Last weekend, while sitting at a poker table, I was one seat away from an older gentleman who I’ve played poker with in the past. At some point the topic got around to health care, and this gentleman complained that he’d had an aneurysm, spend only one night in the hospital, and the bill came to around $39,000. I told him he was lucky on many fronts, and that a bill that low was actually pretty lucky.

sasint / Pixabay

I find that there are misconceptions about health care and the fees that, in some cases, aren’t in line with reality. In other cases I fully comprehend the distress of patients. In this instance I had to take the hospital’s side.

A comparison of the cost of his procedure in the central New York area as opposed to being in the metropolitan New York City area is at least 4 to 1, possibly more. But that’s not really the point.

In the past, having an aneurysm would have been a multiple day stay in the hospital. Based on today’s rates, you’re possibly talking $25,000 right there in a major city hospital just to lay in a hospital bed. In the past, he wouldn’t have had some of the equipment we have today, which means an operation of the sort he had to have would have been more dangerous, with less chance of success. In the past, he wouldn’t have been given the types of medications we have today, which would have meant the possibility of more complications and less comfort.

Also, it was an emergent situation, and his life was saved… in a few hours, and he was back home the next day. My mother had a heart attack and was home in 3 days. Both of those are amazing when compared to the past.

Let’s talk about the costs of having an operation in a hospital.

Before anything begins, one has to do pre-admission testing, which will end up on the same bill as your operation; that’s law. Next, the room has to be cleaned, which means sterilized, and there are specific procedures that must be adhered to. You don’t just pull out the Spic and Span to do the job; it’s quite thorough.

Next, there are fixed costs that aren’t allowed to show up on your hospital bill; sheets, gowns, gloves, needles, syringes, poles, scalpels, bags, swabs, saline, etc. That stuff adds up, but there’s more.

Equipment can’t be charged for; items that are considered non-sterile can’t be charged for. Hospitals can charge for procedures, and supplies that are specific to the procedure. This means many dollars are built into trying to recoup the cost of purchasing and maintaining hospital equipment. Add in the electrical costs, recording equipment, documentation equipment, computers, and all the people who have to be in the room, such as nurses and monitor techs, whose services can’t be separately charged. Anesthesiologists can bill you; sorry about that. 🙂

ulleo / Pixabay

Next we have supplies that will “possibly” be used in a patient. Each doctor has their favorites on items they choose based on the severity of what’s wrong with the patient, which sometimes is unknown until the surgery has begun. In some cases the prices can vary drastically.

Take pacemakers; the price of pacemakers can run from a couple thousand up to close to $100,000, depending on maker, type, etc. Depending on the patient’s need, the physician might have to go into an operation with more than one. If the item that’s put into a body doesn’t work properly, the hospital often has to eat the cost of the item. If it’s defective, sometimes you can return item to the vendors, but not always. There are some items where the hospital can legally bill you for their usage, even if they really weren’t able to use it, such as screws during a knee operation, but not every supply item, especially big ticket items, follow that same rule.

After the operation, you get wheeled into a recovery area, where hospitals capture the cost but will never get reimbursed for the time. Therefore, whether you take thirty minutes or two hours to come out of anesthesia, and there are no complications, the hospital won’t be paid. Yet, nurses must monitor you with all sorts of equipment, and of course the time. If you’re an outpatient and you need to stay longer, up to 24 hours, without specific complications, the hospital gets nothing.

Finally, at least a month after you’ve been discharged and your bill has been paid (if the hospital is lucky to get paid in a month by your insurance company), if the hospital gets paid at least 40% for what was charged for your operation it considers itself lucky, since payments are based on diagnosis and procedure codes. In other words, a bill that was $39,000 doesn’t mean the hospital necessarily got anything close to that.

Sometimes the payment rate is only 10% of what the hospitals costs were for some procesures; the overall total bill of the operation, in many cases, is meaningless. There are negotiated rates, and hospitals are getting killed often. The only people who suffer are self pay patients; luckily there are ways to help patients who qualify for assistance pay their bills, along with specific discounts in most states.

That’s something to think about. This doesn’t give hospitals that are either intentionally or unintentionally overcharging patients any excuse for getting it wrong. At least now you know part of what makes health care a totally different business than any other. Can you imagine a car dealer accepting 40% of the cost of a new car, or a contractor accepting 40% for building you a house?

But give your hospitals some space; they’re doing what they need to do, for the most part, in order to survive.

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