Now we're hearing from a physician who aptly demonstrates why medical care is so expensive and why it will become even more expensive and, in the end, become less available to everyone, including the very people ObamaCare was supposed to help.
Dr. Jeffery Singer is a general surgeon in Phoenix, Arizona and has seen first hand why medical care costs are so skewed. The case he uses to illustrate the problems we have with medical costs involves a patient who was suffering from a hernia and the routine surgery he needed to repair it. The patient was self-employed and had a low-cost indemnity health insurance policy. That meant his insurer would pay a set amount and that the patient would have to pay the balance in advance. And that's where the problem started.
The insurance policy, the clerk said, would pay up to $2,500 for the surgeon—more than enough—and up to $2,500 for the hospital's charges for the operating room, nursing, recovery room, etc. The estimated hospital charge was $23,000. She asked him to pay roughly $20,000 upfront to cover the estimated balance.So by using his health insurance the surgery would have cost the patient $20,000 out of pocket. Adding in what insurance would have paid for would have brought the total paid to the hospital to between $23,000 and $25,000.
I received a call from the admitting clerk informing me that he wanted to cancel the surgery, and explaining why.
Most people are unaware that if they don't use insurance, they can negotiate upfront cash prices with hospitals and providers substantially below the "list" price. Doctors are happy to do this. We get paid promptly, without paying office staff to wade through the insurance-payment morass.
So we canceled the surgery and started the scheduling process all over again, this time classifying my patient as a "self-pay" (or uninsured) patient. I quoted him a reasonable upfront cash price, as did the anesthesiologist. We contacted a different hospital and they quoted him a reasonable upfront cash price for the outpatient surgical/nursing services. He underwent his operation the very next day, with a total bill of just a little over $3,000, including doctor and hospital fees. He ended up saving $17,000 by not using insurance.
But by paying for everything out of pocket the patient paid only $3,000 for exactly the same surgical procedure and level of post-operative care.
Dr. Singer explains why this disparity exists, putting it into terms just about everyone can understand. I won't repeat it here because he does a much better job of it than I could, so go Read The Whole Thing. Also read the comments as they expose the absolute ignorance of some folks who believe that health care should be free or that ObamaCare will cure all ills.