The Cost of Healthcare

This is what a patient received as a bill by the local hospital.  It was shared with me and I do not know which region of the country it came from.  It doesn’t matter because this is the kind of insanity going on healthcare.  In my office these labs would cost my patients a total of about $70.  You may say that for insured patients it is much less because it would be negotiated down.  My answer would be why?  Why do we have to play these games?  And who negotiates for the self-pay or high-deductible patient?

It’s time for transparency and the free market to bring down the cost of healthcare.  Or do you any better ideas?

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Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  14 comments for “The Cost of Healthcare

  1. Christopher Rhody
    August 15, 2018 at 11:04 am

    I have a good example of this. My daughter had routine female labs and got a bill $890; it had been processed as not covered by insurance. A few pone calls later the EOB was reprocessed as covered and the bill was $309, all of which was covered by insurance. Why is this done. Market FORCE. In general force. Charge reasonably or we will not pay you and none of our patients will go there. Otherwise caveat emptor.

  2. Chris
    August 14, 2018 at 4:59 pm

    The actual charge on this bill was $100.65. The gross charges are pretty meaningless. I have never really understood why people charge so much more than they are going to get reimbursed. I don’t think you ever really need to charge more than your best payer is going to reimburse. It’s sort of like shopping at The Limited…there is a perpetual 70% off sale.

    Now if you go there and want to pay cash for your labs you would probably ask up front what the charge will be and they will say something stupid like “but we give a 90% discount for cash if pay your bill at time of service”.

    Also if I can actually make $20/stick I am quitting my job as a family physician and going to work as a phlebotomist.

  3. Allan Rice
    August 14, 2018 at 3:29 pm

    The only realistic charge here is the Radio Isotope B12 and maybe the Lipid panel. In my lab the fees would have been $90 & $150. CBC $20, CMP $30, Aic $40, ur alb $10-LOUSY DIP STIK test. Keep in mind if its Medicare all bets are off. They pay what the hell they want and most of the time it does not cover the cost of the disposables to do one test. ie needles, reagents, reaction cups, urine cups, dipstiks, machines to perform said test run over $100k in many circumstances,Billing & coding people, centrifuges, taxes, rent, power, etc. When I decided to quit medicine, in 2000, MEDICARE PD ME $5 for a glucose that could not be done for under $12 ea. Our suppliers were not capped in their fees but we sure as hell were. Hence, rather than starve and have to gouge the nonmedicare public, I quit. Went back to school at 50 yo and became a damned good Home Inspector with better hours, vacations, and better pay with a lot less headaches.

    • CHRIS
      August 15, 2018 at 11:13 am

      You make more money as a home inspector than as a physician???

  4. Terry Nugent
    August 14, 2018 at 8:55 am

    Typical. At Illinois’ best hospital chargemaster for simple low tech X-Rh is ~$1,100

  5. Betty
    August 14, 2018 at 7:56 am

    A hospital has more overhead. Open 24 hours, nursing, housekeeping etc.
    unfair to compare pricing.

    • Doug Farrago
      August 14, 2018 at 8:00 am

      So people should be charged $1000 more?

      • Scott
        August 14, 2018 at 9:34 am

        That’s the cost of business. Hospitals are a business and have to be paid for. If the labs are cheaper in your office, advertise that and then get new patients. You will probably have to hire more staff and get a larger office. Maybe bring in partners. Your cost of doing business will go up and unless you live with the motto of volume cures all evils, your prices will go up as well because you won’t want to work 16 hours a day plus maintain your privileges at your local hospital. How about offering a solution instead of pointing out the obvious pricing issue for tests. Do some research as to why it’s so much. See why hospitals and physicians are in bed with insurance and the pharm kings. Or, do a career change and instead of treating illnesses and symptoms, go to the other side and teach health, prevention, diet etc. The latter would help cure some issues your current patients are having and get them less reliant on the over priced medical system.

        • August 14, 2018 at 10:01 am

          @Scott: He IS offering a solution: DPC! and the “research” why is so much is also done

        • Doug Farrago
          August 14, 2018 at 10:07 am

          Who are you again? Have you ever read anything on this site? I just said my prices are $1000 cheaper. That’s a solution. Oh and your theory is interesting. You say that if my prices are cheaper then I would have so many patients that I would need more staff. Ok. So that would mean I would need to raise my lab prices 10x to cover the extra staff? What economic theory is that? If McDonalds keeps selling more hamburgers and opens more stores with more staff do the burger prices go up? Maybe you need to do some research.

        • Moshe
          August 14, 2018 at 2:48 pm

          He does mention the solution. It’s transparency. If the hospital had let them know in advance that it would cost 10x the normal rate, he could’ve chosen to go elsewhere. But no, we can’t know what it costs until AFTER we get the bill.

    • Dean
      August 14, 2018 at 8:24 am

      So how much does it cost the hospital to run those tests? How much is a “reasonable” profit to expect? And why couldn’t we know those prices ahead of time?

    • Adriana Raus
      August 14, 2018 at 9:32 am

      I think this was an outpatient lab, not a STAT, not in the emergency room. Why should the outpatient patient pay for hospital housekeeping and the nurse? the only person that interacted with him was the phlebotomist. $15/h – draws 5 people per hour. How this adds up to 1000?

    • dr chris
      August 14, 2018 at 11:25 pm

      Why is that ? Does Home Depot charge more for a screwdriver than a mom and pop shop? That’s the most ridiculous argument

Comments are closed.