Suppose you and I both went into a restaurant and both ordered a steak and lobster dinner. Both meals are prepared the same and both were delicious. Then when our bills came, you were charged $157.61 and I was charged $11.02. Would you think that fair? That's what is happening every day in our health care system.
Janice S. was also charged $157.61 for a CBC-the complete blood count that those of us who are ER aficionados remember George Clooney ordering several times a night. Medicare pays $11.02 for a CBC in Connecticut.
The first of the 344 lines printed out across eight pages of his hospital bill-filled with indecipherable numerical codes and acronyms- seemed innocuous. But it set the tone for all that followed. It read, "1 ACETAMINOPHE TABS 325 MG." The charge was only $1.50, but it was for a generic version of a Tylenol pill. You can buy 100 of them on Amazon for $1.49 even without a hospital's purchasing power.
Dozens of midpriced items were embedded with similarly aggressive markups, like $283.00 for a "CHEST, PA AND LAT 71020." That's a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare, the government health care program for the elderly.
Every time a nurse drew blood, a "ROUTINE VENIPUNCTURE" charge of $36.00 appeared, accompanied by charges of $23 to $78 for each of a dozen or more lab analyses performed on the blood sample. In all, the charges for blood and other lab tests done on Recchi amounted to more than $15,000. Had Recchi been old enough for Medicare, MD Anderson would have been paid a few hundred dollars for all those tests. By law, Medicare's payments approximate a hospital's cost of providing a service, including overhead, equipment and salaries.
I'm not sure the answer to this but it seems like usury to allow charges to be jacked up so high or to let Medicare pay way under what they should. I don't know which is happening but it's probably a bit of both.