My husband and I got married in 1999. His profession is as a programmer/analyst for health care billing software for hospitals. When a patient is admitted to the hospital, this program keeps track of all the information about them from the day they were admitted to the day they leave, then it generates a bill to the appropriate insurance companies for reimbursement. He knows the ins and outs of health care medical billing.
There came a point where I was no longer insured and some friends of mine told me where I could get a reduction in the bill for any labs I had done, so this is where I went to get a blood test. I told them I was self-pay and later I got a bill for $525.00. I called the lab and asked them if this was the self-pay price, how much does the actual procedure cost? They realized they had mistakenly sent me the "insured payer" invoice. They corrected it, re-billed me, and I only paid $37.00.
I asked my husband why there was such a discrepancy between the cost to the insurance company and the cost to self-payers. He explained to me that the health care providers make agreements with insurance companies to accept only a percentage of the total bill as reimbursement. In order to recover their costs, they pump up the bill. I was billed the actual cost as a self-payer. I was glad I didn't have to pay the $525.00 but something just didn't sit right with me about the whole situation.
When President Obama started running for President and started campaigning about the continually rising cost of health care I started putting two and two together. Why was the cost of health care going up? Sure there were new advances in technology and some doctors and hospitals periodically got new equipment, but basically, health care practices were business as usual.
Cost vs Price
I finally figured out that the cost of health care has nothing to do with price other than for computing what to bill the insurance companies. The cost of my blood test was $37.00. The price was $525.00. In order for health care providers to get reimbursed for the cost, they must inflate the bill until the percentage they get reimbursed matches the cost. This practice then sets the PRICE for that procedure (or whatever it was billed for).
So what? My insurance will cover it.
This seems to be the way the insured see their coverage, and it is a valid perception, but here is the reality. Have you seen your premiums go up and were told it was because the costs of health care have gone up? WRONG. The price of health care has gone up. Who raised the price?...the health care providers in tandem with insurance companies. As these practices continue, you will see your insurance premiums go up.
The Uninsured
In my own past experience, I have found that private practitioners as well as many hospitals do not give self-paying individuals any discount. The health care professionals will tell you they have to do this in order to get enough money to cover losses from non-paying patients. In my very unofficial research about non-paying patients, I have averaged the information I have found represent about 7% of all patients, which roughly translates to about 7% loss in profits. I am sure there are regional differences for more or less.
They bill the uninsured the same as they bill the insurance company, so the uninsured are paying the PRICE, not the COST of their health care (remember Price vs Cost?). If my blood test had not been discounted and I had to pay $525.00, as would be the case in many places, that is a 97% mark-up to cover 7% of profit lost for non-payers. Talk about funny math! And remember, they can write off these "losses" as well.
All this seems like legal fraud to me.
One final note: My husband and I moved to Missouri and I have found the cost of health care here for the uninsured is quite reasonable through the University Health Care System, but this does not occur in places where these kinds of facilities are not available. This scenario concerning price vs cost does not happen everywhere, but it happens enough to drive health care prices up. Think about it.
What is your opinion? I would like to know. And what are the solutions?
