Medical Costs

My family has recently incurred a lot of medical expenses. In the case of my son, we paid over a thousand dollars for an ER visit that resulted in the wrong diagnosis. They told us his knee was sprained when it turned out it was fractured and he needed surgery. Now, I'm not really upset with the ER; I'm sure they do the best they can. They have to deal with a wide spectrum of problems, so they can't afford to specialize too much; they're ridiculously overpriced because they're required by law to treat everyone regardless of their ability to pay; their one virtue is that they're always open, which is why my wife took my son that night. But the expenses have got me thinking more about the reason for those high costs.

When was the last time you went to the doctor and saw a price sheet posted for various examinations, tests, and procedures? Have you ever seen a menu like that published by a medical practitioner? I've heard of a few scattered practices that cater to cash-paying customers who do things like that, but I've never seen one myself. Have you ever asked a doctor after he prescribes a procedure or a medication how much that treatment will cost? Or whether there are less expensive alternatives? I have. The doctors usually don't know. This is an industry that has become unconscious of price and I think I know why.

The unstated argument seems to be that health is more important than money. Now I would agree in general, but only "for the most part". If I had to pay a million dollars to fix an ingrown toenail, I would probably pass. Everything has a price. My own life is not worth a billion dollars and I would not think of saddling my family, or society, with a bill like that just to extend my own little life for an indeterminate amount of time. So that argument can't be universally true.

Given that, I think we have become far too complacent regarding the cost of medical treatment. If there is no awareness of cost, there can be no consumer-driven pressure to keep prices low. On the contrary, we typically accept whatever treatment doctors prescribe because they know more than we do and we are fearful of doing something that will negatively affect our health. And because insurance is there to bail us out, we don't worry about the cost. And then we wonder why our premiums go through the roof year after year.

So, the first reason that costs have become so ridiculous in the medical industry is because of the prevalence of insurance and the absence of mind this safety net gives the consumer, leading us to be unaware of cost. The insurance industry largely takes away the individual consumer's natural incentive to minimize his/her individual costs. Interestingly, we are seeking to fix the problem in my country by expanding the influence of this insurance industry, which is one of the causes of the problem. I have a great deal of sympathy for those who can't afford necessary medical procedures, but I'm afraid we're making the problem worse at a time when we can hardly afford to do so.

The second big reason I see is the impact of medical lawsuits. We love our lawsuits in this nation and so many precedents have been set for malpractice that doctors are forced to prescribe anything and everything that might help the condition of the patient and limit their own legal liability if anything should go wrong under their watch. And of course, the doctors know more than we do, so we accept their advice, unconscious of cost, and undertake every procedure, every test, and every medication they prescribe thinking they are acting in our best interests. No doubt most of them are trying to do exactly that, but they are a bit hemmed in by all the legal precedents.

Related to that are the costs of malpractice insurance that every doctor has to have to avoid the risk of going out of business when slapped with a multi-million dollar lawsuit. Every time you go to the doctor, you're subsidizing those insurance premiums, which are necessary thanks to the army of lawyers who have helped to take money out of the system.

I have no doubt that there are many legitimate malpractice cases and some people, whose lives have been damaged or ruined because of the negligence of medical professionals, should justifiably be compensated. But I believe there have been far more suits over the years that have not been justified and have led to the necessity and high premiums of this interesting form of insurance and have served to cage doctors in to some extend in what they prescribe out of fear of a lawsuit.

There are high costs associated with both of these factors, but it seems to me that if consumers would become conscious of the medical costs they incur and seek to minimize their own costs, it would go a long way to keeping those nosebleed costs in check.

I'm afraid I have little hope that will happen in the current environment. But maybe I'm wrong.

Since writing the above, we've received bills for my initial orthopedist visit and my son's surgery.

• Total cost of surgery: about $22K. No kidding.
• Most ridiculous item in my opinion: almost $200 for some pre-surgery medication ... two pain pills.

• Total cost of my visit: about $1500.
• Most ridiculous item: about $1100 to set my ankle. This consisted of the doctor painfully forcing my ankle into position while the nurse cast it. The cost of the casting material was separate.

The lady in charge of the billing at that office told me that about half of that $1100 would go to pay for malpractice insurance premiums. For insurance purposes, that setting was basically considered the same as surgery and any complications that arose from it could potentially subject their office to malpractice suits. I really am in awe of the miracles of modern medicine, but I think we've broken the medical industry with selfishness and greed.