Avoiding a $108,951 Heart Attack

Imagine you have a massive heart attack. Yes, you, a 44 year old high school swimming coach and Ironman competitor, history teacher, father, and all around good guy.

Now imagine you’re rushed to the hospital in the nick of time. They put in four stents and you’re saved. Then you get a bill for $108,951, nearly twice your yearly salary – this after your insurance company already paid $55,840.

(A reasonable bill – for everything – according to industry experts, would have been between $26,985 and $36,800.)

“They’re giving me another heart attack”, you think.

That happened to a guy in Austin, Texas. Until the press got the story. Then the hospital, St. David’s Healthcare, known for exorbitant billing and run by the immense for-profit HCA Healthcare, immediately reduced the charge to … uh….$782.29. Oops!

Such is the state of US healthcare costs today.

Politicians love to argue about universal healthcare. Republicans say it smacks of socialism (it does), which is really communism (well, no), which is one step away from devil worship (I’ll leave that up to you). Democrats say it’s righteous (being righteous, they would know), is embedded in the Declaration of Independence -“life, liberty and the pursuit of happiness” (hey, two out of three ain’t bad), and should be paid for by rich people (anyone worth more than them).

While Obamacare brought 21 million people into the system, it also brought more bills. Covering all those people is one thing; making the system effective and cost-efficient is another.

Some examples: The US has a higher rate of healthcare deaths than comparable countries. US adults have slower access to doctors and nurses. Our use of the ER is nearly twice that of comparable countries. We spent an average of $8233 per person on healthcare in 2010; 33 other developed nations averaged less than half that – $3268. We have a shorter life expectancy than average. We have fewer doctors than other countries.

A recent article by Ryan Cooper inThe Weekoffers some interesting insights.

A frequent argument cites the “fee for service” model for high costs. But studies show that when insurance companies paid some providers a flat fee per patient per year, costs didn’t go down. Another argument is that, because Americans rarely see all their bills, they overuse the system. That, too, was disproven by studies.

However, studies do support two big differences between our system and those of other countries: administrative costs and drug prices.

Any visit to a doctor’s office illustrates administrative costs. Clerks outnumber the doctors. Why? Complying with a maelstrom of rules and regulations required by the government and the many insurance companies. To lower costs most doctors now join groups.

Insurance companies also pressure doctors to see more patients in less time.

So, what was once a reasonably pleasant 20 – 30 minute visit with your family physician is now a 45 to 60 minute ordeal of presenting your insurance information, sitting in a packed waiting room, filling out medical and HIPA forms, and eventually seeing the doctor for – maybe – 10 to 15 minutes.

Ryan’s Solution: cut administration by reducing government regulations and get insurance companies to standardize procedures and rules.

Americans frequently pay roughly twice what other developed countries pay for drugs. One reason, in 2003 Congress prohibited Medicare, the biggest provider in the country, from negotiating with pharmaceutical companies.

Ryan’s Solution: Let Medicare, the biggest buyer in the country, negotiate with pharmaceutical companies, which would lower prices for everyone.

Ryan is just one of many people studying healthcare. Recently, some big names in private enterprise, frustrated at government inaction and incompetence, also produced some solutions:

1) To cut insurance costs, Amazon, Berkshire-Hathaway, and JP Morgan recently announced a joint project to establish their own health system. That’s over a million people. Stock prices of insurance and pharmaceutical companies tumbled.

2) To educate more doctors, New York University announced free – yes, free – tuition for medical students.

3) To cut drug costs, 500 hospitals, including the Mayo Clinic, just formed a not-for-profit drug company, Civica Rx, to negotiate with makers of generic drugs.

While not changing the whole system, a lot of people are certainly sending a message to government, healthcare providers, and insurance companies alike.

Will their solutions heal a clearly ailing US health system? Let’s hope so. They’re certainly a step in the right direction.

And, at least, a start on eliminating that second heart attack.

(If you like this, pass it on. If you don't, pass it on anyway. Why should you suffer alone?)