
The doctor took a good 20-30 minutes to do his part, so it's not like he just came in, did the work in seconds, and left.
You might say "The ER is always expensive", but keep in mind that this is a preferred provider for our insurance company, and this is specifically done to keep costs down for them. Yet they had to send out a check for almost $3000 for something that honestly should have been much cheaper. At the same time, I actually felt the doctor got underpaid, given that he had the expertise, did 30 minutes of real tough and critical work, and had to come in on a Sunday.
This is just one of many examples. There needs to be a realistic cost to these services. The recent prevalence of "urgent care" places is directly in response to the outrageous ER prices, but those places are typically staffed by terrible doctors. (Both times I took Benjamin to these, they made mistakes.) But somehow the urgent cares otherwise provide a lot of the same services for a fraction of the price.
There really just needs to be reform across the board regarding the cost for a lot of medical procedures/services/tests, to where they don't drain our economy so badly. When I saw the report of the huge check sent to the ER, I realized why everyone's rates are so high.
