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Why We Need Medical and Insurance Reforms
A $10,169 blood test is everything wrong with American health care
A lipid panel is one of the most basic blood tests in modern medicine. Doctors use it to measure cholesterol levels in their patients, probably millions of times each year.
This is not a procedure where some hospitals are really great at lipid panels and some are terrible. There's just not space for quality variation: you are running blood through a machine and pressing buttons. That's it.
And that all makes it a bit baffling why, in California, a lipid panel can cost anywhere between $10 and $10,000. In either case, it is the exact same test.
"We're not talking twofold or threefold variation. It's a different level of magnitude."
"What we were trying to see is, when we get down the simplest, most basic form of medicine, how much variation is there in price?" says Renee Hsia, an associate professor at University of California, San Francisco who published the price data in a recent study.
"It shows how big the variation really is. We're not talking twofold or threefold differences, it's a completely different level of magnitude."
More than 100 hospitals — with more than 100 different prices
For this research, published in August in the British Medical Journal, Hsia and her colleagues compiled reams of data about how much more than 100 hospitals charged for basic blood work. The prices these facilities charged consumers were all over the map.
The charge for a lipid panel ranged from $10 to $10,169. Hospital prices for a basic metabolic panel (which doctors use to measure the body's metabolism) were $35 at one facility — and $7,303 at another.
For every blood test that the researchers looked at, they found pretty giant variation:
This huge variation in the price of a really simple, incredibly basic blood test tells us a few things about the American health care system.
Blood tests aren't the only place with this variation
Hsia's previous research looked at the cost of an appendectomy in California and found similarly gigantic variation. For an appendectomy with no complications, she found that hospitals in the state would charge anywhere between $1,529 and $186,955.
One the issues with that study, she says, is that different hospitals might treat patients differently. "Some hospital might use more IV bags than others or one doctor could be ordering a lot of blood tests," she says.
appendectomies can cost anywhere from $1,529 to $186,955
The point of comparing an incredibly basic blood test, and its prices, was to distill down to a very basic test that offers no space for variation — but still has a huge range in how much hospitals will charge.
Not every patient pays the full charge rate: insurance companies, for example, typically negotiate a lower rate with the hospital. Medicare, which covers seniors, has a set fee schedule it uses. But these are the prices that an uninsured patient — who doesn't have a health plan bargaining on her behalf — could face.
"If I'm hospitalized, don't have insurance and my doctor orders three days worth of blood tests, this is what I'm getting billed for," Hsia says.
What this tells us about American health care
For one, there's not much price transparency: it's really hard to know whether one hospital is charging $10 or $10,169 because prices are rarely listed. For this particular study, Hsia literally had to hire a software engineer to collect the data and line up all the different hospitals against each other.
The $10,169 blood test tells us we're suckers: we've developed a health care system where its hospitals have pretty full authority to name their price with little protest from consumers.
Americans are getting suckered on health prices
For people with health insurance, really big price variation often isn't a concern. If their plan covers the bill, it doesn't matter to them, personally, whether they get the $10 test or the $10,000 one.
For those without coverage (or those whose coverage only covers a certain percent of the bill), price variation matters a lot. Getting a $10,000 blood test can put a patient into bankruptcy. But right now, our health care system doesn't have the mechanisms to limit those high charges — nor would the patient likely have the tools to know the cost of his or her blood test to begin with.
"There's no other industry where you see this kind of extreme variation," Hsia says. "And nobody has ever really challenged it. It shows an extreme inefficiency, and something we really need to change."
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Replies to This Discussion
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Permalink Reply by ProblemAgain on
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Obamacare will cost less than thought
Obamacare's price tag continues to fall.
The president's landmark health reform law will cost $506 billion for the coming five fiscal years, according to updated projections from the Congressional Budget Office, released Monday. That's 29% less than the agency's projection back in March 2010.
Among the reasons for the decline:
- The Supreme Court's 2012 ruling that allowed states to decide whether to expand Medicaid.
- The continued slow growth of health care spending.
- Enrollment in the Obamacare insurance exchanges have ramped up more slowly than anticipated.In its latest projection, CBO also revised its estimates for where people are getting insurance.
It now expects only 7 million people to lose job-based coverage by 2025, down from 9 million. That's because new data shows that fewer people had work-based plans than the CBO thought.
Conversely, Medicaid enrollment before the expansion was higher than originally thought. So CBO only expects 14 million more folks to enroll by 2025, rather than 16 million.
Fewer Americans lacked coverage than originally projected, CBO said.
Only 22 million will enroll in the Obamacare individual exchanges, while 25 million will remain uninsured by 2025, according to the new projections. That's 2 million less in each category. As a result, the feds will spend 20% less on subsidizing low- and moderate-income Americans on the exchanges. And it will collect 6.4% less in penalties from the uninsured.
Health care spending, however, won't stay muted for much longer, the agency said. Private health insurance spending per enrollee grew an average of 1.8% between 2006 and 2013. But it's expected to ramp up to 5.6%, on average, between 2016 and 2025.
Overall, Obamacare will cost the federal government $1.2 trillion between 2016 and 2025, 11% less than the CBO projected in January.
This revision in Obamacare costs contributed to the CBO lowering its projected federal deficit estimate by $431 billion.
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Permalink Reply by grammyk on
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And this is why so many people don't "get" that we need single-payer - they just see their co-pay amount and think they have good, inexpensive health care. They have absolutely NO idea how much their insurance is paying along with their small co-pay.
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you just have to love this......
Ted Cruz's ride on the Obamacare train wreck
Doyle McManus
Los Angeles Timesdoyle.mcmanus@latimes.com
@doylemcmanusRT @drshow: Friday morning: @SusanPage. @GeraldFSeib. @DoyleMcManus. And all of the news you need (with video, too!) http://t.co/8H6dJaZOmc
When Sen. Ted Cruz, the conservative firebrand from Texas, launched his presidential campaign last week at the Rev. Jerry Falwell's Liberty University, he earned grudgingly glowing reviews from otherwise skeptical pundits. The very next day he drove straight into a pothole on his already-narrow road to the Republican nomination: Obamacare.
Obamacare was supposed to be one of Cruz's selling points. When it comes to denouncing the evils of the president's health insurance plan, Cruz takes second place to no one. Obamacare is “unconstitutional,” he says. It's “a train wreck.” And, of course, it “puts a government bureaucrat between you and your doctor.”
So, last week, when Cruz said he intended to sign his family up for health insurance coverage through Obamacare, the media had a field day.
“We'll be getting new health insurance, and we'll presumably do it through my job in the Senate, and so we'll be on the federal exchange like millions of others on the federal exchange,” he told Dana Bash of CNN.
“I believe we should follow the law, even laws I disagree with,” he explained.
Liberals charged Cruz with hypocrisy. But that's not quite right. To quote ethics scholar Rush Limbaugh: “There's no hypocrisy in Cruz using Obamacare, just like there's no hypocrisy in people opposing Social Security using it.”
If you're more comfortable with a left-wing example, when a billionaire like Warren Buffett calls for higher taxes on the rich, that doesn't obligate him to send voluntary contributions to the U.S. Treasury.
Had Cruz acted on his initial statement, he might have been fine. The real trouble started when his aides said the senator had not, in fact, decided what to do about his health insurance. Thus began a week-long controversy.
“He had a superb announcement,” said a GOP strategist who's backing former Florida Gov. Jeb Bush. “But then his message got thrown off by this Obamacare distraction.”
Cruz's selling point to GOP voters is that he's a principled conservative who will never compromise and never back down. His hesitation muddied that otherwise crystal-clear image.
It was also ill-advised for Cruz to suggest that he had no choice other than to sign up for Obamacare through his job at the U.S. Senate — when, in fact, he does.
The reason Cruz suddenly needs health insurance is that, until now, his family was covered by a policy provided by his wife's employer, Goldman Sachs. Heidi Cruz has decided to go on unpaid leave during her husband's presidential campaign; the couple have two young daughters.
What are Cruz's alternatives to buying a policy through the government-run exchange? His wife could ask Goldman Sachs to continue their coverage under the firm's generous unpaid leave programs, but that might look like a sweetheart deal. She could apply for continued coverage under the federal COBRA law — but since she didn't lose her job, but is departing voluntarily, she might not qualify.
Or Cruz could buy a policy directly from an insurance company. Blue Cross of Texas, for example, offers policies for a family headed by a 44-year-old beginning at $623 a month, although that comes with a hefty $12,700 deductible.
Finally, Cruz could refuse to buy health insurance at all and pay a penalty to the Treasury on top of his taxes.
He hasn't done any of those things.
When I asked Cruz's spokeswoman, Catherine Frazier, about his deliberations, she responded with the eail version of hemming and hawing. “The senator is looking at the options,” she said.
In Cruz's view, she said, every health insurance plan on the market now counts as Obamacare, because the Affordable Care Act regulates them all.
“Every plan, no matter what provider, is required to comply with the Obamacare law,” she said. “Obamacare isn't a plan in and of itself; it dictates what plans have to provide. All plans operate under Obamacare.”
“Any American that wants a healthcare plan, including Sen. Cruz, has no choice but to utilize Obamacare — either the Obamacare exchange or much more expensive private coverage that must be Obamacare-compliant,” she said.
That all sounds awfully lawyerly — fittingly, perhaps, since Cruz prides himself on his chops as a constitutional lawyer. If that kind of statement came from anyone named Clinton, conservatives would call it slick.
This kerfuffle is likely to be forgotten by next year's Iowa caucuses — assuming, of course, that Cruz has settled on an insurance carrier by then.
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