I’ve been getting tired of my allergies recently (or, rather, getting tired of being made tired by my allergies), so after talking to my doctor, I made an appointment with an allergy specialist. That specialist gave me suggestions for different drugs to try, and also thought that allergy shots might make sense; but if I’m going to do shots, we need to know exactly what I’m allergic to and how allergic.
The standard way to do that is skin tests; unfortunately, if I want to do those, I have to go off of allergy drugs for a week, which doesn’t sound like fun. My doctor suggested that I take a blood test; if it shows me as positive, we can go ahead with the treatment, while if it turns out negative, I’ll still have to do the skin test. That seemed like a good idea to me, so I went and did that.
The blood test mostly turned out negative; that’s too bad, but not at all unexpected. What was more unexpected was when I opened up the bill from the Palo Alto Medical foundation: they billed a thousand dollars for those blood tests, which is ten times what I’d expected based on previous blood tests I’d had.
I didn’t have to pay a thousand dollars myself: my insurance has negotiated rates that are lower than the billed rates, and my insurance paid for a fair amount of what was left, so my bill was only about three hundred dollars. But there is no way that I would have paid three hundred dollars for a known-inaccurate test if I’d been aware of the price in advance; and the part that the insurance company paid for isn’t free, either, it just gets paid for by my insurance premium.
I sent my doctor a message, under the assumption that perhaps he didn’t know, suggesting that he might want to warn other patients. His response was that he was sorry that I’d gotten stuck for so much of the bill, which isn’t my point: my point is that spending a thousand bucks on a test that is known not to work without even warning me first is not a good idea. And I called the billing department: they said it’s my fault for not asking the price first. (And they, like my doctor, took the attitude that the only thing I should care about is the amount my insurance doesn’t pay for.)
So I decided to try to ask the price for my upcoming skin test. The Palo Alto Medical Foundation has a website that lists prices of some tests, but not that one. I sent a message to the billing department, saying “I’m scheduled to have skin tests done on this date, can you tell me how much it costs?” And their answer was: $25/unit, but they couldn’t tell me the number of units, and nothing in my medical record lists that number. (The blood tests were $29/unit; if I’d heard that, I would have thought that it was fine, but it turns out that those tests involved approximately 30 units.)
The amount of obfuscation here is amazing: the denial that the money paid by insurance matters, the refusal to list prices on the web site, the refusal to tell me and the lack of records to let me actually figure out the price even when I ask. (And that doesn’t even bring in the negotiation power that insurance companies bring in: the immorality of charging the most to people without insurance!) It’s very easy for a doctor to encourage you to take a test, and I would like to be able to just trust that my doctor’s recommendations are in my best interests, but I can’t do that. I don’t know which people in this system are consciously designing it to make more money for PAMF and which people in the system are just going along with the flow (and I’m sure that most of the people I talked to, possibly all the people I talked to, are in the latter category), but it’s a crappy system.
Last summer, Miranda had an appendectomy: her stomach was hurting, the PAMF triage department sent her to El Camino Hospital, and the doctor there (in consultation with us) eventually decided that there was enough risk of appendicitis that we should probably take it out. And the doctor and staff at El Camino were great, Miranda was well looked after in the hospital, she recovered quickly, and that’s one potential life-threatening problem that she’ll never have to worry about again.
So (unlike with the blood tests above), I have no regrets about making the choice for her to have that surgery. But still, there’s a bill involved; I don’t remember the exact number, but the hospital tried to bill our insurance for approximately forty thousand dollars.
Again, my insurance company didn’t pay that much, and we paid still less: it used up our deductible, and our deductible was high, but our part of the bill was something closer to two thousand dollars, maybe only one thousand? But still: forty thousand dollars is a lot of money, I remember periods in my life where I lived happily on an annual salary that was less than half of that.
Yes, I realize that appendicitis is potentially deadly; yes, I realize that multiple very skilled people were involved in the surgery and care. But she was in the hospital for less than 24 hours, and appendectomies are also completely routine surgeries. I have no idea how El Camino Hospital justifies that price, but I have a hard time imagining that I would accept whatever justification they would provide. Miranda will be going to college in a little over a year; I expect that to cost about fifty thousand dollars a year, I think that price is also too high, but that’s a place where she’ll be living for nine months a year and where many many equally highly skilled people spending much more of their time helping Miranda than El Camino Hospital did; how does a brief, routine surgery end up costing almost as much as an entire year of college?
When I moved out here and started getting allergies, I found that a nasal spray called Vancenase worked well. I eventually switched to Claritin, but I recently thought I should try Vancenase again, given my problems. These days, the same medicine is instead sold under the name Qnasl, so I tried to get a prescription for that.
My health insurance didn’t want to approve the prescription until I tried several other drugs first; given that I knew the medicine had been effective in the past, I considered paying out of pocket, so I called up the pharmacy and asked for the list price, which turned out to be $110. (Or maybe $140?) So I decided to try other drugs first: heck, maybe they’d work as well, and it would save both my insurance company and me money. (My insurance company had Qnasl listed at a $40 copayment, so they were strongly urging me to try other drugs.)
When I saw my allergist, he gave me a free sample of Qnasl. And what was interesting there was the card that came with that free sample: it’s a coupon saying that Qnasl’s manufacturer (Teva Respiratory, LLC) would pay all but $15 of my copayment, and in fact if I were uninsured, they would pay up to $90 for the drug.
I said above that I didn’t know how much Palo Alto Medical Foundation’s system was a conscious system to obfuscate pricing in order to get as much money out of me and my insurance company as possible. In contrast, I am completely confident that Teva Respiratory is consciously trying to use the insurance system to get as much money out of the drug as possible. This is an out-of-patent drug that, based on their discounts for uninsured patients, lets them make an acceptable profit at a $20 price point; they charge five times as much, and design the pricing so that, even if insurance companies try to fight back by affecting individual’s purchase decisions to accurately reflect this higher price, they’re unable to do so because Teva changes the pricing so that individuals don’t actually see that higher cost. (At least individuals that are lucky enough to be talking to a doctor with free samples; individuals who don’t do that are just collateral damage, with the uninsured who don’t have access to doctors taking the worst hit.) This American Life had a segment on this practice a few years ago; now I’m seeing it first-hand.
None of this is a sob story for me: I have a Silicon Valley tech salary, I’m part of a two-income family, so while there are many other ways that I would prefer to spend $300, we can afford it. But I also live in a company where health costs are twice as high as any other country in the world, while having no better outcomes than other industrialized companies, and where health costs are growing: this is a serious problem, and stories like the above are, I think, exactly why.
I don’t like insurance companies, but I actually think my insurance company (Anthem Blue Cross) comes off better in this than any of the other parties involved here. About once every other year, my insurer comes close to cancelling their contract with PAMF; that ends up not happening, and I don’t really want it to happen (we like our GP a lot, and she actually is good at warning us about expensive tests), but they’re right that PAMF is way too happy to spend my insurance company’s money. And Anthem actually just cancelled their contract with El Camino Hospital a couple of months ago; if you’d asked me a year back, I would have been pretty unhappy that my insurance company didn’t want me to go to the hospital that’s closest to my house, but now I’m completely willing to go a little farther away in a non-emergency situation, that could easily save tens of thousands of dollars. Anthem is pretty hard-nosed about pushing back on certain prescription drugs, wanting you to try cheaper alternatives; again, this now looks like a good thing to me.
Maybe I’ve been listening to too much Econtalk, but I’m also seeing the downside of health insurance: the fact that the person making treatment decisions is mostly insulated by price outcomes really does lead to a lot of waste. Don’t get me wrong, I still think that universal health insurance is table stakes for a civilized country in this day and age, but the reason why I believe that isn’t because I think it’s good to have my prescription drugs mostly be paid for by my insurance premiums instead of being paid out of pocket: it’s because insurance is important for people who really do have emergencies or unusual chronic health issues, and because people who don’t have Silicon Valley tech salaries need healthcare, too. But the current US health care system is doing a lousy job of meeting those two objectives at any sort of reasonable price.
- May 9, 2016 @ 22:44:51 [Current Revision] by David Carlton
- May 9, 2016 @ 22:44:51 by David Carlton