The Business Of Health (in Debates)

I was reading this article today.

Why an MRI costs $1,080 in America and $280 in France

And I thought, hey, we have someone here who can speak pretty directly to this. In the article, one paragraph caught my eye, and it made me wonder what you guys think:

"The result is that, unlike in other countries, sellers of health-care services in America have considerable power to set prices, and so they set them quite high. Two of the five most profitable industries in the United States ﾗ the pharmaceuticals industry and the medical device industry ﾗ sell health care. With margins of almost 20 percent, they beat out even the financial sector for sheer profitability."

Of course health care providers should make money, but should they be getting rich off of others suffering? I mean.. something just doesn't sit right with me when I read things like that.

Socialist...

That article is a load of crap.

This I can chat about with 100% certainty as this is my specialist in medicine.

An MRI in America averages to be about $300. That is what the company I work with charges cash payers and what it typically gets from Medicare.

Physicians are NOT free to charge whatever they want. We are all bound by Medicare reimbursement rates. All insurance companies base their reimbursement on Medicare rates. Physicians can charge whatever they want, however, what they get paid is predetermined by the insurance companies. Some large physician groups can negotiate with the insurance companies to get higher than Medicare rates. But small groups and solo practitioners can get even less than Medicare rates.

For instance, in Florida, when I first joined that group they were getting 110% of Medicare. After we sold out to a larger company our rates were 150% of Medicare. This did not effect the Medicare reimbursements at all.

Medicaid gives on average 60% of Medicare, which is why many doctors do not see Medicaid patients. Or just limit the amount they see in a day if they have to.

I know why Pharmaceutical companies charge so much. It is to subsidize their R&D. Likely the same with device companies.

The reason we use more dollars per patient in the US is our persistence to have everything done to everyone. I have seen people in the end stages of cancer with their family telling the hospital to do everything it can. Racking up hundreds of thousands of dollars in costs. And hospitals do it so as not to get sued.

In other countries, there is a more stoic acceptance of death and its process. Maybe in the US we are wussies, maybe we as a country do not have the history of other developed countries. But I see so much medical care, time and effort go to waste in the last weeks of life, on people who obvious need to pass on.

The article is very flawed in numerous aspects. The apparently took the price a Saudi prince pays for his MRI at Mayo vs the average price that is set in France. Anyone who pays 1080 for an MRI in the US should buy the Brooklyn Bridge I am selling.

Lies, making people outraged since forever.

What they are MRI-ing impacts cost right?

The article said the info was taken from insurance companies. I can see maybe sampling errors/bias, but I don't know why the researchers would lie. The insurance companies might have I suppose... hell who trusts insurance companies, right?

Good luck on the defensive medicine and 'exhaust all means at end of life' fronts Ranger. Sadly I think you have a tough slog there, though you're on the right side for what it's worth.

Troll!

I'll leave the stuff before "I know why" alone for purposes known as "cool beans".

http://www.pharmalot.com/2011/07/quote-of-the-day-pfizer-rd-not-in-a-good-position/
Horrible reason.
Completely untrue.
We have VA scandals to trump their efforts in malice. You mean to say France has the pair we don't? France!?
Wait, what? I see what you are saying that dollars don't need to be wasted on a sure death. Then I connected the lines for what you might be saying as a whole. Are you saying that other first world countries not only let the yet-dead be dead(which you better link), but that we should do the same to defuse a big chunk of costs? Split into three separate questions then answer or not as seen fit.


No matter your answer(s) think you are slowly absolving universal healthcare with each rant. =/

I'm doing a bit of googling right now, which gives me a private price for an MRI in the UK at about $300. The prices across the US that I'm finding are well in excess of that figure, despite what Ranger says.

As a for instance:

http://newchoicehealth.com/Directory/CityProcedureType/Washington%20DC/Washington/15/MRI

JW,

There is a big difference between what hospitals charge and what insurance companies pay.

The typical payment is 3-400. On bills there will be something like insurance write off or other verbiage to show the "discount" insurance companies get.

If the cost for an MRI was 2k, I would have been able to retire years ago as my reading fee is 20% of the MRI cost. Hospitals would be making millions of dollars with MRI's that price.

I make about 50 per MRI I read.

So if I go to you as a scan provider for a scan, say for a spinal injury. How much will it cost me, say if I'm paying cash, insurance not involved. Because if I go to a private provider here I can pay ﾣ300, with no hidden costs. Is that the same or will there then need to be an insurance payout on top too?

I have the exact fee schedule at work. But as I remember it is about 350-500 depending on the scan and if contrast is to be used. The most expensive one is a breast MRI and a few of the MR angiograms. We do not do MR spectroscopy but that I believe is the most expensive of all MRIs currently done outside of research.

That is an all inclusive fee that includes my fee to interpret the scan.

The question still remains, Ranger, why do they charge so much to people who have no insurance? If they don't know to ask for a discount, and Americans don't, then they believe they cannot afford an MRI.

It's really a terrible game. I've had health care overseas, and it's so cheap that I saw no need to have insurance at all.

Japan's pretty great for healthcare. $30 a month for 70% covered on most things.

Yeah, but the cost of the plane ticket really offsets that...

While I won't speak on MRIs as I know the machines are very expensive - ie - how many MRI's at what price to pay for itself - I do think general healthcare is pretty over priced

MRI Machines are very costly, not to mention the Bio-Med tech who have to have expensive training to fix and maintain them.

A new 1.5T MRI with the appropriate coils costs about 1.5M USD.

The technologist that runs the scanner costs 30/hour.

You can get in 1 patient every 30 minutes if you have a well oiled operation.

assuming 350$ cost:

350-(50+15)- (35 more in intangibles like electricity) = ~ 250 profit per use.

250 * 16 (8 hours, 1 every half hour) = 4000 profit per day

~ 375 days to break even.

so how long do the MRI machines generally last?

A while, but I think up-keep is more expensive than you suggest. They are precision machines.

I'm sure the expenses operate an MRI are more. Things like insurance (of various types, workers compensation, liability, damage to the unit, etc.), accounting, health insurance and taxes for the technologist, medical records personnel....

I don't believe the costs are minor. I've just experienced medical care for much less overseas. For instance, I could see the UK educated doctor (about 15 minutes with him or her), and buy pain medication or antibiotics in one visit to the clinic for a total of about $20 USD two years ago.

I can't even buy the same medication here in the USA for that $20, even with my BCBS discount.

Liability insurance can be crushing.

For instance, when I was in Florida I paid 56k a year for 250k coverage.

Is that what they also call 'bad outcome insurance'?

The irony that people who complain most about healthcare costs probably include the people who are willing to sue at the drop of a hat. It ain't like insurance companies are in the not-for-profit grouping.

Loch,

You are entirely correct.

I have been sued twice. Both times I had nothing to do with the case, which was just an unfortunate complication and certainly not malpractice.

Both times, luckily, they dropped me from the case.

But people, at least in S. Florida, sue at the drop of a hat for bad outcomes. And the trial lawyers are quite powerful stopping common sense reform.

I will say, on the other hand, the medical profession as a whole does a very poor job of policing their own to weed out the dangerous doctors.

Only 250k coverage cost 56k? Wow! Most med mal cases result in either a zero verdict or a multi-million dollar verdict. Most med mal attorneys won't touch a case they don't think is worth at least 150k because it costs them about 50k and 3-4 years to prosecute one through trial.

However, when they do take a case, they sue everybody even remotely related to the case for fear of missing the guilty party and losing the case due to the statute of limitations.

The system is broken. Doctors who injure people through malpractice should lose their licenses regardless if they are sued and attorneys who sue should pay defendants' legal fees if those defendants win.

That unfortunately is a very common misconception. Quite a lot of cases are "settled" before even getting to trial. In these cases a 50k payment is not unusual. Insurance companies have the ability to settle any case regardless of whether the physician agress. They typically look at the cost to go to trial and pay off the nusence money. Given the time a lawyer puts into such a case, they make a huge return on their investment.


Yes and no. Some physicans carry less insurance than others. They go after everyone as to get as many people with insurance sued in the hopes of settleling with everyone and getting a nice overall payout. Even if you did nothing wrong if your name is anywhere on the chart, the odds of you getting sued are high.


Yeppers it is very broken. However the trial lawyers are a very powerful organization and give tons of money to one party. They have obstructed meaningful reforms.

The idea of loser pays lawyer fee is one great way to stop frivilous lawsuits. It is what they do in Europe and one reason medical costs there are less. The malpractice costs are built into the system raising costs for everyone.

Some states do have good malpractice reforms. I used to pay 56k for 250k coverage. In Arizona I pay 16k for 1M coverage. Go figure.

Ranger, are different states or areas are allowed to charge a lot more, even with the insurance companies approval? I'm just asking because my wife had an MRI recently and looking at the bills from the insurance company, I think the insurance company allowed quite a lot.

Medicare rates do vary upon location.

So do reimbursement rates from insurance companies.

Not sure what you mean by allow more.

Ranger, I know most cases settle, but the attorney cannot count on that happening and therefore must budget for trial when he takes the case.

The unfortunate side-effect of this is that smaller cases where the doctor does no permanent damage are left unpunished. For instance, if the doctor simply gave somebody the wrong medicine which resulted in nothing more than a trip to the ER to rectify the imbalance, then the doctor will get off scott free.

I've long though there are too many frivolous lawsuits, especially against doctors.

People make mistakes, to err is human, its not possible to be perfect. To think that a doctor should lose his license or a person should get millions for a simple mistake (such as a wrong prescription) that other people make every day is ludicrous in my opinion.

I think in many cases that doctor should do little more than correct the harm caused free of charge. It should only be intentionally malicious doctors or doctors which numerous mistakes who should be severely punished.

I agree Pit. Also Ranger, I will look at the bill when I get home to see how much it was.

Not all harm can be corrected. Furthermore, the patients time and hassle is not free.

The things which can't be corrected can be cared for. The doctor would already have to provide free care to correct the mistake and live with the fact of their mistake. How much do you want them to be punished for an honest(probably) mistake?

They should pay as much as it costs the person injured. I.e. if they cost a roofer his back, they should pay for his lost wages - for life, plus something for the mental anguish and pain the man goes through.

If they cost an artist a hand...well that's a lot of money.

People must pay for their mistakes, honest or not. If you don't think so, try to get the judge to let you off a speeding ticket because you weren't paying attention.

B/c I always say, what's better than one ruined life? Two (Or maybe even four or five if the other person happens to have a wife/husband and some children)!

The point is to remove doctors who make big mistakes. They can go roof. Of course, the people they injure must be compensated. It's pretty simple.

We must pay for our mistakes.

Inattention is not an honest mistake and should be punished more than honest mistakes. You are instantly assuming negligence on the part of the doctor, which is what often seems to happen. Much of medicine is not so black and white, not heres the symptoms and heres the diagnosis.

If you want to turn it around and make it fair the other way: if the doctor saves an artists hand, shouldn't he receive a royalty on everything the artist creates afterward? What if the payment/punishment of the doctor for loss drives him out of medicine. What about all the lives etc he could have saved or improved? Possibilities and probabilities should not be the basis for such large and life altering decisions, the world and life are too complex to do so.

You are missing the point. It's not to let the big mistakes go by, but the many frivolous ones for which people are way overcompensated.

That's what juries are for. Cases don't settle unless the attorneys believe a jury will likely pay. The nuisance settlements are typically small (less than $40k).

Pit Spawn, as for negligence, that is malpractice. Legally, doctors cannot be punished for anything except negligence or worse.

Anyone else see that Hot Coffee docu on HBO? Wasn't bad. ;)