I don’t know what your healthcare costs

Russell Saunders

Russell Saunders is the ridiculously flimsy pseudonym of a pediatrician in New England. He has a husband, three sons, daughter, cat and dog, though not in that order. He enjoys reading, running and cooking. He can be contacted at blindeddoc using his Gmail account. Twitter types can follow him @russellsaunder1.

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92 Responses

  1. A Teacher says:

    Thank you for the insight.

    Here’s some additional data points as a consumer:

    My son fell once while playing outside and bit through his tongue.  It wasn’t a through and through piercing but more like a golf divot that you could just flip back into the whole.  We saw:  The ER Doc, our Personal Doc, the Doctor next door to our personal Doc, and an Ear Nose Throat specialist to be sure that there would be no long lasting damage to him or his speech.  No one was comfortable saying with confidence that he would be all right or what a course of treatment would be so they sent us to another specialist (who was happy to charge us fro our time).  Every visit was accompanied by “We think he’ll heal fine but we want you to see BLAH just to be sure.”

    Second Data point:

    When I was hit with Bells Palsy, our building secretary called and ambulance.  While it might have just been something minor, it could have been a stroke and she wasn’t going to take a chance.  Nice woman.  Did not do well with my death-bed sense of humor. (To Whit:  I said to my wife later in the ER after a particularly bad mortality joke, “You knew when you married me that my dying breath would be one final attempt at humor.”  To which she answered, “And that’s why I still married you.”)

    Anyways, when the EMT’s checked me out and verified that I wasn’t probably going to die right there they asked me if I wanted to be rushed to the hopital or not.  They didn’t tell me I needed to be.  They didn’t tell me it was a medical nessesity.  They didn’t even say “We strongly feel you should do this.”  It was a question as to my preference.  It’s one of the only times I’ve been asked what I wanted for treatment.  Not knowing how serious it was I finally looked at the guy (who was 10 years my senior) and asked “what would you tell your son to do?”  When he said “Take the ride” I agreed to take the ride.  And while enroute I mused with the EMT’s that this was my first IV, my first ambulence ride, and that both of those firsts had come before my first three-some.  I found this sequence to be lamentable.

    Fortunately, all of the above was covered, from the 12,000 doctor visits for a bit tongue to the ambulance ride (which frankly they didn’t even tip me for the entertainment value I provided in transit), so perhaps it’s much ado about nothing.


    • I am generally loath to criticize the care administered by others in clinical situations where I was not present.  I didn’t see the divot in your son’s tongue, so it’s easy for me to be cavalier about what the appropriate approach should have been.  But… um… that’s certainly seems like a lot of medical attention to me.  I am reflexively non-interventionist, but even so that seems more treatment than the injury warranted.

      And your wife can commiserate with my husband, who will also have to put up with lame jokes from me even as I’m wheezing my last.Report

    • Fortunately, all of the above was covered,

      Even the threesome?Report

  2. Nob Akimoto says:

    Out of curiosity have you checked out some of the studies on Outcome vs. Service related research? The only one I can think of off hand is: http://www.nber.org/papers/w9797.pdf?new_window=1
    I’d definitely be interested in hearing a practitioner’s pov on this.Report

  3. Kimmi says:

    Okay. From all that I’ve heard, fee for service is on its way out. Insurance companies hate it, the government hate it, even the doctors hate it — because it incentivizes More More More testing/procedures, rather than paying healthcare for doing their job – which is helping people stay well.

    I hear a lotta blather about “accountable care organizations” and interoperable electronic health records.Report

  4. BlaiseP says:

    Until we can get the ghostly figures of the malpractice jockey and his jury box full of idiots out of the examining room, all this talk of cutting costs is moot.   There he stands like Marley’s Ghost, “Why didn’t you do that CT scan and arthroscopic surgery, doctor?   Because you didn’t, you heartless bastard, this poor child (blows nose and wipes eyes onto silk handkerchief retrieved from the pocket of his Brooks Brothers suit)  will never play in the NFL!”


    • Will H. in reply to BlaiseP says:

      Caps might not be such a bad idea.
      But the only cases I know of personally where someone had something left inside of them after surgery and the like happened after they signed a waiver.
      I’ve spoken before about the shooting death of my best friend. He was released from a rehab unit early that day, over his objection, and there were two witnesses there, also being released, while he was objecting.
      The reason that the facility is not party to the suit is that releasing a patient prematurely over their objection does not amount to “medical care” under law. And I have to wonder how many others in different circumstances that might affect.
      When I hear politicians talk about “tort reform,” it scares the living daylights out of me. If we rolled all tortious acts into one, that would be “reform.” I have no idea what they’re talking about.
      I would rather see awards to persons falsely imprisoned be considered along the same lines as medical malpractice. In fact, that might well serve as the key to reducing those awards.

      One other note:
      Those awards are according to state law.
      I had a brother-in-law that was late to a family get-together one time because he had jury duty. The case involved a man who had been paralyzed from the waist down a permanent condition. The jury found for the plaintiff in the medical malpractice suit, and so they had to look to other similar cases to determine an award. The guy got a little over $13,000.
      My brother-in-law felt really bad about that, and wanted to give him more. He mentioned that the fellow would never be able to go hunting or fishing ever again.
      Always two sides to everything, and it seems like a certain amount of injustice exists on either side.Report

      • BlaiseP in reply to Will H. says:

        There’s a simple and obvious solution to the malpractice problem in this country:  speciality courts, such as we have in admiralty courts.  Everyone on the north side of the railing must have at least an RN degree.  Judge, jury, counsel, everyone has to have a working knowledge of medicine.

        And, what’s more, we ought to institute the practice of making the loser pay legal and court costs.   That would drive off the worst of it.Report

        • Will H. in reply to BlaiseP says:

          I like the idea in theory.
          I have to wonder how medical staff might feel about being tapped for jury duty more often.Report

          • BlaiseP in reply to Will H. says:

            Obliging all these malpractice jockeys to get an RN or MD would be an excellent start.  The very fucking idea, that we allow a jury of impressionable civilians to be empanelled in a malpractice case, it’s unjust.Report

            • Derp in reply to BlaiseP says:

              Doctors have insurance that covers them if the screw up, so they aren’t worried about the money. Caps and damages don’t help. Doctors do not want to get sued because they don’t want to physically go to court. They have to put their lives on hold to sit in the courtroom and hear their professional expertise, training and education put on trial. It’s psychologically draining.

              Just make malpractice suits similar to worker’s comp claims. You make the patient sue a governing body that all doctors pay premiums into, not the individual doctor.Report

              • BlaiseP in reply to Derp says:

                Doesn’t work that way.   If you lose a malpractice case, it’s essentially impossible to get re-insured.   A case my mother testified on:  an obese woman, blood alcohol twice the legal limit, caused a car crash which killed both of the passengers in the other car, arrives at the ER, anaesthesiologist intubates the woman, she aspirates some emesis, successfully sues the anaesthesiologist and the guy loses his malpractice insurance. Now he can’t practice.

                Many practices do self-insure, paying into a common pool.Report

            • Burt Likko in reply to BlaiseP says:

              So should only cops serve as jurors in a police abuse case?Report

          • Kimmi in reply to Will H. says:

            around da burgh, that’s strongly encouraged.Report

    • I am curious to see what Burt might have to say in reply.Report

    • Burt Likko in reply to BlaiseP says:

      I am of the opinion that the specter of medical malpractice litigation has, on balance, been good for the medical profession and the practice of medicine. The fear of litigation which doctors express — usually at the behest of their insurance companies — is dramatically overblown. Doctors win these lawsuits, much more than they lose them. Juries like doctors.

      As I explored in the first link above, the reason malpractice insurance rates are high is not because of ridiculous verdicts in frivolous (I prefer “unmeritorious”) lawsuits. To address Will H‘s concern above, a majority of states already impose damage caps on malpractice lawsuits. In California, for instance, the medical malpractice tort reform law limits general damages (commonly but imprecisely called “pain and suffering”) to $300,000 — not an inconsiderable sum of money, but also not something your typical lawyer looks to as the sole source of his retirement account (and indeed, often a $100,000 fee for eighteen months’ worth of litigation is closer to “breaking even” or “making an okay living” than it is to becoming John Edwards).

      And to get that point, the lawyer needs to overcome a substantial burden of evidence and overcome the jury’s substantial predisposition to give the doctor the benefit of the doubt — in other words, the lawyer needs to offer very substantial proof that the doctor really did screw up. No one seriously contends that a doctor who really does screw up shouldn’t have to make compensation to the patient who is hurt thereby. But juries like doctors. While the theoretical standard of proof is preponderance of the evidence, the practical reality of the plaintiff’s burden in a med-mal trial is something much closer to the criminal standard.

      Now, a very real objection exists that even if the doctor wins the verdict after a trial, she’s lost anyway because of the mere fact of the lawsuit, the requirement that it be publicly reported and disclosed, and the time, expense, and stress inherent in dealing with it. To that end, I’ve proposed my own, admittedly imperfect, variation on medical malpractice reform, because the tort system does not appear fundamentally broken to me. If the tort system produces what is derisively referred to as “defensive medicine,” why is that a bad thing? The only concievable objection I could make to it is that it causes additional expense that outweighs the clinical benefit of the procedures or tests requested.

      But as Dr. Saunders points out above, the status quo teaches doctors to disregard cost, and instead to focus on providing the best treatment for their patients. If we, as a society, adopt an ethic that instead we must balance the cost of expenses and procedures with the likelihood of the procedure producing a clinically useful result, then that is, by definition, incorporated into the concept of “prevailing standard of care.” Doc once wrote that doctors are trained to not “look for zebras.” Good advice for them, and that is the standard of care. We hold doctors liable for deviating below the standard of care in their treatment, not for conforming to it. If there really is a “zebra” condition and it gets missed and missing the diagnosis causes material harm to the patient, then the doctor who missed it was nevertheless conforming to the standard of care and therefore by definition will not be found liable.

      The financial impact of malpractice litigation on the medical profession is a paper tiger, one which does not withstand sober analysis. The psychological impact of malpractice litigation on the medical profession may well dramatically exceed its economic importance — but for some people, the threat of financial consequence is the only langauge that they understand. I see plenty of people speeding down the freeway, who slow down when they see a cop car. The threat of an economic consequence for unreasonably unsafe behavior, and not the inherent risks of that behavior, is what governs their conduct. No one would really want to drive on a freeway in which no driver faced any effective consequence for driving unsafely — and no one should really want to participate in a medical care situation in which there was no effective consequence for Dr. Nick leaving a scalpel inside your body after surgery.Report

      • BlaiseP in reply to Burt Likko says:

        Thanks for writing that up.  Seen from the other side, I suppose there’s considerable truth in the notion a jury might like a doctor.   But this might vary with the doctor and the jury.  As you mention in your worthy attempt at malpractice reform, ours is a legal system not exactly famous for its compassionate treatment of litigants, which might run contrary to the grain of your notion about juries liking doctors.

        And there is the friendliness of the venue to consider:  in southern Illinois,  from the banks of the Big Muddy, through the city of Belleville and out to the east, there are simply no OB/GYN doctors.  They’ve all decided it’s simply not worth the mere fact of the lawsuits, the requirement that they be publicly reported and disclosed, and the time, expense, and stress inherent in dealing with the threat to their livelihoods. Sorta like every patent infringement jackal JD hies his unwiped ass to the Eastern District of Texas, to the court of the Honorable John Ward.

        You make a point about expediting the medical expertise portion of the trial. I’ve got a considerably expanded point upstream:  get the non-medically-qualified people out of the proceedings entirely.   You cite Daubert, which goes hand-in-hand with Kumho Tire.   I contend malpractice ligitation and expert witness testimony brought to the court is uniquely fraught with all sorts of prejudicial shenanigans.  Kumho makes it clear enough:   “[W]e conclude that the trial judge must have considerable leeway in deciding in a particular case how to go about determining whether particular expert testimony is reliable.”

        Leeway, yes.   Without the judge himself being an expert, Daubert and Kumho mean nothing.Report

  5. Damon says:

     Something’s missing from this discussion.  Where is the awareness of the consumer for the prices for these services?  I think that’s a bigger issue.  Russell outlined it in his opening paragraphs.  He knows how much his co-pay is, etc., but he doesn’t know the full cost of the service.  There are very few services in this economy where the end user-the consumer-doesn’t know the cost of the product he’s buying.  But of course, now he’s doesn’t care about the cost because he he’s doesn’t pay for it directly.  The insurance company does.  He pays a fixed amount every month in his pay check and maybe some out of pocket co pays.

    Want that expensive MRI?  Sure.  He’s not paying for it.  Turn that situation around.  Want that MRI…YOU consumer have to write me a check for 5K.  This lack of cost awareness is, in my opinion, the single largest reason why costs continue to spiral up.  Folks don’t make the connection that their actions in wanting more, faster, better, etc. have the result of higher costs except through the annual insurance premium increase their employer is hitting them for.  It’s like tax withholding.  The pain in diffused.  Bring the pain to the point of sale and watch things charge fast.Report

    • Kimmi in reply to Damon says:

      all due respect, but a $75 dollar bill for an MRI hurts.

      And all warranty service tends to not tell you waht you’re paying. In fact, the manipulation of the end price is an excellent way to make people buy new cars from your dealership.Report

      • Murali in reply to Kimmi says:

        all due respect, but a $75 dollar bill for an MRI hurts.

        Only if you are really really poor.Report

        • Kimmi in reply to Murali says:


          Fuck off, I’m not really poor.

          It’s still more than my food budget (for just me, not my husband) for a month.

          Trust me, that hurts my budget a lot.Report

          • Murali in reply to Kimmi says:

            Excuse me. You’re living in a country where you can buy a decent sized house and car for the fraction of the cost of public housing in Singapore. I may have been born with a silver spoon in my mouth, but I know lots of guys from lower income families and while $75 may pinch a bit, it would not hurt. That you find $75 for an MRI (which is not something you’re going to get every month) painful either suggests that you are not budgeting properly (i.e. maybe you’re eating out when you could eat in, or buying organic produce when you could buy generic), are poor, or you are pinching pennies and when you say hurt, you really mean that it cuts into your budget a bit. The latter is a nasty jewish stereotype and the first suggests a lack of virtue on your part. Nothing wrong with being poor though, and lots of people who are not poor like to think of themselves as middle class even though they really aren’t just because it makes them feel better about themselves. So, its an understandable mistake to make.Report

            • The latter is a nasty jewish stereotype

              I am having an awfully difficult time understanding the relevance of that particular side comment.  I’m inclined to give you a lot of benefit of the doubt, Murali, since I’ve read a lot of your writing and respect you a lot.  But can you please clarify what your intention was in making this particular remark?Report

            • Kimmi in reply to Murali says:

              Okay, how the hell much is public housing in Singapore? Are we seriously talking $100K or so? Maybe it’s you who’s being imprecise here… (and take the above as rather teasing, I really just want the actual numbers.)

              $20 for a bag of rice (10 lbs?). $10 for butter (4lbs). $8 for carrots. $20 for 5lb. hamburger. $8 onions $5 garlic. $20 milk (4-5 gallons, whole).

              That’s well over $75 a month, off the top of my head, from Costco, which is renowned for its logistics.

              I’m sorry, but if you think that’s really me not budgeting properly… Most people spend routinely three times the amount that I do on food. This is not me going out to eat.

              I’m relatively certain that you’re missing a BUNCH of different cases — gonna throw one out there, just cause I can “am living in relatively unknown conditions, in terms of expenses — therefore any unexpected expense cuts into safety margin that has a reasonably high likelihood of being needed.”

              I dunno, if you wanna count me as poor because I can’t afford kids, do so. But I don’t think that’s reasonable, based on the job I work at, where I live, etc. I also can’t afford a car — and I wouldn’t buy one until I was making about double my current income, which is vastly unlikely under any circumstances.

              I’m sure I’m not the only person around here who would ask you not to repeat stereotypes about my ethnicity…Report

              • Murali in reply to Kimmi says:

                Okay, how the hell much is public housing in Singapore? Are we seriously talking $100K or so? Maybe it’s you who’s being imprecise here… (and take the above as rather teasing, I really just want the actual numbers.)

                Prices range from $300K – $700K (ok that’s median price, but the lowest of the lowest is still higher than $250K

                $20 for a bag of rice (10 lbs?). $10 for butter (4lbs). $8 for carrots. $20 for 5lb. hamburger. $8 onions $5 garlic. $20 milk (4-5 gallons, whole).

                Are you shopping at richie rich boutique supermarket? You know, those places the ultra well-heeled go to burn money? Or is this just the result of tarriffs on foodstuffs in america?

                Here are food prices in singapore


                5kg of rice which is slightly more than 10lbs costs $5 (and that’s in singapore dollars)

                About everything you get is more expensive except milk, which may be slightly more expensive in singapore depending on conversion rate


              • Murali in reply to Murali says:

                @Kimmi: I don’t know how the comment ended up here

                therefore any unexpected expense cuts into safety margin that has a reasonably high likelihood of being needed.”

                I’m not saying that it won’t cut into safety margins. But you’re talking like it will wipe out your savings or nearly so. Which it won’t come anywhere close to. Also, what’s your safety margin for if not for these sudden unexpected expenses?Report

              • Kimmi in reply to Murali says:


                Having moved into a new house, the odds of a $20,000 “unexpected expense” are relatively high. Let alone the probable $10,000 expense. I’m actually stretched rather tight right now. But even if I wasn’t — the amount of money that something would actually be “equivalent to wiping out my food budget” is a sobering thought.

                I know someone who had an MRI because of a running injury — that’s his hobby, he chose that, etc. But, and still, I would have sat and thought, because it FEELS like a lotta money to me.

                My savings are a different story than my monthly budgeting… But something that winds up close to the amount I pay for my electric bill? That’s BIG, in terms of expense. It’s something to consider.Report

              • Murali in reply to Kimmi says:

                Oh, that’s because you just moved into a new house. Different circumstances. Once you’ve settled in an MRI shouldn’t hurt so much.Report

              • Kimmi in reply to Kimmi says:

                In a couple more years, I have a ~5K roof to pay for, etc etc. There’s a lot.Report

              • Kimmi in reply to Murali says:

                I gotta check on the rice — that might actually be a 20lb bag. I think it is actually (totally my mistake!). That said,  I hasten to assure you that spending $8 for ten pounds of carrots is indeed a very cheap price in America.

                this is a place where millionaires shop. It is also a CHEAP place, where poor-as-shit people drive 100 miles to shop there. I am not buying organic, I am not buying much fancy stuff (I must admit to buying high-quality basmati rice, I’d rather not sort out rocks, thank you kindly).

                One would expect rice to be more expensive over here, as there is a far longer way to ship.Report

              • Murali in reply to Kimmi says:

                One would expect rice to be more expensive over here, as there is a far longer way to ship.

                Undercover Economist says that shipping would at most add a few cents. I’m thinking either large markups to prices or heavy tariffs.Report

              • Kimmi in reply to Murali says:

                Actually, it’s rice quality:


                (updated 2/5/11)

                Rice, Long Grain 50 lbs $17.96 each
                Rice, Long Grain 25lbs $9.25 each
                Rice, Basmati 20lbs each $19.99
                Rice, Minute 72oz $4.98 each
                Rice, Jasmine 50 lbs $29.99 each
                Rice, Calrose 25lb $11.49 each
                Rice, Calrose 50lbs $21.99 each
                Rice, Brown Short Grain 12lb $13.99
                Pinto Beans 25lbs $11.37 each
                Quinoa, Organic 4lbs $9.99

                What kind of rice do you normally buy?Report

              • Murali in reply to Murali says:

                I buy Thai Royal Umbrella. I’m not sure how it translates into the various kinds of rice you have listed. It is not Basmathi rice, nor is it any kind of brown rice. It looks like a fairly standard, but good quality white (polished) rice.Report

              • Kimmi in reply to Murali says:

                the rice I buy is aged a year, it’s royal brand (which is the best basmati you can buy). You’re buying: http://www.royalumbrella.com.au/ Which translates out to jasmine rice (costco sells super lucky elephant brand, dunno if you’d like that better, but it should be reasonably easy to find).Report

              • Kimmi in reply to Murali says:

                … what the hell is the average family income? Are those public housing units expected to be passed from parent to child? Because, honestly, that feels either really bubbly, or … uggwuck? Is that a single family dwelling? (or multigenerational???)Report

              • Murali in reply to Kimmi says:

                median family income is $5000/mth.You usually only need to pay a 10% downpayment. There are subsidies for newlyweds and resale prices are actually higher than built to order flats. And taking out a housing loan can settle the initial downpayment. For the rest, its a 20+ year  commitment.Report

              • Murali:

                What do you mean by “public housing”?  In the US, it usually means, as far as I know, housing for very poor people who cannot afford to pay market price.  I know too little about how it works here, to be honest.   But I ask the question just to make sure everybody means the same thing when they’re talking about public housing.Report

              • Murali in reply to Murali says:

                Well, in SIngapore, public housing refers to apartment blocks that are built (contracted out) by the Housing Development Board. The biggest difference is that upt 80% of the pupulation lives in those. Richer families go for the 5-room flats and executive apartments. The lower income families try to squeeze into 3-room flats. Admittedly, the resale values are equivalent to similarly sized private condominiums and it is the new flats which are cheaper (because the government sells a a lower rate that is roughly pegged to some fraction of the resale value)Report

              • Mural:

                That’s interesting.Report

            • Snarky McSnarksnark in reply to Murali says:

              I just have to say that I find this whole comment pretty appalling.

              It’s when libertarians start moralizing

              That you find $75 for an MRI (which is not something you’re going to get every month) painful either suggests that you are not budgeting properly (i.e. maybe you’re eating out when you could eat in, or buying organic produce when you could buy generic), are poor, or you are pinching pennies

              ..or showing their empathy

              or you are pinching pennies and when you say hurt, you really mean that it cuts into your budget a bit. The latter is a nasty jewish stereotype and the first suggests a lack of virtue on your part.

              …that I find libertarianism most objectionable.Report

          • Brandon Berg in reply to Kimmi says:

            You really spend $2.50 a day on food?Report

            • Kimmi in reply to Brandon Berg says:

              yup. It’s not terribly difficult. a 100+ oz can of beans costs $3, and 100+ oz. can of tomatoes costs another $3. Spend a bit on spice (onions/garlic), and you got a decent soup. Supplement it out with some rice/bread, and you’ve got meals for a week or so, for one person.Report

              • Will H. in reply to Kimmi says:

                I track all of my receipts in a spreadsheet.
                I went to look, and I spent $4171.58 on food last year, and I tend to do the fast-food drive-thru quite a bit at times.
                Works out to $80/wk.
                Perfectly plausible.Report

              • Kimmi in reply to Will H. says:

                note: I’m talking about spending $75 a month, per person.

                Yours is indeed significantly higher than mine. 😉Report

              • Will H. in reply to Kimmi says:

                Yes, the time-frame makes a significant difference.
                I think about $100 to $120 a week per person is about average.
                I should note that, with certain things, like bread, I never even concern myself about the price. To me, food is nutrition, the same as gassing up my car; not something I do to enjoy myself. But I have no issue splurging on a thick cut ribeyes (for myself, or my cousin & his family) once a month or so.
                Other things, like coffee, I just buy the cheapest, because I consume too much not to.

                I spent $5154.11 on gas last year, and I put about 700 miles a week on the car.
                I’m probably one of the few people that spends more on fuel than I do food.Report

              • Kimmi in reply to Will H. says:

                not really, a lot of folks in the south probably have you beat. (farmers, mostly, granted).

                I spend $5 a pound for gourmet coffee. Roast it myself, grind it myself, drink a double cappuchino each morning. Cheapest gourmet thing on the market, or thereabouts.Report

          • Jason Kuznicki in reply to Kimmi says:

            First, try to be civil.

            Second, Kimmi, you’ve repeatedly insisted that anyone making under $200,000 per year is not in the middle class.

            Am I to infer that you make more than this?  If you’re among the po’ folks who make $190,000 per year, I may have to hit you up for a loan.Report

            • Kimmi in reply to Jason Kuznicki says:

              using two different metrics, actually…

              yeah, I don’t make that much per year.Report

              • Jason Kuznicki in reply to Kimmi says:

                So you’re poor, but only when it helps you make a point?Report

              • Kimmi in reply to Jason Kuznicki says:

                … about wealth accumulation in certain income sectors? yup. Because I think that’s something we ought to focus on. But bear in mind, I wasn’t the one who came up with that number being the threshold for the middle class… Someone a while back came up with the metric, and I know the guy what ran the numbers again, and came up with that as the current threshhold.

                Millionairres say that to be rich, you gotta have at least about $6 million. I figure that’s accurate — it’s the number necessary to be reasonably self-sustaining.Report

              • Patrick Cahalan in reply to Kimmi says:

                With $6 million dollars, you don’t have to work.  You hardly have to manage your money.

                I think “rich” might be a lower bar than that.Report

              • Kimmi in reply to Patrick Cahalan says:

                Assume someone makes $100,000 a year (as a family, if necessary). In nearly any place in this country (you know the exceptions!), you can get along decent on $50,000 (that’s nearly double the poverty line, I think). Forty years of that, and you got $2 million, assuming no interest whatsoever. I don’t feel like bothering much to do the whole compounding thing, but I think it’s easy to see how you could get to six million without much trying.

                And at six million you absolutely need to manage your money. gotta keep up with inflation…Report

              • Will H. in reply to Patrick Cahalan says:

                That’s if they didn’t have to spend the money on anything.Report

              • Kimmi in reply to Patrick Cahalan says:

                will h,

                assuming you were responding to me: I gave them 50K for living expenses.Report

              • DensityDuck in reply to Jason Kuznicki says:

                “So you’re poor, but only when it helps you make a point?”

                And here is where Jason realizes what #OccupyWallStreet is all about.Report

    • Liberty60 in reply to Damon says:

      Damon, the concept of treating health care as a consumer good is whats bizarre.

      Suppose you fall off a ladder at home and go to the ER.

      Do you want an MRI?

      I’m curiou.

      How would you, as a “wise cost conscious consumer” determine the answer to that question?


      • Liberty60 in reply to Liberty60 says:

        Never mind- I think Snarky illustrated my point more effectively below.Report

      • Damon in reply to Liberty60 says:

        Do I want an MRI?  I don’t know.  But if I go and the doctor said.  “I’ve taken some x-rays and I think you’re ok, but I’d like to do a MRI to be really sure since it’s like 1% possiblity you have XXX that’s only spotted on an MRI and not an x-ray”.  We could then have a conversation about how much the MRI costs and I could determine if I wanted to pay for it.  You know..fully informed consent.  I might choose to do so or I might not given the variables.

        Since I don’t pay, much less know, the “real” cost of an MRI, I’m more likely to agree to one whether I needed it or not.  The lack of price signals is a real problem in this industry.  I’m not even going to discuss the the liability issue of doctors ordering tests/recommending tests to cya.Report

    • NoPublic in reply to Damon says:

      There are very few services in this economy where the end user-the consumer-doesn’t know the cost of the product he’s buying.

      I’d argue that there are far fewer where the consumer does know the cost of the product he’s buying.  I know what I’m charged.  I have no idea what it actually costs to provide most things to me (and invisible carrying costs and externalities abound).  I’d be hard pressed to name something I do know the cost of that I wasn’t intimately involved in the production of, and even then I’m dealing with suppliers and shipping and tariffs ad nauseum.Report

      • Damon in reply to NoPublic says:

        Chalk that up to  poor clarification.  I meant that the consumer knows how much he pays for the service, not necessary the cost to the vendor to provide same to the customer.Report

        • NoPublic in reply to Damon says:

          In which case this devolves to “What’s your co-pay” vs. “What do you pay for a gallon of gasoline”, neither of which has any real linkage to the costs involved.  So why is healthcare the one you want to make painful again?Report

    • Lyle in reply to Damon says:

      I read that several insurance companies are posting their negotiated prices on password protected web sites for plan members for a number of procedures. This should go further. With variances of up to 50% on pricing between hospitals in the same town one wonders if the quality difference is anywhere near that large. (Of course the expensive hospitals and labs say that they are infinitely better than the bargain kind.Report

  6. Kazzy says:

    I often get bills from the doctor indicating the total charges and the amount I am responsiblr for (usually just a copay). I believe that the doctors don’t always get the full rate from insurance, as they have previously negotiated payouts for given procedures. Russell, am I correct on this latter point? And is the former SOP?Report

    • Russell Saunders in reply to Kazzy says:

      You are correct, Kazzy.  The amount that doctors get paid for the exact same service varies wildly (and I mean wildly) from insurance plan to insurance plan.  It is simply an insane system, if it even merits being called one.Report

      • BlaiseP in reply to Russell Saunders says:

        Based on my analysis after years of looking at claims processing, physicians spend more on getting paid than they do on medical equipment.   Just getting someone competent enough to code up this stuff and deal with the ICD9 and now the ICD10 codes is a great expense.  And there’s the continuing nightmare of claims inquiry.

        The biggest problem with a medical practice is long receivables.   Just getting paid is almost more trouble than it’s worth.  Huge problem, one single payer would solve in very short order.Report

        • Lyle in reply to BlaiseP says:

          An interesting market has appeared the order and pay for your own lab tests market. They charge less than 1/4 the price hospitals charge for the same tests. Of course you do have to give them a credit card number so they get paid right away.  It does seem that the 2 to 3 month time frame to get paid by insurance etc does cost real money although Ben Bernanke has reduced that cost somewhat.Report

          • Russell Saunders in reply to Lyle says:

            Of course it costs real money.  Medical practices and hospitals are businesses, with expenses to meet just like any other business.  If there is a two-month lag time between when a service is provided and when it’s paid for, that’s two months that the business has to find an alternate source of covering its expenses.Report

        • Michael Cain in reply to BlaiseP says:

          Yep.  Best anecdote on the subject I’ve heard is from a professor of public policy I had for a health care policy class.  He was on a road trip and visited two similarly sized hospitals offering a similar range of services, one in Washington state and one across the border in Canada.  The US hospital employed 30-some people in their billing office in order to deal with the >750 different insurance plans they saw in a typical year.  The Canadian hospital employed three people in their billing office.

          One of the criticisms one seldom hears leveled against single payer in the US, but which is undoubtedly true, is that it would put large numbers of people out of work, on the care provider side of the provider-insurer interaction as well as on the insurer side :^)Report

          • Kimmi in reply to Michael Cain says:

            hire ’em back to enter in all the paper records (for e-records). Get rid of them when the economy can handle the glut. [you think this isn’t the current prescription?]Report

  7. A Teacher says:

    I once commented that my daughter got “Free” coverage in the NICU when they suspected a post-birth infection.  A collegue looked at me and said “You’re welcome”.

    It ~is~ far too easy to forget just how expensive our health care is as we consume it and that does make it easier to run up prices because there’s no active protest at the time.Report

  8. Snarky McSnarksnark says:

    A large part of the reason that medical expenses are so expensive is that they exist almost entirely outside of the marketplace. We are not in a position to comparison shop between labs, or radiologists, or drugs.    In fact, they guy making that decision (your physician) is in almost perfect ignorance of the costs (which was the point of this quote).

    Some years ago, my doctor sent me to an emergency room, suspecting a burst appendix.     The emergency room physician ordrered a standard urinanalysis and blood test.    When I pointed out that I had carried in the results of those very two tests, from samples taken less than an hour before, the doctor got testy, and insisted that he wanted the results from “his” lab.    And that if I wanted to “participate:” in my medical care, I was welcome to go to another emergency room.

    When it was all over but the bills, it turns out that the redundant tests were billed at over $400  (after prenegotiated insurance rates kicked in, it was a lot less).   But it’s illustrative of the dilemma.    Where else can you go and have $400 spent for you on your behalf, where you have no effective decision power?    What incentives existed for that doctor to be thrifty with my  dollars? How much opportunity does a patient have to participate in the decisionmaking around what tests are ordered, or drugs are prescribed?   What consciousness does a patient have of the alternatives available, and their risks and costs?     How is a patient to know when a doctor has a financial interest in the decisions he makes — because he has an ownership interest in a lab, or he gets to bill another–more remunerative–procedure, or he receives a quid pro quo for a referral?

    For all these reasons, and more, I support tightly managed single-payor health care.   Markets are fine where consumers can understand their choices, and shop among alternatives.   That is manifestly not the case with health care.Report

    • Kimmi in reply to Snarky McSnarksnark says:

      at my hospital, with my insurance company, you wouldn’t have had to carry in paperwork. they’d have already had it (assuming you were still using our affiliates, or labs we can query). And they’d have been hauled on the carpet for the retest.Report

    • The emergency room physician ordrered a standard urinanalysis and blood test.    When I pointed out that I had carried in the results of those very two tests, from samples taken less than an hour before, the doctor got testy, and insisted that he wanted the results from “his” lab.    And that if I wanted to “participate:” in my medical care, I was welcome to go to another emergency room.

      It is my considered medical opinion that the emergency room physician in charge of your care at that time was, to use the medical jargon, a complete assface.Report

  9. Sam M says:

    If you ask the hospitals what healthcare costs, you probably won’t get an answer. because there might not be one.

    There is what they charge and what the collect, which are very different.  Are you talking about what the patient pays or the insurance pays? The hospital has different contracts with Medicare and all the commercial providers. One place might be cheaper for one patient but more expensive for another. It is ILLEGAL in many cases for the hospitals to reveal the detais of their arrangements with the insurance companies.

    If you are looking to ask a simple question like, ‘Where is the X-Ray cheaper and how much does it cost…” there is not an answer.

    This is problematic.Report