The obscurity of medical services pricing

I've often wondered about pricing in the healthcare industry. It is so obscure. I'm very grateful to NPR for exploring this issue recently on Planet Money's Hospital Prices, Revealed! (Sort of).

First, I'd like to recount my fun visit to the hospital on New Year's Eve, 2010 (through Jan 1, 2011). Well, I won't get into the details of WHY I ended up in the hospital (new CGM + too much wine = low blood sugar and friends calling 911).

I will talk about the time a $10,000 bill that made its way to my mailbox. To make a long story short, I ended up making the hospital audit its own bill and contested the claim with the insurance company along with a two-page narrative with exhibits A-H showing why I was right. In the end, they sent me an anticlimactic letter saying that my bill had been adjusted and guess how much I owed? $35 (the amount of the emergency room copay).

What I was astounded by was the pricing of the itemized bill. (Apparently you can get your hands on these if you submit and sign the right form.) Items such as:

• Laboratory $78
• Unicyclin $109
• Emergency room $2151
• Observation room $1051
• IV start $314
• Physician fee $410

That "laboratory" fee of $78? That's for pricking my finger and testing my blood! Which, by the way, was vehemently against my wishes. I told them I preferred to test my own blood with my machine, but they insisted. The Unicyclin is for one pill of anti-naseau medication. IV start is the tubing for an IV. Just the tubing. The only reasonable charge I see up there is the Physician fee!

Now, when the whole thing was over, I looked at the EoB to see how much the insurance company actually paid for these services. $33 for the unicyclin (less $76 than the bill), $13 for the lab fee (less $65 than the bill). From the NPR article: "...private insurance companies negotiate their own rates with hospitals, and the rates bear little resemblance to the list price."

So, wait. Let me get this straight. If you were charging ME, a potentially poor and uninsured diabetic, it would be 3 to 5 times what you would charge the insurance?!?! WTF.

Insurance companies, hospitals, medical service providers: SHAME ON YOU. You are all so sketchy. Just be reasonable. Have a fair price. Stop engaging in this racket that bankrupts people and leaves them fat, sick, and/or dead. Have some goddamned decency. 

"It's no secret that hospitals' list prices are ridiculously high and seemingly arbitrary."
It is a secret (to me, at least) why Americans are willing to put up with this racket.

"But your policy is going to kill me!"

OK, so the medical equipment supplier won't approve my plea to get the new Dexcom G4 system, and thus I will need to stay on the crappy old system for a bit. Fine. I understand that what I'm asking for is kind of nitpicky, and yes, I can chill out on my current CGM for the remaining two months it's under warranty. But I really want the new Dexcom G4 system! It's amazing. 30% more accurate. Twice the range. My God, I'm drooling over it!

Here's my beef: I just don't think that an industry that deals with the health of people should be set up so rigidly. There has been a strong theme, growing bolder each day, of hiding behind policies. Some of these policies make sense (like not covering a new CGM until the last one is out of warranty). Some make ZERO sense.

I was on Harvard Pilgrim healthcare through Brandeis University, where I went to grad school. This was one of the darkest times of my life as far as coverage goes. They reclassified insulin pump supplies (traditionally classified as durable medical equipment and covered at either 80% or 100%), and instead put them under "Prescriptions." You know, like medicine and whatnot. Then, they capped Prescriptions at $2,000/year. Mind you, after the actual prescriptions I needed (insulin, test strips), I wouldn't be able to get any pump supplies, let alone a new pump, should I need one.

I calculated out how this policy would affect me: I would be covered for about 2 months of my life-necessary medical supplies. READ: I would die after 2 months. I did everything I could to fight this. I spoke with managers. I spoke with Brandeis to let them know that I would die under this policy. NOBODY CARED. (Well, they cared, but still hid behind the policy.)

How did this end, you ask? I'm obviously not dead (this happened in 2010). Cuz I'm a hoarder!!!! Mwahhahahaha! All diabetics are. If we weren't, we would be totally screwed by these policies. I had enough pump supplies to power me through grad school and until I got real insurance.

I know Obamacare has made it so insurance companies can no longer categorically deny me coverage as a type 1 diabetic (this has happened, over, and over, and over). But this is where I say "more regulation!" You CANNOT consider that real coverage. It's fake coverage. Oh, and I didn't even mention the $100K lifetime cap!

The university system wins it! Second only to Universal

I thought that teachers had good health coverage. That was until I looked into how good professors have it. The University of Michigan health coverage for faculty is crazy good, and even better if you have type 1 diabetes. They have a diabetes program that eliminates copayments for most of the prescriptions: insulin, syringes, test strips. And other related prescriptions that are not necessary but can help with management, such as Symlin or Glucagon, are on a copayment reduction schedule which means they cost as low as $15 for 3 months' worth.

They even tried out a program to see if eliminating ALL copays for diabetes-related stuff (Dr visits, Rxs) would encourage type 2 diabetics to take better care of themselves. It didn't. That was a year before I got on UMPC.

However, it is hugely bureaucratic. Partly because it has to be in order to cut down on fraud or unnecessary services, and mostly because it's managing so many moving parts.

Let me illustrate: There is something called "Coordination of Benefits." Sounds nice, right? No, it's not. It's more of a racket among insurance companies to make sure that nobody has to pay for something that another insurance company has paid for (OK, fine, it's mostly to protect insurers from fraud, but also kind of a racket.) I recently learned about this when I tried to lie, cheat, and steal my way to the new Dexcom G4 system, which is leaps and bounds better than the old SEVEN Plus system. Twice the range! 30% more accurate! Who wouldn't want that?

Well, when they go the request from my doctor, they actually called the manufacturer and demanded my records (wait, I thought that was against HIPPA). When they found out that my current CGM (Continuous Glucose Monitor) is still under warranty for another two months, they denied my claim. Oh well. Guess I'll just have to wait the 2 months.

BUT, my larger point here is that in the universal system THIS DOESN'T HAPPEN. There's no such thing as coordination of benefits. It's all already coordinated. I'm not saying universal coverage is without fault, but image, just imagine, a system that cuts out all that waste and extra manpower and paperwork?!?!? It would be so efficient.

Sigh.

We are insurance. We do what we want.

What kills me about the entire insurance industry is that THEY were the ones who decided to get into the business. They bet we won't get sick, we bet that we will get sick, and thus we have this incredibly convoluted and opaque industry where they make tons of money, America has never been sicker, and a diabetic can't get a break.

So, when their bet goes awry, instead of taking it like a champ, and saying, "oh, blistering barnacles, we were wrong, here's your coverage, old chap," they try to weasel, lie, cheat, steal and red tape their way out of paying.

It's so disgusting.

The latest ickiness is UMPremierCare: a representative from Dexcom (manufacturer of continuous glucose monitoring systems) told me that PremierCare has the strictest policies on obtaining medical devices. Mind you, they have NEVER paid for a CGM for me. The last one I got was last July when I was still on CareFirst. They make Dexcom send them warranty reports and serial numbers for any previous CGM, whether or not it was covered by UMPremierCare or not. Let me illustrate this for you:

Jane is on CrappyOptOut Plus through her job. She quits the job, and takes another job. Her new insurance is LeastBadOptionCare. When she goes to order a new CGM, LeastBadOptionCare first checks with the CGM manufacturer to see if SOMEONE ELSE has ever paid for a CGM that is still under warranty. They find that CrappyOptOut Plus had paid for a previous system, so they deny her a new one. 

This especially sucks when one's CGM has been lost in a field, and one's blood sugars have not been under such tight control ever since.