Doctor or Thief?

Why we especially hate medical bills.

This past spring, I sprained my ankle on a curb.  After sweating it out in agony overnight, I finally succumbed to the inevitable and dragged my sorry hide into the urgent care clinic.  I emerged with crutches and the reassurance that nothing was particularly broken; I've since pretty much recovered.

The injury is far from forgotten, however.  Bills keep arriving from all and sundry citing the date of the injury but with little if any other recognizable information save the amount due, and of course all marked "PAST DUE!!!" even when it's the first time I've gotten a bill from that particular vendor.  Aside from the bill from the actual urgent care clinic itself, which I paid promptly and reasonably willingly, the rest of them have been received by gnashing of teeth and a cry of "Those thieves!"

Which is interesting, because throughout the course of this year's health-care debate, Scragged has regularly argued that patients need to be paying more of their health care costs their own selves so as to be more sensitive to savings.  Logically, this would cause more bills to come to me, and thus make me more angry and upset.  Am I a hypocrite?

I don't have this reaction to my other bills - to be sure, an egregious credit card bill might lead to some discontent with family members, but not fury at Wal-Mart, Lowe's, or whoever the charges are from.  Whatever wrath ensues from normal bills is directed inward at one's own lack of self-control.

Clearly I'm not alone in being upset with my medical bills; there are an awful lot of people upset at the costs of medical care.  There are a lot of people upset at the cost of everything, but we don't normally call for the government to nationalize an entire industry.  We know that won't work; it will only raise costs and reduce service.  Why are doctor's bills viewed differently?

On examining my own reactions and feelings, I have come to the conclusion that there are indeed several differences between medical bills and ordinary bills which are well worth pondering before we tear down one sixth of our economy and turn it over to the government.

Shock and Awe

The first and most fundamental uniqueness about medical bills is that they are unpredictable.

You might think that this means that we don't know when we will get sick, and of course that's true.  But we also don't know when the car's transmission will break, the washing machine will fry, or the tub will spring a leak.  Life is full of surprises, most of which come with a heavy bill.

For everything save medical expenses, you can get some idea of the cost before you buy.  Every car repair shop, by law, is required to give you a written estimate if you want one before they do any work.  "You need a new alternator; that'll be $450 for the part and $100 for labor."

Odds are you'll grit your teeth and shell out.  You don't have to, though: you could simply decide to scrap the car, call around and find a cheaper shop, or let it sit in the parking lot until next paycheck.  In any case, you know what the bill will be and, at least in theory, have a chance to say "No thanks."

Not so with the doctor.  When was the last time a doctor told you, "I'd like you to take a CAT scan which will cost around $500?"  Almost always, the doctor couldn't even tell you the cost if you asked him - trust me, I've asked.

If I'm hit by a bus, I'm not going to be calling around to find the cheapest hospital, but 90% of doctor visits are not that sort of emergency and getting an estimate would be really useful.  Why is that so hard?

Most doctor's offices do have a top-line price sheet, but nobody ever pays those rates; your actual bill is determined by his negotiated rates with your insurance company, your plan's co-pay, the status of your deductible, and the phase of the moon.  It takes six people and a half-hour of computer time to cough out a bill.

Now, there is one small advantage to this system: it helps psychologically, a little, to see that your treatment "cost" $1,500 but your share is only $300.  When you had no idea what it would be up-front, it's still a shock.

The Hair of the Dog That Bit You

It isn't just one shock, either.  Consider our car repair shop: the mechanic gives you one estimate, and when he's finished, one bill for you to pay.

Not so the modern medical practice!  For months after a treatment, at unpredictable intervals and in unpredictable amounts comes a parade of separate bills from everyone under the sun: the doctor's office; the doctor himself, who is an independent contractor; the nurse, who is too; the lab who ran the test; the lab tech who interpreted the test - everybody save the janitor who cleaned the floor gets their own little pound of flesh, one at a time.

As noted, for none of these bills did you have any idea of the cost beforehand.  You don't even know their number.  Just when you think you've taken care of the last one, why, here comes yet one more.

This is for good reason.  The insurance companies try to push down both the fees on each individual service and the total amount any one doctor makes.  Not being stupid, any rational doctor is going to a) hit the insurance company up for every conceivable little individual service they can bill for, and b) play the corporate shell game so as to hit the insurance company from every possible side.

We see this sort of thing in Japanese dentistry.  The government limited the reimbursement for an office visit.  The dentists couldn't make enough money given the reimbursement for cleaning a patient's teeth, so the dentists all started cleaning one tooth per visit and having the patients come in often enough that they make more money than ever before.  Even Japanese respond perversely to perverse incentives!  Alas, the poor patients suffer by having to come in way more times than reason demands, and the overall costs and inefficiencies shot through the roof.

That sort of system may be OK for a giant insurance company which processes millions of bills and whose computers don't really care where they come from.  But it annoys the heck out of the poor patient who is greeted with a new and different bill in the mailbox every week.

How would you feel if you paid the auto shop a few hundred bucks for your service and went home - then the next week, got a bill from GM Delphi for the cost of the alternator?  Then the next week, another bill from the mechanic who's an independent contractor?  Then another from the company who owns the diagnostic computer, and another from the driver who road-tested your car to make sure the fix was good, and finally a small one for the four bolts that hold the alternator on?  By the third bill, you'd be steaming; by the last one, you'd be loaded for bear.

For whatever reason, Americans do not like to be nickeled-and-dimed to death.  The airlines are discovering this as passenger surliness rises to new heights as they now must pay separately for everything from checked baggage to a glass of water.  Yes, it makes more money for the airline - for a while - but there's a price to be paid when you declare war on your customers and they respond in kind.  The medical industry has made the same mistake.

Blind Choices

All this adds up to the fundamental problem with the American health care system.  It's not that the uninsured don't get care - they do.  It's not that the system is too bureaucratic, though it is.  It's not even that the whole thing is too expensive, though that's definitely a concern.

No, what drives Americans nuts is that there is absolutely no transparency.  Go to the doctor and you have no idea what you will end up having to pay.  It could be nothing, or you could lose your house - and you have no say in the matter, no opportunity to shop around, no chance to try to cut corners or even to plan.

In my opinion, most of all, that is what infuriates people about doctor bills.  If I'd gone to the doctor and he had told me upfront what should be done and at what cost, just like my auto mechanic, I'd've groused but gone for it with eyes open.

It's the never-ending surprises that run up my blood pressure - and hey!  More business for the doctor!

Petrarch is a contributing editor for Scragged.  Read other articles by Petrarch or other articles on Economics.
Reader Comments
Yep, just like the tax system. Transparency would fix everything IF it were properly applied. Shining light on a problem has a way of exposing the flaws. Sadly, our politicians love darkness rather than light.
September 22, 2009 9:22 AM
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