The New York Times Misdiagnoses the Problem
In a story that’s making the rounds, the NYT reports on outrageous hospital bills:
With blood oozing from deep lacerations, the two patients arrived at California Pacific Medical Center’s tidy emergency room. Deepika Singh, 26, had gashed her knee at a backyard barbecue. Orla Roche, a rambunctious toddler on vacation with her family, had tumbled from a couch, splitting open her forehead on a table.
On a quiet Saturday in May, nurses in blue scrubs quickly ushered the two patients into treatment rooms. The wounds were cleaned, numbed and mended in under an hour…
Then the bills arrived. Ms. Singh’s three stitches cost $2,229.11. Orla’s forehead was sealed with a dab of skin glue for $1,696. “When I first saw the charge, I said, ‘What could possibly have cost that much?’ ” recalled Ms. Singh. “They billed for everything, every pill.”
The NYT article goes on to explain the cause: “Hospitals are the most powerful players in a health care system that has little or no price regulation in the private market….[M]ergers and consolidation have resulted in a couple of hospital chains…to command high prices from insurers and employers.”
No, that’s not really a good explanation.
The reason it’s so obvious to people that something is wrong, is that we can all sense that it doesn’t take a 10 years of medical school and residency to give somebody three stitches without causing an infection. So it shouldn’t carry a price tag of $2,229.11 for such a procedure.
If there were a wide open market for health care services, it’s not possible that a hospital could charge such a price. They would have to cut prices or let outpatient clinics in shopping malls take over such routine procedures.
But instead of getting government roadblocks out of the way, it looks like Americans will go along with ever increasing political “solutions.” The cost overruns and bottlenecks will pile up, the insurance companies and hospitals will continue to anger their customers, and then “health economists” will say this just proves the need for a single payer system to get rid of the waste.
Then we’ll have low prices like the single-payer Pentagon gets from its contractors.
Medical malpractice payouts in the USA are huge, in Australia for example you can search around on the Dr Patel case but the government set up a special tribunal to settle claims and most of the reports are that the payouts were pretty small (exact values are being kept secret). That’s one of the things about government health care, they can keep costs down in ways that private companies cannot do.
Why is “malpractice” considered a tort, not a breach of contract with previously negotiated terms concerning breach?
Bob,
You might be very interested in this data:
http://blogs.reuters.com/felix-salmon/2013/11/22/the-government-dominated-bond-market
The main source of demand for government bonds is…..central banks??????
“Then we’ll have low prices like the single-payer Pentagon gets from its contractors.”
Excellent.
500 million for a website that don’t work.
Aha, so you do have a use for Kevin Carson’s (so-called) theory of value. 🙂
Bob, lovely point. I would also suggest that Student debt has gone down and the cost of an education is flat lining ever since the Government became involved in lending pushing out the banks.
Oh wait…
This is a fabulous post.
This post is 99.99999999999999999999999999999999999999999% perfection.
The missing miniscule percentage, IMO, is that you didn’t explicitly mention the government granted monopoly among doctors (AMA) as the main reason why we don’t “wide open market for health care services”. This monopoly is mainly responsible for why we can’t go to a Wal-Mart walk-in clinic for 10 minutes to get stitches from someone who has a basic diploma in medical services who is legally allowed to compete with medical doctors.
We have to explicitly point out to the numskulls at the NYT, and other publications, the specific causes for why we have such high prices.
Our supposed local conservative news station FOX, is the first to go after unlicensed dentist practicing from their homes, etc. Even when the customers are happy they received such good service at such low price. The media goes after them like hawks. I always hear these old quotes about how a free press is more important than such and such. Would Jefferson really have said that about a fiction corporation press, nearly state owned? I don’t think so…
The state is nothing but an organized system of theft and coercion. It is that simple. Healthcare should be provided as anything else on the free market. Insurance would go back to its proper role as a catastrophe safeguard, and people would be more proactive instead of the ‘there’s a pill for that’ mentality, as proper incentives would be the case as occurs in a market.
Bob,
My question is…why didn’t these people go to an urgent care facility? We have a million of them around where I live. So the healthcare marketplace is a bit more open than you acknowledge…even though I think some regulations that give excess market power to doctor’s cartels should be done away with.
As high deductible plans (e.g. the bronze Obamacare plan) become more common, and employers start to offload employees onto the private exchanges, I think you will see a lot less knee jerk reaction visits to the E.R., unnecessary ambulance rides etc.
Yup. Redundant visits to the OR are a real problem in Canada.
oops I mean ER
“Remove my left leg again.”
‘Sorry, removal of a specific limb is idempotent, so doing the operation again would be redundant.’
“Then select a *random* limb and remove *that*!”
[/compsci humor]
A point for you Silas!
Superfluous visits? Unnecessary visits.
I’ve been to urgent care a few times. Where I live, these places are practically deserted. Every time I’ve gone to one I’ve been seen right away, contrasted to the couple times I’ve been to the ER and had waits of over an hour each time.
“I think you will see a lot less knee jerk reaction visits to the E.R., unnecessary ambulance rides etc.”
Why? There’s not really much difference between going to the ER and to an Urgent Care facility…. other than you have shorter wait times at the urgent care facility.
If you are uninsured, ER’s are often legally required to write you off as a loss if it is expensive – urgent care is not.
If you are insured, the cost is practically the same after insurance deals come out, unless you need hospitalization (which would necessitate a transfer to the ER from urgent care anyway).
Expensive care for actual emergencies, I should point out. Which does include “I need a few stitches for this bad slice on my finger to stop the bleeding and heal it”.
“If you are insured, the cost is practically the same after insurance deals come out, unless you need hospitalization (which would necessitate a transfer to the ER from urgent care anyway).”
Matt,
I don’t agree with this statement at all. First, in the ER you are usually charged extra physicians’ fees, in urgent care you aren’t. Overall, the visits I have had to urgent cares may run $100 out of pocket…you pay $600 just stepping into an ER.
For any other procedure that an urgent care would send you to the ER, I don’t think you would be wanting to go to Bob’s unregulated mall clinics anyways.
The other Dan, here. It’s not a matter of going to unregulated mall clinics. It’s a matter of going to market regulated clinics. It isn’t needed, or even preferable, to have the government regulate industries.
“Overall, the visits I have had to urgent cares may run $100 out of pocket…you pay $600 just stepping into an ER.”
With insurance? Because I’ve never really seen a difference with insurance. The initial bill for the ER is much higher, but it also gets knocked down much further.
Yeah, there is something weird in the USA. It actually makes sense to buy a health insurance plan that covers you for nothing at all, but you pay a small premium for access to the haggling team.
In other words, you are happy to pay for medical care, at the same rates insurance companies pay for medical care.
The crazy thing is, Obamacareless goes in and removes the tax advantage component of the health savings account used to pay the high deductible. I don’t think they want what you say. I don’t think they want consumers driving prices down. I don’t think they want sick people to have skin in the game. When Obamacarless is fully implemented(2018 A.D.), there will be no market, no price mechanism, no profit and loss and no consumer input. There will be socialized medicine. Planned chaos.
This above post was directed at Dan.
“Bob,
My question is…why didn’t these people go to an urgent care facility? We have a million of them around where I live. So the healthcare marketplace is a bit more open than you acknowledge…even though I think some regulations that give excess market power to doctor’s cartels should be done away with.
As high deductible plans (e.g. the bronze Obamacare plan) become more common, and employers start to offload employees onto the private exchanges, I think you will see a lot less knee jerk reaction visits to the E.R., unnecessary ambulance rides etc.”
I got 6 stitches not long ago, paid cash and was out the door for under $300.
A few years ago I paid cash for chest a xray and a shot of heavy duty pain killer, again for under $300.
Had I insurance and they ran the full battery of xrays, tests and shots I would be looking at around $4000.
DMV physical, $75, on insurance $350. $100 for a visit when I had a bad flu; had I paid through insurance it would have been over $500.
I know someone who’s insurance would not pay for the $7500 CATSCAN. I suggested he inquire about a cash price and he got it done for $500.
WalMart used to have out patient treatment. I need a tetanus vaccine. $450 at a doctors $35 at Wally World.
It is all the crap that is mandated by law that must be done when you are insured combined with the legal compliance and paper work that drive these crazy prices. Truly free the market, let doctors and medical services bid and or advertise prices, in other words, create a truly free and competitive market and these prices will drop fast. I’ve experienced it. I have even gotten dentists to essentially bid on dental work.
With regard to the AMA comment; I have had corpsman stitch me without a doctors visit and I even had a vet stitch me at a roping. There are many things that can be done that do not require an MD. Most of the time I see physician’s assistants. I seldom see an MD
On the Tom Woods Show today, the guest was David Beito who explained how the AMA helped kill medical plans that existed through fraternal societies and how they went after one in the Mississippi Delta that worked well for poor blacks.
http://www.schiffradio.com/f/Tom-Woods
A friend of mine,who is uninsured, asked his hospital for a quote for his wife to deliver a baby there. He was quoted a little over $25 grand, I kid you not. He decided to go “au naturel”, and contracted with a retired nurse for a few hundred dollars for an at home delivery.
It’s interesting that getting pregnant and preventing pregnancy are now considered medical conditions which one cannot foresee, and therefore must be included in the standard o’care package. I believe also, only female contraceptives are included, I could be wrong, but condoms are not included, so highly disciminatory.
This is worse than Europe. While we were on vacation there, my three year old fell and cracked his head open, and had to be taken to the emergency room for stitches and a check for concussion. When all was said and done, we walked out of there and the bill came out to 200 euros, cash or credit card. Although, this may have included a subsidy, who the heck knows…