I’ve written before about how it costs more to be poor in this country, but beyond having to pay more often for lower quality items, one of the biggest reasons it costs more to be poor is healthcare.

Let me be honest here. I work in healthcare. I work for what is known as a managed care organization or MCO (which is different than an HMO, but not to the layman). My company combines both our own staff model clinics (salaried physicians) and the standard fee for service contracted providers. In fact, while I don’t negotiate contracts myself, I work in the department that does the contract negotiations with outside providers.

This is the industry that pays my bills, and I believe strongly in my company’s overall mission. But I assure you, healthcare in this country is BROKEN.

 

I’ve read a number of personal finance blogs that recommend negotiating with your doctor as a way of reducing fees. If you do not have insurance, you should definitely negotiate. If you do have insurance, do not bother. Your insurance company has already done a better job than you can ever dream of.

For example, my mother in law just had total knee replacement surgery. The hospital charge (which does not include the surgeon, he bills separately) is $54,355.83. This is what the bill would look like without insurance. However, she has insurance, and the negotiated rate knocked $37,606.89 off the bill, for a balance of only $16,748.94. That’s right, the contract between the hospital and the insurance company has the hospital receiving only 31% of their charged fees. My mother in law is responsible for only $795 of that.

$795 is an amount she can easily afford (because we saved for this). In fact, it’s less than 1/6 of what we pulled out of savings to cover her medical costs. (The majority of the costs will come from her stay in a rehab facility.) But what if she hadn’t had insurance?

People without insurance have to pay more than $795. They have to pay more than the $16,749 than the hospital is getting paid for this surgery. They are charged the full $54,356. And trust me, you as an individual, do not have the buying power to negotiate your bill down by 69%.

Sure, you can get it down some, but even if you were able to reduce it 50% (not likely, but let’s say you are the best negotiator in the world), you would still owe over $27,000. If you were then able to get on an interest free payment plan, paying say, $795/month, it would still take almost 3 years to pay off the bill.

And people wonder why medical bankruptcy is so high in this country.

 

Now, I know that most of the people who go without insurance are young, people who think that they are healthy, that nothing can happen to them. C got a kidney stone at age 27. He had just started a new job and did not yet have insurance. That kidney stone, and the drugs they gave him for pain, resulted in my marriage proposal (and you bet your sweet patootie that I held him to it). Because he was working, they would not discount his bill, but they did put us on a payment plan. Due to some paperwork snafus, it took us over 5 years to pay off that hospital bill.

In addition to the cost, the treatment he received from the triage nurse was below par. At one point, he moaned in pain. The nurse looked over her little wall and told him to be quiet, he was upsetting the other patients. (The other patients, for their parts, assured us they were only upset because he was in obvious pain and nothing was being done about it.) Do I think that would have happened had he had insurance? Very much no. I believe that if he had had insurance, we never would have been asked to wait, that he would have been taken back almost immediately.

We have since been to ERs (though admittedly not that one) with insurance and have always been taken care of immediately. After my car accident, we were not even finished with the triage nurse before they were calling me back. (Obviously a different set of circumstances, but I was in less visible distress than he had been with the kidney stone.)

In those subsequent cases, we never paid more than $100 out of pocket for an ER co-pay. $100, one time, instead of 5 years of debt.

 

Sadly, not every job offers health insurance, or offers coverage at a reasonable rate. Sometimes people have to make the choice between rent or groceries and health insurance, and I can not blame them for gambling on not getting sick. Bad things are guaranteed to happen if you cannot eat or keep a roof over your head; there is a chance no one in your family will get seriously ill or incur thousands of dollars in hospital bills.

 

I do not think people should have to make that choice, not for their children, not for themselves. I do not know that completely socialized medicine, or mandatory health insurance is the answer, but I would be willing to give either of them a shot. To quote Voltaire, “the perfect is the enemy of the good”. I do not know that there is a perfect solution out there, but what we have now, it is not even good.

Charging people who can afford it 1/34^th of what we charge people who cannot is not a system that is ever going to work. Pretending that something costs 69% more than it apparently does, just to increase write-offs on the balance sheet, does not accurately reflect medical costs.

 

I am not saying hospitals or physicians should give away their services for free, nor do I think doctors should be making minimum wage, but I do think there needs to be an honest discussion of what healthcare REALLY costs, and how we care for all of our citizens, especially the most vulnerable among us.

This is a conversation that needs to be taking place at every level of our society- nationally, regionally, state-wide, and in our individual communities. Healthcare is one of those issues that is both intensely personal and a national concern at the same time. We cannot pretend the problems do not exist. We cannot sit back and hope someone else solves them.

Healthcare in this country is broken, and I for one, am willing to entertain any suggestions to make it better.