Why Healthcare is so expensive!

You always wondered why, but then you were never in the healthcare industry or work at an exec level to know how the tech systems work at a typical hospital…

Here’s a quick education into the healthcare disaster! 

When you go into the hospital, a chart is written up based on your comments and the doctors evaluation and actions (draw blood, tap your knee, whatever). This chart is then translated into a series of medical codes so they know how to charge them to you or your insurance.  The charts are evaluated by a series of medical “coders”, no, they don’t know C# or Java or JavaScript, they just match the words to “codes” (ICD9/ICD10).

Each chart is “coded” to a specific set of codes.  The codes are then sent off to the billing system.  The billing system will match the codes to the patients insurance (or lack thereof) such that the base charge rate is multiplied times a discount (or again, a lack thereof) or “forced” charge amount for that particular insurance contract (Blue Cross, Medicaid, Medicare, etc).

Most insurance companies want a “discount” on your particular services\codes.  They can negotiate or force (depending how big they are) just about anything for a set of codes.

The crazy part about this is that the base rate that the hospital charges (the “charge master” database system) is pretty much a let’s run a sql query against the database and increase everything by 7%  EVERY YEAR (or some rate adjustment, possibly matching inflation or exec\board discretion).

You should be saying…”wait what”?

Yup, every year, a non-qualified individual will increase the pricing of stuff because the execs tell them too.  Remember the movie “Independence Day” when the jewish guy says something about the price of the hammer…yeah…$400 for a hammer.

Aka, $20 for a bandaid!

Why?  Because the charge master simply gets incremented by a percentage every year in a blanket fashion!

Ok…so the charge master is broken.  Yup.  That’s where the government comes in.  Obama actually kicked some serious ass with this.  He forced certain codes to be charged at a base rate that is run by the government (and you have to follow them for any ACA insurance policies).  If you send in a bill with a code that has a price over the base, REJECTED!  It forced everyone to reevaluate their charge masters (at least for government stuff).

I applaud him for that.

But…here’s the kicker.  The “coders” that “code” your chart.  Those people are instructed to interpret the words in such a way that they can set the chart to match the most expensive codes!  Even though those codes may not even really match!  It’s up to the patient and the insurance company to do a review of the worded chart to see if the codes have been applied appropriately!

This review happens very rarely.

Now that I know how this works, believe me…every time I go into the doctor’s office I ask for my chart and the codes that were sent for it.  I actually got $250 back for this last visit!

What else happens?  Oh, execs and doctors are “spiffed” for overdoses of various items.  Example, you get bit by a snake and need the anti-venom, guess what, you only need one dose…but how many do you actually get?  Anywhere from 1-5 doses!  Each dose (back in the day) can be up to $20K each.  Where does the money go?  The doc, the hospital and the execs get a kickback!   What?!?!  Yup…there is shadiness that occurs for all kinds of things.

And that is your 10 min run down of how corrupt the medical system in America is and why we don’t have universal health care, everyone has a different charge master that no one can agree to the price of anything!


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