When I started at the U of R a couple of years ago, I was offered the opportunity to enroll in a group health insurance program. The University obviously uses Excellus (it is based here in Rochester). My choice of plans had nothing to do with differences in services covered, doctors in the plans, etc. The only choice was whether I wanted to enroll in a high-premium and low out-of-pocket plan or a low premium high out-of-pocket plan. I chose the latter thinking that even a small semblance of a market would leave me better off than if I had first dollar coverage for every medical expenditure.
I did not have the option of purchasing different insurance policies through different companies – since employers only offer insurance through one provider. And because the government has regulated the life out of the insurance industry, there was not a chance of me purchasing any type of non-employer coverage that met our family’s needs (largely because they are mostly high-premium first dollar coverage for all manner of things I had no interest in getting covered for). So I bought into the U of R plan. Now, our school contributes a fantastic portion of the premiums on my behalf. Our family pays only $20.18 in out-of-pocket premiums each month while the school kicks in something like $225 each month on my behalf. I then save $200 per month in a health savings account (tax advantaged) in order to pay medical expenses that happen during the year. This pretty much means I have all of the money for my deductibles covered – if I use less medicine in a particular year, I can keep the difference and invest it. This may be used for future health care expenses, or can be leveraged for other uses if exceptional circumstances arise. After we run through our deductible, we pay 20% copays for the next $x thousand of expenses, and then get full insurance for all expenses beyond the threshold. This means generally that our family pays dollar for dollar out of pocket for most medical expenses we incur each year, but we also are protected in the event of a large adverse health situation striking our family.
But those cost savings only materialize when you can actually shop for your medical care. And as I’ve said before, the notion that we can shop for medical care is an absolute joke. The only shopping you really can do these days is to decide whether to see a doctor or not. More on that in a future post. Rather, I wanted to show everyone exactly how the system here works.
We rushed our (then one year old) son to the pediatric ER here at Strong Memorial Hospital (it is a terrific operation by the way) when he was having breathing issues. We must have got to the ER around dinner time on March 13, 2009. We was given some nebulizer medicine to help him breathe for about 6 hours, while every 90 minutes or so an ER doctor would spend roughly 15 seconds looking after him. We took up a shared ER bed (perhaps one of 40 on the floor) during this time. Around midnight, the doctor didn’t like that his breathing was still not improving and recommended admitting him for the night. At this point we asked whether this was really necessary, and we never were given a straight answer (our sense was that they did not believe he needed to be admitted, but were being overly cautious). We ended up getting admitted (but before we did, I asked what it would cost and they told me they would not be able to tell me) and then released after 12 more hours the next day, March 14th. So we spent about 18 hours in the hospital. During that time, our son was given 8 or so albuterol treatments, a single chest x-ray, and tested, and we saw professional staff for a total of 15 minutes.
We contacted the hospital in the Fall of 2009 asking why we have not seen a bill yet and we never got an answer. I came home from work today to finally get “An Explanation of Benefits Statement” in the mail from Excellus. Note that this is still not the bill, but a statement showing me what the insurance company covered (not much, as I expected – that was the point of my plan) and what the hospital is billing me. Without too much comment, here is what the hospital is billing me for my time in the ER:
For a total of $2,781.68 for an ER trip for a breathing incident where we spent no more than 18 hours in the hospital. There was no invasive surgery, no fancy medicine, no complicated procedures, just the cost of the space we took up for that time (which I understand is valuable). At no point during the visit was I encouraged to think about any of this, nor was I encouraged to consider not having the XRAY, the admission and some of the albuterol treatments done (we do them at home for him, manually, rather than connected to a simple electric pump).
No doubt the price we were charged is different than the kids’ families who were in the ER with us. Even if it takes a bad experience for a customer to learn his lesson in a normal market, he has a way to reduce future costs and bad experiences through choices. What choices do I have the next time our son is rushed to the ER (and with breathing issues, this is not a trivial possibility)? And how would everyone’s near and dear “health care reform now!” do a thing about this mess of a situation?
And by the way, what sort of a free market enterprise takes a year before sending its customers an invoice? And on that invoice, how many firms get away with not laying out what services were rendered? How will raising taxes on the “rich” and mandating that my brother get health insurance do a darn thing about what I describe above?