Saturday, December 19, 2009

Medicine is Complicated, So Are Computers: You Can Get Price for iMac, But Not Ingrown Toenail

Health-care prices are a mishmash for lots of reasons, but one of the main ones is the way we pay for health care — you don’t pay the doctor, your insurance company does, an arrangement that gives at least two of the three parties involved a good incentive to obscure prices, so that the consumer has no idea how good or how rotten a deal he is getting while the insurers and hospitals attempt to game and swindle each other. Given the shocking and terrifying size of serious medical bills — my mother’s last stay in the hospital billed out at $360,000 -- the American health-care consumer, quaking in his paper hospital slippers, no longer even asks:What does this procedure cost?” He only asks: “Does my insurance cover it?” No prices, no negotiation, no mystical coordination between producer and consumer — instead, maddening and expensive and often underhanded mediation by the insurer.

Medicine is complicated; computers are complicated, too, but you can call Dell or Apple or Best Buy or whomever and ask: “What does this sort of computer cost?” and you will receive an answer. And then, when you get to the store — miracle of miracles! — that will be the price. Computers are damned complicated to make, with programmers in the United States and India collaborating with Taiwanese microchip fabricators, Dutch LED manufacturers, Irish customer-support agents, etc. You can get a price on an iMac, but you can’t get a price quote on an ingrown toenail.


~"
Priceless is Worthless" by Kevin Williamson in National Review (subscription required)


Thanks to Pete Friedlander.

Update: Full article here.

18 Comments:

At 12/19/2009 11:03 PM, Blogger save_the_rustbelt said...

"but you can’t get a price quote on an ingrown toenail."

That is blatantly false. Pick up the phone.

 
At 12/20/2009 1:13 AM, Blogger sethstorm said...


Medicine is complicated; computers are complicated, too, but you can call Dell or Apple or Best Buy or whomever and ask: “What does this sort of computer cost?” and you will receive an answer. And then, when you get to the store — miracle of miracles! — that will be the price. Computers are damned complicated to make, with programmers in the United States and India collaborating with Taiwanese microchip fabricators, Dutch LED manufacturers, Irish customer-support agents, etc.

All the CSR's I'll talk to hail from a First World country - the United States of America. Might I add, I hear them perfectly clear, in a Midland accent(when speaking about a paper subscription), Southern(Atlanta), or Midwestern(Denver) accent. I don't have to have a corporate account to do it (as with Dell), it just happens to be that way. Well, it does help that I make sure that it is on a consistent basis.

As for the Third World programmers in India and China, they have to rely on "fellow travellers" like Carly Fiorina and various law firms to clear a path to US companies. Going offshore not only is a few steps from treason, it also makes the product quality decline to unacceptable levels.

The folks in Taiwan(and the PRC), they just make shoddy equipment(e.g. Realtek, NatSemi, TSMC, VIA) on order from whomever. I avoid their products however I can.

Cheap hardware has no major place in my house. Shipping, travel and time trying to decipher CSR-speak takes away from delivering superior solutions. It only exists where there is no way to show economic preference towards quality(at the time of purchase).

Sadly, the trend is going from exported goods designed with the First World in mind to imported goods that were designed with the Third World in mind. May that never happen with medical care, ever.

The same thing applies with my medical care, even moreso; my selection criteria is First World, multigenerational US citizen.

 
At 12/20/2009 7:31 AM, Blogger bob wright said...

Correct me if I'm wrong, but Curtis Mathis was an American company producing TVs in America.

Their TVs were very expensive. Their TV add said "The most expensive television set in America; and darn well worth it"

Consumers bought less expensive TVs.

Curtis Mathis filed for bankruptcy.

 
At 12/20/2009 8:21 AM, Blogger Mark J. Perry said...

Save-the-rustbelt:

Sorry that the entire article is not available without a subscpription. In the article the author recounts his experience of NOT being able to find out how much a procedure would cost if he paid cash, when he did "pick up the phone" and ask:

"A few years ago, needing a medical procedure, I conducted an experiment, partly out of curiosity and partly out of dread of dealing with the insurance bureaucrats who are theoretically paid, by me, to provide me with an agreed-upon service, but who in fact earn their pay in no small part by scheming to renege upon and undermine that agreement in various sneaky ways. I asked my doctor: “If my insurance will not pay for Procedure X, how much would it cost me to pay for it out of pocket?”

In the article, he explains how he was not able to find out the exact price.

 
At 12/20/2009 10:03 AM, Anonymous Lyle said...

It is amazing how much this is true. With the web, why not require all drug prices to be posted. Its only a database problem, and likley the info is already in a computer, just needs to be copied and maintained. The issue with hospital costs is that the full costs include a lot of unpredictable things, such as how many of various things are needed. If we made hospitals charge only by DRG, then you could post the prices.

 
At 12/20/2009 10:29 AM, Anonymous Anonymous said...

Something troubling to me along the "pick up the phone and ask" line. As a follow-up from a recent stay in the hospital, I was approved for a 1-time test. I desired and asked the doctor for a repeat of the test; he was concerned the insurance would not cover it (for approximately $125). I asked the doctor what it would cost me, personally, if the insurance did not pay; answer, approximately $525. I told the doctor I would pay for the second test if the insurance did not cover it (the insurance did cover it). My question, though, is why should I pay $525 (if my insurance company did not pay) for a test that insurance deemed to be worth (and covered for) $125?

 
At 12/20/2009 10:48 AM, Anonymous CompEng said...

The base point is 10% on: the lack of information in healthcare is astonishing and kills competition.

The reasoning is wrong: all the uncertainty wrought by the complexity of computers is dealt with up-front, and amortized before consumers get there, not a solution applicable to medicine.

A better analogy is car repair, and you will in fact find that mechanics often can't give you a correct price up front unless the repair can by reduced to the rote replacement of a commonly replaced part. The best we can hope for is that medicine becomes more like car repair.

 
At 12/20/2009 11:15 AM, Blogger sethstorm said...


Their TVs were very expensive. Their TV add said "The most expensive television set in America; and darn well worth it"


...and what Chinese junk passes for a TV these days has no polite word to describe how bad they are.

 
At 12/20/2009 12:15 PM, Anonymous Anonymous said...

sethstorm apparently sits in the dark, typing out drivel on his 20 year old IBM computer, which he still boots off a floppy, ever fearful of committing "treason" by purchasing a newer computer with foreign components. This goes a long way toward explaining the "informed" quality of his posts.

 
At 12/20/2009 12:52 PM, Blogger sethstorm said...


Anonymous 12/20/2009 12:15 PM

Only the keyboard, for which is a fine US-built Lexmark/IBM Model M13 Trackpoint with spring-loaded keys. It is a fine typing instrument for which will outlast any cut-rate computers for which receive its input. If I wanted to, I could even switch to an IBM Model M that is even older than that; it also will outlast many cut-rate computers.

I have no problem with pre-expansion UK/Europe components and if there is an effort to minimize Third World inputs from start to finish. With all practicalities aside, what I have is current(to this year, not 1989) and as US-sourced as much as possible.

If you want your cut-rate machine, fine; but remember that you do get what you pay for.

When it comes to medical care, I do not make such compromises. Disaster is just one step away from a HSA-inspired corner-cut.

 
At 12/20/2009 12:59 PM, Blogger James said...

Cosmetic surgery is generally not covered by health insurance and people do ask how much it costs and do get answers. While other medical procedures have continued to go up in price cosmetic surgery has been coming down.

Medical costs have always been high but the real surge happened because of Medicare. If you remember one of the groups opposed to it were doctors. As Medicare was first getting funded, Congress was very worried about doctors working to scuttle it. To avoid this they decided to pay doctors generously. I remember reading a story about a doctor going in the front door of a nursing home and coming out the back door 18 minutes later and billing Medicare for 12 nursing home visits. At the time more than the equivalent of one week of gross pay for a blue collar union job.

 
At 12/20/2009 6:32 PM, Blogger Steve said...

This comment has been removed by the author.

 
At 12/20/2009 7:50 PM, Blogger juandos said...

The whole article: Priceless is worthless: in health care, education, or bonds, the price is (metaphysically) right...

"That is blatantly false. Pick up the phone"...

Oh really?

When's the last time did that work for you save_the_rustbelt?

"Going offshore not only is a few steps from treason, it also makes the product quality decline to unacceptable levels"...

What planet does is this sort of lunacy the norm sethstorm?

"...and what Chinese junk passes for a TV these days has no polite word to describe how bad they are"...

Oh dear sethstorm, you just have the worse luck with electronics...

I have a computer in front of me with Chinese made componets that has been humming along for five years now even after changing out the motherboard/processor/memory chips (that's right! made in China) twice to upgrade capabilities...

I've have a Philips television proudly made in Shanghai that is eight years old and still works as good as new...

 
At 12/21/2009 12:51 AM, Anonymous Lyle said...

It is interesting that there have been a number of stories recently about overtesting. There is usually a anecdotal reaction about the one person whose life was saved by some test. I put it this way, insurance pays for those tests that make economic sense to pay for based upon effectiveness research. If you want others you are free to pay for them.
The issue is what should everyone pay for your health care? Now some on this forum would say nothing, but short of this position, perhaps we say that you get a cost effective medicine payed for, but if you want Rolls Royce medicine you get to pay for it.

(This confronts the 8 ton gorrilla of health care --- we are all going to die)

 
At 12/21/2009 4:55 AM, Blogger OA said...

Lyle said...
...I put it this way, insurance pays for those tests that make economic sense to pay for based upon effectiveness research. If you want others you are free to pay for them.


Overtesting has nothing to do with the effectiveness. It is effective testing done when it isn't really needed. As in there's a really small chance of something showing up but the test is ordered just in case.

Even if a doctor thinks there's only a 1 in a thousand chance of a test coming up with some exotic disease, it's in their interest to order it because they can't afford to be sued on every thousandth diagnosis.

 
At 12/21/2009 7:42 AM, Blogger juandos said...

It seems that medicine will be getting even more complicated in the near future...

From Mary Theroux of the Independent Institute: Medicare’s Refusal of Medical Claims Continues to Outpace Private Rate

"According to the American Medical Association’s National Health Insurer Report Card for 2008, the government’s health plan, Medicare, denied medical claims at nearly double the average for private insurers: Medicare denied 6.85% of claims. The highest private insurance denier was Aetna @ 6.8%, followed by Anthem Blue Cross @ 3.44, with an average denial rate of medical claims by private insurers of 3.88%"...

 
At 12/21/2009 10:39 PM, Anonymous Lyle said...

For an interesting tale on costs etc, see the 12/21 issue of the San Francisco Examiner on Medical Tourism.
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2009/12/21/MNFJ1B6BRS.DTL
Which relates to the difficulty of getting a price for medical care in the US. Note the lower prices for proceedures even at the hospital in OK mentioned in one of the earlier posts than at most hospitals. For medical tests see prepaidlab.com. Now most of these work by charging the patient directly. (Prepaid lab does not even require a Doctors order,)

 
At 12/26/2009 2:06 PM, Blogger Dalemore said...

After hearing a lot of good reviews, I purchased a Dell laptop for $275 from lionoutlet 4 months ago. Laptop arrived after 10 days, outer casing had some scratches, LCD was fine. Laptop has been taking abuse from a 10 year old for 4 months now still works fine…good value for $275!

 

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