Aisle 7, Price Check for Pap Smears
Lizzie Skurnick
Contributor
Posted:
09/16/09
Recently, I wrote about my experience trying to get my BlueChoice Preferred Provider Organization to honor its contract to reimburse me for out-of-network care for depression. Most of the comments I received later fell into the usual categories: faulty logic; big fat meanie; off-topic; starring in personal Lifetime Drama; seeking agent. (OK. No one was seeking an agent.)But one commenter did stand out because his contribution revealed a common misconception about people with health insurance:
The writer unwittingly exposed the biggest shortcoming in the current system: "Between gynecological exams, lab tests, infected retinas and monthly doses of Klonopin and Lamictal, I have probably only spent about $1,500 out of pocket in the past year."
Now what do you suppose the actual cost was for all of those things listed? No doubt, significantly north of $1,500. Quite frankly, people have no clue about the cost of their care, because they bear so little of it themselves and because they rarely seen actual bill broken down line by line. They just expect someone else to pay for it.
Actually, I know exactly the cost of everything I do and take. Or I like to think I do. Here's why.
When I buy my prescriptions, I see that while 30 days of Lamictal costs $323, I only pay $25. When I see a doctor, BlueChoice sends me a statement afterward. In black and white, I can see that my gynecologist charges $375 for an office visit, of which BlueChoice pays him an "allowed" benefit of $75, and I pay a remarkable $15.
When I buy my prescriptions, I see that while 30 days of Lamictal costs $323, I only pay $25. When I see a doctor, BlueChoice sends me a statement afterward. In black and white, I can see that my gynecologist charges $375 for an office visit, of which BlueChoice pays him an "allowed" benefit of $75, and I pay a remarkable $15.
Except, what's this "allowed benefit" thing?
On the open market, transactions are pretty simple. Before I get a loaf of bread, the grocery store knows exactly what it paid for the loaf and how many I'm likely to buy. The store has shelved and priced the bread accordingly. BlueChoice and I and every other customer --- we all pay the same $4.35 at the checkout.
But when I see my gynecologist, if I'm still working through my deductible, the bill is $375, of which BlueChoice pays the "allowed benefit" of $75, leaving me with a $300 tab. Once I've met my deductible, the bill is $75. Since I paid BlueChoice $5,000 in premiums to negotiate that rate, I only pay the doc $15. I don't know what I would pay if I were covered by Medicare, or, (gasp) if I didn't have insurance at all.
But why not? I'm the same patient. Doesn't my gynecologist know what that five minutes with the speculum actually cost him? And since it's my tushy in the seat, shouldn't I?
David Goldhill recently wrote in the Atlantic Monthly about what happened when he tried to find the actual cost of a given procedure in the market, using the time-honored tool of picking up the phone and asking. Here's what happened:
David Goldhill recently wrote in the Atlantic Monthly about what happened when he tried to find the actual cost of a given procedure in the market, using the time-honored tool of picking up the phone and asking. Here's what happened:
Eight years ago, my wife needed an MRI, but we did not have health insurance. I called up several area hospitals, clinics, and doctors' offices -- all within about a one-mile radius -- to find the best price. I was surprised to discover that prices quoted, for an identical service, varied widely, and that the lowest price was $1,200. But what was truly astonishing was that several providers refused to quote any price. Only if I came in and actually ordered the MRI could we discuss price.
Several years later, when we were preparing for the birth of our second child, I requested the total cost of the delivery and related procedures from our hospital. The answer: the hospital discussed price only with uninsured patients. What about my co-pay? They would discuss my potential co-pay only if I were applying for financial assistance.
Goldhill explains this happened because he actually wasn't the customer. The health insurance companies were. And doctors dependent on them for patients literally could not afford to take an interest in the people at the other end of the stethoscope.
"It's astonishingly difficult for consumers to find any health-care information that would enable them to make informed choices -- based not just on price, but on quality of care or the rate of preventable medical errors," Goldhill writes. "So while every city has numerous guidebooks with reviews of schools, restaurants, and spas, the public is frequently deprived of the necessary data to choose hospitals and other providers."
Ironically, since I'm seeking treatment for mental health issues, I'm in the unusual position of truly knowing what my care actually costs. When they're not in the hospital or clinic environment, many psychologists don't accept insurance discounts and, therefore, patients are in a direct negotiation with their providers. I happen to know that where I live the shrink market will bear between $100 and $200 for 50 minutes of a qualified professional's service. This is a cost arrived at by quantifiable factors -- rent, investment in training, cost of living, number of patients seeking treatment. Every patient in a given doctor's office gets quoted the same price. And if they don't like the doctor or the cost, they can go seek the care of a direct competitor.
But if BlueChoice were in the game, that would change. Suddenly, my doctor's rates would transform from what she needs to charge to make a living to what she needs to charge to get a decent rate from all the insurers she uses. It would have little to do with what the market will bear, and everything to do with what revenue streams are available to her.
That's why the argument about "choice" in health care is forever polluted by the middleman of unregulated, insurer-negotiated rates. Goldhill puts it well: "Health insurance is the primary payment mechanism not just for expenses that are unexpected and large, but for nearly all health-care expenses. We've become so used to health insurance that we don't realize how absurd that is. We can't imagine paying for gas with our auto-insurance policy, or for our electric bills with our homeowners insurance." For the history of how we arrived at this bizarre system, Goldhill's entire article is a must-read.
I wouldn't care if health insurance could actually work like auto insurance. After all, auto insurers and consumers both benefit from mandated insurance. Insurers know there will be a given number of fender benders, each costing X amount to fix, in a year. We know that even though it's unlikely we'll have one, it benefits us to bet a small amount to offset the chance that we might. The government tells us all exactly what we must insure and what we can't. Boom. Everyone's happy.
Health insurance only also works for known conditions with a large pool of consumers. (Ladies, enjoy your yearly pap smear.) But who knows the profit margin on a detached retina? An abortion? A broken toe? The market can't tell us, because doctors can't compete with each other to let it settle on a reasonable cost. Instead, they have to get patients through the big insurance bullies and accept whatever BlueChoice says it should cost, hoping they can barrel through enough patients to make a living, while patients have to deal with wildly fluctuating costs and capricious reimbursements.
If I could really know my broken toe would cost $256 to fix, I'd say screw insurance on my toes. If I knew a pregnancy cost $15,000 on average, I'd seek a good rate to make sure I'd be prepared. But insurers have no investment in giving me a good rate. They have no investment in helping doctors provide decent care. They have an investment in keeping our claims squeezed on the patient end and the doctors squeezed on the office end, and since Congress can't seem to come to an agreement on how we can administer the transaction any other way, we're all choking to death.
But, as I wrote in my earlier post, I went ahead and treated myself like a car. Knowing my health history, the amount of care I would need, and being in the rare position of knowing exactly what that care cost, I invested in what Republicans kindly call "the market," using "choice." I made sure I had a job so I couldn't be rejected for a preexisting condition. I paid more for a PPO so I wouldn't be limited to the sparsely populated pool of in-network psychologists. I received a diagnosis and course of treatment from my provider, and I submitted the claim in a timely manner.
BlueChoice, you bet my brain wouldn't get in a fender-bender. I bet it might. You lost, you sneaky deadbeats. Now pay up.