Saturday, January 14, 2017

The idiotic way we buy healthcare

Seven years ago, President Obama and the Democrats said that they had solved the healthcare crisis. Their Affordable Care Act promised universal coverage for the uninsured and lower prices for the rest of us. Their calculations were wrong and Obamacare ended up making America’s healthcare mess even worse.

While there are many problems with the current healthcare system, one seems to stand out among all the rest for its sheer stupidity. The most idiotic thing about the American healthcare system is that when we buy healthcare, we have no idea how much we are buying it for. This problem seems to have been worsened by Obamacare.

Aside from suffering from steadily rising premiums and higher deductibles since the onset of Obamacare, we are being blindsided by unexpected medical bills that come out of nowhere. When we go to the doctor for an office visit or check into a hospital, we have no idea what it will cost.

Medical care is the only commodity that we buy in such an insane fashion. Can you imagine going to your local car dealership and signing a contract to buy a new car without knowing how much it would cost or even what kind of car you’d be driving home? Not many people would be willing to take such a deal, but we do it every time we step into a doctor’s office.

When we go to the doctor, all most of us know for sure is that we’ll be paying the insurance copayment. My copay has gone from $20 for an office visit a few years ago to $35 today. In addition to higher copays, my PPO also makes me pay a share of many tests and procedures through deductibles and coinsurance. With my HMO from years past, I only had to pay the copayment for most services.

Not once, but twice in the past two years I have had large bills come from out of the blue for tests that doctors had ordered for members of my family that were denied by the insurance company. In both cases, I took the bills to the doctor to ask them to appeal the insurance company’s denial. In both cases, the doctors said that lab was only supposed to bill the insurance company, not their patients, for the tests in question.

This seems to represent something of a scam. The doctors order tests that aren’t universally recognized and approved and then the lab bills the insurance company. If the insurance company doesn’t pay for the questionable test, apparently the lab takes the loss rather than billing the patient. Occasionally, a bill for thousands of dollars for a test for a routine health condition slips through the cracks to the patient, but normally the patients never know how much money the insurance company is paying out on their behalf unless they actually look at those Explanation of Benefits forms that normally go straight from the mail to the trash.

A third of medical tests are considered unnecessary according to a paper in the Journal of American Medicine. This mountain of needless testing costs hundreds of millions of dollars. When the insurance companies are billed for these expensive tests, it translates in to higher premiums.

Even when you try to find out how much your healthcare costs, you might still be surprised. When I went in for a colonoscopy two years ago, I paid the doctor and the hospital in advance. I thought that this would eliminate any problems with the billing.

Since I had already paid for the procedure, it came as quite a surprise when I started getting more bills in the mail, again for more than a thousand dollars, a few weeks later. After spending countless hours on the phone getting the runaround between the insurance company, the hospital and the doctor’s office, I traced the problem to a diagnostic code that had been entered incorrectly. The confusion was over whether the scan was medically necessary or preventive care. Under the ACA, preventive care was covered at a higher rate than a procedure that is needed for an actual existing health reason. Go figure that one out.

Even after finding the problem, it took many more hours on the phone to get it corrected. Total time to resolve the issue was about six months. Many people probably would have simply paid these bills when they received them and couldn’t get them dismissed immediately. Alternatively, many others might have ignored the bills and suffered credit damage as a result. I have to wonder how many people are paying outlandish medical bills that they don’t really owe.

Some uncertainty in medicine is legitimate. It is possible to go into a hospital and have real, unexpected complications that make your stay more expensive. However, there shouldn’t be any fear of going in for a routine doctor visit and coming out with thousands of dollars for routine and unnecessary tests, even when you have insurance. The price of a colonoscopy shouldn’t double because you have a medical problem that requires you to get a colonoscopy.

There are many problems with the health care system and Obamacare, but one of the biggest is the lack of transparency in pricing. Patients should have an idea how much they will owe before they commit to a procedure. Too often now, cost is never considered by the doctor and never known by the patient. At least not until the bills start showing up in the mail.

To take it a step further, patients should be able to compare the rates of various doctors and hospitals. With any other commodity, if you want the best you’d better be prepared to pay a little extra. If you desperately need a procedure, but don’t have much money, you might prefer a safe, but less prestigious hospital or clinic. Before you pooh-pooh this idea, consider that medical tourism is already gaining in popularity as people travel to countries with better doctors, advanced treatments that may not be approved at home or less expensive care.

In short, health care reform needs to reintroduce real competition and markets. People can’t make intelligent decisions if they have no information about what a transaction will cost them. The illusion that their copayment is their only cost for care is leading to wasteful practices, large bills and inefficient medical care. Give patients the information to make good healthcare choices and the freedom to choose.

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