A few years ago, a good friend of mine who holds bachelor's and law degrees from Ivy League schools lost his job and became one of the estimated 50 million medically uninsured persons in the U.S. Over the course of several days, he developed increasingly severe abdominal pain, fever, and vomiting. Though reluctant to seek medical attention, he finally was persuaded to visit his local hospital's emergency department, where he was diagnosed with acute appendicitis. Despite his critical condition and the need for immediate surgery, he refused treatment until the hospital's billing department gave him an estimate of how much an emergency appendectomy would cost. Then, as he was being prepared for the operating room, he somehow managed to bargain with the surgeon to reduce his customary fees.
Sharing this harrowing story weeks later, my friend, until then a strong believer in the power of the market to control rising health care costs, was justifiably proud that his negotiating skills had prevented the hospital bill from completely depleting his savings. On the other hand, he recognized the insanity inherent in trying to practice "consumer driven health care" during a medical emergency, especially given the lack of information about the pricing of health care services. I've written before about how difficult it was for my wife and I to estimate how much it would cost to have a baby (our son, incidentally, is now three months old and doing well). It turns out that variations in pricing for the diagnosis and treatment of acute appendicitis are even larger and less explicable.
A study published recently in the Archives of Internal Medicine reported that the hospital charges for patients hospitalized in California for acute uncomplicated appendicitis ranged from $1529 to $182,955, with a median charge of $33,611. Patient age, insurance type, and geographical location explained only about 2/3rds of the observed variations. My friend's experience in a different state confirmed what the authors of this study observed:
A patient with severe abdominal pain is in a poor position to determine whether his or her physician is ordering the appropriate blood work, imaging, or surgical procedure. Price shopping is improbable, if not impossible, because the services are complex, urgently needed, and no definitive diagnosis has yet been made. In our study, even if patients did have the luxury of time and clinical knowledge to "shop around," we found that California hospitals charge patients inconsistently for what should be similar services as defined by our relatively strict definition of uncomplicated appendicitis.
Given better transparency about pricing, perhaps there is a role for comparison shopping for predictable health care expenses, such as elective surgery or labor and delivery. But huge variations in pricing for emergency care illustrate how badly the consumer health care model fails. There are many flaws in the Affordable Care Act that Congress passed in 2010, but extending insurance to millions of currently uninsured Americans is not one of them. As this example shows, it is our country's broken health system, not the health law, that requires urgent repeal and replacement.
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