$$$ The Bills $$$
Business 101
I have already had one interesting conversation with a person in one of the business offices who tried to explain a charge for $2100 or so. I pointed out to this official that the street price for the device was about $500, and the reply was that [1] they were a for-profit business, and [2] their cost was $1800.
I get the first part. But one of the first rules of business is that your customers don't give a damn what your costs are; they care what they pay, the amount conventionally known as the price. The moral and economic justification for charging me "too much" becomes that the person doing the selling has paid "too much" for the raw material, and this line of reasoning will not get you out of the intro class in undergraduate school.
I suggested that I knew a good supply chain manager (which I do, although he lives in Atlanta and is happy with his job), and I am considering offering to do the job for 20% of the savings over what they pay now.
The hospital's bill
This is the detail from the insurance company's response to the bill from the hospital. It is completely mind boggling.
Direct your attention to some of the more interesting line items. Line 19 shows as the familiar bag of Ringer's Lactate for $752, known to TV audiences worldwide because it is so frequently requested in the endless deluge of medical shows we unleash on the world. It is essentially water with a salt ratio about like the body's own. If you google for /Ringers lactate price/ you will be led to this site where you can get it for $14.08 for the half liter. If you are willing to set your sights a bit lower, try the canine variety where a full liter will run you $10.97 CAD.
(BTW, how long would a liter last a dog?)
At lines 11, 12, 13, and 14, we see that the insurance company paid more than the charges. Our customers at Digital Gaslight, Inc. have yet to adopt this practice, although if you are a customer and you see this page, please feel free to send us extra money. Small denomination, used Euro notes are best --- please meet my car in back of the store, and you can load it up. Now that I drive a station wagon, it will be easier on your back.
I realize there is some major league hocus pocus in the calculus of charges. I understand that the figures may be skewed one way or the other, and that the net amount is the real matter at hand. Nonetheless, do you want to be seen making overpayments at a time when Americans' health care is under such strain?
So, let's tackle the gross amount versus the amount paid: $137,401.92 versus $45,986.50. (And let me say, I hope that the matter is settled at that figure. So far, I am out around $7000 in deductibles and co-pays, not to mention the loss of income.)
In every American city there is at least one furniture store that is running its seventh annual going out of business sale. The prices on the red tags that dangle are astronomical. So are the mark downs. This practice of pseudo-discounting is the flip side of the Business 101 topic at the top of this page. Why do this? I get the perversion in the marketplace for furniture -- furniture that is still overpriced at the eventual selling price, but why mark up medical care to a price no one is ever going to pay? It certainly doesn't make me feel like I am getting "a good deal."
A friend of mine suggested today that the inflated figure is the one that the hospital kicks out to the uninsured. I have no information (yet) with which to decide the fact of the matter, but it hardly seems like a plausible explanation ... unless ...
I'll pick this up when I have more time.