Discounts make true cost of medical procedures questionable

The medical procedures introduced in the past 10 years have, without a doubt, improved the quality of life of thousands of people. Like most of us, when we get treatment for an injury or disease, we want the very best. Insurance companies also have, no doubt, saved thousands of dollars because of the revelations in medical treatment.

The big unanswered question, though, lies in the true cost of health care.

A few weeks ago, there was an article about a new vascular procedure that will enable a physician to insert a thin wire catheter into a patient and literally shave the plaque from his or her blood vessels. In the past, the only real options were angioplasty, stents or replacement of the vessel either by borrowing me from another place in the body or using an artificial vessel. This is a great development.

Another notable breakthrough has been carpal tunnel release surgery, whereby the surgeon makes a small incision in the wrist and then inserts the instrument to essentially cut the affected muscles to relieve the pain. A much better option than the older method of cutting your wrist open two to four inches.

Advances such as these these have come at a cost. The development, the training and the instruments were in research and development labs for years. All of them had to undergo the stringent Food and Drug Administration approval process. For the future, we have been told of new potential treatments for arthritis, cardiovascular, orthopedics and continued development of cures for many life threatening and debilitating diseases. We look forward to those new treatments and procedures because we have friends and loved ones that need that improvement in their lives. No one wants to take that away, but it is quickly coming to an issue of what is it worth?

With the ever increasing cost of health care, we all have a stake in the outcomes. Yes, there are some people whose outcomes are not going to be good and there are some who are going to be very happy. Still, the unanswered question is how much does it cost?

The true cost of health care is virtually unknown. There are many factors including mortality, lost productivity, quality of life and others, but what does a specific procedure really cost? Certainly, with the advent of managed care in the 1990s, there has been an impact on reducing costs; reducing and/or stabilizing premiums, but has it really had an impact on cost? On a weekly basis we review customers’ explanations of benefits to confirm the proper claims payment or simply to answer questions. In virtually each of the explanations of benefits there is one common denominator: the discount on care for using in-network providers.

This discount can be minimal or it can be substantial. For example, for a person with a three-day cardiac-related stay in a local hospital, the billed charge was over $25,000, but with the discounts, the amount paid by the patient and the insurance company was just over $6,000. So does this mean that $6,000 is enough? Or do they really need the $25,000?

Another case was for a cancer-related surgery. The billed charges were more than $30,000; after discounts the total claim that the provider had contractually agreed to accept was a little over $4,000.

In a third case, an uninsured person spent more than a month in the hospital. Just the hospital bill was in excess of $200,000. “Please pay within 60 days and you will get a 20 percent discount” was an agreement reached with the provider. That same claim, when run as a dummy claim through a claims administrator, would have only been $101,000, or a 50 percent reduction in the charges.

Undoubtedly, there are a lot of factors within these contracts with insurance companies and the providers, and the community wants to have choices. But it seems only logical that the provider community needs to take a long look in the mirror, determine what is best for the community as a whole and negotiate appropriately.

Your choice of physician or hospital should be based on your concerns for quality, accessibility and cost, not just where your insurance plan has the best contract. Virtually every other thing you consume will be based on the quality of service or product and the cost. It is past time for the providers in this area to drop their exclusive arrangements and let patients choose their providers.

This community is blessed with two great health systems that are caught in a trap to gain or maintain market share based largely on discounts, when it should be based on their ability to provide a quality product at an affordable price.