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Monday, September 24, 2012

Why An Insurance Company Paid $83 For A Cloth Sling

The cloth sling James Dichter was fitted with cost his insurer $83, but he found it online for just $7. (Suzanne Kreiter/Boston Globe Staff)

James Dichter, a 59-year-old consultant from Massachusetts, recently had elbow surgery and went home with a sling that cost his insurance company $83. His co-pay was $25, but he found a similar sling online for a mere $7 dollars. He filed complaints with government agencies, the supplier, his insurance company, even with Massachusetts Senator John Kerry’s office.

Company Defends Price

He also called Liz Kowalczyk of the Boston Globe.

She started looking into why Dichter’s insurer had paid SurgiCare, a Waltham, Massachusetts medical equipment supplier, so much for the sling, which is made of two thin cloth panels sewn together and a shoulder strap.

SurgiCare told the Boston Globe that their price was fair because the company provides services that an online retailer doesn’t.

A ‘Little Understood Corner’ Of Health Care

Kowalczyk writes that there are no simple answers for medical equipment costs, what she calls a “little-understood corner of the health care system.”

Prices for medical equipment (from glucose monitors to wheelchairs) are based on prices set by Medicare, the federal insurance program for the elderly. These costs amount to $37-billion in medical spending annually in the U.S. But, Kowalczyk writes, a lot of that is wasteful spending for Medicare:

Medicare has struggled for a decade to implement competitive bidding as a way to combat overpayment, but the industry has lobbied hard against these changes. And because payments to hospitals and doctors account for a much larger chunk of health care spending, private insurers generally have not focused as acutely on the cost of medical equipment.

Guests:

  • Liz Kowalczyk, healthcare and medicine reporter for the Boston Globe
  • James Dichter, patient

Please follow our community rules when engaging in comment discussion on this site.
  • J__o__h__n

    Beer and wine are marked up at a comparably obscene rate by restaurants.  Obviously health care is essential but the concept of screwing the consumer is still the same. 

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    The military and toilet seats. We’ve been here – it needs to be fixed.

    • Mike

       Military items are more expensive than regular consumer items partly because, military tools MUST be 100% reliable– don’t want your hammer to break while you’re fighting for your life.  So, military things must meet Military Specifications.  That means better materials and lots of testing– more cost.

  • Adam Zolciak

    I have called and questioned these types of items before.  It is always the same canned answers.  As a consumer it is very frustrating when you can’t get a TRUE itemized bill for services rendered.  The best I have been able to get is a list of codes.

    • Mike

       It’s even harder to get a good estimate of price of medical service before you buy it.  Doctors don’t know the price of tests.   Price estimators aren’t accurate or don’t even give an estimate (I spent half a day trying to find the price of physical therapy [comparison shopping], but couldn’t).

      So, that’s another problem.  How can you be a good shopper if there are no price tags?

  • Beerwidow

    Try a gel ankle brace for a sprained ankle… $110 from the insurance & $20 on line.  Once I found out how much it was, I tried to return it to the medical office but could not return it because it was a ‘prescription’ – even though it had never been used.

  • Mike

    How can they charge  so much?   Easy, because they can.   The patient doesn’t pay for it, so they don’t question it.   The insurance company doesn’t question it,  they can just charge higher premiums.

    I guess that’s why businesses get into health care: it’s profitable.  It’s a “hard” market:   Prices don’t affect demand.   “Customers” aren’t deterred by price.

    Something is wrong here!

  • Bruce Macbain

    I had a similar experience to the one your guest is describing. I wore this overpriced sling for a couple of days and then offered to return it to the hospital (Beth Israel) in virtually untouched condition so someone else could use it withuot having to pay the exorbitant cost. They refused to take it!

  • June

    are you living in a bubble?
    A $1000 deductible is low!
    We have $5000 for individuals and $10,000 for a family with our coverage.

  • Suu

    I was put into a “surgical bra” after surgery to treat breast cancer.
    It was a plain heather grey sports bra, of which I have at least six,
    They cost, tops, $35.
    The billed cost was $430.  The bra did not have sequins, spangles or Swarovski crystals.

  • C guest

    Hi Robin.  We needed a nebulizer machine for asthma medicine for our son.  The doctor’s office had me sign a form that we were responsible for the charge ($180.00) and when I asked about it was told – don’t worry insurance will pay for it.  BUT, we have a high deductible family plan ($6,000 is the deductible amount we have to hit before insurance kicks in).  Feeling a bit overwhelmed, I brought the machine home. My husband then went to Walgreens and found a comparable machine for 69.00 – and on sale for 49.00.  I took our machine back to the doctor’s office and was told that it was charged that high amount to insurance to cover the costs of any future losses.  I don’t know how accurate that statement is but the very high deductible is forcing my family to look at cheaper options – including NOT going to my family doctor but using clinics instead.

    • Bpedrick

      That is insane.  ”charged a high amount to cover the cost of future losses”??????
      Sounds like the insurance company is insuring it’s bottome line and not your health. 
      I am thankful almost every day that I live in Canada and we have universal single payer and none of this kind of nonsense. 

  • loving OR

    I received a bill for stainless steel screws used in my eye orbit surgery that were line itemed out at $85 each. I could buy stainless steel screws for $0.05 each at the hardware store. Granted they aren’t surgery grade, but $84.50 is far too much mark up. They could have been gold and they would still be grossly over priced.

    • jefe68

      I doubt you could buy surgical screws in a hardware store. Are you sure they are stainless and not titanium? Most surgeons would use titanium as this lessens the possibility of infection. Still $85 a screw is outrageous.

  • Jose Miraya

    I shopped online for a CPAP machine which the Blue Cross approved store wanted $4000. Found it for $1500 including a mask. Got a prescription from my doctor before buying. Blue Cross denied claim because it wasn’t bought through their approved supplier.

  • Legmaker

    You need to look up L-codes. These were set in place for items that need to be custom fitted as well as custom made and unfortunately things like slings still fall into that. The insurance companies are paying not only for the device but for a trained individual to fit that device and all the overhead that goes into it. A sling is not a good  depiction of this system but a custom plastic ankle orthosis or a custom fitted back brace would be. Look into L-code billing and you will find your answers on why things are so expensive. 

    • Mike

       I think you hit an important point:  overhead expense.   Part of that is people who get sick or hurt and have no money to pay.  But they have to be helped– that’s the nature of civilized societies.  So, those costs have to be spread around.

      Another part of the overhead is having expensive “stuff” on-call.  For example, I would guess that the cost of one more MRI scan would just be just the electricity to cool it during the scan (half an hour).  But that cost goes on 24 hours a day, 365 days a year, even if it’s not used at all.  And then there’s the cost to buy the MRI machine!

      • BHA_in_Vermont

         ” I think you hit an important point:  overhead expense.   Part of that
        is people who get sick or hurt and have no money to pay.  But they have
        to be helped– that’s the nature of civilized societies.  So, those
        costs have to be spread around.”

        Which is why we need universal single payer instead of a bunch of “for profit” insurance companies that “negotiate” a different price depending on the size of the “pool” being represented. When the size of the pool is “one” you have no “negotiated ” price break. When the size of the pool is “everyone” there is no hocus-pocus” math to cover the cost of care for the uninsured. 

  • Barbara

    Last week when I needed stitches in my hand, I was encouraged to put on a sling, and “would I at least like to take it with me?”
    I declined specifically because of this possibility.  The ER itself will be a killer, even after insurance pays part of it.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    They should send insurers and Medicare money folk to Walmart – not that I approve of everything Walmart does, but they are the experts on getting vendor costs down.

  • Justin

    My ENT charges $10 for a syringe for an allergy shot. That’s after the $60 office visit to get the shot. Brought my own syringe in to do the shot myself but was told I couldn’t do that even though I do it at hone every week except for a new vial.

  • Lawrence

    So there’s outrage when a 3 dollar item is sold for $83? I don’t like it either but that is how  capitalism works to make it’s profits. Starbucks and Nike follow the same business model but there’s  not much outrage there. What happens when a businessman like Mitt  Romney  becomes president…hold on to your wallet! 

    • Winkpc20

       Let’s not blame capitalism.  Blame the politicians and regulatory agencies that fail to address this kind of thing.
      I do agree that Romney will only make it worse!

      • Secripp1

         I’m reading all these posts and thinking to myself, ‘What do you think the Affordable Care Act is about?  Not only trying to make health care available to all, and end the ‘pre-existing condition’ nonsense, but putting a stop to this outrageous padding of insurance companies bottom lines! 
        I was unfortunate enough to have been diagnosed with three benign brain tumors, and if it weren’t for the ACA, there’s no way I’d ever be able to find health insurance.  And I’m in school as we speak for Health Information Management, and while it may seem to some that coding is just a way to inflate a patient’s bill, every single thing on that bill has to be medically justified.  If it isn’t, it isn’t reimbursed.  Period.

        • Secripp1

          Needless to say, I will not be voting for Romney.  For this and a truckload of other reasons.

    • Paul K

      The big difference with Starbucks is that when I walk in, if I don’t think the price is fair, I can take my business elsewhere.  Free Market economics assumes the buyer and seller agree on service and price.  In our health care system, the buyer doesn’t know the price, so the seller has no reason to be competitive.

  • Canoec1

    This is how it is done in the US system.   I worked for Convatec for 20 years.  A product that we produced in the United States would sell for half as much in Europe and most other countries.   

  • EEF

    I work for a DME company.  When I first went to work for them, I was astonished at the cost of what I perceived as relatively inexpensive items.  Then I learned about the intricacies of  insurance reimbursement expense:  an activity based costing activity revealed that it cost almost $500 to process an item — any item — through insurance.  Interestingly, the $115 ace bandage may likely have been a net lost for the DME supplier because of the significant embedded expense of insurance processing.  I agree, this is a mess, but there is not excess profit being made here, as bizarre as this looks.

    • Cat

      There is probably some “excess” profit being made on the insurance company side. Especially taking into account the exorbitant amounts they spend attempting to deny my needed care.

    • Out raged

      I hate to say it but you have been drinking the cool aid too long. The insurance processing line is a bunch of  bull as much of it is automated through computer generated forms – So what’s the next excuse , Medical coding – this is nothing more than entering in part numbers – I have see ridiculous bills $45 for a pulse oxygen reading – my god , this requires less work than taking temperature – you can buy pulse oxy meters for $50-200 , I am so offended by the bills I have been receiving that I am starting to challenge all of them. 

      Maybe one of the reasons health care has become so expensive is that the people who do medical billing just add more and more BS to the bills . Another one – the doctors office takes my blood for blood work – Tests $ 800 . Sample handling $ 20. let’s just nickle and dime people to death , these bills are so out of control that if law enforcement were to start looking at them for mail fraud , medical fraud , insurance fraud – I think quite a few people would be going to jail. 

      • EEF

         If you hate to say it then … don’t!  You can accuse me of drinking as much cool aid (sic) as you’d like, but we employ a very, very large room full of people whose job it is to do nothing but process claims through insurance.  It is a tedious, time consuming, uphill battle and every “misplaced” fax that must be sent again and again, every repeated phone call, every additional document request, every new Letter of Medical Necessity request , every request for a revised RX, etc., merely continues to inflate the cost of what should be a nondescript, low cost item.  Don’t forget that — in my business — about 10% of our reimbursements must be written off as bad debt.  We simply never get reimbursed from the insurance company.  Please understand I am not advocating that triple-digit ace bandages are acceptable by any means, though, I can certainly understand how that happens given the expensive and byzantine processes by which DME and supplies providers must endure in order to get any kind of reimbursement at all.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Can you say kick-backs? Sure, I knew you could.

  • Jnewton123

    $1,600 charge from Presque isle Maine ER for 1-staple in my head, less than 30 minutes from leaving car to back in car, first staple gun miss fired shooting two staples which had to be removed second gun had to be used charged for both guns, same procedure at my Vet would have been $75.00 total and additional $300 for emergency call, why should I pay for product that didn’t work and caused undue pain!!

  • Debby Shapiro

    Not an overpriced sling, but emergency care BIDMC intimidatd me into then billed me for.  Short version: I was at BIDMC as medical advocate (with Rape Crisis Hotline) at 2 am to accompany victim.  At 5 am, accompanying her for an invasive ultrasound, I passed out (stress and lack of sleep.)  Came to and was fine…but shortly after a nurse told me I “should be checked out.”  I insisted I was fine but she insisted, called over a doc who made it very clear I MUST be checked out.  I said, “I’ll do this under the assumption this is to protect your liability because I do not need or want any medical attention.”  They took blood, checked my eyes, etc…then 1/2 hour later came in to tell me they wanted to perform an EKG.  That’s when I realizedc this was going to cost…(I hadn’t given them insurance info…I self pay and have a $200 ER co-pay and very high deductible for tests.)  I refused the EKG and made it it clear I did not expect a bill as this was care I was intimiated into.  (You try resisting a dr. and nurse in your face at 5 am with a moaning rape vicitm in the background who you are there to comfort!) Dr. said he’d leave note in the chart for billing Dept.  Call to them next day found the note said “PAtient will self pay.”  This happened July 22 and after many go rounds with billing dept and “Patient Relations” (Ha!), received a note todaysaying “After two departmental reviews it has been determined your bill cannot be waived.”  (Then go on to say you can give us insurance info and have them cover it.)  How’s that for Chutzpah???

  • Carl Melina

    The comment was made that now that deductibles are higher people are noticing the exorbitant costs of medical supplies. People have been paying these high costs all along in the cost of their insurance premiums.  The same is true for the cost of health care in general. In my clinic an insured patient pay a $20 co pay for an office visit and comes in for a hangnail while an uninsured patient pays $160 and pay much closer attention to the need for health care. The investigation needs to go deeper. The entire system is warped and everyone along the way is getting a payoff including doctors.

  • Hillarion

    I’m partially deaf (both ears), and found that hearing aids, professionally provided after tests, run roughly $2,000 per ear. I suspect that that cost is considerably inflated. One local hearing-aid center said that if you lose your h.a. in the first 90 days after initial [fitting], it would cost you $150 for a replacement. Now, they are probably not being magnanimous in setting that charge. I’m a retired electronic tech. with manufacturing experience, and that $150 seems like a reasonable cost for something made in relatively-large quantities.

    Otoh, setting up individual h.a.’s is (we hope!) done by well-paid specialists who use relatively-costly equipment that needs periodic calibration and maintenance. Their lab. surely doesn’t come free, either. However, do these costs justify such a high charge per ear? I have significant doubts.

    Robin is the epitome of compassionate decency coupled with a fine awareness of what’s going on, along with having a pleasant voice.

  • cambridge dweller

    The same is true for hospital services.  I was hospitalized at Mt Auburn for 4 days with an acute infection, and wanted to keep up with physical therapy for my shoulder.  I already had a routine and just asked the nurse if they had weights I could use.  She said she could sent a physical therapist up, and I said “no, I just need weights, I don’t need a PT.”  Then a physical therapist came to my room, and I repeated that I didn’t need a PT, I just wanted to use weights.  She was there no more than 15 seconds, and I had a $254 service charge for a PT consult on my bill.  I called to complain, and they told me it wouldn’t affect my copay.  I said that’s beside the point, no one should be paying for a service I didn’t receive.  Then she commented on how high my deductible is ($1000) and asked if I’d like to make a payment.  I said I’d pay it all at once, and she said “oh, then I can give you a 30% discount”  What?!??  So I saved $300 by paying in full…which has never been communicated as an option, and felt like hush money to me. 

  • Dhealhtknut

    My wife was told by her Dr. that the intervenes drug that she received cost the hospital eighteen hundred dollars while she was charged eighteen thousand dollars for it.

  • Banannaskins16

    I am 43. Back in the late 70 and early 80 my grandfather was undergoing treatment for Cancer. I remember my grandmother going over the bills at my parents house. Back then I can see clearly in my mind, the disbelief that the grownups had that each aspirin was 11 dollars. she tried desperately to bring in there own aspirin. She was told No. The finances of my grandparents was never the same, do to the fact the bill she was left with were so high. It can only have gotten worse as time has gone by.  How is it I knew this at the age of 8…and I still do not know what to do about it.

  • Lavada

    Part of the scams of both the medical-industrial complex and insurance exhortion rackets of America.
    Making money in any way possible off of an ignorant, gullible public.
    Wake up folks, the scams are everywhere and they don’t stop with you while you are still breathing.
    You are a “market” for their crap from cradle to grave.
    Welcome to Amerika.

    • Mike

       Is it the Declaration of Independence or the Constitution that says Government is to protect us from “enemies, foreign and domestic”?   Sounds like we need protection from the health care industry.  When we’re sick or hurt, we need someone to look out for us.  I thought that’s why we voted the government in– to represent us against predators.

      • BHA_in_Vermont

         I gather you won’t be voting for “take care of yourself” Romney.

  • Mdictu

    You have stumbled across the pricing model for ALL US health care today. The logic is “everyone else is doing it” and “we have to make some profit to support the care of the indigent who don’t pay for their care”.  Smoke and mirrors.
    Vulture capitalists?  Think Vulture health care companies! What was not emphasized in your program (because your investigators didn’t get the data) is what the hospital paid for the device they used on or gave the patient. General rule: cost  x 5 = minimum price; cost  x 10 or more is often the price. Fitting and other ‘added value’ costs to hospital or provider?  Almost nothing.  ”Hey, we took the device out of the package! That’s our service!”  And further, you can be sure, if some sort of real staff assistance or other services are needed to ‘install’ a device, the patient is charged extra for that (on the same pay scale).  This pricing is routine in the ORs and EDs across the US, and now most everywhere in the US healthcare system.This pricing rule operates in all US health care systems, most notably at the level of hospitals (’cause that’s where the big $$ is), and elsewhere when it can be managed. Ever look to see how many non-profit hospitals make a profit, often huge profits, and further, pay their executives big bucks with golden parachutes? Where does that $$ come from?The whole of the hellth  care industry is rife with abuses of this sort. They are hidden, kept hidden. Billing clerks are clueless; and their job is on the line if they speak out!  Further, the public is gullible and needs services. Ignorance plus necessity-demand:  a perfect setup for exploitation.  There’s a reason that health care in the US costs so much more than other modern countries. With this article — on a cheap sling no less — you’ve just stuck your toe into the swamp that is US hellth care. Now if you have the audacity to look further, plan on being attacked and  given an unimaginable amount of obfuscation, irrelevant information, pleas that business practices are proprietary, and basically every possible diversion from showing what’s going on. Sunlight is not the exploiter’s friend, and sunlight onto the US healthcare industry, as it is practiced on the ground in real situations and locales, is going to cause great distress in the health care industry. Expect stock values to fall when it actually occurs, and know that it hasn’t occurred if the stock prices of health care companies are still rising.

    Oh, and enjoy your 10-30+% premium increases each year.

    To put it in current vernacular: you been pwned.

    an MD

    • Mike

       You’re right.  Look at how much yelling and shouting has happened over “Obama care”.  Same thing when the Clintons tried to do something about it.

      Someone, somewhere, doesn’t want us to see the problem.

  • Anne

    I recently visited a podiatrist.  He recommended an ankle brace for me and I took it home.  When I got the bill, I saw that $220 was charged for the brace.  I could get the same thing at CVS for $35.00.  I have an HSA and high-deductible insurance so I pay for this myself.  I complained to the doctor who agreed to take $70 and told me his charged is based on how much Medicare pays.  I also did not get a fitting.  I won’t go back to this doctor.  But no wonder our Medicare system is in financial trouble.  This needs fixing and if it’s representative of other Medicare charges, it needs a big fix.

  • Holly Kruse

    when i got a knee brace for a torn MCL, my insurance was charge $700+ and when i balked at the price, the tech told me that was what they bill insurance, but if i were self-pay the cost would be around $450.  this is NOT right, and could be one reason our health insurance cost is skyrocketing.  our deductible for a family of five is bumping up on $8000.

  • Ray

    My son needed a knee brace after injuring it in football practice. Doctor’s office puts you in touch 3rd party vendor, they billed the insurance company over $750 for it. We found the exact same brace for $113 online. The “negotiated price” finally agreed to by insurance was less than the 750, but still …

  • Chris Hahn

    Slings and bandages are one thing. Yesterday’s Charlotte Observer main story was about independent chemotherapy centers are being bought by hospital corporations and then charging multiple times the previous prices for a life-saving treatment.

  • Else Tracy, M.D.

    I am just listening to this segment and am so glad you are airing this.  This problem also applies to drugs as well.  I am an M.D. and some mail order pharmacies have charged my patients over 600 dollars for a drug they can buy locally with no insurance for less than $30.   The patients do not know this is going on, so either pay it or just don’t get the medication.   Else Tracy, M.D.

  • Marilyn

    I have been treated for cancer for over five years. Both of our local hospital chains have Oncology Care Units. If I go to the cancer unit, they charge $500 for a port flush. When I go to the Infusion Unit at another building-owned by the same Healthcare System, I am charged $150. This procedure requires 5 minutes of a nurse’s time and a kit which contains a syringe full of heparin-one of the cheapest drugs on the market. Contact me if you would like to hear MORE…the more contact with “the health system” you have, the more outraged you become.

  • MAN

    I had a similar situation.  Before surgery I was fitted for an arm sling.  A few weeks later I received the bill for over $120.  I called my surgeon’s office and told them I’d like to return the sling.  The woman seemed confused and pardoned herself for a moment.  Upon returning, she told me they had a one day return policy and I had the sling in my possession for 2 weeks.  I explained that I had only just received the bill that day.  Then I asked, “Doesn’t this seem ridiculous to you?  When have you ever purchased something without knowing the price up front?  When have you bought something that only has a one day return policy?”  She replied, “Sir, why are you complaining?  Your insurance company should be covering the cost.”  “Ma’am,” I responded, “where do you think the insurance company’s money comes from?”

  • Dasha

    I went through a similar care when my son got hurt during football. He needed a sawa brace for his shoulder which was denied him because he hadn’t broken a bone (never mind his needing surgery). The contracted distributor wanted to charge me over $700. On line, I found the same item for less than$200, and the med trainer for the high school team got it the next day and charged me$212. When I tried to investigate, I was told to quit bitching since I found a better deal!

  • mcnham

    My insurance company was billed close to $150 for a nebulizer. My insurance only cover some of it and I was billed $96 by the medical supply company. I found the exact same nebulizer online for between $25- $50. When I called the medical supply comany, they told me that I could not bill my insurance if I bought it off line. When I told them what my insurance was covering, they told me they could not compete with online prices. THank you for covering this, Robin! I love your show. 

  • Simmons100

    Forget healthcare reform until the US government gets serious about cost control. The whole system is a major rip-off from doctor’s bills, hospital charges, to insurance costs. The whole system is rigged to soak everybody. Why do we pay so much for care that does not really rank higher than European countries or Canada? Quality of care, timeliness and outcomes do not really change much. And I have not even mentioned the cost of drugs!!! Obamacare did nothing to address the fundamental underlying problem –COST!!

  • BHA_in_Vermont

    How much could we save in medical costs if the hospitals had a loaner or rental (CHEAP) program for this sort of thing?

    My daughter got a sling (fancier looking than the one pictured) after emergency surgery a few years ago when she broke her arm just below the shoulder. Of course it was one of the many charges on the bill. It has been sitting unused in a closet since then and will probably still be there in 10 years. I’ve seen any number of people with the same sling, probably “sold” to them at the hospital. Use it for a month and then store it in a closet for the rest of your life?? WHAT A WASTE!

  • Lorentzenb

    Don’t people understand that this is what is wrong with health care?  This is how insurances and doctors use codes to determine how much they are going to charge for something….lets say that item 1 lets call it code 1 and code one for insurance company one will pay one dollar but insurance company 2 will pay two dollars.  then the company/hospital chooses to insurance company code 1 = two dollars because they choose the highest paid out amount per code.  so every code = an amount of money.  bad company’s use this fraudlent method to choose the insurance company code that gives the highest amount back for each code and then so that it is not illegal….the person without insurance now has to pay the two dollars.  it is bs.  so insurance one pays one dollar but the company decides to charge the public two dollars because they know that insurance two will pay two dollars.

  • susanpf

    While I agree the price for the sling was excessive, I think you are also not taking into consideration the price of filing the insurance, waiting for payment, submitting additional information, billing patient for copay or coinsurance. When you buy off line payment is required at time of purchase. Just a thought!

    • BHA_in_Vermont

      They are filing insurance for everything else related to the treatment, a single sling isn’t costing them much in time or money.

      IF the patient were told ahead of time that the needed a sling, even a specific brand, the patient and insurance company could save a lot of money.  One would HOPE the insurance company would rather pay the full cost of something you bought yourself than pay 80% for the same thing given to you at the hospital when they shell out significantly less money in the process.

  • Yvette4759

    Boise Idaho, St. Alphonsus Regional
    Medical Center [Trinity Healthcare 2nd biggest in nation]..amongst
    other things on a bill $5 tylenol tablets…..those add up!!

    • BHA_in_Vermont

       Presumably including the cost needed to dispense it at the hospital pharmacy, deliver it from to the the nurse and from the nurse to the patient.

      I can see that cost more than the way over priced sling. It is too bad they won’t allow you to bring in your own generic that costs $5 for 500 at Costco even if it has to be left at the nurses’ station so people don’t take more than they are supposed to and the hospital staff know EXACTLY what you are taking and when.

  • Pete

    This inequity in the health care system is pretty much universal.  I believe that an even bigger problem are the differing rates charged in hospitals and nursing home.  My wife spent over 9 years in a NYS nursing home prior to her death.  She entered care at age 60 as a result of Early Onset Alzheimer’s Disease.  Medicare and health insurance doesn’t cover these costs, except for initial payments made by Medicare in some cases.  After paying the “private pay” rate for my wife for about 3 years, I realized that the rate for those on Medicaid was about 30% less for exactly the same services.  I was subsequently able to gain Medicaid eligibility for my wife through a device known as “spousal refusal”. 
     It cost me about $10,000 in legal fees to do this, but I subsequently saved much more than this at “30% less”.
     Our politicians and no doubt the nursing home lobby, are responsible for this inequity and they won’t change the system unless there is more of a public outcry.

  • YVETTE4759

    They can charge so much because most of the time patients never see the bill…ASK FOR AN ITEMIZED BILL, YOU WILL BE SHOCKED!

  • JR

    I had knee surgery last year and was directly billed by the medical supplier. I do believe this is excessive pricing, but wonder what percentage of bills/co-pays go unpaid. If you are insured then there still is a healthy profit if the co-pay isn’t received, so I guess how much do bad debts of uninsured individuals affect pricing?

  • susanpf

    If you are a Medicare patient and you take medications for chonic conditions (hypertension, cholo ect) you may bring your medications with you and they will be dispensed by the nursing staff at no cost to you. Also, you are right by having your home meds given to the nursing staff they know what you are taking and when. Normally when you are in hospital you are not seen by your family doc. so having meds there help your hospital doc also.

  • http://profile.yahoo.com/AV5Q72GMSTRKXX4YPPGO36QIMI joes

    Aetna health insurance company sends me a letter saying they wont cover
    my post-op knee brace (Bregg T-scope) and that I should expect to be billed $899.00 by First Step Orthotics and prosthetics. I google my knee brace and find it retailing for $150- $200. I call First Step – they tell me that $899 is
    what they charge Aetna because Aetna wont pay more than $900 for any
    knee brace on any plan, but that First Step will only be charging me
    $350. I TELL THEM THAT THEY ARE WHY WE NEED HEALTH CARE REFORM. First Step has a change of heart and decides to only charge me $155.

    ——–Fist step says that they provide a “service” and that is why the brace costs more than online retail. They said they would come out and fit the brace for me. I never used this services – the physicians assistant fit the brace for me during my pre-op visit and I woke from surgery with it on.  While a markup for additional services may be appropriate in some instances it  doesn’t explain why they would charge the insurance company so much more than an individual.

  • Genie

    I am so glad that you are scratching the surface of the insurance companies and big pharma scamming Americans.  Part D is a give-away program to insurance companies and big pharma.  I could go on and on with many reasons why, but here is one.  My husband needed the generic drug “Atorvastatin”.  His co-pay was $114, and the plan paid $149.20 for a three month supply.  He refilled the prescription recently for the cash price of  $25.28 through Costo.  Yep, a three month supply for much less than his recommended mail-order company was charging.  For people like my husband who also have $700 drugs, the donut-hole is rapidly reached with this outrageous over charging.  For older Americans who simply take for granted that they are being treated fairly by their insurance companies this is simply criminal. 
    One of the comments said “That’s capitalism.”  But Part D is a monopoly.  Take a look at the price of drugs outside the U.S., you will be shocked at the differences in price.

  • Sharon

    Four weeks ago I had surgery for a wrist fracture–involved a plate and screws and 1 1/2 hours in surgery, so I have no doubt it was fairly complex surgery and I’m not complaining about the results. But I went into the hospital at 10:30, left at 4:30. My hospital bill, not including radiology or anesthesiology services or the services of my surgeon, was over $20,000. The bill was not itemized, although I intend to request an itemized bill. I came home in a nice blue sling–can’t wait to see how much they charged for that!  

  • Annette

    When my Mother was in the nursing home she was being charged $12 for a box of Kleenex (actually a much cheaper rougher brand!) and when I said I would bring the Kleenex, I was told that wasn’t allowed.  Ditto on the egg crate foam mattress for her bed for which she was charged $220 when I could buy one at Walmart at that time for $12.  By the time she spent down and could go on Medicaid the nursing home no longer bothered to use her two outstanding insurance policies but just went ahead and charged everything to the state, despite my constant questioning of what they were doing.  They insisted it was policy.

  • Guest

    My wife recently had a similar incident. While in the hospital she had a pic line in her arm. She was sent for a scan and the incompetent technician broke the pic line. She had to have another installed which entailed an additional $150 copay out of our pocket in addition to the insurance payments. We contested being charged for it later as it was their own admitted incompetence. We contacted the insurance company to demand they not pay the charge and to notify them the charge should be contested and while they agreed it should not have been billed they refused to contest it,  so since they accepted it we  were forced to pay the copay.

    In a related topic, the state of Nevada recently passed a maximum $50K cap on the amount that you can sue a provider for medical malpractice. So now it is absolutely impossible to get a lawyer to file any case even when there is obvious, provable negligence since they don’t consider $50K enough to be worth their time. Thus incompetent doctors and facilities are now allowed to run rampant with no concern of prosecution.

  • Bobby Gladd

    Excellent piece, I will be citing it on my REC blog.

  • http://www.facebook.com/profile.php?id=1408602623 Bryan Cherry

    It offsets the cost for birth control/

  • DrKJ

    I also was charged $685 for a knee brace after surgery that I found on the web for $67.
    Please refer to the following articles to see how a scorpion antivenom that was developed and is manufactured in Mexico for $100 per vial.  It is sold to a distributor for $3500 per vial which is then sold to a hospital for $3750 per vial.  The hospital then charges $39,652 per vial to the patient. Quite a mark up and they really are doing it!  Would you believe insurance is paying for it!
    Our private health care system is a joke and the joke is on us!!
    Refer to
    The Arizona Republic 9/21/2012  Section D page 1
    The Arizona Republic 9/9/2012  Section B page 9

  • John Phillips

    My mother in law who lives with us was battling cancer two years ago and we were caring for her at home.   We required a hospital bed, feeding tube pump, stand, bags and so forth.   When the bills came I was astounded by the cost of the itmes.   I work in a laboratory and know the cost of these items.   When I questioned it with the insurance company, medicare and the vendor they all responded similar to the stories you have told…  we already get a huge discount and this the the amount that we have contracted to pay.    For this “medical equipment and supplies”  we were paying 10 to 20 times more than you could obtain the items for in the open market.    There is rampant abuse in this area and it is one of the many problems with our medical system and why we need to do something about it.

  • davet

    Robin, please connect the dots. The cost of the sling is indeed a travesty, but you’re missing the bigger point. The outrageous pricing for medical devices, and probably doctor and hospital charges too, results in the high level of health insurance costs that employers and many employees currently bear. Once again, it’s the consumer that bears the brunt. The cost of health care in this country is way above any other industrialized country and this is one reason. And your guest said somewhat apologetically that some companies may suffer declines in profit if there are changes in the system. These companies have been ripping off the system and in no way deserve the level of profit that they’ve been able to get, so I should hope their profits would decline in a rational pricing environment.

  • Paul

    Thanks for covering this today.  The system is indeed flawed, from many
    facets. My family (family of 4, one income ~$40k/yr) has independent health insurance
    ($550/mo premium, $5300 deductable).  We
    can barely afford this type catastrophic type insurance but I deem it better
    than relying on the public’s nickel (Medicaid) to take care of my loved ones.  We reapplied for coverage this year (after
    two years of coverage) hoping to receive a discount because everyone has been
    well enough and preexisting conditions are getting older.  We were denied due to a regulation within
    ObamaCare.  We did not qualify for the
    discount because my employer (a very small business of 4 employees) is gracious
    enough to pay a portion of my premium.  So
    we are penalized financially due to a gov’t reg that says if your employer
    contributes (any dollar amount) to your premium…no can do there buddy and the heathcare systems wins again. 

  • Patti Murphy

    I work for a company that has a self-insured health plan, which I manage.  Our company pays dollar for dollar the claims of each person on the plan up to $100,000 per person per year.  One employee came to me after receiving an explanation of benefits statement, which showed the insurance plan had paid $5,000 for what she considered a very minor surgery.  Together her and I called the hospital and requested an itemized statement.  Contained within the $5,000 bill was $250 for the pen used to mark her skin (she claimed it was nothing more than a sharpie), and $1,000 for the room, which mysteriously was the same room she had her regular office visit in two weeks prior at $200, now had become a surgical suite and therefore there was a $1,000 fee for the “surgical suite”.  We asked about these charges and other charges and the response from the hospital billing department was “what does she care, she doesn’t have to pay for this anyway, the insurance does?”  However, we have educated our employees that being self-insured means every dollar spent on health care is another dollar out of the bonus and profit sharing pool, so our employees do their best to be wise consumers of health care.  The problem is that no one can find out the cost of things up front in order to be a wise consumer.  So, the question is how can we teach people to do research and consume health care wisely if they can’t find out any information ahead of time.
    I did ask the hospital billing department if our employee could come and get the pen, since it was paid for by our company and presumably it could still be used.  The lady hung up on me.

  • Dhighkin

    I am a physician in a west coast medical group. I had several patient complaints about how much we were charging for simple items such as wrist splints, which could be had for 1/5 the money in the store. I checked into this and discovered as your story says that the prices are set by Medicare. I started advising patients to just go to the store and buy them because I was so embarrassed to be a party to this. Then my son sprained his wrist and was given a thumb splint by the orthopedic surgeon in my group. The charge was $250. I checked online and found the same item for $20. I asked the surgeon if they were the same item, he confirmed that they were, I complained, and got the money refunded. I was assured by our people that they were fixing the problem. What I find ironic and appalling is that Medicare is willing to pay 10-fold for durable medical equipment and procedures, but it pays primary care physicians less than the cost of doing business.

  • Stan

    What is amazing to me is that people are actually defending someone charging $83 for a 3 or 4 dollar product that can be bought for $7. Take a mark-up for profit, a mark-up for coming from professionally skilled people (although a sling is a sling, but still) and you come up to something resonable of $15-$25. People that say its an insurance thing or what ever, the Sling  isn’t by itself. Maybe you have a point on the whole bill, but the sling is a sling and I doubt it has to have its own set of lawyers and a room full of people to find faxes on it and a stack of paperwork to be signed in triplicate and a seperate claim etc etc etc. Its part of they, hey I broke my arm which included among everything else, a sling from off our shelf that will need to be replaced for the next broken arm that comes through. 

  • Groll5

    This was a very one sided story. The price that providers charge for devices is based on everything they have to provide with the device: the device itself, delivery, training, service, guarantee, access fees to the hospital. The internet provider provides only the device and delivery (which the Mr. Dichter and this article failed to mention) so of course their cost will be lower.

    If providers were able to bill for everything they are required to deliver, then the price for each of these services would be explicit and the customer could choose to receive them or not. But the insurance system doesn’t work that way, so the average cost of all services delivered to all patients gets added into the cost of the device and you get an $83 arm sling.

    This is a fact of life in any insurance market. Each day, you pay an infinitely high price for life, home, auto and medical insurance that you don’t use. Then one day, you have an unfortunate incident and make a claim and get a big check. Is the size of the check related to the cost of the event? Unlikely. It is related to the size of the insurance policy. Is this fair or even a suitable way to allocate health care costs? There is certainly room for improvement.

    But this story did nothing to move that discussion forward because of its one sided “how terrible” approach.

    • jefe68

      I disagree, the story was outlining the issues of medical costs and how we the people are getting shafted by everyone from the bottom up.

  • jefe68

    One has to say, what a racket. Our fee based for profit, market based system is broken and is going to eventually bankrupt this nation. We need to rebuild a decent not-for-profit health care system that is single payer that needs to have some kind of oversight into all of these medical device fees as well as all the inflated charges that hospitals add on to cover their rising costs.

    I had a friend once who had to go to the hospital to get stitches for a bad gash on his head.
    He was charged over $50 for Tylenol, of which he had two. When asked why they charged so much he was informed he was charged for the whole bottle. He did get the bill lowered, but how many people are savvy enough to ask for itemized bills and have enough chutzpa to argue with these rubes.

    The system of truly broken. It’s interesting, in Japan the government sets all the prices for all medical treatments and prices are heavily controlled and they pay half of what we for health care in GDP than the US which is the most expensive and least effective of the industrial nations.

  • Frank N. Blunt

    Citizens must confront reality about ScAmerika, where pirates, conniving thieves, corporateers, & perpetrators have heisted social institutions. There is so many issues with ScAmerika and it’s really an outrage that the conditions have only become worse. What is wrong with you people? Recognize the illusions that are perpetuated about this and many other scams, confront them, and end the injustice. Health CON or CAN’T, is absent of care as it is a marketing tool trying to obscure the reality of an abusive scheme which profits from others misfortune, exploits the injured, and has become guaranteed of profits without responsibility to provide treatment, remedies, or cures. Those are the only results that matter, not for another kleptocracy to corrupt the politcronies in your government to socialize the risks of another dysfunctional scam so that its profits are ensured but at the expense of community and society. It’s as terrible as ensuring that equities, securities, and other propositional markets have no risk while they evade exposure, accounting, & other obligations; the stock market has become covered by the FDIC, local governments use eminent domain to procure real estate, the bailouts, subsidies, & other means of perversion are evident of the moral & ethical issues but the suffering that has resulted is evil and sinful. It’s a wonder to me that very few recognize the hypocrisy and how extremely wrong that conditions have become. Then the idea that the NGOs, GSEs, and other supposed non-profit schemes are anything other is another outrage that must be recognized and corrected. Health con a non-profit? As if, … it’s ludicrous for such status to be allowed for so many of these scams, especially when they are issuing stock shares.
    Medicine, education, utilities, & public agencies meant to serve the needs of others actually exploit citizens and serve their own motives. Stop being the fool & recognize the con. I suppose that you have to be veteran or military retiree to become as disillusioned as I have. When cheap and false patriots benefit from your risks but then forsake you by not putting forth their just obligations into the public revenue so that any debt reduction matter has to start with people like me, considered as legacy liabilities, that get egregiously unjust pensions without any of the alleged entitlements or benefits that are purported; else kleptocracies such as the Veterans Affairs, military treatment facilities, and other affiliated agencies can disregard their fundamental purposes to provide services to me but instead provide for their own objectives. So many issues that need resolved, please take one on and change whatever this nation has become because I wonder what it was that I bothered to defend.

  • Chris

    How do “we” USA change this? I think it can be done. Only allow a % mark up on supplies, braces, etc… Again, how can “we” cahnge this cycle?

  • Coltj

    I have another interesting medical insurance coverage story.  Several years ago, within less than a week, my and friend and I had identical outpatient surgery (artheroscopic rotator cuff repair) at the same hospital by the same surgeon.  My friend was sent home with an baggie  filled with ice.  I was sent home with a large thermos-bottle to hold ice H2O, a pump and a plastic cuff to put around the shoulder.  I don’t know how much this equipment cost, several hundred $$ for sure.  My friend had a basic HMO plan, I had top of the line BCBS.  Clearly the hospitals know how to “use” each patient’s coverage to the full extent. 

  • Drdaddy

    …completely out of touch and ignorant of the pressing issues facing hospitals and providers !
    This Harvard economist  clearly  has never set foot in an emergency dept. He never touches the issue cross-funding required to take care of the millions of indigent patients. Sure there’s the $120 slings, but where’s the discussion about the uncompensated $100,000 care needed to treat EVERY drug addict that get endocardititis (happens regularly).Or thousands of dollars treating violent crime victims for free.  And … “Malpractice does effect costs”???? What an idiot! It is a 20+% tax on the system.Margins in hospitals are razor thin…1% in a good year.Typical of NPR, should be called NBR (no balanced reporting). 

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