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.