Former hedge fund manager acquires life-saving drug, raises price 5,555% to $750/pill

Preaching to the choir, BT. When I hospitalized for dehydration and pneumonia in February, a five-minute doctor visit in my room was billed at $445. It's price gouging pure and simple though the Ayn Rand disciples probably love it.

 

It started going in that direction when insurance started paying for everything rather than just the big stuff. Once insurance started paying, people stopped shopping for the best price and doctors and clinics and hospitals started gouging.

 

Actually, if the Ayn Rand disciples had their way, you probably wouldn't have price gouging. Dr. Nick Riviera could help at a fraction of the cost.

There are efforts to cut costs. Several grocery stores and pharmacies have clinics now. I've seen urgent care clinics advertise one price that includes X-rays.

 

Interesting point. But I've never seen prices posted anywhere for hospital services. They did a CT scan on me billed at $2,800 but who would I have been to say don't do it?

 

But beforehand you could have asked what it cost and if it could be done for less somewhere else. No one ever does that.

There are places popping up now around where I live that are advertising MRIs for $600, whereas hospitals charge $3000. That's how you start to bring down prices. As long as no one asks, prices will remain outrageous.

 

I was in a pretty tenuous situation physically as it was an emergency admission, so not sure if your reasoning works in this case. I suppose for future reference I could check around for prices. I get that. But shouldn't health care facilities be required to list prices like everyone else. I'm still don't think markets work for health care. Too much manipulation and insider trading.

 

Actually, you have it backwards. It's not that the hospital gouges the insurance companies because they have more money. Blue Cross screws hospitals down tight on their fee schedules as relentlessly as Walmart does its suppliers. You want to know who pays the really obscene prices for hospital care? It's people who have no insurance. They get it stuck in deep and broken off, because they can't do squat to prevent it. They don't have batteries of lawyers on retainer like the insurance companies do, they can't afford to get a lawyer. They get screwed and pay it off for years or they go bankrupt over their medical bill. When you get seriously injured and taken to the emergency room, are you going to price shop and take a cab to the ER across town?

More than that, often they don't know what they are doing to be treating you for to give you a price. Until the X-rays are read, or the CT, or the lab work comes back, they often don't know for sure what they are going to be treating. It's all an if /then equation. Diagnoses are built step by step, by taking history, examination, tests, etc. Sure, if you slice your forearm, they know they have to stitch you up. Come in with severe abdominal pain? That might be dozens of things.

In many cases the doctors and techs who work doing medical care have no more idea than the patient does what the procedure will cost. Seriously. Sure, sometimes the physician does, but often he does not know either, no more than he knows what the prescription he wrote you will cost. Often things depend on how your insurance policy is written. There are many different policies, tests and procedures that are covered or not, differences in how the prices are structured. For instance, maybe it is not until you get a referral for a specialty visit that you find that your copay is now nearly as much as if you simply paid cash. Or you don't know that your medical insurance no longer covers speech therapy until your kid is in a car wreck and has a head injury, because who compares their last year's coverage to this year's that closely?

 

Tony, do you really want your medical care done by the lowest bidder? Shit, I wouldn't repair my car that way, let alone my liver or heart.

 

Just how do you think your insurance company pieces together its network?

 

The same way your employer does. Some are old heads who have been there a long time and in general know what they are doing. Some are fresh from school and work cheap. Most are in between. You can look at the available choices and try to get a sense of their rep and skills, then make an appointment. This assumes that there is time to do this and that you can get an appointment that's not three months out.

In a general sense, most doctors work for a health system and the insurers make deals with systems as a whole. They don't cherry pick all the cheap docs unless you are going to the doc in the box. There is generally a reason a physician works for one of those.

 

Tony is right. Under the old model of health insurance, you paid your $20 copay and didn't care beyond that.

One of the big pushes with Obamacare is to get the consumers to think about the cost of services. You can call it shopping around for the lowest bidder or you could call it not springing for the $5,000 MRI from the doc who owns the MRI service if you can get it for $500 somewhere else.

If you have a high deductible health plan, it makes you think about costs.

Patients/consumers have not been trained to think that way about health care. Now the hospitals/docs charge outrageous amounts know that the insurance has agreed to pay a percentage of that and most people who don't have insurance will stiff them.

If you are in the middle, you're screwed.

 

People get their cars fixed that way all the time.

"The lowest bidder" doesn't always have to win the bid, but by having lowest bidders, everyone in the market has to react. Sure, emergency cases may not be able to seek "bids," but for the most part things like MRIs and CAT scans are done by appointment. And that means you can shop for a better price. And once those prices come down, then all prices come down -- even the emergency ones.

It used to be that if you went to the doctor you paid those office visits out of pocket. Health insurance back then was referred to as "major medical" -- meaning your insurance was just for the big things like surgery, hospitalization, major disease treatments, etc. And visits to the doctor's office didn't cost an arm and a leg back then. Now they do. Seriously, why does it cost $500 for "lab" procedures that take 5 minutes? Are nurses who take a couple of tubes of blood making $6000 an hour? I don't think so.