Tuesday, February 26, 2013

Doctors have two sets of books

I went to a doctor in Brooklyn this week. Since my insurance is sold to Zingerman's in Michigan I can't use it for a regular doctor visit here; the insurance doesn't work out of state. More about how that's a bad idea another time. This time I'd like to talk about prices.

Most of the time doctors are opaque about what things cost. You don't know what costs what, you aren't presented options, you may never see a bill. Not at this doctor. I was told right up front how much my visit would cost. They took my credit card when I handed in my paperwork. Before I was given a shot the doctor said it would cost an extra $25 and was that OK. ("Sounds cheap, let's have two!") This kind of this-is-what-it-costs-will-you-pay is common courtesy in the retail world but I've never had it happen with a doctor so I was kind of shocked.

I went to check out. They gave me the bill. It was laid out in a matrix, like a spreadsheet. There were three rows and three columns:

New patient  visit
 $250.00  $150.00
 $112.20  $25.00

 $362.20  $175.00

 I was confused. "What's going on with the different prices?" I asked?

The clerk answered matter of factly, "Oh, the first column of numbers are what we would charge if you had insurance. The second are what we charge you if you don't."

In other words, if I had used insurance the procedures would have cost $362.20, twice as much as the $175 I paid. They would have been the same procedures. They would have lasted the identical amount of time. They would have had the same result. So it appears that the identical product, given to the same person, has two vastly different prices depending solely on how they choose to pay. Of course we're all used to price discrimination from airlines based on when we want to travel. But this is isn't a case of priced scheduling. It's priced paying. Gas stations sometimes charge a few cents more for paying credit card instead of cash but never anything like this. If I had stopped the clerk at this point and said, "Oh, I'm sorry, I DO have insurance!" they would have said, "Great!" and promptly charged me double.

This may seem strange to the rest of us humans. But I learned it's actually normal in health care. "Normal," that is, for the worst run industry in America. There's a simple — and ridiculous, I assure you — explanation for it. I'll write about it soon.

The Worst Run Industry In America is my look at the American health care industry, its service, prices and promises, from my view as a merchant.

1 comment:

JP said...

Oh the stories I could tell about my ridiculous encounters with health care billing for a family of seven that buys ALL of their own insurance! One quicky from our most recent hospital visit (we basically have a room continually reserved with our name on it, five kids...) had me commenting many times how horrible our insurance was because we have to buy it ourselves so the nurse and the doctor said they'd work with the codes they put down to make sure we get a better deal...and they did, and we did (first time this happened in our favor, HALLELUJAH!).