I’ve told this story a million times. A few years ago my wife saw her doctor for a recurring problem. It was something so common her doctor should have known off the top of her head what the problem was. Instead, her doctor strung my wife along for numerous appointments and tests. Perhaps it was defensive medicine. One of the tests was a CT scan. My wife didn’t know any better than to check on having it done at a hospital outpatient department. Prior authorization alerted us her sharing of the cost would be $2,700. My wife’s health insurance approved the hospital scan, but I found it elsewhere for only $403 at a diagnostic imaging center near the doctor’s office. As an aside, I suspect the imaging center was breaking contractual agreements by posting prices negotiated with insurance companies.
I always wondered why the insurance company didn’t reach out to my wife and inform her about lower prices elsewhere? I had to be the one to tell her you never go to a hospital if you can avoid it. Later that year I asked that question to a Humana spokesman presenting at a conference. He said it was because Humana respects “patient preference.” My wife was not insured through Humana, but I told him my preference is to save money, not spend more than $2,000 on unnecessary cost sharing.
Kaiser Health News published an anecdote about of a man who, along with his health plan, were charged more than $27,000 for two shots of Lupron Depot, a 50-year old prostate cancer therapy. This was not an inpatient stay. It was two injections including lab and physician fees. This from Kaiser Health News:
Total Bill: $73,812 for the two shots ($35,414 for the first, $38,398 for the second), including lab work and physician charges. United Healthcare’s negotiated rate for the two shots plus associated fees was $27,568, of which the insurer paid $19,567. After Hinds haggled with the hospital and insurer for more than a year, his share of the bills was determined to be nearly $7,000.
Kaiser Health News estimates that the University of Chicago Medicine paid a wholesale price of a little over $500 for two doses of the drug. Yet there were other options.
Since then, many other drugs aimed at lowering testosterone levels have entered the market, including a pill, relugolix (Orgovyx). So why wouldn’t a patient use them?
Here is the conspiracy part of the story. Why was Hinds not advised about alternatives? Doctors tend to say the convenience of one shot every three months is preferable to taking a daily pill for 90 days. Also, patients may forget to take it or stop taking a pill.
But there is another important factor that may well explain Lupron Depot’s ongoing popularity among medical providers: Doctors and hospitals can earn tens of thousands of dollars each visit by marking up its price and administration fees — as they did with Hinds. If they merely write a prescription for a drug that can be taken at home, they earn nothing.
More conspiracy: why didn’t Hind’s health plan reach out to him and explain that he was about to spend thousands of dollars unnecessarily?
Asked about this high patient charge and the possibility of using alternatives, United spokesperson Maria Gordon Shydlo said payment was “appropriately based on the hospital’s contract and the member’s benefit plan,” adding that the insurer encourages customers to shop around for the best quality and price.
Yes, but it’s difficult to shop around when only the insurer knows the prices and keeps them a secret. Why did Hinds have this drug infused at a hospital rather than a physicians’ office? Why did his doctor not inform him of all his options, was it because his doctor worked for the hospital? Moreover, why couldn’t his health plan advise him? So many questions. So few answers.
The status quo seems to work for all stakeholders except patients and employer plans. About half of people covered by private insurance are covered through an employer that is self-insured. That means an insurance company just manages the plan, not underwrites it. It almost seems like there is tacit agreement that insurers won’t rock the boat with hospitals because insurers make money managing big employer plans and the bigger the bills, the bigger the management fees.
A few years ago I met with executives from two different companies that helped employees make more informed decisions on medical services. Both companies charged employers a subscription fee based on the number of covered lives. One company was mostly an online portal with tools employees could use to search for cheaper care. The other was what they called a “high touch” service where an actual health manager would reach out to workers about to get high priced care and tell them about options. Workers could also contact their health manager for advice. This service was more expensive than the web portal. It’s not clear whether either service is still available.
Across the country physician groups are lobbying state legislatures to ban restrictive prior authorization that many health plans require for costly services. Funny thing: prior authorization is all that saved my wife from spending $2,300 more on a hospital CT scan than what I found it for elsewhere. Beginning in January insurers are required to provide decision-support tools to their enrollees. Let’s hope they’re robust enough to help patients navigate the maze that is our health care system.
7 thoughts on “Your Hospital, Health Plan and Possibly Your Doctor are Conspiring Against You”
TIME Insurance Company was so far ahead of everybody when Obamacare put them out of business in 2015. They were in MORE states than any competitor. When a test was coming up they sent the insured the cost of several in network providers so the consumer could just set back and let TIME with their expertise and computers determine all available costs.
Now we have Centene taking over Obamacare, the largest Medicaid company. They have class action lawsuits for fictitious Medical Providers that when the consumer figures it out the Open Enrollment is over and they are trapped like rats with these lying fraudulent hozers.
TIME was so stupid that they went on the exchange in Florida with the lowest priced PPO and every single cancer in Florida immediately jumped on TIME and TIME stopped all commissions on January 10th of 2016. The only thing they could see that rapidly was the Rx that was filled on 1/1/2016. Just seeing those Rx orders and TIME said we are done by 1/10/2016.
Today there are 169 plans in Obamacare from 6 insurance companies in Tampa. Centene, Blue Cross Monopoly, United Healthcare, The billionaire Molina brothers, Oscar the youngest company in America and local Avmed. ABSOLUTLY NO PPOs. Those days are over.
Nobody will ever put a PPO in Florida again because it’s like a giant Magnet drawing cancers!
Of course no plan can go to MAYO Clinic in Jacksonville. That’s why we should describe Obamacare this way. The Skinny networks of Obamacare HMOs are dangerous and deadly.
Devon, if survival odds went up 30% for your wife if you took her to Barnes-Jewish Hospital in St. Louis and your insurance said NO, like an Obamacare HMO, would you sell everything you owned to save her life? If your answer is yes, then Obamacare doesn’t work for people with assets. If you say lets roll the dice with an in network provider and I have life insurance on her anyway you next wife will like that you kept your assets.
I remember explaining to you Devon that you will lose that NCPA Blue Cross if you got a brain tumor and was too sick to work. I remember being surprised that you seemed not to understand. I thought weird. You are smarter now right? Still on an employer-based plan?
Ron my Obamacare plan is so bad that I have to get sick on a Friday to get covered at all.
Devon: As your title suggests, the potential conflicts of interest don’t necessarily stop at your doctor’s office door. As you point out, doctor’s office infusions are much less expensive than hospital infusions. (This is the reason CMS developed its “site of service” regulations several years ago, which many private health plans are trying to emulate.) But even doctors who operate their own infusion centers make higher margins on more expensive drugs, so they are not incentivized to use the least expensive drug to treat your condition.
One time I had to visit a dermatologist for eczema, caused by winter dry skin. He asked me what type of insurance I had. When told my deductible was $5,000 he quickly said a biopsy and other services were not needed. I was glad he was willing to work with me on cost. On the other hand, I also realized that if I had 1st dollar coverage he may have done a ton of unnecessary testing.
Thanks for posting this revealing article.
There needs to be a clear path for patients to be able to sue their physician, if the doctor sends them to a price-gouging medical center like the one in question.
Normally I do not like price controls, but cancer care might be an exception,
Years ago many of the left-of-center think tanks thought the key to cost control was vertical integration like the VA and Kaiser. Now we are seeing the conflict of interest that can occur when hospital execs employ the doctors we trust to advise us and care for us.
Bob, 1/3 of all original MSA clients were lawyers. I would make them get out their small group plan policy and read it to them. It says, “Owners, partners and proprietors who are working 30 hour a week are ELIGIBLE. Insurance TERMINATION: When you are no longer ELIGIBLE. Then I would say, “So, if you get brain tumors and can’t work you lose your insurance. If you try and sell your practice you lose your insurance. Under ERISA can you even sue a group plan if they kill your daughter?”
Then I say, “If you’re as bad a lawyer as you are picking out health insurance I know EXACTLY who not to call if I have a legal question —-YOU!”
Then they LIE and say, “That’s why I asked you to come.”
That’s not true they were trying to save a buck and then I smacked them and they always purchased. You can’t be nice or they would ask you to come back.
I trained my daughter who sold for me at University of Nebraska in 1999 part time as a student, “Come back, no way. Seeing you once in life is more than enough for me. You are not a good looking. Am I going to fast?”
She is so smart she switched the last question to: I hope you are picking up what I’m lying down. You are right? (She says that worked 100% of the Time)
I trained a MONSTER, I pity her husband today!