Whats’ really wrong with the health care system, a real life example

Ok, so we all know there is a great deal that could be improved starting with our own behavior at times, but there is also something fundamentally wrong with incentives to provide more and more services and to bill in such a way as to maximize reimburement.  Perhaps you have read about the famous Ear Infection on these pages. Following is the text of a memo I am leaving with members of Congress when I meet with them.  Perhaps you will see an idea for providing your own input to the people who would reform our system.  The Explanations of Benefits are not attached


Attached are the actual Explanation of Benefits forms from an ear infection episode for an adult woman.  The result was the placement of a drain in the ear similar to what is done with many small children. 

The total charges for this episode were $18,120, including the charges of $13,110 for a ten-minute procedure in an outpatient surgical center. 

Write down CPT 233, 455,320,123,333
Write down CPT 233, 455,320,123,333

This is a good example of what if fundamentally wrong with our health care delivery and reimbursement system.  The costs are too high and the payment system is skewed toward providing more and more services. 

Note that on many occasions of a single office visit there is billing for several separate procedures, on February 27 four procedures for a total of $695 and on April 30 six procedures for a total of $2,005.  Remember, regardless what the EOB says regarding the “type of services” all these services were for an ear infection in one ear.  

According to the surgeon, the placement of the drain took a total of ten minutes, yet the charge for use of the surgical center was over $13,000.  From the time my wife walked into the center for the procedure to the time we left was no more than 90 minutes. 

Interestingly a group of fifty doctors, including the specialist who inserted the drain, owns the surgical center. 

Also, note the difference between billed charges allowed, and accepted charges.  Why should some people pay more and other less for the same procedure?  If a given charge is acceptable for people with coverage why not for all patients? 

This is a large self-insured employer group; the “carrier” does not function as an insurer, but rather a third party claims administrator. 

The fundamental questions are:

Why is one office visit divided into numerous costly procedures? 

Why are physicians allowed to refer to facilities they own? 

Why does it cost over $13,000 to use an outpatient center for 90 minutes? 

Why is a follow up visit following the procedure not included in the fee for the surgical procedure?

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