Divided by a Common Language - The Elephant in the Room

 

"Ello ma Breeteesh chooms"

For those of you who might not know what the big Healthcare row is all about, I thought I might give you some insight into how things work here.

Hospitals

I was confused, when I got here, to see that Hospitals do fundraising.  Why would a company, often part of a network, need to ask for donations? I never understood until this evening.  

I was watching an episode of House, and it concentrated on a day in the life of Lisa Cutty, Head of the Hospital.  She was in a difficult negotiation with a Health Insurance company, who she was trying to get to pay an increased rate.

Here's the thing.  

Insurance Companies rate hospitals and put them on payscales.  Every procedure has a price which the insurance company pays and it is also dependent on the way the insurance company rates the hospital, and the contract they have with them.  

So if you have an appendix removed, that's priced (by the insurance company) at, say $1000.00.  If the hospital's costs are $900, they make $100 profit.  If the hospital's costs are $1200.00, then they lose money.  The hospital may choose to charge the patient with the difference.

So hospitals have to negotiate their contracts with health insurance firms to get paid for the services they offer at a reasonable rate.

Administrative costs

With all sorts of codes for every procedure, dependent on the contract between the institution and the healthcare insurer, as well as the patient's level of cover, the administration of the whole system is garguantuan.

Administrative costs for private healthcare insurance firms are estimated at between 5 and 6% (Washington Post).

Understanding your own insurance

At my previous employer, insurance cover was extensive.  There were no deductibles and no copays.

First, some definitions

Deductible:

"This is the initial dollar amount you must pay before your insurance company begins paying for health services. Usually, the higher the deductible, the lower your premium. However, do not choose a deductible so high that you cannot afford to pay it. The contract will dictate the specific amount you pay per year for your family. You must pay a deductible each year, which will vary depending on the number of people covered by the policy."

Copay:

"A copayment is a specified dollar amount you pay, as a subscriber to a managed care plan, for covered health care services. It is paid to the medical provider at the time the services are rendered."

In and out of network:

An in-network provider is one contracted with the health insurance company to provide services to plan members for specific pre-negotiated rates. An out-of-network provider is one not contracted with the health insurance plan. Typically, if you visit a physician or other provider within the network, the amount you will be responsible for paying will be less than if you go to an out-of-network provider. Though there are some exceptions, in many cases, the insurance company will either pay less or not pay anything for services you receive from out-of-network providers.

So, basically, each year, you have to pay: 

• The first amount of any type of service, dependent on whether the service provider is in or out of network
• A percentage of the cost of the service, depending on whether the service provider is in or out of network.

For example, if I want to go to a Chiropractor: 

• In the network - $300 deductible, after which I pay 20% of every visit and I am restricted to 24 visits a year
• Out of the netwok - $600 deductible, after which I pay 40% of every visit and I am restricted to 24 visits a year.

Medication

Medication costs depend on whether or not the medicine is "Brand" or "Generic."  Essentially this refers to the time period that the drug company has a patent on the medication.  While they do, they charge high prices.  

Once the patent has expired, a bunch of companies produce knock offs of the drug and, even though they may not be exactly what the brand medicine was, and may not work for you in the same way, your insurance company will want you to take the cheaper drug.

For my insurance, which I am told is pretty good, I have to pay 40% of Brand and 24% of Generic medicine costs.

Not only that, but the insurance companies do not let you get your drugs from the pharmacy.  You can get your first 30 days of pills, but after that you have to go through their mail order service and you get 90 days of pills sent to your home.

So, when you get a prescription, they tell you to get two copies, one for your immediate needs, and another to send to the mail order service.  See "Administrative Costs", above.

So here are what my drugs are going to cost me:

 Asthma pill - $360 per year

Asthma pump 1 - $20 per year

Asthma pump 2- $75 per year

Antidepressant 1 - $250 per year

Antidepressant 2 - $450 per year

Hayfever medicine - $1300 per year

TOTAL - $2,455 per year

Needless to say, I'm going to shelve the hayfever stuff and go back to the over the counter medicine, which doesn't work, and cough and sneeze my way through summer, sleeping on the couch whenever lying down is so uncomfortable that I have to angle my head to control the post-nasal drip.

There must be so many people that have to think through these kinds of choices with healthcare very day here.

My colleague was telling me today that she and her husband had to consider the costs before they decided to get pregnant.

I could go on and on, but I hope this has helped give some insight into why healthcare is so broken here.  And I HAVE insurance, unlike 46 million people (1 in 6) here.

To read more Divided by a Common Language, click here. 

Comments

[Shelli]

You've only just scratched the surface. I am under a Medicaid program, which means that I get free healthcare, paid for by the taxes skimmed off the people who work in my state (it's state coverage, not federal). However, free healthcare doesn't mean what you might think it means. I am one of the lucky ones, and because of my disability, I have zero co-pays and zero deductible. I still have to pay a paltry amount for my prescriptions, ranging anywhere from $1 to $10, depending on whether a generic version is available, and depending on whether my insurance company agrees that this medicine is worthwhile. Yes, you read that correctly ... my insurance company decides if they want me to have the medicine that my doctor prescribed for me. THEY make the final decision. If they decide against it, I have to pay full price. Luckily, Walmart now has a plan in place to help those of us who have to take medicines that our insurance companies deem unworthy. If the medicine is on their list, you'll pay only $4.

(side note, I've never heard of a plan that makes you get your prescriptions by mail, only that they offer it, if you choose to)

Also, the insurance companies contract with individual doctors, as well as hospitals. For instance, if I see my chiropractor, they've signed a contract in advance that they will not charge patients with my specific insurance a fee for x-rays or initial exams. They'll only charge for adjustments. And since I have no co-pay, the doctor has to eat the cost of the x-rays and initial exams, they are NOT allowed, by contract, to charge me for them. Which is nice. Except that increases the cost of everything for every other patient, in the long run.

Now, here is where I "pay". I am allowed 18 doctors' visits in a year, not including my primary care physician (which I can visit as many times as I need to, without limit). I have several disabilities, and several different types of doctors. I have my podiatrist for my foot problems, my neurologist for my migraines, a pulminary doctor for sleep disorders and migraines, a gynecologist for normal yearly visits, my eye doctor, and my chiropractor. 3 months into my year, I had used up 14 out of those 18 visits, and still needed to visit my chiropractor, which used up the remaining 4 visits (each adjustment was considered a visit). So, if I have to go back to any of my other doctors, I have to get pre-approval. My insurance company tells me how easy it is to get pre-approval, and yet when I and my PCP try, it's denied, saying it's not life-threatening enough. So, my PCP has to try to accommodate me, even though they are not specialists in the fields that I need.

Fun, huh?