Saturday, April 6, 2013

The Price of a Miracle

One of the great milestones in the birth of a child is anxiously awaiting the medical bills said birth had generated. Recently, I sat down and attempted to determine the amount of billable services that one vaginally-delivered healthy child could generate. The total, from the in-office pregnancy test until hospital discharge, was $15,677. Now in our case my wife suffered from post-natal pre-eclampsia and had to be readmitted to the hospital within the first week which generated another $6,110.07 so in our particular case the total would be $21,787.07.

Of this total, $10,577.45 was for use of the hospital facility. Since the physicians and anesthesiologist bill separately this meant that I was paying more for the structure itself than the medical talent utilizing it. Now I fully realize that this fee includes nurses, equipment, labs, meals, utilities, and apple juice but it should also be noted my wife was housed in a non-critical care unit at a not-for-profit hospital in an area with a low cost of living. 

As outrageous as the cost of inpatient care has become, the real cash cow is outpatient surgery. When my wife had her tonsils removed at a local outpatient facility, she spent a grand total of six hours within the building for a 30-minute procedure. The surgeon billed $550 but the facility billed $8,100. For those keeping score at home, that works out to $22.50 per minute.

I have to wonder how it got so expensive to spend time at a not-for-profit medical facility. For instance, had my wife and I reserved the 1,100 square-foot Premier Suite at the Central Park Ritz Carlton in New York for the same dates it would have only cost us $4 per minute (and that include cocktails, hors d'oeuvres and valet parking).  I say this not to suggest that they provide comparable services, but to provide a point of reference for value. How is it that a not-for-profit medical facility in the south can cost five times more per minute to operate than a decidedly for-profit luxury hotel in the most expensive metropolitan area of America?

As for the medical professionals, no one is stacking paper like the anesthesiologist. For the twenty-eight minutes he spent in my wife’s room administering the epidural he billed $2,448.00 which averages out to $87.43 per minute. To put that in perspective, the per-minute rate for the OB that actually delivered the baby was half that.

Fortunately, my wife and I were only responsible for about 17% ($3,724) of the total cost of our son’s birth because we have deductible health insurance as part of a sizable risk pool administered by a large insurance company. This is important because our company is large enough to negotiate service discounts that I as an individual would be unable acquire. For that privilege, we pay $3,912 per year in premiums and administrative fees and I consider that a deal because I get several discounts for being non-smoker and submitting myself to an annual physical.

I am decidedly middle class and the fact that I am only on the hook for 20% of the medical bills* I generate prevents me from filling bankruptcy. However, if the cost of routine medical procedures continues to outpace middle class income even 1/5 of my bills could be financially catastrophic. Perhaps I am being too critical and these prices scarcely allow hospitals to keep their doors open, but if that is the case I have to wonder why they are so eager to continue expanding them.

*Even that 20% only applies to charges incurred at in-network facilities by in-network physicians. Were I to go “broken arrow” and find myself at a hospital out of the approved network my financial exposure would be much greater.

1 comment:

  1. I should have listened to my parents and gone to medical school !!!!!


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