Sunday, November 27, 2016

A Noisy Bill

My son, Sam, recently suffered a fracture of one of his body's least consequential bones, the first bone of the pinkie finger of his non-dominant hand (left). All is well now, we think. The cast is off. He's back to playing the violin, showering without a bread bag serving as an improvised glove, and running around like a 10-year-old boy. Also, the cause of science has been advanced by the new life forms discovered underneath the dirtiest cast in the Western World.

A bill arrived, however, indicating that the whole saga might not be over. Apparently I owe another $100 dollars because that is the "patient's responsibility." Hmmm. I'm understandably curious why we owe another $100 after having paid a $100 copay at the hospital as well as another $25 copay to the office of the doctor who operated on Sam and put the cast in place. Perhaps this is the hospital's cut? Perhaps the doctor seeing him in office counts as a separate economic activity from the same doctor performing surgery two floors below that office the next day. I'm sure I'll find out we owe it. We'll pay.

A moment of humility: I think about how many families would have their finances wrecked by an unanticipated $225 of medical expenses. We're fortunate. And Sam's care was excellent. And when the doctor said it could be less adequately set (at probably lower expense) we didn't hesitate to have it done the right way.

Let's get back to that bill, though.

Note that there are several numbers on here. The first, $13,170 seems to be the total cost of the surgery. Next, $1,691 is the amount my insurer paid. Then there's $11,379.00 which is listed as "Write-Off." Finally we get to $100. That's our share.

Wait a minute, a write-off of $11,379? That's not a write-off. That's a decent used car. That's more than half a vacation for four to Europe. That's a semester of tuition at a public university. That's months' accumulation of wages for someone earning minimum wage. That's a lot of money.

I don't know much about what medical technology and expertise cost. However, $1,691 seems like a relatively small sum for the expertise, labor, and technology involved in my son's procedure. $13,170 seems grossly inflated.

So, what's the real price? I haven't a clue.

I've spent a lot of time contemplating the cost of medical coverage in the U.S. I followed the debate over Obamacare with rapt attention. I've followed news on it since it's been enacted. I examine carefully what politicians say about it and attempts to reform it. I've also moved through a spectrum of opinions on that measure, from outright objection to it to acceptance of it. Generally, I want to let the markets use the pricing mechanism to determine what we make, how we should make it, and who should get what we make. A marketplace, however, relies on prices acting as signals to the participants. Prices rising or falling in particular ways cue producers and consumers to more wisely use the resources available. But markets fail to work well when price signals can't cut through noise that distracts from prudent decision-making. And markets fail even more profoundly when the prices become noise themselves. And that's where we might just be with health coverage in our country.

We heard before the election that Obamacare premiums were spiking by 25% or more. But then we heard (at a quieter volume) that government subsidies would pick up some of that increase.

We hear about mandates and Cadillac taxes. Regulations, too. We hear about premiums, deductibles, and co-pays. It's a lot of jargon that most of us partially understand. It's a lot of economic reality that families experience to different degrees of severity. My eyes are more aware of it now that I went through a broken pinkie finger with my son.

There's no such thing as a free lunch. Those lunches only get more expensive when the cost is obscured, passed on, and "written off."

No comments: