IMPENETRABLY BUREAUCRATIZED AMERICAN MEDICINE

When Bracha Klausner returned home after an extended hospital stay for a ruptured intestine three years ago, she found stacks of mail from doctors and hospitals waiting for her. There were so many envelopes - some of them very thick - that at first, Mrs. Klausner, 77, could not bring herself to open them, and she stored them in large shopping bags in her Manhattan apartment. When she finally did open some of the envelopes, there were pages filled with dozens of carefully detailed items, each accompanied by a service code: "Partial thrombo 2300214 102.00," "KUB Flat 2651040 466.00." On the 15th page or so of each bill, a "balance forward" line listed amounts in the tens of thousands of dollars. One totaled $77,858.04.

Another mailing, from her insurance company, clearly said, in large type, "This is not a bill." But she could make no sense of the remark codes: "G7 - Your benefit is based on the difference between Medicare's allowable expense and the amount Medicare paid" or "QN - Your claim may have been separated for processing purposes."

Mrs. Klausner's experience is shared by millions of Americans who, frustrated and confused, find themselves devoting enormous amounts of time and energy to sorting out their medical bills. Walk into any drugstore, and the next few minutes of your life are fairly predictable. After considering the choices, you make your purchases and head for the cashier. Seconds after the transaction, you are handed a receipt that reports to the penny what you paid for each product, along with its brand, its size, and the date, time and location of the purchase. But become a patient, and you enter a world of paperwork so surreal that it belongs in one of Kafka's tales of the triumph of faceless bureaucracies. And although some insurers and hospitals are trying to streamline and simplify bills, the efforts have been piecemeal.

Medical paperwork is a world of co-payments and co-insurers, deductibles, exclusions and contracted fees. Nothing is as it seems: patients receive statements that often do not reflect what is actually owed; telephone calls to customer service agents are at best time-consuming and at worst fruitless. The explanations of benefits that insurers send out - known as E.O.B.'s - are filled with unintelligible codes. The system is so impenetrable that it mystifies even the most knowledgeable. "I'm the president's senior adviser on health information technology, and when I get an E.O.B. for my 4-year-old's care, I can't figure out what happened, or what I'm supposed to do," said Dr. David Brailer, National Coordinator for Health Information Technology, whose office is in the Department of Health and Human Services. "I can't figure out what care it was related to or who did what."

Dr. Blackford Middleton, a professor at Harvard Medical School with special training in health services research, said he did not fare much better than Dr. Brailer. "I understand the words of diagnoses and procedures," he said. "But codes? No. Or how things are paid or not paid? I don't understand that." Dr. Brailer said he often used an analogy to describe the current state of medical billing. "Suppose you walk into a restaurant," he said, "and you don't get a menu, you don't get any choice of what food you'll eat, they don't tell you what it is when they're serving it to you, they don't tell you what it's going to cost." "Then, weeks or months later, you get a bill that tells you all the food you ate and the drinks you had, some of which you remember and some you don't, and although you get the bill, you still can't figure out what you really owe," Dr. Brailer said.

Some people make valiant efforts to sort through bills and claims, but end up throwing up their hands; others ignore them, until they are pursued by collection agencies; still others, basically healthy but weary at the prospect of a paperwork fusillade, stop going to the doctor altogether.

In the days before managed care, most insurance plans operated on a fee-for-service basis. Patients paid 20 percent of medical fees; insurers paid 80 percent. But as health care costs have continued to rise, many patients are being required to pay an ever-larger part of their medical bills, and deductibles continue to increase. And to keep the system churning, close to 30 cents of every dollar spent on health care goes for administration, much of it spent generating bills and explanations of benefits.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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