“Chaos, behind a veil of secrecy”: Show me the cash flow

Original post here was June 2013. Or, jump to the Nov 2015 update below.

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Latest in my series Let patients help, cost-cutting edition

I’ve blogged several times about the greatest truth I’ve learned about the business of medicine. It’s the title of a 2006 Health Affairs article by Princeton economist Uwe Reinhardt: The Pricing of US Hospital Services: Chaos, Behind a Veil of Secrecy.

The cost chart at right shows what’s happened since Reinhardt’s paper appeared, in the middle of the chart. It’s what you’d expect if slush is flowing around with nobody watching.

Today I was reminded that it ain’t just hospitals. :-)
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Last week I got my annual checkup. There were two separate problems in my hospital’s appointment system, so I ended up leaving too late to get the simple lab work my doctor had ordered; I said I’d get it done at a local lab.

Today I visited AnyLabTestNow, a chain with a local office. I called ahead, and for walk-in self-pay, it’s $49 for the chemistry panel I needed (Calcium, CO2, etc) and $49 for the cholesterol, total $98. And a $10 off coupon, on the site! Just $88.

Or not.

I checked with my insurance company, and the blood work is covered 100% as part of a normal checkup, because “The doctor diagnosed the test right” (her words – i.e., he ordered the test using the right ICD-9 code).

BUT, the lady was careful to point out “This is not a determination of benefits, just a description of services.” How’s that for malarkey? “We’re not saying you WILL be reimbursed when you submit the claim – I’m just telling you what the policy says.” But she’s required to say it, because the company that denies claims is not accessible through customer service and might possibly deny the claim, even though she said it should be covered.

And I am not allowed to talk to someone who does know, right now when I need the service, to actually find out. The only way to be sure is to file a “predetermination” and wait a week. If I don’t and the determiner says no later, I’m stuck with it.

And I can’t send it to the “determiner” (to invent a George W word); I have to send it to the service company, who in turn forwards it to the determiners. Then the uncontrollable delay starts – she said “We try our best to get it back in 5 days, we really do, but sometimes we can’t.”

Guess who’s holding all the cards and all the power behind that veil of secrecy?

It ain’t me the watchful consumer, and it ain’t even the nice customer service lady. She, meanwhile, explained that “It’s not a person who makes the decision – it’s the computer.” I explained that if she’s been fed that line of malarkey, there’s more funny business going on, because somebody puts the rules in the computer and I want to talk to someone who knows what the rules are. So I can be responsible about medical costs. Which nobody else seems to want to do, in this picture. :-)

Anyway, I got the blood taken, and in a couple of days the results will be sent to him and visible to me online.

But really – no, really – what did this cost?

Even though insurance paid, I care about costs, especially since my premium went up 20% last year, even though I didn’t file a penny of claims; I still want to help keep spending down. So I asked the lab’s desk lady how much it would cost through insurance. She said the classic response, familiar to readers of this blog:

“Oh, we don’t know. It’s up to the insurance company – they pay whatever they pay.”

So I called back the insurance company, and told that to the next nice lady, and asked “So, what do you pay?” And she said:

“Oh, we don’t know – it depends what the doctor charges, and your deductible and copay.”

And I said “So in my case, what would that be?” She said there’s no way to know.

Chaos. Behind a veil of secrecy.

Observe, ladies and germs: money flows around, behind a veil of secrecy, and nobody we are allowed to talk to can give us any information so we can make responsible, informed choices.

Where does the money go? Does anyone know? Looking at that cost chart, I’m guessing it’s being shoveled into someone’s pocket, behind that veil. Jerry Maguire shouted “Show me the money”; I’d settle for just being able to watch it move – “Show me the cash flow!”

I say, let patients help control the cost of care. Until then, let’s not let anyone say consumers are the cause of rising costs.
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p.s. As always on these calls, I asked if I could talk to the people who do know, and this time, much to my surprise, she said yes – she gave me the phone number of the company who actually negotiates the prices!  This is the first time anyone’s offered it.

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Update Nov 2015:

Two additions:

Update 1: The trend continues through 2014 2015 2016

The Kaiser Family Foundation (KFF) slide above shows data through 2012. They publish this yearly, and in some speeches I use one or more. For future reference here’s the complete set, starting from the 2010 edition. Note that the advent of the Affordable Care Act has had absolutely no effect on these trends – it’s what they call an “inexorable trend,” so that’s what I titled the slides.:-)  (No effect yet, at least. )

Update 1b: 2016 edition

Update 2: Meanwhile, they’re giving citizens more of the burden

The slides above only compare costs against wages – those slides say nothing about what we get for our money. In September 2015 KFF published one that does – the trendline for our deductibles: despite inexorably rising premiums, the insurance industry is also leaving us with more of the bill, by increasing our deductibles.

From the web page with this graphic:

Since 2010, Deductibles for All Workers Have Risen Almost Three Times as Fast as Premiums and About Seven Times as Fast as Wages and Inflation

… “With deductibles rising so much faster than premiums and wages, it’s no surprise that consumers have not felt the slowdown in health spending,” Foundation President and CEO Drew Altman said.

“Consumers [that’s you!] have not felt the slowdown” – no kidding! That’s because the money companies are seeing to it that they get their share first. Why this is called “insurance” is beyond me.