It's about our kids' future

When medical bills drive families into bankruptcy it's someone's very real suffering.

It's about our families

When medical bills drive families into bankruptcy it's someone's very real suffering.

If this was a joke, nobody found it funny.

Keith Smith, M.D. writes: "What you see above is a bill sent to me by a friend. This bill makes no sense unless you realize that a free market is not involved. Either Adventist Health System doesn’t think whoever is paying this bill cares, or is holding them at gunpoint. The Medical/Surgical Supplies charge ($63,371.71) represents mostly the defibrillator battery, for which Adventist paid $12K-$15K according to my sources. They will, of course claim that every dime of this they don’t collect will be “uncompensated care,” and use this “loss” to maintain the fiction of their not for profit status, while pocketing their DSH (disproportionate share hospital) kick back courtesy of the blindsided taxpayer. They will “carry” cash reserves to match this “bad debt” and use this slush fund to buy and build, buy and build….everything and everyone in sight. The insurance company (if there is one) will “reprice” this bill and charge the employer group a “percentage of savings.” The insurance company would be better off had this bill been $200,000 or more as their “repricing” take (usually around 30% of “savings”) would be even greater. To bring this sick system under control, we must first address the cost. Imagine now that an innovative hospital published upfront pricing for defibrillator battery changes for $25,000. How would this affect the price and availability of healthcare for everyone? Doesn’t the lack of waste benefit all of us? To focus on getting everyone “coverage” only guarantees bills like the one above and rationing of care to all but the uber-rich.." [Read here]



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Health Care in America...

Health Care in America...Where to begin. America offers some of the best Health Care on the planet. Yet, for many Americans Health Care is unaffordable.

Dear Mother. Dear Father.
Dear Parent. Dear Grandparent.

Dear Friend,


Today even a small surgery can mean that a middle class family wakes up the next morning broke and insolvent.

At the same time hospitals and insurance companies are in a tug-of-war of ever billing mayhem to the detriment of the taxpayer and citizen. Innovation in our health care service infrastructure is stalling. Not because of fierce competition for highest quality at lowest prices. But because there is no knowledge about prices, no market and no competition. The billions of dollars that end up in the health care industry, pulled in through efficiency gains and innovation in other sectors of the economy do not benefit medical progress and innovation, unfortunately. In most cases they are wasted in overhead and bureaucracy. Thus the medical industry is anything but transparent and has become a huge drain of human resources and capital. Unfortunately, it will be our kids that suffer and grandchildren that will have to pay for it.

Let me give you an example (and I am sure, you know of better ones, but it will prove a point). A few years ago my daughter strained her wrist. The bill I got from my local hospital was out of this world. A doctor who could not open a pdf attachment on his computer charged thousands of dollars for a five minute consultation. It had to be a mistake. You have to know that I was not born in the US. My home country in Western Europe experimented with with health insurance. On the one hand it was "free" - on the other it robbed my sleep when I saw how much money it drained through taxes from my family dinner table. In reality, a heavily government regulated semi-nationalized industry forces middle class families to pay ever raising insurance rates to cover expenses that no one can see. But in America? If prices were high, would not there be at least a good reason for it? Surely someone else had looked into the cost of hospitals and doctors and found that there is absolutely nothing we could do, right? This was my confusion and thinking, until March this year, when the Time Magazine published an excellent investigative report (see the link section below).

Back to my story: A little while later I received an itemized bill for my daughter's ankle x-ray and sling. It listed numerous procedures which I had to lookup online. Very quickly it became clear that the billing for this procedure did not follow any market principle we encounter everywhere in our daily lives. The sling, a piece of cloth, tagged as "made in Guatemala", was listed for $400 dollars. The same amount as an iPad.

Something was not right. I started asking questions. I read and studied. Surely hospitals had to be bankrupt that they need to charge prices like that? The more I found out about how these prices come to be (see link section) the more I became convinced that there had to be a better way. And that way seemed to be the most logical simple and straight-forward conceivable. It is the same path that we take when we interact and exchange services every day in our lives. What was missing was a market place. Most people I talked to said "No, there will never be a market system in the health care industry". I thought about it. But the more I questioned the more it became clear that it wasn't just the market. It was the transparency, the "shining of light" onto the procedures and treatments and operations.

A few decades ago, when you needed a doctor, you dealt with a doctor. From one person to another. From someone who knew his daily cost to someone who had to work hard for his cash. No filing complexity, administrative overhead, drawn-out paper trails. Just you and me and a price. A price that would be a win-win for both of us. We have seen how this simple principle has pushed technology forward and let to advances that are mind-boggling. What would happen to health care in the US, if we let price transparency have a come-back? Would not that be amazing? Don't get me wrong, it's not just about the prices. But when you combine the popular vote and scrutiny of the masses and at the same time favor the innovator, we might see dramatically improved future in healthcare.

If a hospital really is losing money, the public needs to know. The prices will tell. They will be an early sign that something needs to be done. But without that knowledge? Where do we even begin to recognize real problems? How do we identify the winners who outcompete in quality and service and should be promoted and then turn around and teach others to improve? How do we find them without prices? If there are cartel-like business models in healthcare, something which the anti trust laws prevent in other industries, should not the public know about that as well? But how can we see it, if prices are not public?

We live in a new era. In a time when information rules. So we have to ask ourselves - don't we think that we can do better? Certainly we could, we always have found ways to improve, but we need to see. We need price transparency. Medical prices have to be public if we desire progress in the health care system. We could wait for someone else to make this change, but why not us. Why not now. Why not make it profitable for both - patient and physician. And some have started already. The surgery center of Oklahoma comes to mind, where Dr Keith Smith had had tremendous success, streamlining his operation, cutting waste and innovating his clinic, drawing patients from across the nation and Canada.

Let us give all the money it really takes directly into the hands of caring and thoroughly publicly vetted physicians. Let's give them the money directly and have them get the best tools for the job. So that they can truly focus on what they love most: helping people. And yes: the better they are, and the more thoroughly they do their job, the more business they should get! They should be able to help more people! And if they opposite is the case and we discover fraud and theft and abuse of public resources, then let us see that as well and improve.

And finally let's give us, what we deserve: prices. Price is transparency. The ultimate form of knowledge about the state of affairs in medical cost and our willingness and ability to drive them down through innovation. Let's find out what it really costs to get something done. Let's have medical companies compete. Let's have them fight for each and every patient. There cannot be any innovation if there is no price pressure.

We believe in the forces of a free market. We all carry our smart phones around with us as a daily reminder that it does work. Why should a simple procedure be as expensive as a smart phone? We know and feel that the system is broken. But we can change that.

And we believe that truth and transparency can change the system. Let's rebuild it from ground up.

And for that journey, we kindly ask you to be part of it. As a patient. And as a provider of health care.


Sincerely,
pricepain.com's team

This is why:

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Jeffrey Singer: The Man Who Was Treated for $17,000 Less

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American Way of Birth, Costliest in the World

The $2.7 Trillion Medical Bill

Revealing a Health Care Secret: The Price

How much should we expect healthcare to mimic other industries

In Need of a New Hip, but Priced Out of the U.S.

How a secretive panel uses data that distort doctors’ pay

Bitter Pill: Why Medical Bills Are Killing Us

ReasonTV: Oklahoma Doctors vs. Obamacare

Capitol Hill Briefing: Medical Markets increase access & quality

Heart Surgery in India for $1,583 Costs $106,385 in U.S.

$1,000 For a Dental Crown? Maybe You Should Shop Around

Bringing Comparison Shopping to the Doctor’s Office

Push for doctors to list prices falls short

My Rebuttal to the Rebuttal

Per capita health care expenses