This is a true story.  A family member had an accident in the home.  She took a nasty backward fall and her head slammed against a piece of sharp edged furniture.  The result was a bloody mess and a call to 911 for assistance.  Ambulance, police and fire department vehicles were promptly on the scene.  The patient was transported to the hospital about 4 miles distant.

Three stitches were required to close the wound.  Some tests were made to be sure there were no hidden injuries.  Twelve hours later the patient was released and walked out of the hospital.  It was as simple as that; there were no extenuating circumstances.  The medical care was good; the healing was complete.  That’s not the story.

When the bill came, it was $27,607.92.  That’s the story.  One item was $13,541.54.  It was called Trauma Response Level II.  That’s the price for the house call.  The other items were all various hospital charges.  One does not expect good medical care to be cheap but having to pay these prices is bizarre!  But wait.

There were two more items on the bill.  One item was Insurance Paid $1,610.51.  The other was Insurance Adjustment $25,947.41.  Translation – A) the prices were highly inflated, and B) nobody paid the artificially inflated prices.  Nobody was ever expected to.  The injured was a Medicare patient.  Medicare only pays a certain percentage of the “price” for each service, so the price is set high because the percentage paid is low.  There is something seriously wrong with a system that requires healthcare providers to bill at horrendous rates in order to receive modest remuneration for their services.  That’s the story.

Oh yes, there was one more item.  There was a box at the top of the bill that read Your Portion $50.00.  And so in round numbers, the patient paid $50, the healthcare providers got $1,600 but they had to bill for $27,000 to get it.

What about the uninsured, perhaps a mid-life family provider currently out of work, a foreign tourist or a member of the perpetually unemployed?  Is there a separate billing rate for them?  In some cases there is not.  Full rate billings happen every day.  In these cases it is up to the patient to negotiate a better rate.  It’s similar in the doctor’s office.  There is a list price, the price an insurance company pays and there is the price Medicare pays, all different prices for exactly the same service.  What you pay if you are uninsured may be different from all the other three and it will be the highest.  Health care in America is superb.  The financial administration of it stinks.

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