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There is an interesting whistleblowing thread going on at reddit http://www.reddit.com/...

I wanted to share my post here as well.

I worked in a doctors' office.  We did clinical research on the side, and I want to explain the billing process at a hospital or clinic through an anecdote:

I had just started and had no idea how much anything in medicine cost, yet part of my job was negotiating the budget with the pharma companies.  The company (big ones like Pfizer or small, obscure ones) would send us an itemized budget for all the procedures we would have to do over the course of the study for each patient: $90 for an EKG, $50 for a physical exam, $1000 for an MRI, etc.  These prices are from circa 2005-8.

The first time I negotiated a budget (and this was my strategy ever since), I simply requested 4x what was initially proposed and also added a bunch of extra expenses.  They accepted my counter offer immediately, so I thought I did a bad job.    
After my "screw-up," I asked the girl in billing what the doctors charged for a 15-minute, physical exam.  She said, "$400."  That didn't seem weird to me since I was asking over $800 for a routine check up in the research budgets.  But still, I thought I was low-balling it, because these visits would take longer than typical visits.

Later the officer manager called me into her office to talk about the budget I just negotiated.  She was ecstatic!  Apparently, we BILL the insurance company $400 for a 15-minute appointment, but they only REIMBURSE us $80.  Add the patient's $20 copay and that means we make $100 per 15-minute appointment.  So if the doctor wanted to be a jerk, he could tell the patient that they still owed $300.  Doctors don't do that though, because they don't want to explain to people how much their appointments cost or why they won't take self-pay patients. A hospital, however, DOES occasionally see self-pay patients without insurance, and it makes them pay dearly:  

If someone without insurance goes to a hospital and gets an MRI, the hospital charges the patient the premium price of $4000 - same price that gets billed to the insurance company.  But when someone with health insurance gets that same MRI, the healthcare company pays as little as they can - typically 90% of whatever medicare does.  The hospital then "eats the cost" of what they don't get from the premium $4,000 price rather than going after the patient for more.

I know this is getting long and there are lots of numbers involved, but the point is - research is the most profitable thing a hospital or a clinic does and it's just one more thing that's driving up the cost of healthcare and drug research.  We would make up to $40,000 on a single patient over the course of a year, and we always had about 5-10 patients per study.  I usually had 6 studies going at once, so yeah - we had some pretty awesome x-mas parties after I got started there.  There was/is seemingly no ceiling for clinical research medical costs.  Most of the time, they accepted whatever crazy budget we wanted.  

The doctors I worked for wanted me to help them expand into Phase-I testing (healthy people), but I quit and went to grad school instead.  STUPIDEST financial decision I ever made!

TL;DR - doctors and hospitals set the prices for healthcare and are also to blame for the cost of it.  They charge more to 3rd party payers with deep pockets, so it makes health care more expensive to people who can't negotiate with a team of lawyers.  If you ever have a $4,000 bill for an MRI, get your doctor to write the hospital a letter asking them to charge you a fair price.  Also, give your doctor a hard time about not taking self-pay patients.  The system needs to change.

10:46 AM PT: Update: it should also bother you that the doctor is getting $40,000 from the drug company, while you might be getting placebo...

Some places compensate patients for their time.  We never did.  The doctor said this was because it's unethical, "they're not volunteers if they're paid."  I bought that then because he has a point.  We don't want these people to do something potentially dangerous to their health because of money.  But some of these patients joined the studies because they didn't have health insurance, and maybe wouldn't have "volunteered" if they did.  So if we're going to offer incentive to one group (the uninsured), we may as well bias the rest of the groups the same way (by giving patients $50 or so per visit).

Wed Aug 21, 2013 at 6:46 AM PT: In response to some comments regarding placebo.  I'm not saying there shouldn't be a placebo group in clinical trials.  Duh - it's a basic element of science.  In fact, if I was a doctor I'd probably use placebo in practice because patients seem to do quite well on it. =P

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Comment Preferences

  •  Tip Jar (12+ / 0-)

    "We have now sunk to a depth at which restatement of the obvious is the first duty of intelligent men." George Orwell

    by El Wiemo on Mon Aug 19, 2013 at 10:13:00 AM PDT

  •  Three comments . . . (5+ / 0-)
    Recommended by:
    Catte Nappe, FG, TheOrchid, semiot, TiaRachel

    Human subjects should be compensated for their time. No, not enough money that it becomes the reason why they do it, but it's also wrong to exploit them. That's the consensus of most IRBs. Also, it gets you a higher response rate and a more representative sample.

    Second, the real problem here seems to be that the investigators for these studies know about clinical research, but they aren't businesspeople, don't really know anything about the business of running a health care practice, so they were letting you screw them, basically.

    Third, this shows why the conservative claim that if people have to pay out of pocket, that will hold down costs, is bullshit. Insurance companies have much more market power than individual consumers, and they're already using it, to get much cheaper services than people can negotiate on their own.

    •  Disagree with 2nd and 3rd points... (0+ / 0-)

      1) Agreed.

      2) The people I was negotiating with were usually people with a JD or an MBA.  They knew what they were doing.  The people in charge of writing the checks, however, were completely incompetent, had a high turnover, and always seemed understaffed.  All the drug companies seemed put a complete idiot in charge of payments because we never got the right amounts or at the time they were supposed to be paid.

      3) If the 3rd party payers were gone, prices would crash.  But no one wants that to happen because then the medical field wouldn't be profitable.  Doctors and hospitals raise prices for the deep pockets.  Even though that CT machine was bought a decade ago and paid itself off after one year, the hospital is still going to charge $1000 per scan if it can get away with it.
      Like I said, insurance companies don't really argue to keep the costs down, they just pay a fraction of what medicare does.  Thus, medicare (i.e. the government) is already setting the prices.  I'm not sure how they decide how much a medical procedure should cost, but if it were up to the suppliers of health care - it would be exorbitant.

      The real problem is that health care shouldn't be a business, but a public utility.  There are all kinds of examples where a market system creates inefficiencies.  The pharma companies waste all kinds of resources on "me too" drugs that don't work any better than generics, but will hold a patent (and a higher price tag) for another 10 years.  And don't even get me started on medical records!

      We should have single-payer healthcare.  The government should decide the payouts, and should lead investment into worthwhile therapies.

      "We have now sunk to a depth at which restatement of the obvious is the first duty of intelligent men." George Orwell

      by El Wiemo on Wed Aug 21, 2013 at 07:23:29 AM PDT

      [ Parent ]

  •  My doctor (1+ / 0-)
    Recommended by:
    TiaRachel

    sometimes uses the research studies to benefit his self pay patients and lets his self pay patients pay what the insurance companies charge if you pay upfront.  He is a good guy.

    "I want to live in a world where George Zimmerman offered Trayvon Martin a ride home to get him out of the rain that night." Greg Martin, Bishop of the Episcopal Diocese of Central Florida

    by CorinaR on Mon Aug 19, 2013 at 11:19:05 AM PDT

  •  Note re placebos... (1+ / 0-)
    Recommended by:
    TiaRachel

    ...in many clinical trials (e.g., double blind) they are absolutely critical to establish effectiveness (or lack of) of a drug product.

    The road to Hell is paved with pragmatism.

    by TheOrchid on Mon Aug 19, 2013 at 12:12:50 PM PDT

  •  A couple of corrections (2+ / 0-)
    Recommended by:
    pvasileff, TiaRachel

    In many cases, it is not legal or it is against the doctor's contract with the insurer or government to bill patients for the difference between the contracted amount and the fee they charge to uninsured patients. I know doctors absolutely cannot do so with Medicaid subscribers.

    Second, you should not be upset if you are in a trial and receive placebo. This is the kind of nonsense that scares people away from trials and is why trials sometimes cannot meet enrollment quotas to achieve meaningful results.

    Trials must offer the best standard of care against the novel drug. You get placebo if other treatment options considered equally effective to the drug are not available. It would be unethical to withhold an established effective treatment just to make sure the trial is placebo controlled. In these cases or in dose-setting studies, patients have already exhausted their best options when they enter the study. Incidentally, this makes it even harder to establish a new drug as effective because you are typically dealing with the sickest of the sick or people whose condition resists available treatments.

    It is  irresponsible to scare people away from clinical trials when you apparently do not know how they work.

    Proud Aspie mom of an LGBT kid and some Aspies.

    by CatM on Mon Aug 19, 2013 at 01:54:14 PM PDT

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