Patients have few remedies for spiraling health-care costs, but here are a few tips

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It is fair to say that all of us have had experience with skyrocketing health-care costs and are astonished that this situation is allowed to continue. Policymakers seem to have an insurmountable inertia.

Recently an article published in the Journal of the American Medical Association looked at the cause of this problem using data from the Organization for Economic Cooperation and Development, an organization created by international treaty. The conclusion: the United States spends almost twice as much on health-care than other developed nations but has similar health-care utilization. Although, commonly blamed, this is not the patient’s fault.

While these findings should be extremely important to policymakers, I’m alarmed that the point is not already universally obvious. All anyone has to do is look at their health-care bills.

Consider two bills my family members have received. One was for more than $13,000 for a radionucleotide stress test and the other was more than $4,500 for a contrast MRI scan. Medicare, allowed less than 10 percent of the charges.

But why charge such exorbitant fees in the first place? Certainly, a private sector insurance company would not want to pay these. But this may not be the case.

Just look at the mind boggling payment of $178,900 by a major health insurance company in 2014 for the outpatient removal of bunions. They must have been huge bunions. And let’s not forget that our relatively small insurance rebate checks are followed by increases in insurance premiums which outpace wage growth and deductibles which are growing eight times faster than wages.

Catherine Duff at a recent Health Watch USASM conference may have shed some light on this situation when she paraphrased what she was told by insurance company CEOs : “You don’t understand the insurance business. We have no interest in controlling our costs. If our costs don’t continue to rise, we cannot justify raising our premiums every year.”

But high prices are not the whole story, over-treatment is becoming all too common. There is also little incentive for private insurance companies to undertake pre-certification, since it may create added legal liability and any cost savings may also have to be returned to patients as an end-of-the-year rebate.

Just look at what happened to one of my octogenarian neighbors with end stage renal disease. He was referred for a screening colonoscopy, did not see his surgeon prior to the day of surgery and was not offered the outpatient test “cologuard,” which only requires the submission of a stool sample to determine if it contains the genetic markers for colon cancer. Certainly, considering his risks, he would have been a possible candidate for this noninvasive test, which cost only $600 compared to thousands of dollars for a colonoscopy. He was never given the option.

All of this may well relate to the provision in the Affordable Care Act which fixed private insurance company profits plus overhead to 15 percent to 20 percent of the policyholder’s premiums. Unlike Medicare, a for-profit company has pressure to increase profitability and one of the ways this can happen is with the purchasing of more costly care to justify premium increases.

Those politicians who do not want government-controlled medicine and wish to keep medicine directed by physicians are out of touch. Competition is all but gone from the system, with most doctors being employees of a facility. Their fiduciary responsibility (loyalty) to the patient should be primary but often comes into conflict with that to the facility.

Our leaders have shown little fortitude in reestablishing market forces and competition in the system. Allowing insurance companies to market across state lines is a euphemism for deregulation of the insurance system. Far greater fixes are needed and unless the system changes, we will continue to see costs spiraling out of control, with no guarantee of improved quality or life expectancy.

So what are patients to do?

▪  Ask up front how much will it cost and compare prices at different facilities.

▪  If you do not have insurance, ask the facility to charge Medicare prices or a percentage (for example 25 percent) above Medicare.

▪  Remember the physician who is ordering your tests may be required by his employer to keep you in his system, and not refer you to the most cost efficient provider.

▪ If you have private insurance, check the company’s website or call its patient coordinator, they may be able to refer you to a more cost-efficient lab or center to obtain the needed study.

▪ Just pray you do not have an emergency and are taken in a debilitated state to the nearest facility for treatment. In this case the sky may be the limit on the charges you will incur.

Kevin T. Kavanagh is a retired physician and board chairman of Health Watch USA.