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How a cat bite cost one man $55,000
The culprit: David Lazarus' cat, Bear.
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The cat bite was bad enough. But then L.A. Times columnist David Lazarus got an infection. Soon enough he was in the hospital, having surgery that eventually saved his left hand. Of course, he was relieved. Then he got the bill. The total charges came to over $52,000. Add a couple thousand for physical therapy and co-pays for follow-up visits, and it comes to nearly $55,000.
But how? Let's do the math.
Surgery: $12,282
Hospital stay (6 nights at $4,000 per night): $24,000
Anesthesia: $780
MRI: $3,290
Drugs: $3,412
Laboratory services: $4,534
Tube for in-home IV drip: $2,352
Miscellaneous other charges: $2,010
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Total: $52,660
Digging into some of these individual charges, Lazarus found that they were available for much less elsewhere. Why, for example, was he charged $16 for generic Tylenol?
"It all basically stems from the discounts that are contractually given to insurers in return for them bringing scads of patients into hospitals. So what do the hospitals do? They jack up all the prices so that the prices become so inflated, that once the discount kicks in, they'll still be able make a profit," Lazarus says. "You have no idea what any particular thing really costs."
Luckily for Lazarus, he has health insurance. Blue Cross Blue Shield of Illinois covered $38,448. His co-pay was a little over $1,500. That leaves some $14,000 unaccounted for.
Lazarus went to talk to the head of the hospital where he says he received excellent treatment. He says Dr. Feinberg of UCLA Medical Center told him the extra $14,000 was "funny money." It simply disappears.
You could argue that American health care worked exactly as it should. Lazarus received the treatment he needed and the bulk of it was paid for by insurance, a point he acknowledges.
"Three thousand dollars out-of-pocket for a $55,000 bill -- there's going to be a lot of people who say, 'What are you griping about?'" says Lazarus. "But ... the average worker pays more than $4,000 a year in premiums for family coverage. So is $3,000 out-of-pocket a good deal? A bad deal? I don't know, because I don't know how much anything costs."
And yes, Lazarus still has the cat.
David Lazarus also guest-hosted our personal finance show, Marketplace Money, this past weekend. Click here to listen.
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The same thing happened to my friend’s next door neighbour - the dog bit was deep in the right leg the bill was $22,000 Pics… http://www.businesselectricityprices.co.uk/
I've never understand why people in our country accept that healthcare should be a for profit business. It's tantamount to accepting slavery as "a way of life". -- So happy you kept the cat. I pay $2,400 a year for coverage and I have an $8k deductible up from $5K. Which reminds me, last year I didn't have the 20 percent co-pay. I'm concerned this has changed. They've been sneaky. One more thing on the to do list (not that I can really "do" anything about it)."
The week I received my PhD in 2002, I got a scratch on a rusty nail. I knew my tetanus wasn't up to date, but I didn't know how urgent it was to get a new shot. I went to the emergency room at St Francis Hospital, a few blocks away. I didn't have any insurance, so I knew I'd get socked - maybe $100. At the hospital, no one told me it wasn't really an emergency or that I could wait. I asked how much it would cost and they wouldn't say.
They put me in a room. The scratch needed no treatment. A resident wandered to the door. He never came in, the nurse said he wasn't needed. An EMT in training (not employed by the hospital) came into the room and gave me the tetanus shot. I asked who he was, but the nurse wouldn't deign to answer me.
Two weeks later, before I had received the bill, I was called by a collection agency representing the hospital. When I did receive the hospital bill, it was for $500. Then the emergency room doctor sent me an additional bill for $150. The hospital's own pharmacy told me the cost of the serum for the injection was $15. I finally spoke to the hospital's Vice President and offered to pay the higher of $100 or whatever Blue Cross would pay. They refused to negotiate. Ask me if I paid $ 650 for a $15 tetanus injection administered by someone who was not a hospital employee. Hospitals are always complaining about how much they lose by serving the uninsured. They could have had $100.
In 2008 I had open heart surgery for a 4 way bypass and to replace a bad valve. When I received the Hospital bill, $250,000 I nearly had a heart attack. Fortunately I only had to pay a fraction of that.
I have had the good fortune to be able to holiday frequently in Europe but the bad luck to often get sick while there. My treatment in Russia, Spain and the UK was excellent and the charges were most reasonable.
Your explanation of our current Health care business madness was excellent.
All the politicians objecting to reform should listen.
On the surface this piece sounds light and airy warranting a little laugh. However, what we are talking about here is white collar crime. If you are working poor and do not get insurance from your employers then it would not be so funny to recieve an inflated bill of 20 to 50 % higher than reasonable simply in an attempt to bilk and insurance company or a taxpayer who left holding the bag.
All this and the medical profession gets to "bury" their mistake. NPR should be at the forefront of calling to task and begging to question, "is this why the cost of health care is un-affordable"? This country needs a good dose of reaility and a good lesson in ethics and moraility!
I suspect that if you examine the tax returns of the hospitals you will see that the "funny money" is a loss that they claim to offset their gains. Our tax system is so convoluted and perverse that is what company's do to reduce their taxes. It is what our IRS does as told to by bills passed by congress and signed into law by our president. It's not a "health-care" problem.
Having been a beneficiary of government run healthcare for over thirty years those who think Obamacare is going to fix much of this and cost less let me illustrate. My daughter and I got our flu shot at a local pharmacy. They billed my government run healthcare $10.00. (Remember this pharmacy is in business to make money so their bill should reflect that, eh?) The federal government paid them $15.00! Yes, 50% more than they asked for! Now guesstimate how many of my fellow 9.4 million beneficiary brothers and sisters did exactly what we did and figure out just how much money the federal government wasted paying 50% more than was billed!!
Someone above said we all know how much we pay in premiums, our deductibles, etc. I asked my congressman at a session shortly after he voted for Obamacare what he paid for insurance and what some of his costs were? He didn't know. Just as he probably didn't know what that bill contained that he voted for. We get what we sow.
A great article. We need much more of this sort of thing because we know so little about it. There are more comments here than I've seen in a long time. Keep it going.
I was hit on my motorcycle by an uninsured motorist 2 years ago. I spent 6 days at SF General after they fixed my broken tibia. The entire bill was around $155,000. Blue Cross paid about $83,000, what they considered 'Fair and Reasonable', leaving me with a balance of $72,000. David Lazarus is lucky that he had a policy that protected him from balance billing (the $14,000 'funny money' that he didn't have to pay). In my case, my policy, which is a high-deductible policy regulated by CA Dept of Insurance, did not. The physicians' billing department sent me to collections, and I had to fight both the hospital's and the physicians' billing departments for a year before they agreed to write off my balance. I lost many nights of sleep over this, and yet I consider myself lucky because I know how many people had been driven to bankruptcy by medical debt.
And here's my example to echo David's befuddlement at the itemized bill: I was billed $193 for a dose of Zofran. After release I got them from Costco for 40 cents each. So, yes David, we often don't know how much anything costs. It's whatever the hospital decides to put on the bill. There's no transparency to us, the hospital care consumer.
And they say our system is not broken?
Here's a link to an LATimes article questioning why we have 2 health care regulators in CA:
http://articles.latimes.com/2011/jun/23/business/la-fi-insurance-regulat...
Thank you so much for this story. David Lazarus makes an excellent point when he says we have no idea how much things cost. Most people know their premiums, deductibles, co-pays and that's about it. "A doctors visit costs $30 because that's what I pay when I go see her." As many of the comments have pointed out, there's a lot more to this issue than what was covered in this story. I really hope Marketplace continues to do stories regarding medical billing, to help those of us outside the medical profession get a better understanding of it.
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