A $4,853 Bottle of Tylenol

 

If you want to be immersed in abstract thinking, be dazzled by statistics, or ponder what is wrong with our health care system, look no further than hospitals and how they bill.

A recent trip to the hospital for an operation left me scratching my head regarding our health system. It’s not the skilled care and great results the hospital delivered. It’s the cost of the services and how it impacts different individuals that dazzles me.

My bills for surgery and overnight stay came to $49,450, including a hospital pharmacy bill of $4,853. Fortunately between medicare and my insurance carrier, I only paid a small fraction of this bill. 

The way hospitals charge is at best confusing. While raw rates are in part based on cost, they also are for market positioning. Those raw rates are forced much lower if the patient is medicare or medicaid. The balance left is further settled at a lower negotiated rate with major insurers. The hospital simply writes off the difference.

Thats all good news, but not everyone has insurance. There are 55 million gig and part time workers in the US. They represent 34% of the total workforce and that figure is expected to grow to 43% by 2030. Only 24% of these workers have health insurance. Additionally, only 27% of low wage workers employed by companies have health insurance, 

compared to 94% of the top 10%.

No health insurance means the patient bears the raw rate charged by the hospital. The only salvation is the means testing that some hospitals employ. Regardless, the amount owing never reaches the low created by the power of public and private insurer negotiations.

Even more startling is that 69% of hospitals even with these high rates end up losing money. They justify their tactics on billing uninsured patients higher rates to help make up losses.

The whole scenario doesn’t make sense. The gig and low wage worker already strapped by having to pursue multiple jobs to make a go of it should not end up bearing the brunt of a health care emergency. Hospitals should not be burdened with the complex accounting needed to negotiate with various public and private insurers. 

There is no easy solution to all this, but it makes sense that everyone should pay the negotiated rate for care, insured or not. Further that hospital profits not be viewed under a microscope. That they instead be viewed as part of a profitable health care network of doctors and other services that surround them. Finally, that some new form of medical coverage, 

available to more people, be established.

These are long term goals. Until that time, the hospital may have “Medical Arts Building” on its side, but their billing is not a Rothko painting.

David Young