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The Myth of Health CARE Cost Transparency! ^ | March 25, 2014 | Harry R. Jackson, Jr

Posted on 03/25/2014 3:16:03 PM PDT by Kaslin

Last December just before Christmas I took my car to a Body Shop for repairs. I received an estimate, which gave me an idea of how much I would be charged. My insurance company also gave me a clear quotation on how much they would cover. Once the repairs were completed, I received an itemized receipt showing exactly what I paid for parts and labor. The process was expensive, but it was not difficult to understand.

Healthcare, however, is an entirely different matter. Once we learn we need a procedure or a test, we often have very little idea what we will actually end up paying for it. This is true whether it is a diagnostic or preventative procedure like a colonoscopy or an MRI or a treatment, like chemotherapy or surgery.

Although we receive an explanation of the charges afterwards, it is often impossible to know what our insurance will or will not cover – until doctors are done negotiating with the provider. This situation makes it virtually impossible for healthcare consumers to comparison shop. In almost any other industry, the ability of consumers to compare prices leads to competition, and competition drives prices down. But for most of us, the prices of medical procedures remain a mystery.

Clearly, greater transparency in health care charges will benefit patients, but achieving this transparency is easier said than done. Eleven states so far have tried to make health care prices public. They have done this mostly by collecting receipts from private insurance companies, as well as Medicare and Medicaid and trying to publish the prices paid in a format that consumers can easily understand. But the task has proven complex and (ironically) very expensive.

In the quest to make such information public, doctors have been criticized for not simply disclosing procedure prices to patients ahead of time. Unfortunately, it isn’t always that simple. As cardiologist Dr. Lisa Rosenbaum pointed out in the New Yorker, “The first problem with financial disclosure from doctor to patient is a practical one. Doctors rarely know how much their patients actually pay. Patients are covered by a variety of insurers, all of whom offer several plans, for which any individual patient has a different copayment and deductible, which he may or may not have met.”

It is also important to remember that the money problem in healthcare isn’t only the prices providers are charging. Unfortunately, in our quest to lower the amount that patients actually pay for healthcare, we have become confused about the difference between cost and price. As North Carolina State University economics professor Mike Walden explains, “Cost is simply what it takes, in terms of dollars or resources, to produce a particular product or service.” Walden goes on to enumerate the resources it takes to produce a restaurant meal: the food, the labor, as well as a portion of the cost of the building, the utilities and the kitchen equipment.

Price, on the other hand, is what the restaurant actually charges for the meal. If I give you a coupon for $15 to make your lunch free, I have reduced what you pay for your meal, but I haven’t reduced the cost of what it takes to produce the meal. If it takes $15 worth of food, labor and overhead to produce a particular meal, the restaurant cannot sell it for less without losing money and eventually going out of business.

Where do medical costs come from? They begin with what it costs to train a doctor properly. In 2012, according to the Association for American Medical Colleges, the median amount of education debt for a new doctor was $160,000 for those attending public institutions and $190,000 for those graduating from private medical schools. Then doctors in private practice must pay all the overhead costs associated with running their offices and paying their employees. Then there is malpractice insurance, new equipment, continual training, and administrative costs for filing claims with insurance companies and negotiating payments.

Other medical costs are associated with the tremendous resources it takes to run hospitals as well as research and test new treatments and drugs. For example, according to the National Institutes of Health, the average cost for a pharmaceutical company to bring a new drug to market is between 1.3 and 1.7 billion dollars. A Gallup study found that more than $650 billion dollars is spent each year on “defensive medicine”—procedures and tests ordered by doctors out of fear of lawsuits.

Transparency in healthcare prices will help consumers get the best deal on the tests and treatments they need. However, the more pressing need is to identify ways to reduce the actual costs of healthcare. In addition, comprehensive tort reform to protect doctors from frivolous or opportunistic lawsuits will help lower costs, as will reducing the regulatory burden on newer treatments. These simple steps seem like a very good place to start.

TOPICS: Culture/Society; Editorial; Government
KEYWORDS: 0bamacare; abortion; deathpanels; healthcare; obamacare; transparency; zerocare

1 posted on 03/25/2014 3:16:03 PM PDT by Kaslin
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To: Kaslin

Truth is, our problem isn’t start with health coverage, and it isn’t with health care, it’s with health.

The crux of the problem is that we in a health care crisis because damned-near everybody is sick. And they’re sick because for the last forty years the government’s been trying to push everyone to eat low-fat crap, and it’s making us sick.

2 posted on 03/25/2014 3:26:05 PM PDT by jdege
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To: Kaslin

There is a place where you can get up front pricing, and it is great care: I just checked their prices and seem pretty damned cheap in comparison to Anywhere in Southern California, hell it was $2600 for 12 stitches in my finger here at the local hospital.

3 posted on 03/25/2014 3:57:54 PM PDT by eyeamok
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To: Kaslin

I saw this quote on another site: “I’m a Critical Care RN
Use to employees could go to ER for less than $100 for EVERYTHING (1990s)
Now, I have hospital insurance and I can’t afford to go to the ER , much less be put in the hospital!
When I go to ER ...... We it doesn’t seem to matter who is there, County hospitals do not turn anyone away! Come one come all ! Wether you’re drunk, sniffles etc!
People need to check and see how many illegal aliens who have family in United States that NEVER plan on paying anything for open heart surgery, 89 -92 yrs old , diabetic, etc
AND also AMERICANS that are heavy drinkers/ smokers , used hard drugs, come in with chest pain, have emergency open heart 5 vessels and labs shows : weed, cocaine, barbiturates and alcohol level
Sky high!
On life supports for 2 - 3 weeks. Then goes thru regular Rehab, only to come back within 6 months with another heart attack stoned when he comes to ER
No insurance and we start all over again .......
Oh by the way when he leaves the Unit he mentions ,” He —, I’m not paying for this hotel bill!
Figure why healthcare is SO high?
All of this happens all the time!”

4 posted on 03/25/2014 4:56:05 PM PDT by tuffydoodle (Shut up voices, or I'll poke you with a Q-Tip again.)
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To: tuffydoodle

The US pays more on each person for health care than any nation, but there’s a story here.

I’ve spent six weeks of my life in Denmark and kinda came to observe how health care costs are kept minimum.

In Denmark, gas costs $9.50 a gallon (more or less), so you don’t drive unless necessary, and you tend to live in your town or village.

Roads? Speed limits are are mid-50s on secondary roads and 65 on their interstate. Note, on secondary roads...most are an extra three feet to six feet wider than US roads.

Booze at the grocery? It’s hiked up to a fair degree on taxes. If you want to be an alcoholic in Denmark on hard stuff in need to make big-time money. Beer and wine? Probably ten to twenty percent more than in the US. Caught on a DWI....lost discussion, no negotiation, no pleas.

Drugs? Ten percent of society there might do weed, but you just don’t find cocaine, meth, LSD, or anything much. The taxation on people....usually means they don’t have the money to waste on ‘extras in life’.

Overweight victims waiting to have a heart attack? Go walk around’s hard to find morbidly obese folks. Want to smoke? Better have ample cash on you to avoid a pack of smokes.

Emergency room action in Denmark? Mostly traffic accidents, farm accidents, or heart attacks. But nowhere near the same statistical numbers as the US.

This game we play about cost being silly and outrageous? Well...we won’t change nothing that relates to the cost.

5 posted on 03/26/2014 2:18:56 AM PDT by pepsionice
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To: tuffydoodle

This is what happens when people are silly enough to believe that government, which thrives by creating problems, can be trusted to solve the same problems that government INTENTIONALLY created! Those who are old enough to remember know that before all the government “SOLUTIONS” a person could walk into a doctor’s office, sign in at the desk and see a doctor WITHOUT AN APPOINTMENT and pay five dollars for the office visit. Now you have to call and make an appointment in the distant future and pay a huge fee when you finally see the doctor for one and one half minutes and if you can’t wait that long you are told to go to the emergency room where you may sit for hours longer than you would have had to sit in the doctor’s office in the old days before seeing someone and you are lucky if they don’t make your condition worse and charge you more than a new car used to cost in the old days. No, for those in Yorba Linda, I am not making that up, an emergency room visit can easily cost more than the price of a new car back in the fifties. It is called inflation, a McDonald’s lunch for two now costs more than a week’s worth of groceries for a family used to cost when I was a child and I am not a hundred years old, I am hoping to make it to seventy in late spring.

6 posted on 03/26/2014 6:21:30 AM PDT by RipSawyer
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To: pepsionice

“Go walk around’s hard to find morbidly obese folks.”

I have never had the pleasure of going to Denmark but I would not be surprised to find that there are many there who would rate obese by the standard height and weight charts we have in this country. I did spend a year at Keflavik, Iceland and there were men there who would rate as obese on those charts but they were mainly muscular types with very strong bodies. I myself am obese by those charts at six four and 250 but people compliment me everywhere I go on how good I look. No one who has seen me thinks I am fat. In fact when I weighed 240, which is still obese by those charts, people used to ask me how I stayed so “skinny”. The chart says that I should weigh no more than 202 maximum, at which weight I look like Ichabod Crane in the old animated version of “Sleepy Hollow”, not just skinny but scrawny.

7 posted on 03/26/2014 7:03:56 AM PDT by RipSawyer
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