What you can learn with a $190,000 heart operation

If you get your health insurance from your employer, the chances are pretty good that last week your co-pays — the amount you pay just for showing up — went up. So did your out-of-pocket maximum and your deductible. In short, it’s going to cost you a lot more to use your health care.

Source: The Commonwealth Fund

Before we start the usual blame game on the Affordable Care Act, it’s important to remember that co-pays, out-of-pocket limits, and deductibles have been going up for years as employers try to shift more of the cost of health care to the consumer under the theory that if consumers shop around, they’ll choose wisely and create a more competitive health care environment, forcing health care providers to lower the cost.

This is an academic discussion that takes place in ivory towers of politics and business and there’s a flaw with the idea: it’s absurd.

Stephen Brill made that abundantly clear with his Time story two years ago. “This is not a free market,” he said. “You don’t get health care because you want it. You enter the market unwillingly. You know nothing about the products being offered. You have no choice in the products being offered.”

Brill, who has now turned that essay into a book, got his own dose of reality when he had heart surgery while finishing the book, which will be featured this Sunday on “60 Minutes.”

“There I was: a reporter who had made hospital presidents and hospital executives and health care executives and insurance executives sweat because I asked them all kinds of questions about their salaries and about their profit margins,” Brill tells Fresh Air’s Terry Gross. “And now I was lying on a gurney in a hospital in real fear of my life.”

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“When we’re sick, we are not a savvy consumer of health care,” he told CBS this week. “The only thing we know is we’re scared and we want to get better.”

Now that the new Congress has started work in Washington, much of the attention is on Obamacare. Brill, who notes there’s nothing in Obamacare to bring down costs, has plenty of criticism for ACA, largely because it was put together only with the “permission” of lobbyists for the health care industry. The same people who will influence the bill’s destruction.

Who’s calling the shots here? The same people who’ve always called the shots, he says.

Even the people who run health insurance companies don’t understand the system. Brill says he took the explanation of benefits for his hospital stay to the CEO of UnitedHealthcare. He couldn’t figure it out.

So what hope is there for mere mortals?

What defines “affordable” in health care is a shell game, the New York Times suggests today.

Insurance premiums are slowing their meteoric rise, it notes. But that’s because co-pays, deductibles, and out-of-pocket limits are going up so fast.

To contain costs, many large corporate employers are offering high-deductible plans, also known as consumer-directed plans. At about one-third of large companies, it is the only option available, according to the National Business Group on Health. The plans require employees to pay for a greater share of their medical costs upfront, before the plan starts making payments. The goal is to make employees comparison-shop for medical services, something not always easy to do, particularly in emergency situations.

“It’s quite shocking when you see the range of costs for the same services in a market,” said Brian Marcotte, president and chief executive of the National Business Group on Health. “But employers are also trying to get employees to play a greater role in managing their care.”

In 2013, 81 percent of workers were enrolled in a health plan with a deductible, according to Commonwealth Fund, compared with 52 percent in 2003. The average per-person deductible has more than doubled over that period, rising 146 percent on average. In 2013, the average per-person deductible exceeded $1,000 in most states, and exceeded $1,500, on average, in seven states.

“It can only get better when people decide as taxpayers they’re not going to let lobbyists in Washington for the hospital industry, for the drug industry, for the medical device industry have their way,” Brill says, nothing his book is really how “the country doesn’t work,” using “the largest and most screwed up industry in the country” to illustrate it.

  • How do I decide as a taxpayer to not let these powerful industries have their way? I’ve already decided I’m not going to let them! (But I still have to pay taxes and the politicians I vote for don’t do anything about it.) How do we fix a broken system that gives all the power to the wealthy when politicians don’t get elected if they don’t take the lobbyist money? There doesn’t seem to be a solution.

    • I think the reality is you can’t.

    • jon

      Step 1: We all need to stop paying ANY attention to political ads.
      Step 2: We need to research the candidates that are on the ballet, we can do so on the web at the candidates website, at various lobbyists webs sites, and news outlets.
      Step 3: Vote for the Candidate on the ballot who best reflects what you feel will be best for the nation.
      Congratulations we’ve just removed money from politics.
      We still have some issues with lobbyists endorsements being chased, but if people are actually going to research the candidates across more than one source of information than that should be a limited impact.
      We’ve also destroyed the two party system, since masses of money are no longer required to run for public office (just getting on the ballot and setting up a simple web page describing your position) politicians no longer need to affiliate with a major party to run.

      Now that we’ve done that we can move on to step 4: Get people to run who will best represent our interests as a collective nation.

      Now it all goes as planned the elected officials should take over from here… doing things like removing the gerrymandering and establishing rules for district drawing that don’t allow for it to happen again, fixing the tax code, and regulating largely corrupt industries, or perhaps removing them entirely.

      Of course while it sounds like a simple 4 step program, none of those steps are simple.

      • BJ

        >We’ve also destroyed the two party system, since masses of money are no longer required to run for public office (just getting on the ballot and setting up a simple web page describing your position) politicians no longer need to affiliate with a major party to run.

        Except, ballot access from the parties is required in many states. Remember election process in each state is different.

        Besides statewide, and congressional, races a ‘lot’ of money isn’t needed to run. Volunteers and name recognition will do wonders. I’ve worked on or with maybe 200 campaigns in 15 years – 10-25 per year – at all levels except president.

        People don’t ‘research’ anything, getting them to research a candidate is a lot to ask, getting them to research 20-30 offices with 2 or more candidates on the ballot each fall is an insane task.

        Parties do serve a purpose.

        Perhaps getting people to actually research the party the ‘think’ they support, and the one they ‘think’ they oppose, and then getting them to realize there are more than just two parties would be an easier task. And I think that would be nearly impossible!!!!

  • Veronica

    It would help if there was anything like price lists. It would help if we moved away from a model that rewards doing more procedures and doing the ones that cost more. It would help if there wasn’t an arms race to build bigger, fancier, and more additions to hospitals. It would help if there were restrictions on their marketing campaigns. It would help if there was any transparency whatsoever. I think every clinic should have certain core measures posted by the front door, on every website. There are disclaimers and disclosures required for the investment industry (although not perfect, admittedly) but we value protecting money more than saving lives. It’s LUDICROUS.

    Take maternity care– it’s something that you have at least 6 months to shop around for quality care providers, yet there is virtually no way families can access the data to make an informed choice, make sure their providers have a good safety record, and make sure the location they are planning to give birth at has a good safety record.

  • Chris

    If only there were dozens of other countries out there that had come up with a better way we could adopt.

  • KTN

    Sure the ACA ain’t perfect, but it is working. At Gallop, they issued a poll today that outlines the number of uninsured has been dropping, and not just sort of dropping. 12.9%, compared to a year ago, when it was 17%.
    I think the end game gets lost in much of the discussion around health care, and that end game is having a healthy citizenry. Nobody benefits when people are sick, and nobody really benefits from using the emergency room for their health care. There will be bumps in the road, but, the direction taken is fundamentally better than continued sticking our heads in the sand and yelling that the ACA is Socialism.
    I had a procedure done a couple of weeks ago, and I shopped to find the best price – it worked. I paid less than if I had just gone in blind.

    • It is and it isn’t working. Brill noted the two questions involved in saying it is. One is (a) Is there more access? Yes (b) Is that access affordable? The insurance is affordable but there’s more to insurance than the premiums as he described.

      But the other side of the question is “is it bringing down health care costs?” No. Because there’s nothing in the bill to bring down health care costs and the reason for that is the lobbying power of the health care industry.

      The system remains insane. . In my case, for example, my copay just went from 40 to 50 (a 25% increase). the deductible went from $900 to $1250. My out of pocket went from $3000 to $4000.

      Prior to ACA, we could put money away pre-tax. But ACA limited that to $2500 now. So as the overall cost of the insurance went up, the ability to pay in pre tax dollars went down.

      And that’s just the insurance. What Brill is talking about, though, is the utilization of health care if NOT affordable.

      The big problem here is the health care discussion is imposed as an Obama vs. GOP discussion when the reality is that neither side is interested — for political reasons, of course — in doing what truly needs to be done. Both sides are feeding from the health industry lobbyist trough.

      • Barb

        My employee contribution went up $200 a month to $550. My deductible went up to $8,000 and out of pocket to $12,700. I make $23,000 annually and will pay out $27,000 this year for medical expenses. Where is the affordable in that?

        • Nick K

          Your story doesn’t add up. Under the ACA your employer is not providing you with a plan that is affordable. Therefore, you are eligible to use the online marketplace. Based on an income of $23,000, you probably qualify for a subsidy. Right now, you claim to pay 28% of your income in insurance premiums alone. On MNSure you will be able to find a plan for a lot less (probably 9%). Also, with $6600 in premiums and an out of pocket max of $12700, you won’t be paying $27000 this year for medical costs.

          • Kassie

            At an income of $23K, you qualify for MinnesotaCare with a premium of about $45/month, no deductible and co-pays capped at $3 if you are single. As Nick says, go to MNsure and apply.

          • Barb

            You are correct, I added wrong (I will blame it on the pain and meds); I will be out $19,300 medical costs, plus prescription costs as they don’t count towards deductibles. According to ACA guidelines, my company came in at just under the limits. I would not be eligible for subsidies (I checked). This is a family plan; hubby, myself an granddaughter. We live in Wisconsin, no group market, with very limited choices and the costs would be about the same (once again, I checked). It is still very wrong…

      • Jack

        I wouldn’t mind that deductible and out-of-pocket, it’s much lower than mine and I work for a much larger employer.

        We need to get health care truly disconnected from employment – a national plan that is affordable (single payer).

        One of my friends commented that the US could probably start on-shoring the off-shored positions once health care was no longer a benefit as it is such a huge expense.

        As the former HR department for a past employer, I can attest that health care is an incredibly expensive proposition for the company even if the employees are paying a large portion of the premium. Many companies have self-insured plans. All you need are a few large claims in the group to blow the reserve the company is required to keep. There is stop-loss insurance to help control the impact but that requires a substantial deductible before it kicks in.

        Think your plan can’t be affected because everyone is young and healthy? All you need is a significantly premature birth and the plan is blown.

        An eye-opener for most ex-employees is what the insurance premium really is for the plans they have been on. Explaining COBRA to those folks was never fun and that was in the mid-90’s when premiums were reasonable.

        The whole health care system needs an overhaul. So does the tax code.

    • Barb

      That doesn’t always work. And if you have something major, it can break the bank. Not every illness is negotiable, especially when you have something where there are few options for care. Even worse when the insurance company denies treatment for several months until they bump you to the next year so you have to pay for it all out of pocket… again…. i have now been approved for treatment that they will not have to pay for. Go figure.

  • Barb

    As of this year’s plan, my entire wage and then some will go to doctors. between my paycheck contributions, deductibles, out of pocket max and co-pays, I will go into debt this year. Sadly for me, Affordable is not the name of this game.

    • Kassie

      So why don’t you quit your job and go on Medicaid? It would seem to be more sensible.

  • Chris

    This fall our child had an unusual health issue which as far as they could tell it was as a result of a cold virus.

    Two emergency room visits, eight days in two different hospitals (thanks Mayo!) MRI’s, tests upon tests, the whole shebang.

    We have the high deductable plan through work with an HRA and I have never been so grateful for insurance. Original submitted expenses from doctors/hospital, etc. $100K reduced by insurance adjustments to $75K we’re out $10K for deductibles and coinsurance.
    A well child is priceless but holey moley an experience like this makes me look at health care costs in a completely different way.

    • And it’s ludicrous for anyone to logically expect that your priority in that situation was to shop around for the best deal.

      • Chris

        No kidding. The LAST thing on our mind was money.
        When my friend came to the hospital to visit she told me, I just want to let you know that you’re not actually thinking. You’re reacting appropriately to people and information but you’re aren’t thinking.
        It was the truth, fear had an incredible numbing effect on my brain. When the doctors recommended a treatment or procedure we said yes. Period.

  • Anna

    Years ago not every hospital or major medical center had the MRI machine, the PET scanner, the nuclear medicine department, etc. There were cooperative agreements between Hospital A and Hospital B for the judicious use of that technology and that kept costs down.

    Now Major Medical Center A has to keep up with all the technological advances at Major Medical Center B to maintain their “market share.”. MRI machines, PET scanners and CT scanners do not come cheap. If you invest in them, you have to get a “return” on your investment so doctors have to prescribe their use and patients aren’t satisfied until every test and procedure has been done to tell them the obvious—your low back pain will improve with time, with or without expensive surgery or expensive MRI scans.

    Your local medical center is an accessory-after-the-fact and you are paying for it with increased deductibles and co-pays.

    When my son was born in 1987, all of my delivery costs and office visits were covered nearly 100%. I think we paid a total of $300 after all was said and done and that was for the anesthesiologist for the C-section surgery. My share of the bill today would be at least 10 times that much and more.

    Managed care my eye. We are back to traditional indemnity insurance. You just think it’s managed care.