Wednesday, July 29, 2009

Cindy Goes To The Doctor

One day last March Cindy woke up with a red and swollen eye. Her predicament offers a case study on American’s dysfunctional health care system.

For years Cindy had a comfortable income earned from a small business she operated in the shadow of Noblesville’s clock town. At an ever-increasing price, she bought health insurance. As the price got higher, she accepted an increasingly higher deductible, to the point that her coverage, though it cost $700 a month, was for all practice purposes, catastrophic insurance. She was paying for most expenses out of pocket. But at least she was covered for a major illness.

But last fall as the national economy tanked, so did her business. To make ends meet, she dropped her insurance and joined the other 50 million Americans who have no health insurance.

And then she woke with that eye problem. A pretty small issue, really. She didn’t have cancer, wasn’t maimed in an accident. But her relatively simple problem became an maddening ordeal.

She tried to find inexpensive treatment and went to a local Med-Check center. They said they would charge $150 for a consultation. Sounded high to Cindy. They kindly suggested she try the clinic at Wall Mart. So she did. The Wal-Mart clinic suggested she go to the emergency room.

Her attempt at bargain shopping failed.

Lots of people say competition in health care would bring prices down. But when people have a stroke or heart attack or cut their arm open, or for that matter, get some mysterious inflammation in their eye, they don’t typically go looking for bargains. They look for relief. It’s why competition hasn’t worked very well in health care. You rarely have a couple days to read Consumer Reports or compare quotes from competing doctors.

So Cindy went to the emergency room.

Once at Riverview Hospital a nurse put some numbing drops in her eye.
A doctor came in, examined her for 5 minutes and said he couldn’t help her, but referred her to a specialist. When she left, she asked a checkout clerk what she owed and was told, “We’ll catch up with you next time you come in.”

She drove to the specialist’s office at 146th and Cumberland and after another 5-minute consultation she was given some eye drops. The drops made her eye hurt more. She quit taking them and decided to let nature heal it for her. Which eventually worked.

Then the bills started rolling in. There was a bill from Riverview Hospital for $350 with no itemization or explanation. The ER doctor also billed her $196 for their fruitless 5-minute consultation. That’s a rate of $2,353 per hour (Who does he think he is, a Wall Street banker?). The specialist charged her $100 for his 5-minute conversation that resulted in the eye drops that didn’t help.

So the total bill came to $646 for a lot of driving around, fleeting encounters with doctors, and a treatment that didn’t work. Cindy still doesn’t know why her eye was red and swollen.

Why did Riverview and the ER doctor charge so much? A Riverview representative told me the hospital bills $22 million worth of care a year that goes uncollected. You see, as people complain about “socialized” healthcare plans being considered in Washington, few acknowledge that it’s already socialized. The hospitals, insurance companies, and doctors have done it themselves. They’ve been forced by market realities to charge those who can pay to cover losses caused by those who can’t pay.

The expenses are compounded because those without health insurance tend not to see the doctor when they have a cough or the flu – because they have no coverage, then show up at the emergency room a week later with pneumonia, which is far more expensive to treat than the original illness.

Was the doctor bill high because of malpractice insurance? Research tells us that malpractice insurance, lawsuits, payouts and extra tests run on patients by doctors to protect from lawsuits accounts for only 1% of health care costs. Eliminate that and Cindy’s bill falls by just $6.46.

Cindy called the hospital and the doctors and asked for an explanation of the bill. She was told they’d give her a 20% discount if she didn’t have insurance. Sounds like more socialized, “spreadin’ it around,” to use the parlance of last year’s election.

While Cindy was struggling to understand the bills, Cigna, owner of her former insurer, Sagamore, announced that their 1st quarter profits had tripled to $208 million, which disappointed Wall Street insiders who had hoped for more. According to Forbes, Cigna’s CEO, E. Edward Hanway, earns on average, $15.6 million per year. Which helps us understand another problem for people like Cindy. The goal of most insurers and providers isn’t simply to provide a service, but also and perhaps more importantly, their goal is to earn a profit.

To this day, Cindy still owes the $646, is being threatened that her bills will be turned over the a collection agency, and still, nobody’s asked her if her eye got better.

Facts about American healthcare:
*The Institute of Medicine estimates that 18 thousand people die each year in America because they have no health insurance.
* The United States is the only industrialized country in the world without a universal
health insurance system. -American Journal of Public Health
* Half of all bankruptcies are caused by medical bills. Three-quarters of those filings are
people with health insurance. –Health Affairs, 2006
* There are four times as many health care lobbyists in Washington as there are members
of Congress. -
* According to the UN Human Development Report, while the United States leads the
world in spending on health care, “countries spending substantially less than the US have
healthier populations.… The infant mortality rate for the U.S. is now higher than for
many other industrial countries.”
* A baby born in El Salvador has a better chance of surviving than a baby in Detroit.
The infant mortality rate in Detroit is 15.5, compared to El Salvador's rate of 9.7. -
• Canadians live three years longer on average than Americans do.
* Cubans have a lower infant mortality rate than the United States and according to the
U.N. Human Development Report, a longer average lifespan.
*Americans rank 29th in the world for life expectancy. We tie with Jordan. –CIA World Factbook

1 comment:

  1. Great column, Kurt. The bankruptcy fact really grabbed me. High, impossible-to-pay medical bills are what drove us to cash in our IRA two years ago due to my husband's terrible medical insurance at the time. It was either that or the bankruptcy route.