Health Care And Hospitals: Scam


We must tear down the entire medical system in this nation and imprison virtually all of the financial folks involved in it — especially Hospital-affiliated entities.

That’s a strong statement.  But it’s supported by reports like this in the NY Daily News, which illustrate nicely what I’ve talked about on The Ticker for a long time in relationship to health care, how it’s broken, and what we must do to fix it.

The charges, in fact, were mind-boggling. A statement the hospital sent to my insurance company, Aetna, showed that Good Samaritan billed $22,214.92 for a four-hour emergency room visit that included a physical exam, sedation, endoscopy and extraction of the stuck food.

Even more astonishing, Aetna agreed to pay only $2,885.67 for the services — just 13% of the bill — and the hospital settled for that amount.

This sort of game-playing, where the intent is to catch “uninsured” people and “gotcha” them into bankruptcy, would be felonious in virtually any other line of business.

Services contracted without a price?  Billing someone for services where they are in no position to negotiate before service is provided at nearly ten times what you later accept — from certain “favored” people — while you chase everyone else for the “full” price?

Let’s assume that you ran a gas station.  Your gas station posted no prices.  Further, the same gas was sold to different people, all of who were similarly situated at the time they pumped the gas, at different prices depending solely on who their employer was, and nobody would know the price of the gasoline until after they pumped it.  And if that wasn’t enough insult the price would be $3/gallon for most people who worked for a long list of companies but if you were a passer-through in town and didn’t work for any of those firms as a consequence the price would be $25/gallon.

This would run afoul of deceptive trade practices legislation virtually everywhere in any State.  You’d never get away with running a grocery store this way, or a cellphone company, or for that matter a hair salon.

It would be bad enough if the pricing was “just” 10x as high.  But in some cases it’s even worse.

As but one example of what I discovered, consider Ondansetron HCl, an anti-nausea medication that both hospitals administered to my son. Good Samaritan charged $439.90 for the drug; Aetna allowed $77.63. Somerset charged $6.52; Aetna paid $3.26.

Medicare pays 17 cents per dose.

Oh really?  That’s a factor of 2,582.  No, not 2,582% — that would be outrageous!

It’s actually charged at 258,200% of what Medicare pays.

And I’m willing to bet $1,000, right here and now, that the hospitals in question did not disclose (1) what the drug would be billed and cost before being administered and (2) what consequence, if any, would occur if you did not accept administration of that drug.

In this case the consequence could be that you vomit.

So to avoid puking you get overcharged by 258,000%.

THAT is enough to make you vomit all on its own.

The entire medical system in this country is a racket.  It is a scam designed to play on your fear of mortality or morbidity to rob you.  In any just society where the rule of law meant anything this sort of “billing system” and “practice” would lead to felony criminal charges and everyone involved would be sitting in a prison cell finding out all about the proper uses for anti-nausea medication to avoid throwing up as they were repeatedly instructed in the joys of gay prison sex.

If you want to know why our government is going broke and our financial system is headed for collapse within the next several years the reason is found right here.  This entire portion of our economy has become so imbued with graft, cost-shifting and scams that it is literally bankrupting everyone.

This is what the article claims Aetna said:

The driving force behind all this, according to Aetna, is the way hospitals and the government do business.

The rates that insurance companies pay are negotiated based on what they believe a hospital’s true costs are. But then those rates are jacked up an average of 30% to 50% to make up for money that hospitals lose in treating patients who don’t have private insurance — which is the majority of them. So to make up the difference, they overcharge patients who are insured. This practice is called cost-shifting.

This sort of collusive behavior by entities that have market power is illegal in virtually every line of business under the Sherman Act, among others.

So why haven’t these firms all been prosecuted?

Oh you know the answer — they went to Congress, “lobbied”, and got special dispensation to be able to screw you blind in both eye sockets through business behavior that would land you or I in prison for 20+ years were we to try it — including the collusion required to enforce this sort of ridiculous differential in billing — in essentially any other line of business.

Tear it down. 

All of it.

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