The other health care issue: Getting costs down

A few weeks ago a friend of mine received a bill from a hospital in New York where he had had a routine colonoscopy, one of those preventive procedures that people over a certain age are supposed to have every five years or so. The bill, my friend was surprised to see, was for $8,513.36, not including the doctor's fee, which was a few hundred dollars more - this for a procedure involving no anesthesia and taking less than half an hour from start to finish.

What was most surprising about the bill was not even the total, rather high, amount; it was an indication that Medicare - the government insurance program for people 65 and over - had paid the lion's share of the bill, or precisely $8,200.61. Over $8,000 of the taxpayers' money for a routine colonoscopy - a procedure that would normally cost a few hundred dollars, maybe a bit more than a thousand for a high-cost doctor in a high-cost area. What was going on here?

The truth is: I don't know. When I called Medicare to ask about this, a spokesman said Medicare would normally reimburse a hospital about $500 for a colonoscopy performed in New York City - where costs are higher than they would be in, say, Fargo, North Dakota. Why Medicare would have paid 20 times what it is supposed to pay, or if in fact it did pay that amount (maybe the hospital's invoice was incorrect) are questions buried somewhere in the vast federal bureaucracy.

In the meantime, the matter of a friend's medical costs served as a reminder of a large and lively issue in American life, which is why medical costs are so much higher here than in most other advanced industrial countries, and what, if anything, can be done about it. We pay per capita about twice what European countries pay for medical care - roughly $6,000 per person per year - and costs are increasing at three times the rate of inflation.

And beyond that, another question: health care plans to remedy the gaping holes in the American system, most notably the hole represented by the 40 or so million people who have no health insurance, seem to come out almost every day. Both Hillary Clinton and Barack Obama have produced elaborate plans, while one of the claims to fame of the ex-candidate Mitt Romney was that he put the country's first statewide medical plan into effect when he was governor of Massachusetts.

Analysts have pored over both the Clinton plan and the Obama plan and given both of them pretty high marks. The Clinton plan would get more people on the rolls than the Obama plan, but it would have more enforcement in it and would be more expensive. Either plan would probably mark a major step forward from where we are today, and the country does seem in a mood now to make some kind of step.

But while there is a great deal of discussion on how to get more people insured at rates they and the nation can afford, there seems a good deal less talk about ways to get costs down, which is where my friend's colonoscopy and other rather sizable medical bills come in.

Among the other sizable bills was one for hip replacement surgery I underwent at the end of last year, surgery that, as I said in this space at the time, I'm fortunate to have had - and happy, too, that the entire cost was borne by Cigna International, my health insurance company.

Despite the overall worrying picture, there are some things right about American medicine, especially when you are among the lucky ones covered by a good insurance plan, or for that matter among the millions of people 65 and older whose costs are mostly covered by Medicare.

Still, there's that cloying question of cost. My hip replacement was expertly done by my surgeon, Allan Inglis Jr., and his team at New York's St. Luke's/Roosevelt Hospital. But the total cost will end up being around $40,000, or perhaps a few thousand more, once the bills for anesthesia, for four days in the hospital, for medications, pre- and post-operative exams, physical therapy and the prosthesis itself are added in.

Cigna paid $32,000 to Dr. Inglis for the surgery alone, a sum that seemed stratospheric to me and that even the good doctor allowed, in a telephone interview, was "a lot." When I asked him why, if he thought it was a lot, he charged that much, Inglis described a system of billing and payments so complicated and inconsistent that it defies easy understanding. "It's a number out of a hat," he said of the actual amount paid. "We don't have any idea of what we're supposed to be billing because we don't know what the different insurers are going to pay, which is kind of a funny way to do business."

When he submits a bill to an insurer, he said, he doesn't specify an actual amount. He puts in a code for the procedure he's done, and the insurance company pays what it calls its reasonable customary rate. Some insurance companies, like mine, pay a lot, he said, and others, like Medicare, pay less, with the higher payers subsidizing the lower ones.

In the end, the result is higher costs than just about anywhere else. In Germany, for example, the cost of a total hip replacement would be 7,000 to 13,000 euros, or $10,200 to $19,000, depending on the patient's condition and whether there are complications, according to a spokesman at the national health insurer AOK. A private clinic would charge about 20,000 euros.

And if you're willing to go to Thailand or India, you can have the surgery performed for $10,000 to $12,000 all inclusive, in a state-of-the-art hospital with state of the art prosthetics and surgeons. Maybe the answer to the American problem is a bit of medical globalization. If insurance companies would cover the airfares to send willing patients to Thailand, they could save upwards of $30,000 for each hip replacement they cover. They don't reimburse airfares, but maybe they should.

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Australia: A farcical public hospital

Even under great public pressure, the bumbling NSW government still manages to do zilch

THE state of the disastrous new $100 million Bathurst Base Hospital has descended into farce after a head doctor bought an air horn from a sports store so he could be summoned in an emergency because he did not trust the alarm system. It was hoped that non-urgent surgery - suspended indefinitely more than a week ago because of safety concerns - would resume yesterday but doctors instead voted to postpone all operations booked for the next week, calling the situation a "crisis".

A representative on the Medical Staff Council, Dr Stavros Prineas, said the alarm system had serious communication problems, putting patients at risk. The emergency alarm could not be heard across the theatre complex - despite sounding in other areas of the hospital - so nurses had resorted to running through corridors looking for doctors during an emergency, he said. He said Telstra was working yesterday to give the hospital mobile phone coverage. Surgery lists would be reviewed weekly but operations would probably be suspended for at least a further three weeks, Dr Prineas said.

The Health Minister, Reba Meagher, has agreed to a potentially multimillion-dollar redesign because the hospital does not meet national health standards. The co-director of the intensive care unit, Brendan Smith, said nothing had improved after Ms Meagher's visit on Thursday. "We still do not have an effective alarm system in the theatres and recovery. Yesterday we did a couple of cases in the theatre and the only way we were able to do it was because I went to the shop and bought an air horn," Dr Smith said.

"We actually gave it to the director-general [of NSW Health], Professor Debora Picone, and said this was what we've been reduced to and she looked shocked and there were a few comments from her minions in the hospital that said, 'I don't know if that's legal', and we said, 'It might not be legal but it's effective', and they got the message loud and clear."

He said doctors were also considering closing maternity because anaesthetists felt they could not provide a safe service. "Everything but the most dire urgent surgery is being cancelled and it's probably that the obstetrics unit will be closed down because we can't give anaesthetic cover," Dr Smith said.

The doctors have issued a list of demands to Ms Meagher including that a purpose-built annex be urgently constructed for services they say were promised but not delivered such as the ambulatory care unit and outpatient clinics.

The State Government yesterday tabled its response to the Nile inquiry into Royal North Shore Hospital and said it would implement all but two of the 45 recommendations. Doctors say the recommendations do not address the basic problems of bed and staff shortages.

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