Healthcare Has Jumped the Shark

Rodney Johnson | Tuesday, February 12, 2013 >>


Too many years ago the sitcom “Happy Days” was all the rage. As time went on the story went stale, so the writers kept having the characters do more outrageous things…

In one episode, the Fonz (Henry Winkler) is on vacation with the gang in California. One of the highlights of the trip is when he jumps over a shark on water skis.

Now there are all sorts of things wrong with this storyline but this isn’t the place to delve into it, as much as I want to. Suffice it to say the general consensus was that when this episode appeared it was the true end of the show.

And today, whenever something has become so ridiculous it’s only a shadow of its former self, it’s said to have “jumped the shark.”

In the world of healthcare, this has definitely happened…

Several weeks ago my older daughter hurt her ankle during crew practice. It had not healed in a few days so the coach wanted to have it x-rayed.

Sensing a teaching moment (as parents we have a sixth-sense for such things), I sent my daughter to a local orthopedic urgent care clinic. This was only two days after her 18th birthday.

The clinic is run by a big orthopedic center in town. I sent her with instructions to find out how much it would cost to get an x-ray and have the ankle checked out. My goal was to drive home the notion that we really can make a cost / benefit decision on healthcare.

We have insurance, but it’s a high-deductible plan with a health savings account, so we pay the first several thousand dollars of any care. So these decisions are important.

The clinic told her she’d pay $300 for the doctor’s visit and $75 for the x-ray. That seemed steep to me, but not so far out of line as to be a problem. She signed in and then called two hours later to relate her story. It went something like this…

She saw the Physician’s Assistant (NOT the doctor himself) who thought she had a high ankle sprain. The x-ray confirmed this.

All of this took less than 10 minutes.

Then there was a discussion about how to immobilize the foot so it would heal faster. They offered her an inflatable walking boot for a cost of $620. She said that was a bit ridiculous and asked for alternatives. They told her an old-style short fiberglass cast was included in the $300 office visit. She took the deal.

A week later she needed to have the cast removed. When she called back, the center said, “Oh, this is not an urgent care issue. For that you will have to become a patient, which requires a $3,000 deposit.”

Again, she pointed out this was stupid.

They lowered their price to $800.

She hung up.

After searching the Internet for 20 minutes she found instructions on how to cut off the cast in the garage, which she happily did.

(Yes, I’m a proud father.)

This whole story tells me that few people “buy” healthcare. They consume it. To “buy” something means to pay for it. Most don’t.

There is a third party involved, an insurance company, which masks the cost of every single aspect of healthcare. Most people would have presented their insurance card, paid the deductible, and never considered the “cost” of the different options available… which of course leads to runaway billing on the part of providers as evidenced by my daughter’s experience, which isn’t over yet…

After all of this, I received a bill for $408 from the clinic. It showed the visit, the x-ray, and then a separate charge of $100 for the fiberglass cast and $308 for putting it on.

My daughter confirmed that her conversation with the Physician’s Assistant was clear: the cast was included in the cost of the visit. So I called the number on the bill to discuss this with a “finance consultant.” I told her the story. I told her I have a receipt.

She told me the receipt just shows a payment, it doesn’t mean the bill is paid.

I asked her how, if I had paid the full amount requested, was I to know that more was going to be asked of me?

She told me that I would have had to ask for a detailed list of the treatments coded for my daughter.

I asked how I was supposed to know that.

And she said, “I don’t know.”

I reiterated that the care provider had told my daughter the cost of the cast was included in the visit, and she told me that it was impossible for a Physician’s Assistant to tell a patient the cost of anything because none of the providers – assistants, doctors, no one – knows what any of it costs.

As politely as I could I asked her how a patient was supposed to determine if a treatment was worth the cost if the cost cannot be presented before the treatment?

She told me, “You can’t.”

This is where we are. Doctor’s offices are not care provider units anymore. They are care provider units that are coupled with medical coding expert units. The goal is to certainly provide care, I don’t doubt that, but then also code an account for the highest possible reimbursement from the insurance company or Medicare.

Given that coding can take a myriad of forms, doctors are taken out of the equation. If I had any hope of finding out the cost of anything, I was told that my daughter would have had to check with the office manager before receiving any specific step of care.

And this is why healthcare is broken.

There is no financial relationship between the patient and the caregiver. If we want to have any hope of bringing the cost of care under control, we must inject the cost of treatment into the conversation at the point of care, not in a political debate 1,000 miles away.

By the way, I’m still fighting this, but as you might expect, the office manager has yet to find time to call me back.

I’m considering paying the bill.

In pennies.

Does it seem wrong to show up at their office with 40,800 pennies?

Rodney

 

 

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About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.