In Time.com’s Heartland section online, Steven Brill reports on reasons for the high cost of medical care in America. Brill begins by relaying the experience of Sean Recchi, a 42 year old man who was diagnosed with non-Hodgkin’s lymphoma. Recchi and his wife Stephanie struggled to endure the hardship that would result in the cost of his medical care.
Brill writes [Emphasis is mine]:
His wife Stephanie knew she had to get him to MD Anderson Cancer Center in Houston. Stephanie’s father had been treated there 10 years earlier, and she and her family credited the doctors and nurses at MD Anderson with extending his life by at least eight years.
Because Stephanie and her husband had recently started their own small technology business, they were unable to buy comprehensive health insurance. For $469 a month, or about 20% of their income, they had been able to get only a policy that covered just $2,000 per day of any hospital costs. “We don’t take that kind of discount insurance,” said the woman at MD Anderson when Stephanie called to make an appointment for Sean.
Stephanie was then told by a billing clerk that the estimated cost of Sean’s visit — just to be examined for six days so a treatment plan could be devised — would be $48,900, due in advance. Stephanie got her mother to write her a check. “You do anything you can in a situation like that,” she says. The Recchis flew to Houston, leaving Stephanie’s mother to care for their two teenage children.
About a week later, Stephanie had to ask her mother for $35,000 more so Sean could begin the treatment the doctors had decided was urgent. His condition had worsened rapidly since he had arrived in Houston. He was “sweating and shaking with chills and pains,” Stephanie recalls. “He had a large mass in his chest that was … growing. He was panicked.”
Nonetheless, Sean was held for about 90 minutes in a reception area, she says, because the hospital could not confirm that the check had cleared. Sean was allowed to see the doctor only after he advanced MD Anderson $7,500 from his credit card. The hospital says there was nothing unusual about how Sean was kept waiting. According to MD Anderson communications manager Julie Penne, “Asking for advance payment for services is a common, if unfortunate, situation that confronts hospitals all over the United States.”
Brill reports that the overall initial cost for Sean Recchi, “To get his treatment plan and initial doses of chemotherapy was almost $84,000.”
Upon examination of Recchi’s medical billing statements, it is discovered that the price charged for one aspirin is more than a whole bottle of aspirin on Amazon. The blood and lab work came to more than $15,000. Brill compares this price that Recchi paid to what the hospital would have been paid by Medicare to perform the same blood tests and lab work and found that the hospital would have only made a couple of hundred dollars.
Also, Recchi was charged “similarly aggressive mark-ups” on x-rays.
The report continues:
Dozens of midpriced items were embedded with similarly aggressive markups, like $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare, the government health care program for the elderly.
And, then there was the mark-up on the cancer drug, Brill reports:
On the second page of the bill, the markups got bolder. Recchi was charged $13,702 for “1 RITUXIMAB INJ 660 MG.” That’s an injection of 660 mg of a cancer wonder drug called Rituxan. The average price paid by all hospitals for this dose is about $4,000, but MD Anderson probably gets a volume discount that would make its cost $3,000 to $3,500. That means the nonprofit cancer center’s paid-in-advance markup on Recchi’s lifesaving shot would be about 400%.
When I asked MD Anderson to comment on the charges on Recchi’s bill, the cancer center released a written statement that said in part, “The issues related to health care finance are complex for patients, health care providers, payers and government entities alike … MD Anderson’s clinical billing and collection practices are similar to those of other major hospitals and academic medical centers.”
The non-profit, University of Texas hospital MD Anderson may indeed be typical in it’s medical billing practices, but the hospital also garnered a 26% profit margin on $2.05 billion in revenue last year. The non-profit hospitals CEO earned almost $2 million in income for the same period.