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$53,000 for a cat bite? You gotta be 'kitten' me!

The culprit: David Lazarus' cat, Bear.

We all get sick or banged up from time to time and occassionally it gets worse than that. Picture this: Getting bitten by your cat, the spawn of Satan, which turns into an infection, which turns into surgery, which turns into a week in the hospital for a grand total of -- wait for it -- $52,660.53. Ouch! That's exactly what happened to guest host David Lazarus. Fortunately, he has insurance so that enormous bill, which is basically how much it'll cost to send his kid to college for a year, is not really what he owes. But how do you make sense of medical bills like this? To answer that, we turned to Dr. David Feinberg, president of UCLA Health System, which runs UCLA Medical Center in Santa Monica, Calif., which is where David was treated.

"The current bill that you're looking at is really based on a system where part of that bill will be immediately reduced because of a contractual arrangement that your insurance company has with us," says Dr. Feinberg. "So, in essence, there will be a discount on that bill."

 

David's insurer will cover $38,448 and his total due is a little over $1,500. But what about the $14,212.53 on the table?

"That's a discount. That would be like when you would buy something on sale and they say it's 25 percent off or whatever number that comes out to be. That $14,000 or so is a discount because you're part of an insurance company that sends us a lot of business. And then the itemized items on the bill really are our best way of capturing everything that happened to you during the course of your treatment. While I don't have the details of all your treatment, I do think you were in our emergency room, in our operating room. You got treated by a staff. We spent a lot of money on treating and coordinating the care," says Feinberg.

"The other part that's 'hidden' -- let's say, and I'll put that in quotes -- in that bill is care for others. So likely in the rooms on either side of you -- in the OR before and after you -- there were patients with no insurance or insurance such as Medi-Cal that don't even cover our costs. So we, in essence, cost shift it. We put that uncovered cost into your bill," he adds.  

Feinberg says patients shouldn't think this is a deliberate act of deception because he's a good guy and doesn't think that people who "go into health care are actually trying to deceive others." But he does agree that the current health system is flawed.

"It's a crazy system. We're working very hard to rationalize it. Everywhere else you go, they list the price and you know what you're getting. In health care, because of the history of how the finances went, it just doesn't have that in it. We're really working to be transparent."

Feinberg says if we look at the amount that we spend on health care in the U.S. -- $3 trillion a year -- we don't hold a candle to countries that spend far less. Nevertheless, a couple of changes will happen because of the Affordable Care Act.

"A couple of things that are happening right now are those without insurance are getting the opportunity to get insured and that will take place over the next couple of years. That will automatically decrease how much I need to charge you... We won't have to shift the cost of the uninsured to those with insurance," says Feinberg. "Two is, to switch from a business where we make more money the more often you come in the hospital -- the sicker you are and the more we do to you -- to a new system where we'll be incentivized to keep you healthy."

Feinberg says we can expect to see these fundamental changes in the next two to three years.

About the author

David Lazarus is an American business and consumer columnist for the Los Angeles Times.
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My parents live in Austria and have for over 30 years. They are American citizens. They have private Austrian insurance. My dad has had several medical issues and insurance has never questioned a claim, they just pay it. In fact he's been in and out of the hospital many times in the last 10 years.
My dad was visiting a couple summers ago when he started feeling dizzy. It turned out he had an irregular heartbeat (it was stopping), and so they decided to admit him and put a pacemaker in. He called his Austrian insurance, and their first reaction was no problem we'll arrange to have you airlifted back to Austria. When he explained he was ok with them doing the surgery in the US, they approved it.

Several months later he got the bill. 4 days in the hospital and the surgery....$115,000. It shocked not only us, but the insurance company. They couldn't understand the obscene prices. Not being familiar with the game, my dad ended up having to play the middle man between the US hospital and the Austrian Insurance. It all worked out in the end, it was negotiated down to something like $60,000, and insurance paid it. But it underscores just how messed up the US system is. The insurance company even said, it would have been cheaper for them to have medical 'repatriated' my dad back to Austria and performed the surgery then to deal with the bill they got from the US hospital.

I am more amazed that he got it all on one bill. My last visit (as a patient) to the ED resulted in a bill from the Hospital, a bill from the the ED Doc, a bill from the lab, a bill from the x-ray, and a bill from the hospital "general services operation center".

My "share" of all the bills came to $130 for a simple sprained ankle. But the total cost to the insurance company was over $2,000. Some of it was in my mind questionable, $34.97 for an ace wrap...which you can get the exact same one from CVS for less than $8.

Thing is, I work in an ED from time to time, and see people come in with out insurance at all who get treatment that they will never pay for. That cost is also added into people like me who have insurance. If I did not have insurance, they would have done the same things for me, but would send me the bills for a few months and then write it off as uncollectable. No matter how many times I show back up, they would still keep treating me even if I did not pay at all.

Really have to wonder how much of that $53,000 is covering the cost of non-payers.

I am an American who lives in France and I always travel to the U.S., with good travel insurance. I was hospitalized in 2010 for 48 hours and received a bill from the hospital for $37,000. There were difficulties with my travel insurance paying all the bills as there were so many for this little 48 hour stay and rather simple operating room procedure that took less than 40 minutes. My son in Los Angeles called the travel insurance people in the States to nag them about settling some of the bills that were not yet paid. The agent (I'm sure in error) sent him an XL spread sheet with all the bills they received and what was paid. They were billed $37,143.98 (hospital alone). The insurance company's discount was $32,583.69. The insurance company $4,560.29. The total they paid for the whole stay including the doctor, emergency room, scans, etc., etc., was $11,042.29. Now if I didn't have insurance, the hospital bill alone would have been around $25,000 IF I paid in full immediately by credit card or check as they will offer a discount if you do this. So those people who don't have insurance will pay far more than any of the insurance companies whether they are regular customers of that hospital or not. In addition, when I returned to France and had to have major surgery for the same problem, my total hospital and surgeons bill for an 8 day stay in the hospital was about the same as the surgeons bill for this small procedure - about $3,700 - and I had excellent care. Something has to change and fast in U.S. healthcare. It's coming to the point where people even with good insurance are paying through the nose. Last January my young non-smoking niece died after a 6-year battle with lung cancer. Her husband was left with over $400,000 in medical bills mostly owed to the brain surgeon and the oncologist, and they had an excellent insurance policy.

Any medical-care reforms should include reforming the way bills are designed... I suspect they were developed by the same experts who design the phone bill, only this is life-and-death... I have challenged bills - or at least asked for straight explanations - and one has to be highly educated, articulate, and truly ticked off to even ask, and I learn that they are designed to meet the needs of insurance companies and the computer-formatters [Same of course applies to dealings with social security, IRS, and the like: the facts are obfuscated by the forms; "reform" may be needed, but it should begin with the communications demanded]
A funny story for an obscene situation: one has to be very healthy to manage being sick!

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