A NJ teacher cut his finger. After it wasn’t healing properly he visited the ER. No x-ray, MRI or anything more than a bandage, a tetanus shot and some ointment. He didn’t even see a doctor and was instead treated by a nurse practitioner.
He was billed $8,200 for the visit.
He called around and found the going rate at most clinics and hospitals was between $400 and $1000.
I’m not sure which is worse: the $8,200 bill from the ER he went to or the fact that the other hospitals and clinics he contacted charge $400-1000 for the same thing.
The cost of the bandages and sterile supplies was probably a few dollars max. I’ll guess $10 for the tetanus shot. NPs in NJ probably pull in about $120k with benefits, and that’s on the high side. So if he spent 10 minutes bandaging the patient and another 20 minutes writing up the charge sheet and documenting the visit, we’re looking at $60 for labor. Add in hospital overhead consumed by the patient – everyone he spoke to that helped him in his visit, and the visit likely cost the hospital about $120.
In a free market system we could draw the line there and say, “So how do you justify netting $8000 for the visit?”
But our health care system is nowhere near a free market system.
Consider the fact that hospitals cannot legally turn anyone away due to their inability to pay. I’m not a lawyer and I do believe there are limits to this, but from the hospital’s perspective they can’t have lawyers triaging patients in the ER. So they end up providing free care – free to those who receive it but paid by everyone else.
So we have to add on an “indigent care” tax to that $120. How much do we add? That’s a very good question and one that’s not easily answered, but for fun let’s say $130 – turning the visit into a $250. We’re still a long way from $8,200 but you should begin to get a sense that things aren’t as clear-cut as they should be.
Then there’s the issue of Medicaid. Hospitals have to take it, but the reimbursement costs are notoriously below the cost or providing care. Therefore to keep the hospital profitable (for the few progressives who stumble on this post substitute the phrase “from not going bankrupt” for the “P” word) we need to add the cost of treating the medicaid recipients. How much should that surcharge be? How about $50. So now we’re at $300.
The particular hospital the teacher visited is a for-profit (progressives: substitute the word “evil” here) hospital. At this point the hospital can pretty much charge what it wants, so why not $8,200? When’s the last time you walked into a hospital or doctor’s office and seen a board with a list of services and fees on the wall? That used to be a common site but now it’s almost unheard of. Go into any body shop or auto repair mechanic and you will see signs telling you how much the business charges for labor and for common procedures to your car. Yet when you walk into a doctor’s office or clinic you have no clue to what your treatment will cost even if it’s something minor like bandaging a wound or getting a tetanus shot.
This may make it seem like the doctor is doing her work because she loves it, and that the nurses are taking care of you because that’s just the kind of people that they are. But the doctor has $200k in medical school debt and a mortgage, and the nurse has a kid in day-care that needs to be clothed and fed, and “kindness” doesn’t pay back student loans, mortgages or day-care bills. You are paying a high price for that ignorance but you just don’t know it.
The people who do are the ones without insurance or the under-insured who get hassled by bill collectors, and the few people like the New Jersey teacher who think $8,200 is ridiculous regardless of who pays it.
Americans need to grow up and become responsible for their own care, but that’s the long-term solution. The issue is how do we get there? We can start by mandating transparent pricing wherever medical care is offered. The mere fact this hospital would be forced to put “Bandage a Cut – $8,000” on the wall would likely drive down the costs of the service at that particular institution. Eventually people would become aware of the limitations of their insurance and act accordingly, just as people are aware that they pay more to get their cars fixed at the dealership rather than the local mechanic down the street.
The US healthcare system is such a mess that such a simple solution isn’t going to solve everything. The key is to “do no harm” and make the system worse such as what Obamacare has done.