The Price Is(n’t) Right

by Adrianna McIntyre

Let’s play a game. I’m 23 years old. I am utterly unremarkable insofar as my health status–my BMI falls in the normal range, I don’t have asthma, my blood pressure is fine. I have a gym membership, though I wish I used it more. As far as I know, I don’t have a family history of anything, except maybe kidney stones. I’m fortunate to have a job with benefits, including health insurance–though happily, I’d still be covered under my parents’ insurance if I didn’t. I opted for the  second-cheapest of six plans offered by my employer. Every month, I see $84 taken out of my paycheck and put toward my premium. That’s a bit less than the cost of one overpriced mocha/latte/frappewhatever before work every day, or $1008 annually. But my employer also kicks in toward my premium. Based on that information, try to guess the cost of my total premium, with combined contributions from me and my employer. Got a number in your head? Good.

Now highlight the area to the right of the question mark below. Points to whoever’s closest without going over!

?$5328

Was that what you expected? Let’s try again.

I donate blood when I can. Since I work in a hospital and have (mostly) overcome my once-paralyzing fear of needles, that’s actually pretty often. Last time I donated, I made the grievous error of skipping the complimentary cookies and juice that you’re supposed to enjoy before you leave the kindly supervision of the nurses. Besides not wanting to feel six years old, I had a bunch of paperwork waiting for me in my office. I figured since I’d had my morning mocha/latte/frappewhatever, my blood sugar should be fine.

I was wrong. I got in the elevator to go up to my floor, and almost as soon as it started moving, I was seeing spots. I gripped the rail behind me and willed the moment to pass. I think I managed to stay standing as the elevator rose three or four floors before I slumped over onto the shoulder of the doctor standing next to me.

If you’re going to pass out, a hospital is the best and worst place to do it. I think there were two physicians and at least one nurse in the elevator with me, so that was handy. But it’s also apparently a BFD whenever someone passes out in a hospital. Have you ever heard those building-wide pages over hospital intercoms? Rapid response, sixth floor, main elevators. Rapid response. That was me. Because I didn’t want to eat cookies.

What happened next involved a wheelchair and a hasty escort to the emergency room. Which means I took the elevator back down to the basement. I didn’t have a choice; this is the policy for any medical event that takes place on hospital property. While I was there, a resident took my pulse (a little rapid) and my blood pressure (weak but not worrisome). They drew some blood to check if my sugar was low (it was). They decided not to hook me up to IV fluids, mostly because I’d already had a needle in my arm that day and I was chatting coherently enough with them. Someone was sent to the room where the blood drive was being held. They brought back the same the juice and cookies that I’d declined in the first place. Half of my time in the ER was spent drinking apple juice. The other half was waiting for the paperwork to be processed so I could be discharged. All in all, I was there for maybe an hour? Earlier this week I finally got my bill for that visit. My copay is $20. Insurance picked up the rest of it.

They’re just numbers, right? And they aren’t numbers that I really see or feel–but therein lies a problem.

Guess how much it costs to snack on graham crackers and apple juice in the ER.

?$655

Why does this matter? They’re just numbers, right? And they aren’t numbers that I really see or feel–but therein lies a problem. These numbers are very real, and they’re much too high.

First, let’s look at my premium–which comes from my wages, even though a large fraction of that cost is implicit. My insurance is “community-rated,” which means that all eligible employees (without dependents) who choose my plan will pay the same premium. Despite the controversy surrounding community-rating in the new health insurance exchanges (to be established under the ACA), this form of pricing is the existing foundation for employer-sponsored insurance.

But back to that number: $5328. I consciously chose one of the most economical plans offered, a “managed care” plan. You can debate the merits of managed care you like, but it was quite a bit cheaper than the Blue Cross Blue Shield plan, which runs over $9000/yr, about half of which would have come visibly from my paycheck as “employee contributions”. I thought I’d chosen pretty well, considering. But do you know how many countries outside the U.S. average $5328+ in health care spending per person?

None. Zip. Zilch. My premium might be substantially lower than the U.S. average per capita spending ($7538), but it’s still higher than the next country, Norway, which spends an average of $5003 per person on health care. You can’t swing a dead cat on the healthcare blogosphere without hitting a piece on how our high health spending isn’t resulting in better outcomes.

I’m going to keep my musing on the emergency room costs brief: $655 is ludicrous for light blood work and sitting around. I mean, the graham crackers and apple juice weren’t even from the hospital, they were from the Red Cross! When we say that care is more expensive in the emergency room, this is an example of what we mean. My little episode wasn’t even a real medical emergency–can you imagine what a broken leg or a heart attack would cost?  You probably know that most hospitals are required by law (EMTALA) to provide emergency care. Fewer people are familiar with the corollary that they can charge you for it, regardless of ability to pay. Not all hospitals do, but when hospitals “eat” these losses, the costs are actually borne out through government subsidies and higher hospital charges… which result in higher taxes and higher premiums (oh look, full circle).

Why these costs are so high, why they keep growing, and what we should be doing to intervene are all ongoing debates–and they won’t be solved by 140-character solutions like “give ’em more skin in the game,” “let nurses do more,” and “price transparency is the answer.” The solution is going to require sacrifice from a variety of stakeholders and political mobilization on a level we may have never seen in our lifetimes.

And, of course, the frequent rabble-rousing of your friends at Project Millennial.

photo credit

_____________________________
Adrianna works in clinical research and will begin graduate studies at the University of Michigan this fall.
Follow her on Twitter @onceuponA.

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2 thoughts on “The Price Is(n’t) Right

  1. Austin Frakt says:

    “when hospitals “eat” these losses, the costs are actually borne out through government subsidies and higher hospital charges… which result in higher taxes and higher premiums”

    Higher taxes I believe. Higher premiums? Count me as an evidence-based skeptic. OK, maybe a tiny bit higher, but not much. More here and the links therein: http://theincidentaleconomist.com/wordpress/flavors-of-cost-shifting-from-the-uninsured/

    I enjoyed the structure of this post though. Entertaining and informative! 🙂

  2. fastcook says:

    I also enjoyed your post. Now imagine how high the costs would be if you had a whole family of health care consumers to support, and much more expensive medical plan premiums, plus you still get hit with uncovered services (snacks), etc. I do think we need to evaluate hospital charges.

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