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Mark V. Pauly Blending Better Ingredients For Health Reform Health Affairs, November/December 2008; 27(6): w482-w491. [Abstract] [Full Text] [PDF] [Reprints & Permissions]

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Another Health Care Factor

Mark C. Menser   ( 19 September 2008 )

No Senior Pays Retail

Mark V. Pauly   ( 22 September 2008 )

Another Health Care Factor 19 September 2008
Mark C. Menser, Attorney Viles and Beckman LLC Send comment to journal: Re: Another Health Care Factor markm{at}vilesandbeckman.com Mark C. Menser	An overlooked factor in this crisis is the problem with hospital overcharges to Medicare/Medicaid/insurers and patients. An examination of qui tam litigation reveals that no matter how prudent the government, payers, and patients may be, hospitals gouge the system with creative and illegal billings. A case in point: My mother has ovarian cancer and gets outpatient chemotherapy once a week. She lives half the year in Atlanta and half in Florida. When in Atlanta she is required to go to a hospital, while her Florida doctor treats her at his clinic. The Atlanta hospital bill is routinely 5 times the cost of the Florida bill. It includes a $2,300 "room charge," $3,000 for "drugs," plus $2,500 for "pharmacy" and $3,000 for "chemo." She is charged $800 for "chemo prep" (the cotton swab dipped in alcohol) plus $1,500 for "chemo supplies." She is also charged $600 for "physical therapy." This was all billed to Medicare, which paid the claim! When I threatened qui tam litigation, the hospital conveniently "wrote off" the entire bill. The bottom line: When we examine the costs of any health care plan, we must include hospital billing fraud (stricter law enforcement).
No Senior Pays Retail 22 September 2008
Mark V. Pauly, Professor University of Pennsylvania Send comment to journal: Re: No Senior Pays Retail pauly{at}wharton.upenn.edu Mark V. Pauly	This response to my article reflects yet again how non-transparent our medical care system is. One might conclude, as the author did, that the charges to Medicare were what Medicare (and ultimately taxpayers) actually pays, and be outraged by them. However, that is not the case: Medicare sets its own administered prices, and pays according to them, regardless of the hospital's "list price" charges. Unfortunately, the only people who pay retail are those without insurance to bargain for them who are well enough off that the hospital actually thinks it can collect charges. My general point is that it is a fool's errand to try to attribute our high health spending to evil people behaving fraudulently (in mostly nonprofit hospitals, no less). The real problem is that the incentives are evil, or at least distortive, beginning with the tax subsidy to overly generous insurance and continuing throughout the system.