ABC reported on a recent Reddit post of a $55,000 appendectomy bill. Yes, 55 THOUSAND dollars. Although the 20-year-old man in question got over the pain of his appendix removal, his hospital bill probably won’t be feeling better anytime soon. Fortunately, the patient was insured, so he only had to pay $11,119.23 of the outstanding bill. The shocked man of course took to the best place on earth to document all things ridiculous.
“I never truly understood how much health care in the U.S. costs until I got appendicitis in October,” he wrote on Reddit. “I’m a 20-year-old guy. Thought other people should see this to get a real idea of how much an unpreventable illness costs in the U.S.” The recovery room cost $7,501.00, which surprised the man because he spent only two hours in there. The actual surgery cost $16,277.
“I think you can see how outrageous some of these costs are,” he wrote.
Yep, that’s pretty outrageous. But the bill wasn’t that unusual. Do you remember this New York Times article we wrote about? Recent studies have shown that procedure costs vary from hospital to hospital. In April, University of California San Francisco researchers set out to find the average cost of an appendectomy in California. The price ranged from $1,529 to $182,955, the researchers wrote in the study published in the journal Archives of Internal Medicine. The Times wrote, “Sutter Health operates more than two dozen community hospitals in Northern California, almost all in middle-class or high-income neighborhoods. Its clout has helped California Pacific Medical Center, the state’s largest private nonprofit hospital, also earn the highest net income in California. Prices for many of the procedures at the San Francisco hospital are among the top 20 percent in the country, according to a New York Times analysis of data released by the federal government.”
If you look closely at the first image, you’ll notice this bill in question came from Sutter.
“Sutter is a leader — a pioneer — in figuring out how to amass market power to raise prices and decrease competition,” said Glenn Melnick, a professor of health economics at the University of Southern California. “How do hospitals set prices? They set prices to maximize revenue, and they raise prices as much as they can — all the research supports that.”
According to ABC, “Sutter General Hospital spokeswoman Nancy Turner said hospital billing is complicated, and that the hospital has people available to help patients navigate it. She said hospitals often serve many patients who don’t pay at all or don’t pay the actual cost of treatment because they are on Medicare or Medi-Cal, California’s version of Medicaid.”
“Sutter Health agrees that an improved billing structure is needed, where published charges are more closely aligned with actual costs,” Turner said. “And a more straightforward pricing system is only possible when reimbursement from government-sponsored patients covers actual costs.”
Ouch. So the red tape made the bill exorbitant and now the hospital is apologizing for the red tape. And as long as there’s red tape, those without means will require more red tape to get fee-for-service care. This cycle can’t continue indefinitely. That’s where cash-only medicine comes into play. We’re betting there are doctors who can perform an appendectomy, and profit from the procedure, for at least 25 percent of the out-of-pocket cost facing this unfortunate patient.