After my latest upload, I was shocked to see the charge was now $677 -- 2.6 times the previous charge for the identical procedure. Certain a mistake had been made, I called the Alaska Heart Institute and was told, no, it wasn't a mistake. This procedure had been "re-coded," so now two codes applied instead of just one.
"But it's the exact same procedure," I protested, to no avail. The pleasant woman explained that these codes are set by the AMA and the "recommended" charges for each procedure are determined by various other firms that survey the prevailing fees for each service and make recommendations to providers with whom they contract. "Can you tell me the names of any state or federal agencies who have any regulatory powers over your company or those who set these fees?" I inquired. No. There aren't any.
Anecdote No. 2: Several years ago, I visited an orthopedist for shoulder pain. His examination and our subsequent discussion took about 15 minutes. We agreed to try a cortisone injection, which took about three minutes from start to finish. The bill: $160 for the 15-minute visit, which equates to an hourly rate of $640, and $250 for the cortisone injection, which equates to an hourly rate of $5,000! I called his office; his business manager suggested that if I was unhappy, perhaps I'd like to see someone else next time.
Here's what I took away from these experiences:
• Health care providers seem to be able to charge whatever they like. Insured patients will be covered up to the "usual and customary" fee for that service. Some research on my part revealed that "usual and customary" is a self-defining term, calculated by taking the average fee for each service across a given region. To play the game, a provider need only take care to increase fees by a small amount periodically, so as not to exceed U and C by too much.
• Nobody seems to have any regulatory powers over health care providers' fees. Procedure codes are set by the AMA, a group composed primarily of physicians. Speaking of prices, do you know how much your physician charges for exams or procedures? Try asking your doc for a fee schedule.
• As most of us know, the fee structure used by health care providers is procedure-based. Procedures are clearly quite lucrative. Physicians, being human, have great incentive to perform them. Fear of lawsuits provides an additional incentive. But why is a physician's time worth more for one task than for another? Does s/he use that much more of his/her skills when performing a procedure than when examining and diagnosing a patient? Why don't we pay them as we do other service providers: by the hour or fraction thereof? Who came up with this? OK, that was rhetorical.
To be clear, I believe physicians and other providers should be well compensated for their many years of education and training. But how much is too much? Based on conservative assumptions, I estimate the above-mentioned orthopedist's annual gross income to be as much as the low seven figures, plus or minus a few hundred thousand. Even if half this amount is subtracted for expenses, that's quite a net income.
Should we regulate, or should we continue to let an unfettered free market do its work? How's the free market working for your health care budget? Me, I wouldn't mind a little fettering.
Marc Berezin is a retired educator, current database developer and heart attack survivor in Soldotna.
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