Cost clarity will help prevent a commons tragedy

[Note: Long-time San Antonio radio personality Ricci Ware invited me on 550 AM KTSA last week to discuss my recent article in the San Antonio Express-News. To listen, click on the following link and then click “File > Download”: https://docs.google.com/open?id=0B0h4O0zyLnkMR3pfX1ZMcWZTZGFfalM2cnR2bmo0Zw.]
Cost clarity will help prevent a commons tragedy  
“Surgery Center. How may I help you?”

“Yes, m’am. My son is scheduled for a tonsillectomy next week. I need an estimate of what it will cost.”

“It depends on the procedures that are done, sir. We won’t know that until after the surgery.”

“He’s having his tonsils out. Can you please give me a ballpark just for tonsils?”

“Not really. It depends on your insurance. You should call them.”

***

“Insurance Company. How may I help you?”

“My son’s scheduled to have his tonsils out next week. I am trying to make plans to pay for it. Can you tell me roughly what it will cost me out of pocket?”

“Unfortunately, we can’t say until we get a claim from your providers.”

“Can you give me an approximation for children’s tonsils? It’s a fairly common procedure.”

“We have 25,000 procedural codes, sir. I really wouldn’t know where to begin. If you can call your doctor and get the codes, I could look it up.”

***

“Dr.’s Office. How may I help you?”

“My son is scheduled to have his tonsils out next week. I need the procedural codes so I can get a cost estimate from my insurance.”

“We don’t know exactly what the doctor will bill for. We will send a pre-authorization to your insurance the day before surgery. That should give us some idea of what they will cover. You can call back then.”

“That doesn’t give me much time to plan. I’m curious. What would you charge a cash payer for this?”

“$450. But you can’t pay cash. We’re required by law to run this through your insurance now that we know you have it.”

***

Long (based-on-a-true) story short, the surgeon charges the insurance company thousands in hopes of getting hundreds. Multiply this scenario by the surgery center and the anesthesiologist and the cost confusion compounds. Even weeks after the surgery, I still had no clear picture of what I would owe.

No wonder I see in my lending office so many “medical collection” items weighing down consumer credit reports.

Can you imagine any other industry running this way?

“How much for a burger and fries?”

“We won’t know until the chef completes the order and the USDA gives us the contracted rate for beef.”

I understand uncertainty. I comprehend complexity. I know that working on human bodies has different stakes than repairing an air conditioner.

I also know that until we identify health care costs clearly and pay them accordingly with a fair profit included, our system will continue to confound. Industries in general and businesses in particular need certainty to succeed.

We must stop inflating charges for those who do pay to compensate for those who don’t. We must limit services to those who can not or choose not to pay. Doing so will prompt people to take responsibility for their own health and their own finances.

Otherwise we are heading toward a tragedy of the commons, the old economics concept that says that assets owned by everyone will deteriorate in value over time. Where there is no pride of ownership, there is but government malaise.

Politicians may gloat over giving everyone’s goats a field to graze, but there won’t be any grass in the field.

Kevin Thompson writes weekly for The Boerne Star. He can be reached at kevin@kwt.info

1 Response to “Cost clarity will help prevent a commons tragedy”


  1. 1 Helena Hauk March 11, 2012 at 21:06

    Well, said! I agree with your sentiments in this post.


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