Why are medical tests so expensive?

Michael_K_Sr

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Just got the bill today for an MRI I had two weeks ago...$2400!! Sure, my insurance will cover most, if not all of it, but man, that price is a real eye opener for 30 minutes in a tube. I realize these machines are expensive but still... I can see how people with no health insurance that wind up getting sick can fall into debt they can never climb out from.
 

Clinton McClure

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I need to find a business where I can make $2400 a pop by putting people in metal tubes for a half-hour.
I began wondering the other day how many doctors perform unnecessary tests so they can pay off their equipment more quickly.
 

Bryan X

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You may be charged $2,400 but I can guarantee you that the hospital does not receive anywhere near that amount. Your insurance company has a negotiated discount with the provider. For example, my son had emergency surgery for a broken leg. The surgeon charged us (our insurance) $2,900. The negotiated discount with our insurance company was $1,900. So the physician only received $1000.

Hospitals charges are high for various reasons (labor isn't cheap, neither is the equipment) but a lot of it has to do with the fact that a hospital may only receive 50% or less of what it charges you. Medicare is a great example. A hospital can charge all they want, but medicare is still only going to pay up to a certain amount (which is generally a small fraction of the charge). The rest the hospital will not collect.


So do you really want a business where you charge $2,400 and receive less than half of that and STILL have to pay all of your expenses?
 

Eric Samonte

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Yup, medicine is business, sad but true. Don't ever think that docotrs nowadays get big bucks. Hospitals hardly break even these days too and they try and get a profit from grants and subsidies from the gov't. Also, these institutions not to mention private practices are moving into research, where there is almost a guaranteed net profit. The insurance system is actually to blame for this since they have taken over the practice of medicine literally. Medical practioners r partly to blame for this predicament. They thought they were invincible back then, thinking these "new" HMOs and insurance guys r a novelty. With that, they kept saying yes to demands. Today, these guys r so powerful, they got million dollar lobbyists assaulting lawmakers to make amendments favoring their cause.
Before, doctors would ask themselves when a patient walks into a clinic....
" What should I do to this patient to make him better?
These days, its a new dictum..
" What should I do to this patient so I can charge the insurance?"
and....
"What should I do to this patinet so he/she will not sue me?"
The last statement however is for a another discussion...
 

HienN

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I think that is due partly to the high number of people who have no medical insurance. In effect those who can afford to pay indirectly subsidize those who can't, thus driving up the cost and the number of uninsured patients. A cruel vicious cycle, to be sure.
 

Joseph DeMartino

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And that, right there, is one reason why medical costs have gone up so much. People no longer pay for their own medical costs the way they pay for food and transportation and therefore have few incentives to shop wisely or use such services sparingly. The fact that you probably pay for little or nothing of your insurance premium only makes the problem worse. The cost is largely invisible to you.

Meanwhile that MRI machine costs millions of dollars, cumbersome government and private insurance schemes do the paying - at a discount whenever they can manage - and a whole second insurance industry - the malpractice business - soaks up growing amounts of the income of the hospital and the practitioners. Because, as we all know, human beings are naturally immortal and medicine is perfect, so every death or negative outcome from a medical procedure is somebody's fault. Usually the person with the deepest pockets. At least that's what all the trial lawyers I know seem to believe.

The problem isn't that medicine is a business, it is that it isn't allowed to function as a business. All of the normal checks and balances that the market would porovide have been stripped and regulated away, and and then a patchwork of conflicting and incompatible laws, precedents and insurance regulations have been put in their place, all of which tend to reduce efficiency and increase the final cost.

The fact that a large number of Americans receive their health insurance as a "benefit" through their employers is one of the basic sources of the problem. The fact is this system is a relic from the days of the Depression and WWII, when employers paying for health insurance was invented as a way of circumventing government-imposed wage and price controls. (The fact that this in fact allowed employers to offer what amounted to higher wages to high-value employees and the thriving black market in consumer goods that arose at the same time should tell you all you need to know about the ability of the goverment to "control" the economy.)

If you want to complain to someone about the high cost of healthcare, I'd suggest you try a lawyer, member of congress or senator. (Most of whom, come to think of it, are lawyers.)


Regards,

Joe
 

WillG

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Yup. My Father's Malpractice insurance premiums have skyrocketed in the past few years, and he's never even had a claim against him (that I know of, at least not recently)
 

LewB

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I recently had some tests done (nuclear stress test, endoscopy and colonoscopy).
What amazes me about the bills and the cost of the procedures is how much is 'discounted' off the 'list price' when it comes to what the providers accept from the insurance company. In my case, it seems to be half or even less. Must be a 'volume discount'

It's not hard to see how someone without insurance can be financially ruined by medical bills that are charged at 'full list' and not the discount that the insurance companies seem to get.
 

ChristopherDAC

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This "medical insurance is the problem" rant is something I've heard a lot. Of course, it omits some crucial points. Doctors, unlike roofing contractors, won't see you and then give you an estimate. Try finding any kind of medical provider to supply you with a price list in advance! The fact is that the market system, in order to operate, requires information which simply isn't available, and for very good reasons. No ethical physician will lay out a schedule of treatment, or even tests, before examining the patient. Just as with car repair, a lot of the time all you know is the symptom, and the cause is hard to determine. Call up your mechanic and say "My car has a squeaking noise, how much will it cost to fix?" See just how far you get!
 

Bryan X

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In this case, you are generally going to be charged just an office visit-- something which you can call in advance and get a quote for. Once the diagnosis is made, and the treatment is determined you can easily ask for the cost of the procedures involved in the treatment and shop around before getting treatment.

And comparing prices across different providers is really pretty simple. All providers use a billing code which is called a CPT. A CPT is a 5 digit number that identifies the procedure. CPT codes are the same for all medical providers.
 

Michael_K_Sr

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This has shocked me as well. Although I've switched doctors in the last year, tests that I had previously through my old medical group had been discounted for Blue Cross up to 90%. That's unbelievable. Sadly, uninsured individuals don't have the clout to negotiate any discount at all.
 

Chu Gai

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Is that because the list price is nothing more than a phony price, created to make something appear more costly than it really is? Kind of like going to some store and finding watches that've got those little $149.99 stickers on them but now are on sale for $9.99?
 

Michael Reuben

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I'll bear that in mind the next time I experience chest pains. Before determining whether it's a heart attack, I certainly want to make sure I get the lowest price.

M.
 

Chu Gai

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Yeah, Michael, but if you're experiencing chest pains, I kind of doubt you'd call up for an appointment to your regular doctor.
 

Luna5

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My gripe is why people who don't have insurance can't negotiate a better price for a cash payment.. Seems that an immediate cash payment would deserve some kind of discount being that there is no paperwork to file, no 30, 60 or 90 day wait for payment. I tried to negotiate a discount with a doctor some time ago and all they did was laugh! No free market with these guys...but I must say the doctor did have a nice brand new M4 to drive home in!
Merry Christmas everyone and happy new year
 

RobertR

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I also think emergency procedures would have been investigated beforehand, so you'd know where you want to go. If they weren't investigated, you wouldn't be all that interested in price as a consideration. You'd just want the diagnosis and treatment.
 

Bryan X

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We're talking planned visits here. Unplanned emergency admissions are a different story. If you are on the floor with chest pains, the last thing on your mind should be cost of services.

Luna5,

Not all doctors will negotiate price. But it never hurts to ask, as some will.
 

Carlo Medina

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While I agree there is something wrong with the current state of the medical field in the U.S., I hardly think allowing it to function as a business is the answer. Too often, businesses and corporatins find ways to circumvent free market forces (see: Enron, Worldcom, cable, phone, etc.) and find a way to maximize profits. Look at the biotech field (a sister to the medical care field) and how it works. If we freed the medical field from the current system and trusted that the free market forces would work their magic on the industry, I'm of the belief that we will be sorely mistaken.

I fully agree we now have an imperfect system, but allowing the medical field to enter fully into the business/corporate world is not the answer.
 

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