American Morning

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March 1st, 2010
09:00 AM ET

Health care – Prescription for waste: $1000 toothbrush

Editor's Note: All this week, in the American Morning original series "Health care – Prescription for waste," we're examining more waste in the health care system – and this time it could involve your money. Today, a medical billing advocate shows our Elizabeth Cohen some of the wasteful charges she's seen in bills. And tomorrow on American Morning, we go shopping for health care to show you how you can save hundreds when it comes to your own medical bills.

(CNN) – Imagine someone spending a thousand bucks for a toothbrush. It might be amusing – if it wasn't your money. Consider this: for every dollar we spend on health care, fifty cents is wasted.

Our senior medical correspondent Elizabeth Cohen shows us just how expensive some medical accessories can be and whether you’re getting slammed with bogus bills.

soundoff (116 Responses)
  1. Doug Lobdell

    What a ridiculous video! Anybody who understands our health care system knows why a hospital charges SOME patients $140 for a tylenol tablet. Any of you who think that any hospital in the world actually makes $139.75 on every tylenol they dispense is as clueless as they come. This shows that CNN is nothing but a spin machine trying to influence public opinion. Ask the hospital or health insurance company why that happens! How about "the rest of the story?" (Paul Harvey, we need you back!) Sheesh – talk about irresponsible journalism.... CNN, you set the standard!

    March 22, 2010 at 10:31 pm |
  2. Michael G.

    The question was raised, "Why Should I Care"? Well Here's why...

    Our medically complicated baby needs a very expensive formula to keep her alive and nourished. The cash price directly from the manufacturer is $170 per case which is a five day supply. Believe it or not, the insurance company approved 100% payment up to $2,000 annually. So in order to figure out when I would exhaust my $2,000, I had to determine how much the In-Network Formula provider is charging my insurance company. So I called them and they said they are charging my insurance company $375 per case which is the contracted rate, which means I would only receive 5.3 cases (21 days of supply) paid by my insurance company and then my benefits would be exhausted. The formula provider's response was, don't worry, Medicaid will pay when you have exhausted your insurance benefits. I then asked, so what is the contracted rate for Medicaid? They said $135.... Hmmm, you don't have to be a CPA to figure this one out. As detailed in previous posts, these are core examples of how broken our system is. Mr. President, if our healthcare system was a Fortune 500 company and you were the CEO, I would expect during year one for you to bring in the brightest MBA's, consultants etc. as well as accept the input from the people on where they think the system is broken. Then once you realize what is really broken, you can then address each issue one by one and try to come up with a fix.
    Do you really think it only takes one year to fix a system that has been broken for so long? My insurance company was billed by a hospital $14,000 for an overnight stay and then paid the hospital $4,000. If I was uninsured John Smith, I would be on the hook for the full $14,000. Elizabeth, if you read this, please investigate “Compact with Uninsured”. This was started in 2003 by Tenet Healthcare Corp, (one of the nation’s largest hospital organizations) after settling a lawsuit. Basically, this offers uninsured patients discounted pricing at rates in line with managed care rates. Other hospitals throughout our country were presented with this option. Many welcomed the idea, but this eventually lost traction over the years.

    March 9, 2010 at 7:05 pm |
  3. David in SC

    Many of the comments are about the costs to cover the uninsured.

    I seem to remember a series of ads that ran last year about healthcare and all the hidden taxes in the Obama Healthcare Plan.

    Are the hospital charges to cover uninsured patients a hidden tax?

    It sures seems to be to me.

    March 5, 2010 at 8:51 am |
  4. David in SC

    There is a really broken system with healthcare cost. Why should insurance companies control heatlhcare costs? If they push the care providers to hold down costs, then, the insurance rates they charge go down. So, the healthcare providers charge more and the insurance companies charge more and we get less healthcare for more money.

    What is the fix?

    People suggest getting a copy of your hospital bill. Have you tried to get a copy of your hospital bill? I did a couple of years ago. Fortunately, I had proof the billing department had received my letter requesting the bill with the proviso that I would not pay the bill until I had a copy of the bill. Because after they ignored my request and started threatening my credit rating, I sent a letter to the president of the hospital system. Wow. All of a sudden, I received a copy of the bill. Shouldn't a copy of the bill be a standard part of the business transaction of buying healthcare?

    Another issue with healthcare billing, is the doctor's offices no longer handle their own billing and collecting. Here, the doctor's offices are part of a system where the billing and collection is handled by a third party. The doctor provides the service and then they remove themselves from the billing and collections process.

    The Republicans say the solution is to be a better health care consumer and use high deductible plans and shop for your healthcare services. OK – great concept. 1 – have you tried to get costs for health care services? They (insurance companies and doctor's officers) really aren't that cooperative about providing costs. The insurance companies won't provide your with the codes and reimbursement rates. 2 – its hard to get a receipt for services from providers when you use high deductible plans. The only receipt I get is the EOB from the insurance company.

    There is another problem with the high deductible plan. Basically the way my plan works is you get your medical care and the provider sends their bill to the insurance company, then, you get the adjusted bill via the EOB. The adjustment is the contract cost between the provider and the insurance company. Now, if Provider A has a lower billed rate than Provider B but does not have a contract with my insurance company, will I pay more? Probably.

    There is another problem with the high deductible plans, about 4 years ago when I first signed up for the high deductible plan, you went to the provider, had the services, and waited for the adjusted bill. After receiving the adjusted bill you paid it. Now, my insurance company has told me that if a provider demands payment at time of service, I have to pay whatever the provider requests. Then, the bill is processed and the contract price is then provided. Oh, then, I must work to get my refund from the provider.

    I have an interesting experience with this system. First, based on experience, I take the total bill from a provider and the adjusted cost is usually about 1/2 the total billed amount. Second, I have a bill where the bill cost of a test is $289. The adjusted price is $29. Now, how am I suppose to be a better healthcare purchaser when there is a 10x or 1000% markup?

    Regardless of what the noise in the system is, the only way I can see this system being fixed is massive government intervention ON MY behalf to bring costs down.

    March 5, 2010 at 8:34 am |
  5. MF

    Yes, we complain about the prices we pay at the hospital. But remember that your insurance does not actually pay that amount. Usually private ins pay 70 cents per dollar billed, Medicare 60 cents per dollar billed, Medicaid less than 50 cents per dollar billed and people without insurance 0 per dollar billed. Then there's the malpractice insurance for lawsuits. Where else can you find this scenario. Pt comes to hospital, could not pay bills and still can legally sue the hospital? Can we go to a car dealership and buy a car without paying first? Can you go to the grocery store and buy groceries and go home without paying? Since the Obama administration has bailed out almost every industry in this country, why is he not bailing out the health industry? What about it Mr Obama?? Everytime the hospitals lose money, staffing gets cut first. Healthcare workers gets penalized first. And yet everybody wants to be "served", "well taken care off", they "expect the best service, like being in a resort or hotels". And don't pay????
    Healthcare is a PRIVILEGE AND IT IS NOT A RIGHT. If it is , where can I find it in the constitution?? I must have missed it. I say, healthcare providers should work for minimum wage and tips, that way YOU can APPRECIATE WHAT WE DO and SHOW US YOUR APPRECIATION at the same time. Oh yeah, did I say "show us the money first?" " maybe check your credit?? see if you can actually pay.
    To ALL the healthcare providers out there, I say GOOD JOB. Dont listen to these bunch of loosers, who just complains and complains.

    March 5, 2010 at 8:31 am |
  6. maggie

    Tina the RN–if doctors go on strike, the only people who get hurt will be the patients. You think the HMO's, insurance companies or CEO's will give a crap? All they have to do is wait them out, meanwhile the news media does a story on the people left to suffer without care. How long do you think a strike would last? One day? Two? And nothing would change.

    March 3, 2010 at 4:33 pm |
  7. maggie

    Katherine – a $300,000 mortgage? On $65,000 net per year? I see a disconnect there.

    March 3, 2010 at 4:19 pm |
  8. maggie

    To Dr A: My current physician doesn't speak English very well and when I see him, I spend maybe 15 minutes with him (half of that asking him to repeat what he just said because I didn't understand him). But if I make a formal complaint to the HMO, the doctor has the option of deciding that the doctor/patient relationship has been fractured and he can "release me" as a patient. Seems like there is more power on his side of the equation than on mine.

    March 3, 2010 at 4:13 pm |
  9. Ali

    Afterall it is not only the insurances companies, but the hospitals practices that needs to be intervened. The outrageous billing pratices that is shared in this vidoe is very common and frequent and I am surprise that media is mostly silent and I am hoping health care reform is addressing these concerns. It is apparent that is the reason many people go broke when admitted not insured which should not be the case if hospital charges are regulated and which in result will make public option more feasible without incurring further national debts.

    March 3, 2010 at 3:41 pm |
  10. Ali

    Afterall it is not only the insurances companies, but the hospitals practices that needs to be intervened. The outrageous billing pratices that is shared in this vidoe is very common and frequent and I am surprise that media is mostly silent and I am hoping health care reform is addressing these concerns. It is apparent that is the reason many people go broke when admitted not insured which should not be the case if hospital charge regulated prices and which in result will make public option more feasible without incurring further national debts.

    March 3, 2010 at 3:40 pm |
  11. JACK

    For those of you who think that insurance companies pay these prices they are totally wrong. The insurance companies only pay a fraction of these outrageous prices. However if you do not have insurance, they charge you the full amount. That is why when I didn't have insurance I just didn't pay the bill. To me the charges are flat out fraud if they expect people to pay them. They can kiss my you know what! I have had no problems getting multiple mortgages since then. Most mortgage companies ignore medical bills because they know they are unfair. It is totally ridiculous. People should not have to pay any more then what an insurance company would have to pay.

    March 3, 2010 at 2:05 pm |
  12. Tom from Vermillion, Ohio

    Elizabeth, excellent! As you well know, you have only touched the tip of the iceberg. Now attack the pharmaceutical companies, medical equipment mfrs, health care institution, health care insurance, medical doctors, medical malpractice attorneys and malpractice insurances. (Did I miss any?) I'm not saying everyone is overpaid, however, most are and the exceptions are few. The ones that are reasonable, broadcast them! Bring as much shame as you possibly can to all those who apparently can who make over a certain dollar amount annually. No one is worth millions and in certain cases tens of millions of dollars annually. If those premium wages are cut dramatically, then the premiums people pay will drop accordingly. Good Luck and take a bodyguard.

    March 3, 2010 at 1:36 pm |
  13. Jorge

    Yes Krista I wholeheartedly agree with you. The bottom line is our country could have many more Doctors and much better Health Care if becoming a Doctor weren't such a luxury. Cuba has one of the Highest ratios of Doctors in the Americas and its a poor communist nation. The only reason USA cant get to that is because we would rather see our children become gangstas and go to prison or off to war than to help them compete against the millionaires who are the only ones worthy enough in our Capitaism to enjoy the fruitful life of an MD. I don't point the finger at Doctors in this whole mess we have many great (if not some of the best)here. But for the size and wealth of our nation we should have millions more. And add to that insurance companies who have abandoned the free market rule of risk, for a guaranteed payback well that's a prognosis for 'get more money from wherever you can'. Please send me a Thousand Dollars that's what my comments cost.:-D

    March 3, 2010 at 1:21 pm |
  14. aggie

    I was in the hospital a few years ago. When I got the bill, I noticed that for 3 days of prescription pills (that I paid $80 a month for), I had been charged $11,000.00. Good thing I had insurance, but still......that's outrageous.

    March 3, 2010 at 12:35 pm |
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