Friday, October 16, 2009

Why the free market doesn't work in health care

I was chopping onions about a month ago, and managed to slice off a bit of the tip of little finger. About half a centimeter, which wasn't a lot but was enough to really bleed. I was alone and operating with only one hand, but I managed to stop the blood flow and put on a bandage.

The next day I attempted to change the bandage, but this time just couldn't get the blood to stop. (I was at work and didn't have the resource.) It was a mistake to try to change it, but, there you go.

Anyway, rather than bleed all over my desk or the sink in the bathroom, I wrapped it as best I could and headed off to a doc in the box. They, having more than one hand to use, got it stopped pretty easily. They stuck a small piece of "gel foam" on it, bandaged it, and done. 15 minutes. The gel foam was sort of like putting a bit of Styrofoam on my finger, then taping it in place. Simple. Worked great.

The bill came later; $245, of which my insurer paid $0, but was decent enough to apply it to my deductible.

So I scour the CPT manual (which describes the procedure and relates it to a charges) for something less expensive. The code they billed, 12001, included stapling, suturing, etc, much more involved than sticking on a piece of foam and bandaging it.

No luck; that's the simplest procedure going. They won't change it, they won't accept less, I'm stuck.

Was I in a position to bargain as they stopped the blood flow? Not really. Did I have any idea they'd charge me $1,000 an hour to emplace a bandage? Of course not. Will they negotiate something reasonable now? Of course not. Would any of you have stopped them before you got in the door and said, how much will this cost? Had I asked the nurse, would she even have known? Doubtful.

The insurance company won't help me. That's not what they do, negotiate for patients.

I had no knowledge and no bargaining power. That's not the free market at work. It's health care, and it's why insisting in free market solutions for health care is just stupid.


fortboise said...

That categorization and coding of medical procedures strikes me as something between counterproductive and pernicious. It's all about facilitating the business and not at all about health care.

The example you've cited is just wrong; the category is too general, the "standardized" charge is too high for the nature of the procedure and for the amount of time it took. (If it were half a dozen stitches, say, that charge would make sense.)

The insurance company has arranged to have the provider charge too much even as they've arranged to not pay the bill.

What might be a small help is to learn (somehow!) if other Dox-in-Box are playing the same convenient charge-and-dodge responsibility, or if perhaps we can choose better ones.

My choices have almost always been made by location; there's one just around the corner (on Cole, just S of Sockeye Grill). I've been happy with the transactions and care over a couple decades; a couple like this one you describe, and I'd definitely look elsewhere--and make sure they (and my readers) knew why.

It's not much market power, but we have to use what we can.

alan said...

I think that all the providers do the same thing. They have to code the work so the insurance company, and in some cases Medicare, know what was done so they know they're paying the right amount.

The system is deeply embedded. Pernicious is a good work for it. It's no way to ensure the productivity of the citzenry.

Anonymous said...

My experience, even if you ask "how much"...the nurse won't go there and the doctor will say he doesn't know, check with his business office...and they're not available and don't get back to you.
You'll know after you're billed.

Brian said...

I'm not sure I follow your logic.

By your own description of the problem, you would like to have known, up front, what the costs would be, and to be in a position to negotiate. These are things you know and do in a free market. Yet, you conclude that this example shows us how stupid it is to look for free market solutions to health care.

It sounds like not having a free market is the biggest part of your problem.

When the government takes over health care, you won't know how much you're paying either. How much do you pay for police and fire protection each year? How much do you pay for the roads? You don't know. These goods are just "free". And you pay your taxes and assume you're not getting the government.

That's more naive than believing in a literal invisible hand.

Bob T said...

Your predicament might show why there needs to be some health care reform. Tort reform comes to my mind first as a place to fix this particular example. That would go a long way towards allowing simple "clinics" for emergencies like these that are not really life threatening.
But under a govt. system you'd have been lucky to be seen at all.

jscott said...

Once you understand exactly what the free market is, if you then oppose it, you are opposing the natural rights of others. In the example you gave, you gave up too easily. You could have refused to pay and taken them to court. There are two kinds of conflicts...criminal and civil. What they did might have been either type...I don't know, I'm not a lawyer. But I do know that America does not have a free market economy...we have a "mixed economy". And I also know that many people try to blame the "free market" for things that are actually not a result of markets. Rather they are the result of other things like crime, misunderstandings, etc.