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.