My wife recently gave birth to our seventh child. Just a few months before he was born, we moved from Utah to Tennessee. Our plan was to have the delivery done by a group of midwives at a birthing center close to Vanderbilt University, but those plans were changed by the birthing center midwives just a few days before the delivery date. Instead, we were told we’d need to have an induction at the Vanderbilt University Medical Center.
Looking back, we should have gotten a second opinion. Here’s why.
As small business owners who handle our own insurance policies, we typically pay cash for everything we consume in terms of healthcare. In our pregnancy experience for our previous six children, we’d never paid more than seven thousand dollars for the entire pregnancy, including doctor visits leading up to it (usually about $2,000 total) and the hospital stay itself, which normally costs us about $4,500 to check in, deliver the baby (without and epidural; my wife is a tough woman), and head home the next day.
We naively expected something similar in terms of costs from Vanderbilt, but there was no way to know what the total bill would be until after it was far too late.
Over the three months following our little guy’s delivery, we received a total of nearly $22,000 from Vanderbilt. To make things worse, our insurance (which supposedly included maternity coverage) paid very little towards that bill. Ultimately, the experience of having a child at Vanderbilt in Tennessee ended up costing us more than three times what it cost us for any of our previous six pregnancies and deliveries.
Was there a difference in the quality at Vanderbilt versus hospitals like the American Fork Hospital in American Fork, Utah or Mountain Point Medical Center in Lehi, Utah?
Yes, a huge difference!
Vanderbilt was an absolute dive compared to the Utah hospitals we’d experienced before. The delivery unit at Vanderbilt was very run down and unwelcoming. When my wife and I went through the worse-than-sketchy emergency room as we had been scheduled to at 10pm on a Friday night, passing through the security detail that looked like it was run by the TSA, we were a bit surprised. When we arrived at the Vanderbilt labor and delivery waiting room, I noticed just in time that the chair I nearly sat down in was covered in old, dried up blood.
Signs posted on the walls in the halls of both the labor and delivery area and in the postpartum section reassured that the long-neglected part of the hospital where babies enter the world would soon to be renovated, but that didn’t help much while we were there. Thankfully our little guy was born healthy and without complications.
But the unnecessarily huge bill for our use of old and dirty facilities made the experience unpleasant, to say the least.
The Broken US Healthcare System
The healthcare system in the United States has been broken for far too long. I can think of no other market where you’re expected to receive the product or service without being able to make any judgment about how much it will cost and whether you need this or that feature or option beforehand. When you go to a hospital or to many doctor offices, it seems that nobody understand the true value of what’s being provided.
Just a couple weeks ago, my oldest son was referred by his primary care doctor, whose front desk went ahead and scheduled the appointment, to go see a pulmonary specialist to have a breathing test done. My wife took my son to the appointment. A breathing test was given, but there was no specialist to look at the test and make a determination about what it meant. The staff at the facility told my wife that the pulmonary specialist provider normally there wasn’t having his contract renewed, and he wasn’t available to read the test or give any medical advice about what the test results meant.
Soon after the appointment a bill arrived. There had been no follow-up call from a doctor as had been promised. My wife called the billing department and told them that there had been no value provided by the appointment, and that there was nothing yet to pay for, since this pulmonary specialist had not completed what should be required to receive payment: essentially providing a medical service that matched what it was supposed to be in the first place.
Between several phone calls to our primary provider and the pulmonary specialist they are contracted to make referrals to, my wife finally received an attempt at providing value. “Your son has asthma,” was the feedback.
“Duh. We’ve known that for about 10 years! Feel free to tell us something useful.”
The next interaction with them was receiving a bill from the for over $1,200.
For a half-hour breathing test at TriStar Centennial Medical Center, with no review by an actual doctor, no useful purpose, the cost is $1,200?
Sounds messed up, doesn’t it?
But that’s how our healthcare system has turned into. People who rely upon the miracles of modern medicine (who pay for it themselves) often find themselves caught in a cloud of confusion between healthcare providers and insurance companies. The ones left holding the brunt of a dysfunctional system is ultimately the customer of both the insurance companies and the medical providers.
I can’t think of any other industry where that type of situation exists.
If I were going to buy a laptop, I can look at competing models, determine what I want and what wasn’t worth paying for, understand the ultimate price (even adding tax onto the total), and make a good decision about whether I want to buy one and which one I want to buy.
The same concept applies if I want to buy a vehicle, or a house, or pretty much anything else.
But healthcare? With most things related to healthcare, you end up buying some nebulous product or service that you’re not sure whether you do or don’t need, then you find out how much it cost you (including how much your insurance provider, to whom you’ve been paying a substantial premium to make sure you don’t have to overpay for unexpected healthcare needs) afterwards. The sticker shock can be dramatic. The whole experience doesn’t feel very much like something that fits the model of capitalism, where informed consumers and principles of supply and demand hold suppliers in check, that has made the US and the rest of the world wealthy over the past two hundred years.
Donald Trump’s Healthcare Pricing Transparency Executive Order
An executive order released on June 24, 2019 from the White House entitled Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First seems like a good step in the direction of helping patients make better decisions about healthcare and increasing competitiveness among hospitals and medical providers in a way that allows the healthcare market to become more efficient, more affordable.
The major points of Trump’s healthcare pricing transparency executive order are these:
- A recognition by the federal government that in our current healthcare system, “patients often lack access to useful price and quality information and the incentives to find low-cost, high-quality care.”
- A commitment by the federal government to policies designed to improve price and quality transparency and to address the current problems of surprise billing, a condition where patients receive unexpectedly high bills for services after not having adequate information to make decisions before the service was provided. The two cases I described fit into this surprise billing category.
- A proposal of a regulation by Health and Human Services (HHS) to require hospitals to publicly post their prices for standard services so that patients can easily understand and make choices and compare pricing between hospitals.
- A directive requiring departments of the federal government, including HHS, the US Attorney General, and the Federal Trade Commission to figure out what things the federal government is doing to impede competition in the healthcare industry and to remove those impediments.
- A requirement by the HHS together with the Treasury, Defense, Labor, and Veteran’s Affairs Departments to provide to the public access to claims from taxpayer-funded healthcare programs so that tools can be developed to better empower patients and others to reduce inefficiencies in the healthcare market.
- Directives to the Secretary of the Treasury to expand insurance options for the public, allowing opportunities for people to choose high-deductible plans and use them together with healthcare savings accounts; these directives also give more flexibility for writing off expenses related to healthcare ministries and also asks for efforts to increase the year to year carry over flexibility of flexible spending accounts.
As consumers of healthcare services, any progress toward making healthcare expenses shoppable is good news. In the meantime, my family’s approach to healthcare is to be much more conscious of taking care of our own health through good habits and using the assistance of doctors and medical offices as little as possible.