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Another Cause of High Medical Costs in the US


There’s an article in today’s New York Times online about a man who had a three-hour surgery to repair a herniated disk in his neck that required a plate and screws to fuse his spine.  No doubt this was a delicate operation.  The man, who worked in insurance, was prepared to get a bill for $133,000 from his primary surgeon; he knew that the doctor would accept a steep discount.  He was not prepared for a bill for $117,000 from the secondary surgeon, whom he could not remember meeting and was “out of network” although he was head of department at a major hospital.  This doctor would not accept a discount and would not bill his primary insurer.

In this case, his insurance company agreed after discussion to pay the full amount to the secondary surgeon although the primary surgeon accepted a discounted fee of $6,3oo.  The insurance company even sent the patient a check to send on to the secondary surgeon.  The patient was hesitant, but eventually was forced to pass the check on.

The article goes on to mention a number of cases of this type of hidden charge, many even more egregious.  For example, an outside company was contracted to perform the nerve monitoring in this man’s surgery so that the surgeons would know if his nerves were being impinged on during surgery.  This company wouldn’t take the insurance and wanted him to sign a financial consent while he waited to go into the operating room.  Then the man who was there didn’t know how much it would cost and had to call his office.  The patient actually negotiated down the fee which the company was demanding.

Then the article describes what would happen if the patient had been covered by Medicare: the assistant surgeon would have been limited to a fee of 16 percent of the primary surgeon’s fee.  A number of abuses of this type are prevented by Medicare, but anything goes when it comes to the interaction between private insurance companies and medical contractors like doctors, technicians, and laboratories.  Fees have risen to astronomical levels and only the recession since 2008 has had an effect.

The article can be reached at:

The point is that the private insurance companies don’t have the clout that Medicare does.  There are some very simple reforms that would go a long way towards limiting medical costs.   The first would be to qualify everyone for Medicare, even illegal aliens.  The second would be to give the negotiating power over drug costs to Medicare Part D that the Veteran’s Administration has.  Part D currently has no ability to negotiate the costs of medicine; it must pass on the entire retail cost to the patient.  This provision, probably included to save time when negotiating the bill originally, is a sop to the drug manufacturers that insures their profits at the expense of the patient.

It does seem basically unfair to allow all the negotiating power to the private medical contractor and the drug manufacturer at the expense of the patient.  Some simple changes to how the government pays for medical care would make a tremendous difference in evening out medical expenses and taking the burden off of people who are increasingly unable to pay.

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