This letter is in response to Steve Sanders letter regarding “Cost of Tests”.
It caught my attention because I just recently finished reading “Why Medical Bills are Killing Us” a special report by Steve Brill in TIME Magazine dated March 4, 2013. I believe this report is an important read for everyone.
The charges for Mr. Sanders’ blood tests likely came from the “chargemaster” at Oro Valley Hospital. According to author Brill “The chargemaster…is every hospital’s internal price list.” The chargemaster “assigns prices to everything…” Whenever Mr. Brill asked hospital officials questions about the chargemaster, he got the brush-off, was told they were irrelevant or that “very few people actually pay those rates.”
“Insurers…[that] have the most customers to offer a hospital that need patients will try to negotiate prices 30 percent to 50 percent above the Medicare rates rather than discounts off the sky-high chargemaster rates. But insurers are increasingly losing leverage because hospitals are consolidating by buying doctor’s practices and even rival hospitals. In that situation – in which the insurer needs the hospital more than the hospital needs the insurer – the pricing negotiation will be over discounts that work down from the chargemaster prices rather than up from what Medicare would pay.”
In the TIME report, Mr. Brill introduces us to several patients and the costs of their hospital visits, tests, drugs, etc.
Of interest to Mr. Sanders, the report showcases a gentleman in his 50s who was in the hospital for 32 days with pneumonia. He was charged $132,303 for “Laboratory”, which included hundreds of blood and urine tests ranging from $30 to $333. If the patient’s coverage had been through Medicare, he would have paid nothing because it is part of the room fee or $7 to $30. The patient’s total bill was $474,064.
The information shared here from the TIME report is only a very tiny portion of the information presented. The entire report is 36 pages long. I do not subscribe to TIME; however, I wanted to read the report, so I ordered the magazine online. It costs $9. Again, this investigative report on America’s health care costs is vital information for all of us.