Doctors Need to Force Change in Health Care Costs

America has a major problem with irrationally varied, unpublished and often inequitable hospital pricing, and one doctor is calling upon his colleagues to wake up and demand change.

Everyone embroiled in the health care debate, or who has had a stint in a hospital, is familiar with the utterly irrational nature and the opacity of hospital charges. Much work done at the Dartmouth Medical School has been widely trumpeted in the press on this issue. These rigorous studies have painfully illustrated the wide, and unjustified, variation in charges for identical services from region to region, city to city and even across the same city.

Now a new University of California, San Francisco study published in a recent issue of The British Medical Journal replows the same smelly ground, leading me to take a stand, if not an overdue rant. Because doctors have individually and collectively avoided getting involved in the issue with such rationalizations as “not my problem,” “that’s between the insurance company and the patient to resolve,” “it’s too complicated,” and the usual medical garbage can disclaimer “I don’t have the time for it.”

But doctors are patients and employers, as well, and we end up paying unnecessarily high insurance premiums partially because of the opacity of hospital pricing and its consequent resistance to market forces to bring the costs down — and the chance of leaving some money in our pockets.

The BMJ/UCSF article, to pick one example from it, cites 77,000 uncomplicated vaginal deliveries in California hospitals and 33,000 uncomplicated caesarian sections. Bills ran from $3,296 to $7,227 (over 100% variance) for the former and from $8,312 to a whopping $71,000 (more than 800%) for the latter.

Come on people; this is ridiculous and it has to stop.

Silly-high costs and irrational variations like these are financially ruining us individually, collectively and making our health care situation appear even more ridiculous — if that is possible.

Two examples

To fan the flames, I will tell you of two situations I am personally familiar with.

First, some friends from Italy came for a visit. The lady had a fall and broke her hip. She had surgery, did well and was discharged from the local hospital. But, her husband was forced to pay cash, each day, to the hospital and at the insupportably high rack rate because he did not have American insurance. The rack rate typically is multiple times higher than the rates that insurance companies have negotiated with the hospital.

Second, the husband of one of my nurses recently got into a motorcycle accident and had to be airlifted to a local hospital. He had some broken ribs, but he is fine now and sworn off riding. He also has a $40,000 bill from the helicopter company and a $120,000 bill from the hospital for four days there.

After calming my hysterical nurse down, I pointed out that her insurance would in the end probably pay the helicopter people $10,000 and the hospital $25,000 and then they would go away with minimal out of pocket cost to her. And so it came to pass.

The bottom line

America has a major problem with irrationally varied, unpublished and often inequitable hospital pricing, and we doctors need to wake up and rise up at every level and demand change. We have many active organizational voices, we are on hospital boards and, most importantly, we control every admission.

Let’s ask, nay demand, of each hospital CEO that standard prices for standard problems (such as the above mentioned deliveries) are posted on websites and on lobby walls. True, with an asterisk that things happens and the hospital charges for those contingencies are also listed.

Once every hospital has a public list of basic charges, the market can begin to work its magic. Let people and companies shop and compare. But doctors, it’s up to you and me to gather our colleagues, in person, in a letter, whatever, and push the CEO to act.

The health care mess may not be an easy fix, but posting hospital charges is a simple start. Oh, and let’s not neglect requiring every doctor on staff to have his/her fees posted as well.

We’re part of the problem, too. You know, what’s good for the goose…