A recommendation to minimize costs backfires

The following anecdote is by Alexis Ball, the daughter of a patient from New Mexico. Her story was originally submitted to the 2011 Costs of Care Essay Contest.

My mom passed away last December to Stage V breast cancer metastasized to her liver. During this battle she developed ascites (an accumulation of fluid in the peritoneal cavity) as her liver failure progressed. This accumulation of fluid was not only extremely uncomfortable but painful as well. In an attempt to find symptomatic relief for the last months of my mom’s life, the oncologist presented us two options: we could come in to clinic weekly and be tapped to have the fluid drained or we could implement a permanent drain in her peritoneal space.

Per the doctor’s advice, we opted for the latter option. The doctor recommended this option because my mom was on blood thinners and this plan obviated the need to continually reverse her Coumadin dose. Thus this equated to less time for her in the clinic and was less expensive for the hospital and our family… or so we all thought.

Our insurance company approved the top of the line specialty drain for this procedure. After the procedure, the hospital provided us with the first batch of drainage supplies. My dad and I learned how to properly drain my mother and change her dressings. We got into a routine of draining every night before bed. There was a dramatic improvement in my mother’s quality of life due to the release of extra of pressure in her abdomen. All was copasetic until it came time to reorder our supplies,

“Hello Ms. Ball! I understand that you are reordering the drainage and dressing kits , unfortunately they are out of plan for your insurance”

We were dumbfounded. How could the insurance cover a system in which they did not support the supplies?

“These are non durable goods and not covered. The cost of the kit will be 600 hundred dollars monthly with a deductible of 750 for the first month”

Our jaws dropped.

Due to my mother’s illness she was no longer working and was waiting to receive disability benefits. Six hundred dollars a month was more than a third of her entire income on disability. Our oncologist was horrified to learn that the nondurable goods associated with the drain were not covered. He had no idea that this was the case. Our doctor had recommended this plan to not only reduce chances of infection but also minimize costs for our family. This knowledge would have altered his recommendation of treatment plan for our family.

Yet it gets better, the drainage system leaked, requiring dressing changes two to three times a day. These extra dressing changes increased our out of pocket expenses by two fold. The cost of maintaining this system was extremely prohibitive. We could either afford to pay our bills or pay for the supplies of this drainage system. Thus, we resorted to using non sterile dressings instead of the prescribed dressings. Our replacement dressings included sanitary pads, urinary pads, saran wrap, and the occasional paper towel. Although these means were clever and much more cost friendly for us, they greatly increased my mom’s chances of a peritoneal infection. A peritoneal infection would have resulted in a hospital stay and a much more costly bill for both our family and the insurance company than the sterile dressings my mom needed. My mom always joked that the solution to our financial struggles with medical care costs was for her to just hurry up and die… which much to a young daughter’s dismay was the heartbreaking truth of our situation.

Cost Awareness Anecdote: The Cost of Apples

The following anecdote is by Samuel Yang, a patient from Maryland.

Up until last May, my experience of medical costs was limited to the $100 per month premium I contributed towards my employer-sponsored insurance and the nominal co-pays associated with well-child checkups and generic prescriptions. There was never any hesitation in seeing a doctor or filling a prescription. That all changed when went I back to school.

I blindly signed up for the school-recommended family insurance and naïvely assumed myself, my wife, and my two young children would receive whatever health care we needed at a relatively small co-pay. The upfront premium of $10,000 was high, but I believed that this would cover whatever life threw at us. However, two experiences woke me up from my ignorance: my wife's endoscopy and a visit to the pediatrician.

In July, my wife was sent by her doctor to get an endoscopy to determine the cause of her stomach pain. In the weeks following her procedure, we started receiving statements from our insurance company. The statements declared that we were responsible for the full amount. We received the following explanation from our insurance company, “We don't cover preexisting conditions.” As we argued with the insurance company, the hospital bills started trickling in: $1200 from the outpatient center, $200 from our family physician, $400 for the anesthesiologist and $200 from the lab. We received six bills demanding $2600 for one procedure. As I examined the bills I was shocked by the redundancy—why is the cost for the anesthesiologist not included in the outpatient center bill? Why do I need to pay my family physician twice (the initial visit and the follow-up) for a procedure she ordered us to do? Besides feeling hung-out-to-dry by my insurance company, I felt taken advantage of by the medical system. It seemed as if everyone in that hospital wanted to include something for our visit. After fighting tooth and nail to get our insurance to cover my wife's endoscopy, they finally relented. Still, we were left with $700 to pay. For an unemployed student, $700 is not a small co-pay.

I studied the coverage booklet put out by my insurance, and I still do not understand what is covered and what is not. What I found was something similar to how we were billed for my wife's endoscopy: the procedure itself is covered one way, labs are handled another way, and prescriptions are an entirely different matter. How am I supposed to know what labs or prescriptions are associated with an endoscopy?

Compared to my wife’s endoscopy, my daughter’s first visit to the pediatrician should have been straightforward. A fever that lasted three days followed by a rash was a simple diagnosis for her experienced pediatrician. What is not simple is the billing and insurance struggles we are facing. Our insurance company decided that my daughter's fever was a preexisting condition, and as we fought with them to fulfill their responsibility, the pediatrician's office contacted us that the $115 fee is actually $321. Again, the feeling of being taken advantage of is overwhelming. It could be that our doctor's office is honest in their error, but I have never received services or products charged to me like this. In other words, when I go to the store, I know exactly how much a pound of apples will be long before I get to the cashier—and there are no “preexisting” conditions that add hidden costs at the register.

I've learned a lot about medical cost of care; that is, care costs a lot and it's not straightforward what the cost is. I know that we have paid $11,021 for an endoscopy, a visit to the pediatrician and spotty coverage for the rest of the year. It’s not merely that medical care is expensive, it’s also that I have no estimate of what my costs will be. Getting new brakes on my car is expensive, but the mechanic is very careful to give me an itemized estimate before the repair is made. Recently, my wife, after a particularly exhausting week, started experiencing pain in her chest and a tingling sensation in her arm. Being a nurse, she knew exactly the tests that would be ordered if she went into the hospital.

Despite my attempts, she refused to go to urgent care knowing that the cost of the visit, even if our insurance company cooperated, would be enormous. There's now a hesitation to use our medical resources that was never there before.

Itemized receipt for my health insurance premium

There’s been lots of discussion recently on transparency. Whether that means getting a receipt for the income tax we pay and what it’s used for or providing a price list to consumer/patients for different medical procedures in a geographic region, the buzz of transparency is everywhere. All this talk has gotten me thinking about renewing my auto insurance - Bear with me, I swear health care costs are related. When I asked for a quote, I got to see exactly how much I pay for each point of coverage. Having auto insurance liability coverage is required by law in my state, but for other types of coverage, I chose the level of coverage that best fit my own risk tolerance. After playing around with different levels of coverage I received a calculate premium payment. I knew that 50% of the premium was for liability coverage, 30% for collision, 10% for additional medical coverage and 10% for services that save me time. Then I took that same standard language and shopped it around. There is lots of competition, and I have a vested interest in getting the right coverage for me for the lowest cost. I own a lot of the responsibility for controlling the premium and the costs of my coverage are very transparent. I have a direct incentive to encourage me to drive safely and to take care of my car. While I could not tell you the statistical likelihood of me getting in an accident; I know that if I do my best to avoid accidents and take care of my car then my risk is reduced and so is the increase in my premiums. My behavior doesn’t eliminate the risk entirely, but then that’s why I have insurance, isn’t it?

I sure wish health insurance worked this way. I have insurance coverage through my employer. Don’t get me wrong, I’m really grateful for it. But my employer gets to figure out what is the most cost effective coverage for them and only then do I get to choose from the couple of selections that they provide. I feel very disconnected from the cost of insurance. Even though I only pay a portion of the total premium, I know vaguely that I might play a role in keeping health care costs in control by diet and exercise and regular checkups, but I don’t have a very visible way of seeing the impact. I sort of know what my health insurance covers. For instance, I know my employer ensures that all major plans cover approximately the same thing. But then my choice is based on which doctors I have access to and the overall portion of the premium I pay. I also know what my co-pays are and what my deductible is. But I don’t know how much of my health insurance premiums go to catastrophic coverage, preventive care services, chronic care management, prescription coverage, etc. I feel very disconnected from the premium cost and even more disconnected from how I impact that premium.

Out of curiosity, I asked the insurance agent from whom I purchased auto insurance whether their health insurance quotes were itemized in the same way as their auto insurance quotes. Let’s just say that the lack of transparency is not just a symptom of employer coverage.

We keep asking for transparency on health care costs thinking that it will help align consumer and practitioner incentives to use health care effectively. Maybe we could start by asking for transparency on the costs we, as consumers, have a real relationship to, the amount we pay for insurance. It’s all well and good to know how much a triple bypass costs at the different hospitals in my town; I just don’t know that knowing the difference would induce better health behavior on my part. What is relevant to me is what my premium actually buys me and where I might play a role in controlling it.