We HAVE to deal with the irrational costs of health care in this country.
How much does it cost to have a baby in America? Apparently, we don’t know exactly. This whole article is awesome.
Only in the United States is pregnancy generally billed item by item, a practice that has spiraled in the past decade, doctors say. No item is too small. Charges that 20 years ago were lumped together and covered under the general hospital fee are now broken out, leading to more bills and inflated costs. There are separate fees for the delivery room, the birthing tub and each night in a semiprivate hospital room, typically thousands of dollars. Even removing the placenta can be coded as a separate charge.
Each new test is a new source of revenue, from the hundreds of dollars billed for the simple blood typing required before each delivery to the $20 or so for the splash of gentian violet used as a disinfectant on the umbilical cord (Walgreens’ price per bottle: $2.59). Obstetricians, who used to do routine tests like ultrasounds in their office as part of their flat fee, now charge for the service or farm out such testing to radiologists, whose rates are far higher.
Add up the bills, and the total is startling. “We’ve created incentives that encourage more expensive care, rather than care that is good for the mother,” said Maureen Corry, the executive director of Childbirth Connection.
Apt. 11d 
Because of a job change, we’re self insured for then next two months until coverage at the new job kicks in. I’m 43, my wife is 32. Cost per month for a $4000/8000 plan with an HSA? $241. Not too bad. Wait, that’s without maternity coverage. If we wanted that, it was an extra $700 PER MONTH, with a 9 month waiting period.
So, if we had to stick with that plan, it would cost us $12,600 in premiums just to get to the minimum time they would pay for delivery. Add on the $4,000 deductible, and, at a minimum, it would cost $16,600 just to get maternity coverage. That, my friends, is INSANE!
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Highly bureaucratized procurement systems (think Defense Department) tend to produce billing practices of this nature. Unfortunately, no one has a plan (that I know of) to reduce the bureaucracy involved in medical procurement and billing.
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Except those other countries, which manage to spend less. I’d like to see more analysis of the social/political reasons that we pay more than Switzerland, France, UK, . . . . Why do our bureaucracies spend more than those in, say, Switzerland? Is it our greater demands, our poorer health, our greater variability in usage of services and the ability to pay for them, our higher pay, our economic system, our reliance on free market and multiple vendors, . . . .?
I’ve always been wary of cross-cultural analysis that are presented as an answer in themselves — that the Swiss say (or, in a more extreme case, the Japanese — we rarely compare to them) pay less for health care means that it should cost less. I want to see how things are done differently and try to figure out whether those solutions would work here. It’s easier to do the analysis based on available records though, rather than trying to figure out the reasons that underlie the numbers.
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A single cross cultural comparison can be misleading, but every other developed country has, in one way or another, enacted a national healthcare system. I think the burden is on people to explain why we shouldn’t have one, not why we should.
I grew up with Kaiser, which as an HMO gives the sort of care we’d get under a national system, and it was quite excellent. Yes, there were long waits for non-urgent procedures like teeth cleanings or check ups, but getting a teeth cleaning within 2 weeks of calling the dentist instead of 6 doesn’t seem like it’s worth thousands of dollars.
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How will no-maternity plans (and 9 month waiting periods) be affected by the Affordable Care Act?
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As an Australian who has read numerous personal accounts of dealings with the US health system in the blogosphere since the 1990s, I constantly shake my head in disbelief that it’s even possible to survive in the US. I can’t imagine what it’s like to build a life knowing that a serious illness or accident could leave you homeless. (It still could here, but hospital bills in the thousands won’t be the main cause.) I would never live in the US and would fear for my children if some career or personal development took them there.
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Yes, I live in the US but have lived in various countries overseas, including Australia, and this makes me incredibly angry. I think a big part of the problem is the insurance lobby is incredibly powerful. It boggles my mind why we think adding a layer of profit-driven bureaucracy to healthcare is an “efficient” system.
Another problem is the ridiculous and opaque pricing policies of hospitals, much of which IMO should be illegal. In no other industry would you consume something without first checking the price, but we are almost required to with healthcare. Our system is like a restaurant where you eat the meal, and then find out it costs $10,000, $500 for the fork, $800 for the napkin, $50 each pat of butter regardless of if you ate it, etc. My friend had a mole removed, and looking over the bill, she was charged two “facility fees” at $500 each. She assumed it was a mistake and called, and they told her that removing the mole was one surgery, and then sewing it up was another surgery, so each had separate facility fees and doctor’s fees, even though it was the same person doing the procedure. In any other industry something like this would be illegal, but somehow we let hospitals get away with it.
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I dislike the hospital pricing system a lot. But bear in mind that the stuff we don’t like about the hospitals’ pricing and the insurance companies’ cheese-paring is complementary–each is only understandable if you bear in mind the existence of the other entity. The hospitals are trying to run up the prices as a bargaining position, knowing that the insurance companies will make them take a lot less. And the insurance companies, on the other hand, are arm-twisting the hospitals, knowing that the hospitals will slash their bills under pressure.
That is, by the by, how we can justify the insurance companies’ existence. While it is true that private individuals should be able to negotiate the price of expected surgeries in advance (my parents who are uninsured do this a lot and Dave Ramsey tells uninsured families to do this for maternity costs), there’s nothing like having an insurance company in your corner when you have to deal with unexpected catastrophic events.
And what of single payer? Wouldn’t it be tidier to just have the feds be the only insurance company? Well, we have that more or less with Medicare, and on the financial side, Medicare is a mess. The risk we run with our current social environment is that our medical costs are going to explode with ACA, as there will be no political will to say no to the succession of appealing moppets that is going to be paraded in front of us. (Consider, for example, that recent lung-donation case where the family successfully gamed the system by using the national media and the judiciary. Multiply that by 1,000,000 and that’s where we’re headed. If you’re not cute, no one’s going to pull you out of the back of the line.)
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Yeah, if you’re an individual you can negotiate down the price to something a bit more reasonable, but you have to know to do that, and how to do that. You can even negotiate afterwards, because hospitals would basically rather get something out of you because they get a lot less if it goes to debt collection. I’ve had smallish bills completely waived simply because after several years (during which I had no idea I owed any money), the hospital gave up. Likewise with insurance companies. According to an overly candid insurance employee, they often routinely deny claims for no reason at all, and hope the person will just pay out of pocket and not appeal. It’s like a phishing scam: it’s little work for them, even if you only con 10%, it’s still worth it. Finally, another huge problem with hospital bills is they often come in little dribbles, up to years after the procedure. I don’t even know how much I’ve paid for certain medical procedures, because it’s $80 here, $200 there, etc, stretched over dozens of bills over multiple years.
It’s true the system is symbiotic, in that both the insurance companies and hospitals are trying to wring as much money out of the other as possible, but this doesn’t mean it’s a good system. Most of Medicare’s problems is because it’s operating as a single-payer system within the giant mess that is our healthcare system at large. As someone pointed out, the problem with “free market” theories of health care is we the patient are not the customer. The insurance companies/hospitals are each others’ customers, maybe throw in big pharma as well. Since they’re both things we can’t do without, neither has any incentive to try to please the patient, and we have little recourse outside legislation. Boycott health insurance? Boycott medical care? not possible.
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But bear in mind that the stuff we don’t like about the hospitals’ pricing and the insurance companies’ cheese-paring is complementary–each is only understandable if you bear in mind the existence of the other entity.
Our locally dominant health care provider started its own insurance program and is currently engaged in trying to squeeze other health care systems and insurance companies out of business. It’s straight-forward monopoly capitalism except that all of the actors are non-profit institutions and nobody has tried to get market share by undercutting on price.
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Sigh. Steve is still doing contract work, and our COBRA payments are killing us. We’ll get some of it back next April, but that’s a really long time to fork over large amounts of money. He might switch jobs again, but it will be another freelance position – that’s all that’s available right now. So, we’re thinking about going without insurance entirely and getting the kids some cheapy state insurance plan.
How did we get ourselves in this mess in this country? I want to blame the AMA.
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I think the problem is that the government prevents insurance companies from selling “cheapy” policies to adults, i.e., high-deductible, catastrophic policies that don’t cover extras like psychiatric care and various wellness programs.
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Some states are different, but it wasn’t until 2008 that federal mental health parity laws with any teeth were implemented. The 1996 Mental Health Parity Act was easily skirted. The collapse of catastrophic policies preceded covering the “extras”.
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In general, I think the only two options that might be stable are a nationalized system along the lines of Canada and a private system where insurance isn’t tied to employment coupled with a reasonable subsidy for the poor. I am in favor of the latter and I think Obamacare could have evolved into the latter, but for the last election. By forcing Romney to attack what was basically his own MA plan, the more conservative wing of the Republican party has prevented that sort of compromise from happening. I don’t expect that to change.
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B.I. said:
” According to an overly candid insurance employee, they often routinely deny claims for no reason at all, and hope the person will just pay out of pocket and not appeal. It’s like a phishing scam: it’s little work for them, even if you only con 10%, it’s still worth it.”
I forget the terminology for this, but I remember hearing that doctor’s offices are also sometimes bad actors. They will sometimes bill the patient for stuff that the patient is not supposed to pay for, under the insurance agreement in exactly the same phishing style.
“Finally, another huge problem with hospital bills is they often come in little dribbles, up to years after the procedure.”
Agreed. When we had our first baby, it just amazed me how long it took for all the bills to come in (I seem to remember some straggling in 6 months later). I would like to see a 90-day limit.
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Six months? I’ve gotten bills two years after the treatment.
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“Obstetricians, who used to do routine tests like ultrasounds in their office as part of their flat fee, now charge for the service or farm out such testing to radiologists, whose rates are far higher.”
I lost a long comment on this earlier.
I think this particular claim is bogus, particularly with regard to ultrasounds. With my first baby, there were no in-office ultrasounds and the DC OBs sent me out to a stand-alone radiology center. With my second, I was working with a DC hospital OB practice and I don’t think they used an in-office machine. They sent me to the hospital’s radiology department. However, by the time I had my most recent baby in Texas, my Texas OB was doing the first trimester ultrasounds (I’m not sure I had had a first trimester ultrasound in DC) in-office, she sent me to a radiology dept an hour away to do my 19 week ultrasound (the neat one with the color-coded Doppler–I was “advanced maternal age” and was having some mysterious bleeding) and then I did a late pregnancy ultrasound at a radiology department in town. My feeling is that the number of routine ultrasounds done per pregnancy has been steadily growing over the years (there was even a noticeable difference between my first and second babies), but that it may not be at all the case that doctors used to do in-office ultrasounds and are moving away from it. For one thing, I believe there’s a point at which you can see the fetal heartbeat on an ultrasound but can’t yet hear it yet. These days, I believe it’s standard to do a very early ultrasound to get a very accurate due date.
I suspect that the author may be ignoring trends in the demographics of American mothers (at least in the quoted section–I didn’t read the full piece). Older, fatter and otherwise unhealthier women are going to need more TLC with regard to prenatal care. I also think that the author is conflating different kinds of ultrasounds. There’s probably a big difference between the small fuzzy grey office ultrasound that they roll in for appointments and the fancy pants radiology Doppler ultrasound I saw last year that is color-coded to show blood flow, a very important feature for discovering serious problems.
http://www.babycenter.com/0_doppler-sonography_1453999.bc
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Sorry, I should have mentioned that my first pregnancy was 2001-2002 and my most recent was 2012, so there have been a lot of changes during that time.
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I just remembered a supporting detail about different levels of ultrasound and ultrasound expertise just now.
As I mentioned, I had mysterious bleeding starting at 15 weeks which very naturally scared me to death. My OB looked at her in-office ultrasound and thought it might be placenta previa but sent me on to the out of town radiology office at a different hospital around 19 weeks. The OB at radiology there was able to look at his fancier ultrasound and say that it was not a placenta previa but a subchorionic hematoma.
In that particular instance, there was a heck of a lot of point in doing that 19 week ultrasound with a specialist, as placenta previa requires a lot of management.
http://en.wikipedia.org/wiki/Placenta_praevia
http://en.wikipedia.org/wiki/Chorionic_hematoma
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“They will sometimes bill the patient for stuff that the patient is not supposed to pay for, under the insurance agreement in exactly the same phishing style.”
No, really?, and, I hear there’s gambling going on here, too.
As MH alludes to in one of his comments, I think one issue (along with all the others) is the assumptions that we make about the morals of the actors (doctors are good, hospitals are good, not-for-profits are good). In fact, not-for-profit hospitals have become big businesses (not to mention the profit ones) and doctors are workers who are trying to maximize their earnings, too.
The articles showing that computerization of billing has had the main effect of increasing charges for the most expensive costs and the scam (by the for profit hospital in NJ) that makes attractive emergency rooms, overcharges for services, but then can require insurance companies to pay for the service (because of a NJ law that requires insurance companies to pay for emergency services) are examples. And, yes, these inequities arise in partially regulated politically manipulable markets. Medicare is an example of a fully regulated politically influenced market. Is there an example for a fully private market for health insurance? i.e. is there a model in some state or country where people pay out of pocket for all but catastrophic medical costs? There are models for countries where people pay out of pocket (but, as far as I’m aware, these are poor countries where health care is generally available only to a small segment of the population).
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@AmyP I had one too in my last pregnancy; those are scary. Each of my pregnancies was in Canada so I didn’t get bills, but each one was also increasingly expensive (leaving out the NICU stay with my daughter which was crazy expensive, although my littlest guy had one about the same length of time, but many many fewer procedures. And he came home.) Part of that was that my pregnancies were progressively worse, and I believe, although I don’t know, part of that was my age: 34, 35 and 40 respectively.
But also some things became routine or close to routine in the middle; for example I was in a pilot in my last pregnancy for an ultrasound placental scan, which was not standard care across the board, and which became really useful when I then had the subchorionic hematoma because we already knew it wasn’t a previa.
In Canada part of how they are trying to rein in maternity care is in using professional (4 yr degree) midwives and a new thing they are building are birthing centres which, due to losing my first baby to a cord accident, I am not in favour of but I understand the appeal…I just think that what they will find if anyone does the actual analysis is that the rare quickly-emerging problem that would have been a crash c-section in a hospital and becomes lifetime damage in a birthing centre will cost the system the same or more overall because the costs of a seriously brain-damaged child are just so huge.
But that is how the Canadian system is trying to manage it: Take the people out who don’t need the eleventy machines that go ping (you still can opt in) and give them midwives who know when to refer and do (not midwives who are trying to keep their fees and outside the system.)
One advantage of a single-payer system is that if it is well managed (I don’t claim we are there) your costs are perceived to balance more across the whole tax base so for example, better maternity care leads to lower NICU, peds, and even education costs, and possibly thinking for the long-term lower justice and prison costs. I hear this discussion around maternity leave quite a bit. A bunch of Americans tend to perceive it as a loss to workplace productivity, whereas a bunch of Canadians see it as a reasonable accommodation that leads to lower health care costs for infants and families (RSV hospitalizations, noroviruses, stress-related illness, etc.) I think that in countries with more socialized medicine there is less emphasis on fairness being ‘everyone gets 5-star treatment’ and more that ‘everyone gets reasonable treatment.’ Of course we’re not happy about it when it’s us getting 4/5 star treatment (or worse, which does happen) but there’s a kind of shrug about it at that point.
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Hi, JennG! I’ve been a Skeptical OB addict for the past year.
I haven’t gone back and read the whole piece (I should), but what I worry about is to what extent the cost-cutting in maternity talk is being influenced by natural childbirth ideology, as seems to have happened in places like the UK with epidural refusal.
http://www.mumsnet.com/Talk/childbirth/1147361-Anyone-else-tricked-out-of-epidural/AllOnOnePage
On the one hand, the bean counters and the natural childbirth people seem to be coming from totally different worlds, but the public discourse on childbirth is so permeated with natural childbirth ideas that I think that the bean counters can’t help but be influenced by the ideas that this is a natural process, OBs are too risk averse and overtreat, interventions lead to more interventions which lead to C-sections, etc. These are very pervasive ideas, almost conventional wisdom.
I’m much more concerned these days about the perils of undertreatment, especially as I’ve been discovering that there’s a small but influential anti-prenatal care lobby. You yourself know about this, of course, but I think it is generally unappreciated. At the extreme, there is an entire forum on mothering.com devoted to unassisted childbirth (i.e. homebirths with no midwife) and of course the counterpart to unassisted childbirth is unassisted (i.e. no prenatal care) pregnancy, but many relatively normal women are now taking an a la carte approach to prenatal care.
http://www.mothering.com/community/f/306/unassisted-childbirth
http://www.unassistedchildbirth.com/unassisted-pregnancy-every-woman-is-her-own-best-caregiver/ (NSFW, probably)
http://community.babycenter.com/groups/a46255/unassisted_pregnancy_andor_childbirth
This is very extreme stuff and there may seem to be no connection between those people and the respectable world of the author who complains about doctors sending pregnant women out to radiology for ultrasounds, but there may very well be a lot of shared assumptions,
It’s not just crazy ladies on the internet, either. A lot of normal people get sucked in. In our own circle locally, one of the women recently had a baby at a birth center (we’re in a city in the low six digits for population and a Level III NICU–she chose to birth in a city an hour away with population in low five digits). The birth center had no CNMs (nurse midwives)–it was all CPMs and apprentices (I was nosy enough to check their staff bios online when I heard about the mom’s plans to deliver outside a hospital). I haven’t heard the whole story (I’m not that close to the family), but I guess it was a rough birth, there were concerns for both mother and baby, the mom had to have her stitches redone later and she also had to have a D and C much later because of retained stuff. If you did the math on that one, it would be easy to get excited about the initial savings from using totally unqualified personnel outside a hospital, glossing over the painful follow-up procedures.
I feel like there’s a real regression in care going on (unfortunately often actually chosen by women themselves) and concern over overtreatment is missing a substantial amount of what’s going on on the ground.
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Kid Two and Kid Three were born at home, by choice, and it worked out very well for all concerned.
The key differences are that planned home births are part of the overall approach to maternity care, and the system is set up to promote good outcomes for the mothers and the newborns. Any savings that result are incidental. (And at the macro level, I think the share of home births is small enough that it doesn’t show up in the overall costs.) Aim for the costs first, and you have a recipe for fcking up the whole thing.
One of the sociological aspects is that hospitals seem to be where midwives in Germany train and gain their first years of experience, and once they really know what they are doing they work in various forms of private practice, from birth centers to specialized maternity clinics or attending at home births. Our hospital midwife for Kid One was fairly new to the trade; the woman who was there for Two and Three had about a quarter of a century of experience. Kid Two was her third delivery that day. Lots and lots of experience, and it showed. She spotted things in the pre-natal care records that all of the doctors had overlooked.
Because this is Germany, there are rules about who can and can’t have a home delivery, and there are important conditions — travel time to a hospital, should an emergency arise — placed on them as well. Because the midwives are part of the system, rather than acting in opposition to it, they make sure to follow the best practices.
If it’s right for you, it can be very good. But at the policy level, the important thing is to aim for the good outcomes and let the savings come if it works out that way. Putting savings first would be precisely backwards.
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I think as a pubic policy issue there is still over-treatment in childbirth, as there is with many other treatments in the american health care system. I attribute to the overtreatment to an over-reliance on the idea that we can eliminate rather than minimize risks and a lack of understanding of statistical risk.
But, I too am surprised the number of otherwise educated people who take the attitude that childbirth is “natural” and therefore argue that one can go through childbirth/childbearing without medical care. One can, of course, and I am personally familiar with some women who did, including a friend whose mother gave birth to him in the rice fields. But, mothers and children die in those circumstances. As with many of these policies, the conversation really does have to depend on who you are talking to.
(and, that’s not including the under treatment of under-insured and uninsured pregnant women).
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Plus, there’s not a rice field within hundreds of miles of where most Americans live.
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Yes, and, at least going by the threads Amy P posted, there’s a sense that if one has had previous healthy pregnancies, the next ones will be as well. However, women are just as likely to die on their 5th or 10th baby as they are their 1st. Drawing from old family records as data, which go back almost 600 years and include 100s of women, it was more typical for a woman to die in childbirth with her 3rd – 10th child rather than her first. This was quite common too, as most of my male ancestors had 2-3 wives, with the first couple dying in childbirth. I read somewhere that women’s average life expectancies only surpassed men’s once maternal mortality dropped with better healthcare. I think part of it is cultural amnesia. When you don’t know anyone who’s died in childbirth or of the measles, it’s easier not to see them as risky. I hate to wish disaster on anyone, but I wish people understood this better.
On C-sections, there was a great article in the New Yorker in 2006 by Atul Gawande about the rise of obstetrics as a science rather than an art, with standardized good outcomes taking precedence over riskier optimal outcomes where the skill of the doctor plays a larger role in a healthy delivery.
http://www.newyorker.com/archive/2006/10/09/061009fa_fact
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I was just reading this thread (an OB over at the Skeptical OB posted the link):
http://community.babycenter.com/post/a42982720/at_the_hospital_again
I can’t find the initial thread right now, but in the initial one, the expectant mother explains that she previously had a c-section with pre-eclampsia (i.e. one of those complications that can kill both mother and baby) and now she wants to VBAC (vaginal birth after c-section) her second. However, her blood pressure is going up, she’s had protein in her urine, her platelets are going down, her medical providers are starting to panic and want to do a c-section now before she goes into full pre-eclampsia/has a stroke/etc. She herself is holding out for a VBAC and thread participants are egging her on to keep on keeping on.
Worst DIY trend ever. Why can’t these people just stick to posting cute things on Etsy and Pinterest?
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Isn’t it true that hospitals typically lose money delivering babies? Back in 2009 I was working at a health care consultancy, and one of the first things they recommended to hospitals in financial straits was to shut down the maternity ward. I think it all went back to malpractice insurance, but it does reveal the driver behind the extra charges.
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I happened across some medical receipts for childbirth from the 1920s-40s in my museum’s archive today. The charge ranged from $18-40. Adjusted for inflation, that’s between $200-600.
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