It’s not a secret: Medical bills are bankrupting millions of Americans. The fight over health care and the related costs of treatment for even the simplest medical issues is forever reaching new heights. Even though the Affordable Care Act, signed by President Obama back in 2010, has managed to eliminate some issues within the system, problems persist. The biggest and most obvious? Costs. The costs are egregious, outrageous, and for many patients, insurmountable.
One thing that many people still can’t grasp, however, is why. Why is the average American medical bill so expensive?
Medical bills: Structural issues versus gouging
It’s easy to quickly conclude that American medical bills are so high simply because doctors and hospitals are greedy. That is, in many instances, part of the problem. Most doctors and hospitals in the United States are part of bigger systems which are, in turn, driven by the profit motive. They’re public companies, in some cases, and have shareholders who demand a return on their investment.
While driving profits is definitely a variable, there are bigger structural issues at play too. Our health care costs look way out of line, comparatively, to the rest of the world because our system is different. We’re one of the few — perhaps the only — industrialized country without a national health system that covers everyone. Many argue that it’s important to keep the “market” element in the system not only to control costs but to spur innovation.
Innovation is often quite expensive, too. But that’s a different discussion.
Again, though, that’s not to say that doctors and hospitals aren’t doing what they can to get more money out of us by inflating our bills. How do they do it? We’ll list the ways, starting with a principle meant to artificially strangle the “supply” of doctors and hospital beds.
First up: Driving admissions.
1. ‘Driving admissions,’ or, admitting those who don’t need admission
- Or: Artificially strangling supply.
A New York Times report about one hospital chain using software to “drive admissions” is one way in which prices rise for patients. Essentially, hospitals will admit patients that don’t need to be in the hospital, driving up demand for services and space and dwindling supply. This increases prices — which is what the hospitals and doctors want. It may not be quite as nefarious as you’d think, but it’s a common tactic to increase profits.
Next: Betting against the patient’s desire to fight.
2. Betting you won’t negotiate
- If you’re unwilling to fight, why wouldn’t they charge you more?
Everything is negotiable — most consumers forget that. And when it comes to medical bills, don’t be afraid to put up a stink. Especially if you feel that you’re getting screwed. If you knew that you could demand a ridiculous raise and that your boss wouldn’t push back, why wouldn’t you try and maximize your salary? That’s the same logic many hospitals and doctors use. So, don’t be afraid to push back.
Next: “Defensive” medicine.
3. Defensive practices
- Are you familiar with “defensive driving”? It’s a lot like that.
Doctors have a lot in mind when working with patients. But besides curing their ills and providing treatment, one other big thing is in their back of their minds: Avoiding lawsuits. The best way to avoid lawsuits? Cover your bases, and never cut corners. Sometimes, that means going above and beyond. How can that manifest into increased costs for patients? We get to that next.
Next: How “defensive” practices manifest.
4. Unnecessary tests
- Part of being “defensive” involves administering tests that may not be necessary.
If you’re a medical professional trying to cover your bases, you’re going to do what you have to. But sometimes, that involves taking tests that don’t necessarily need to be done — and that can be very expensive for patients. Obviously, not all doctors do this, but it is a problem and one that’s inflating patient’s bills. Many doctors even admit to doing it. One poll of 435 ER doctors revealed that a disheartening 85% of them admitted to ordering more tests than necessary.
Next: More unnecessary things.
5. Unnecessary surgeries and treatments
- Sometimes it’s more than just unnecessary tests.
Tests are one thing. But actual surgeries or courses of treatment? That’s another thing entirely — and an expensive thing at that. It can take many forms, too. Not just a surgery that you didn’t need, or an antibiotic prescription you could’ve lived without. Sometimes you can be misdiagnosed which can accidentally lead to a pile of extra expenses. We know that doctors perform thousands and thousands of unnecessary procedures every year. And studies show that doctors often do it for financial gain.
6. Fees, fees, and more fees
- Fees can tally up to hundreds of dollars per visit.
It seems like every company in every industry is levying fees for anything and everything. Hospitals and doctors offices are no different. If you look at your medical bills, you’re likely to find all kinds of fees — facility fees, administrative fees, etc. What are all these fees? That’s the mystery. Often, patients are never given an explanation as to why they were charged a fee. But again, hospitals can do it because insurance companies and patients will pay it.
Finally: Charging whatever you want, because why the hell not?
7. Plain and simple overcharging
- How did one man end up with medical bills totaling more than $2,000 for a mosquito bite?
Finally, many doctors offices and hospitals will charge you more simply because they can. There are a lot of costs baked into your medical bills, but when it comes to overcharging? Why not? We already touched on this — many people don’t want to try and negotiate and will end up paying whatever the bill says. So, if you’re wondering why a Band-Aid costs $67 or an ibuprofen tallies up to $90 on your bill, the markup is likely a part of it. Sometimes, by as much as 1,000%.
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