An Appendectomy – How much is it REALLY?

Six weeks ago I had an emergency appendectomy.  And, the bills are coming in.  I have a catastrophic medical plan with a large deductible.  And, even with this medical adventure, the amount saved in premiums over the past few years far exceeds what I had to pay out in a deductible.

I spent four days / three nights at the hospital.  And, the bill JUST for my hospital stay was $76,713.03.  That’s not a typo or a misplaced comma or decimal point.  Almost seventy-seven grand!  That did not include the fees from the team of doctors that treated me.  So, what did that $76,713.03 include?  How does it break down?

Inpatient Services:

  • IV solutions (5):  673.40
  • Sterile supplies (29):  25,258.99
  • Lab / Hematology (3):  1,522.00
  • Lab / Urology (1):  288.00
  • CT Scan (1):  12,386.00
  • Anesthesia (2):  4,387.00
  • Drugs requiring DET Code (10):  1,508.85
  • Pharmacy (19):  1,421.94
  • SAD Drugs / other (17):  1,990.85
  • Lab / Chemistry (3):  2,134.00
  • Lab / BACT-MICRO (1):  142.00
  • Path / Lab (1):  1,125.00
  • OR Services (2):  15,462.00
  • Emerg Room (2):  2,634.00
  • Recovery Room (1):  3,575.00
  • Room Charges:  2,204.00

I assure you there are no typos in that list.  I’m tempted to get a break-down of each charge.  The numbers in parenthesis above indicate the number of “units” in each category.  I can’t say that much of it makes any sense to me.  For example, there are three categories that would fall under “drugs” or “medications” in my estimation.  What are the differences between “drugs requiring DET code” and “Pharmacy” and “SAD drugs?”  Sad?  I wasn’t ever sad!  ;)  And, what’s a “unit” of Pharmacy?  And, why did I have 19 of them?  Nineteen of WHAT?  Heck… I refused pain meds in the ER, much to the surprise of all the staff I encountered.

$673 worth of I.V. fluids (5 units)?  What was in it? Dom Perignon?

And, holy shit!  I used a crapload of “sterile supplies,” eh?  Twenty-five thousand dollars worth and change!  If you read my blog post about the sequellae of my surgery (link on first line of this post), it seems they forgot to sterilize the Foley catheter.  I should get a refund on that!

Two units of Emergency Room?  I was in there only once.  Two units of OR services?  Did they operate on me twice?  Did they have to go back in and retrieve something left behind?  At least I only used 1 unit of the Recovery Room!

What about “Room Charges?”  It didn’t list any “units” of that.   Just the charge of $2,204.00.  During my four days and three nights there, I had exactly ONE meal.  No, I’m not kidding.  I ate one meal on my last day.  While I watched a long marathon of “American Chopper,” I don’t recall ordering any porn or pay-per-view.

So… I’m a doctor, and I don’t know what most of this means.  How am I to verify the accuracy of this bill?  How do I know if I got 16 or 17 “SAD drugs?”  Over twelve grand for a single abdominal CT scan?  REALLY?  I was in there for about 60 seconds. Did a bunch of x-ray junkies slip in on my dime?

But, how much is it REALLY?

So, just when we’ve finished scratching our heads to the point of bleeding over the fees outlined above, comes the bottom line after the “Contractual Adjustment.”  Apparently that’s the adjustment that accounts for the fees negotiated between the hospital and my insurance company.  Ready for this?

The “Contractual Adjustment” was $70,729.03!  That leaves a final bill of $5,984!  Whiskey Tango Foxtrot (WTF)??  How is this possible?  I got all that… for under $6k?  And, may we assume that the hospital didn’t lose money by treating me?  They could discount my fees 92% and still come out ahead?  After all, I wasn’t a charity or indigent case.  I was a PAYING customer.  So, if I was a profitable patient, then how do they explain the crazy-high fees in the bill?  It would seem setting the fees must simple be how they “game” the insurance companies.

The surgeon’s fees are as much of a joke as it turns out.  The actual retail price of the surgeon’s fee was $2500.  Actually, I’m good with that… it even sounded LOW to me.   But, OK.  Here’s the part that made me feel bad for the surgeon.  The insurance contract reduced his fee to $400!!  Holy crap, I wouldn’t even drive to the hospital for $400.  And, by LAW, the surgeon has to provide all follow-up services for 90 days for no additional charge.  That’s CRAZY.

So, it does beg the question:  What are these medical services REALLY worth?  And, when third party payers are the primary source of payment, the consumer is left in the dark.  And, in most cases, I submit that the consumer simply doesn’t care.  And, THAT is how you get a nuclear escalation of healthcare fees.

And, if someone doesn’t have insurance, do they pay the full “gamed” fee?  I dare say if the patient doesn’t have insurance, he or she probably doesn’t have seventy-six grand sitting around.  The hospital can’t repossess their services for non-payment.  So, I suspect they collect very little of the total fee.  What happens then?  Do they “write it off?”

So, if I went to the hospital reception desk and asked, “How much is an appendectomy?” do you think they could answer my question?  What if I called the Chief of Surgery, could he or she answer my question?  The CEO of the hospital?  I doubt it.  The hospital is a BUSINESS, right?  How do you run a business when even YOU don’t know what you ACTUALLY charge or what you actually get paid???

In my dental practice, my fee is my fee… for any of the services I provide.  I don’t participate as a contracted provider with any plans.  I don’t “game” the system.  My fee is my fee.  And, I get paid in full.  If a patient at my office needs a crown, they will get a straight answer on what the cost will be.  It’s not rocket science.  But, it seems that hospital fees are a work of science fiction.

It’s not really a matter of the cost being “too high.”  It’s a matter of “What the hell IS the cost?”  Just charge me what the service is WORTH.   Expenses + Profit = Price.  I have no problem with anyone making a profit.  But, as a consumer, I like to know what something costs… actually costs.  Don’t dick around and change up the price depending on which way the wind is blowing.  Just give it to me straight!

I’ve always wondered about 75% off sales at jewelry stores, for example.  It sends a mixed message.  One of those message is that the rest of the time, they’re OVER-charging by 75%.  It undermines credibility.

That’s all for now, fellow Dental Warriors.

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12 Responses to An Appendectomy – How much is it REALLY?

  1. Alan Mead says:

    You’ve said succinctly what I’ve tried to explain many times. General “health care” has no price. Because there is no price, there’s no way to value the service. It’s like the “toxic assets” of a few years ago. No one knew what they were worth, so there was no price.

    Really nicely written and well said, Mike.

  2. Very interesting! Of course coming from Canada, we never see a ‘statement’ of fees so many of us have no clue what procedures really cost.
    An interesting Wikipedia article I read today when I googled ‘comparasin of Canadian and US healthcare; http://en.wikipedia.org/wiki/Comparison_of_the_health_care_systems_in_Canada_and_the_United_States
    This shows that Canadian healthcare on average is significantly lower than US per capita. The system is similar to the ‘benefit’ plans with about 70% of the plan being funded by governments and 30% by private – but the majority of work being provided by private business owners.
    The unfortunate part of the system is the time it can often take to get treatment – in my case I had to wait 9 months for a hernia surgery. It wasn’t so painful that I couldn’t function, so the wait wasn’t really that bad. Our system is like triage – the most critically ill get serviced first. Seems to work for the most part, but it could definitely be better.
    Thanks for sharing, made me think a little this morning – and I haven’t even had my coffee yet!

    Smile!
    Warren

    • The Dental Warrior says:

      Thanks for the comments, Warren. No system is perfect. But, I’d take this any day over the Canadian system. We Americans wait for NOTHING! :) We want it our way, right now. Waiting 9 months for a hernia surgery is crazy to me. And, the notion of PRE-PAYING (via taxes) for a service that is rationed and withheld from me for 9 months in unconscionable.

      My main beef is that the fees be HONEST. They are what they are. But, just tell it to me straight without a 90% variation. It undermines the credibility of the fee when it varies so widely.

      Oddly enough, your post illustrates that the two systems suffer from a problem in common: The consumer is largely left out of the equation. And, that’s how costs have escalated at an exponential rate. The normal free market forces are not there when the consumer doesn’t know (or care) about the price.

  3. Alan Mead says:

    “The consumer is largely left out of the equation. ”

    Boom. End of story. 100% agree.

    Obviously it’s because consumers are too dumb to make good medical decisions.

    • The Dental Warrior says:

      Alan,

      I don’t think it’s because they are actually “too dumb.” It’s that they PREFER to not have to think… not even with basic math. For example: When I tell folks I have a $5,000 deductible, they look at me like I’m NUTS. Then they proudly tell me they have a $10 co-pay no matter what they have done. “I’d never want to pay $5,000!” Oh really? Let’s do some basic math, OK. Not algebra. Not quantum physics. Just good ol’ basic math. Feel free to use a calculator if you must. (I’m using estimated numbers here.) You pay $1000 a month for your family medical plan. I pay $200 a month. You have a $10 co-pay. I have a $5,000 deductible. Your total annual premium is $12,000. Mine is $2,400.

      I have a fluke situation and end up in the hospital for three days. I have to pay $5,000. You smirk, “See? That cost you $5,000. It would have cost me next to nothin’.” Get out your calculator, Einstein! You paid $12,000 UP FRONT in premiums. My TOTAL expenses for both premiums and medical bills was $7,000. So, you have already spent $5,000 MORE than me. In just ONE year, I’ve saved enough in premiums to cover my deductible for that fluke medical emergency. If you factor in all the other years during which I did NOT use any major medical services, I have saved many thousands of dollars. But, go ahead and enjoy your $10 co-pays.

      But, wait… what about regular doctor visits and annual physicals? OK… I am a member of MDVIP. You think I’m crazy for a $5,000 deductible? Check this out: It costs me an additional $1500 per year for this “concierge” doctor service (and worth every penny!). Then let’s add in another $500 for oddball visits like having the flu. So, now my total expenses are $9,000. I’m STILL under your total premium expenses. In essence, you are paying IN ADVANCE for services that you often don’t use! And, you’re paying MORE than me. A lot more.

      But, people don’t like to do simple math. Heck, that’s why car leases are popular. People don’t look at the TOTAL cost. They just want to know what the monthly payment is. Likewise, they just see the $10 co-pay and ignore the big picture.

  4. Alan Mead says:

    Sorry, Mike. I didn’t convey my real meaning. I was being sarcastic about consumers being too dumb. I believe that all consumers could make better choices if they had choices and skin in the game. But I’m discouraged that it will ever happen.

    • The Dental Warrior says:

      Oh, I knew that, Alan. I wasn’t disagreeing with you, specifically. I was speaking more in generalities and disagreeing, so to speak, with the powers that be, who DO seem to think we’re all too dumb to make our own life decisions..

  5. Steve m says:

    The whole system gotfuc??dup when the MDs got into bed with the ins co’s in the 80′s. Can u imagine the jns cos not complaining about this bs, but god forbid u extend charity to an indigent denral px, and waive the copay. The shit could hit the fan. Serious double standard at play here.

  6. Mark Frias says:

    I agree with what’s already been said. The financial disconnect between healthcare providers and consumers are driving up costs. There are costs in every system -high taxes, rationing, waiting times, etc. Nothing is “free”, including the Canadian system. Some say healthcare shouldn’t be left to the free market. I would agree that it shouldn’t be 100% free market, but I’m thinking more like 80%. It seems like now it’s about 20% free market and we are paying heavily for that mistake.

  7. Noel says:

    Some insurance companies now sell an plan with ZERO benefit (they pay nothing, ever). However, you DO get the contracted adjustemts (ie. the 92% savings). You get a card, that’s all, but its cheap and all profit for the provider.

    I just had uninsured friend visit the ER with an ankle sprain. 2 hours later he had a bill for $10,000. When he mentioned he was self-pay, they immediately reduced it 50% (still crazy, but better). I wonder who actually pays the “list price”. Unless you are really poor or have insurance stay the hell away from the ER.

    Please share your experience with the fees you rec’d from the doctors. Thx

  8. Pingback: Feline vs. Human Dental Fees | The Dental Warrior

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