The $1,654 Staple

To get an idea why health care costs are insane, check out this article from the Sarasota, Florida, Herald Tribune. A boy banged his head on a bookcase during a pillow fight. The scalp laceration wouldn’t stop bleeding, so his mother took him to a hospital emergency room. A doctor took a quick look at the boy’s scalp and closed the superficial wound with one small staple.

“The doctor came in for all of five seconds, said he needed a staple, and then told us to go to a pediatrician to take it out,” Tobio said. “We saw the doctor for three minutes total.”

The bill: $1,654.

The boy’s mother wanted to know how one staple cost $1,654, so a reporter, Anna Scott, contacted the hospital to find out. It turns out the staple itself, the staple gun used to apply it, a bandage, and a topical anesthetic cost $274. The gun holds 35 staples, but it can be used only once even if only one staple is used. Then it is thrown away to avoid spreading infection. Whatever happened to sutures?

Note this part:

The staple is helping pay for about $60 million the hospital loses every year from people who are uninsured or cannot pay for treatment, said the hospital’s chief financial officer, David Sullivan.

When the hospital staff says the staple costs $274, they are accounting for the fact that they only receive, on average, 30 cents for every dollar they charge. That includes deals brokered with private insurance companies, too, deals current health care bills do not propose regulating directly.

I keep harping on this, but it’s obvious to me that — within the confines of the current health care reform bills — getting costs hauled back into Reality Land requires getting as many people insured as possible. I fully appreciate that paying for insurance can be a real hardship. I’ve been there. But what’s happening is that people who aren’t insured are running up bills that are being paid by people who are insured, which is one reason why insurance costs so much. Getting more people insured — especially more younger and healthier people — should help. That’s why I support mandates.

The doctor’s charge to do the stapling was $951: $480 for the visit and $471 to repair what the bill calls “a superficial wound.” … Because hospital doctors are usually private contractors, the hospital does not control what they charge.

Now, I suspect the doctor has to jack up his charge for the same reason the hospital does — he doesn’t always get paid for what he does. But I’ve read in several articles that hospitals that pay physicians a fixed salary do a lot better job of keeping cost down, at no loss of quality. However, I suspect that’s the sort of thing we probably can’t do much about until we get closer to a single payer system.

After a few seconds of medical care, the boy’s mother spent about an hour filling out forms. A recent PriceWaterhouse study found that $210 billion is wasted each year on medical paperwork, mostly having to do with insurance. I believe there’s a provision for uniform insurance forms in the House and Senate bills.

In the case at hand, apparently when the boy smacked his head his pediatrician’s office was closed, so the mother took him to an emergency room. That’s what uninsured people do, of course, which is the most gawd-awful cost-inefficient way to provide health care possible, because emergency rooms have horrifically high overhead. A system of neighborhood walk-in clinics for non-critical medical problems would provide care at a lot lower cost.

For his vote on the Senate bill, Sen. Bernie Sanders got an increase of $10 billion in funding for nonprofit community clinics to provide basic health care and pharmacy services, billing on a sliding scale. For this, lots of progressives blew up in outrage and threatened to campaign against him in the future.

And that’s the story of the $1,654 staple.

36 thoughts on “The $1,654 Staple

  1. Yes, but . . . America has always been known to be the country where you get what you pay for. Health care is no where near that as you have so eloquently explained above. In fact, we apparently pay for what other people get–definitely not fair. However, health care did not start going up until it became a for-profit business. Before then, there was the idea that people should not get rich on other people’s misfortunes. Personally, I believe if the doctor/hospital knew they would never get paid by charging the prices they charge, they would have more reasonable pricing. Additionally, the people who are against health care reform (like Limbaugh) have tried to make people think that no one gets between you and your doctor. That is the biggest lie ever told! I recently had knee replacement surgery; and, I can tell you about a minimum of 10 incidences during my surgery and rehabilitation where the insurance company got between me and my doctor. One particular incident was when I needed to go to a rehab facility. My doctor gave me a list of about 7 facilities. My insurance company would not cover me at any of those 7–NOT ONE. I finally had to select a facility that the insurance company would accept despite what my doctor recommended. I wish more Americans truly understood what a crappy health care system we in fact have. Now, I am paying the bills of what the insurance companies didn’t pay; and, it is thousands of dollars. In the end, I really wish I had never made the decision for the surgery despite the crippling pain I was in. The pain of the surgery AND the bills is tenfold.

  2. Maha asserts that “lots of progressives blew up in outrage” at Bernie Sanders. So I followed the link expecting name calling, profanity and other symptoms of outrage, but none were apparent.

    Certainly the article expressed both disagreement with Senator Sanders and disappointment that he changed his position. It wasn’t likely to please Bernie’s supporters. Still, it’s hard to see how accusing people who share our values of “blowing up” is helpful.

    • Still, it’s hard to see how accusing people who share our values of “blowing up” is helpful.

      The article, in short — vote against the bill, Sanders, or lose your seat. Nothing about Sanders’s reasons for changing his vote. My characterization stands.

      Good bye.

  3. I have a friend who is way far right in his views, thinks everything Glen Beck says is gospel. We were talking last week, he says the uninsured should just go to emergency rooms because they can’t turn you away. I said there is the problem of not having preventative care with that method, and not managing illness such as cancer , diabetes, and a number of other conditions that need maintenance, not so much as treatment. In other words, being proactive vs reactive saves lives, the quality of life, and money.
    The cricket chorus followed………
    That said, if you guys know any one who needs a staple or two in their head, please refer them to me. I have several staple guns, a bottle of alchohol, and I’ll charge $99.95, just like Earl Scheibe.What a deal!

    Sorry to hear about your surgery problems, Bonnie.

  4. $1654 is not health care, that’s medical inusurance. Insurance limits medical care to treatment by a MD. Thus, in a hospital this simple wound repair cannot be done by a phys. assit., a nurse pract., intern or resident unless they are supervised by a MD. The only fee for this simple wound repair insurance will reimburse is the MD fee. Please note if an intern had put in the staple, the MD fee would still be $951. Medical insurance is not health care.

    • $1654 is not health care, that’s medical inusurance.

      No, that was the fee the hospital charged for the service performed. The family’s insurance was an entirely other issue.

      Medical insurance is not health care.

      Yes, dear, we all know that. Stop being anal. And goodbye.

  5. Not a surprise that the charge has nothing to do with the service rendered but more to do with what hospital needs to make to stay in business. Another reason for mandates.

    For Mrs. Chief’s two stents, the bill was $55,000 and change. The insurance paid 25 cents on the dollar. Is the hospital overcharging or is the insurer underpaying?

  6. This is long-established practice. In 1971, the hospital that did an appendectomy for a family member had a clause in its admission papers allowing it to bill for an extra day to cover costs for the indigent. There was no choice but to sign.

    In another health care cost arena, lawsuits, I saw a cost-saving technique that is probably pretty common. At a nursing home where a relative was being admitted this fall, I was asked to initial every paragraph of the admission papers. When I got to the one about arbitration, the clerk told me it was to avoid legal claims over lost patient personal property, but I read it all and found that it specifically bound over all claims or constitutional rights for all issues to arbitration arranged by the facility. I bet that helps hold down medical costs. I declined to sign that part, and got no argument. I must not have been the first to catch it.

    All my relatives have good hospitalization insurance through jobs, retirement, Medicare, etc. If not, I can see how at least four families would have been bankrupted by surgical expenses. The high initial costs billed, by the way, ARE charged to the uninsured. If you are self-pay, you WILL be hit with bills no insurance company would tolerate. It is just an indirect advertising method for the health insurers, I guess.

  7. As health insurance premiums and annual deductibles continue to increase more and more people will join the ranks of the uninsured. There will be a tipping point where even the right wing noise machine and MSM collusion won’t keep the peasants and pitchforks away from the health insurance company’s headquarters. As long as health care remains for profit and legislation to allow needed reforms is prevented by industry lobbyists, nothing will change until we go beyond the tipping point. I’d be surprised if every health insurance company hasnt already conducted feasibility studies to know when that will occur.

  8. Bonnie, your experience is just like ours. My wife is looking for cataract removal this spring. We’ve placed many, many more calls to our insurance carrier than we have to doctors, trying to find a provider they’ll pay for, then confirming that they’ll actually pay for the guy we eventually found.

    As to walk-in clinics, we’ve used one in Winchester Virginia for problems that were too small for an emergency room but would not wait for the GPs office to open. We got good care at a reasonable cost. They don’t have 24-hour coverage like emergency rooms, so it would not completely solve the problem. But if there were more of them, they would definitely help, imho.

  9. On ABC this morning, they put up a clip of Rusho the Hut being released from the hospital in Hawaii. Never one not to play to the cameras, he praised the care he got as the best in the world – don’t change anything. ABC noted that in Hawaii, employers are mandated to provide health insurance..

    Open mouth – insert foot. Rusho may next be hospitalized for a severe case of athelete’s tongue – a medical achievement.

  10. Just think of how many indigent peoples visits could have been paid for by stapling Rush’s BIG FAT mouth shut! It would probably amount to the hundreds, if not thouands.

  11. Thank you for another excellent post, Maha.

    If we look at the current pattern in health care, and extend it over time, it’s pretty easy to see disaster looming — not only for the uninsured, but for the rest of us as well:

    1. The more patients unable to pay for medical treatment, the more hospitals and doctors must charge to cover those losses.

    2. The more medical charges increase, the more insurance companies must charge, and the more “at-risk” people they must refuse to insure or drop from their rolls.

    3. The more insurance companies charge (and the fewer they choose to insure), the more people unable to afford medical care.

    4. The more patients who cannot pay for medical treatment, the more hospitals and doctors must charge to make up for those losses.

    It’s a self-perpetuating downward spiral that does not bode well for anybody.

  12. A system of neighborhood walk-in clinics for non-critical medical problems would provide care at a lot lower cost.

    Reading Adam Clymer’s bio of Ted Kennedy, I first learned about the 1966 legislation Kennedy sponsored to provide federal funds for community health centers. At the time, these centers were an innovation that answered the needs of poorer urban and rural Americans, who of course had no kind of “health insurance” whatsoever back then. The centers started up in places where access even to care was nonexistent. The scope of their services might be broader than providing non-critical walk-in care, but they’re the foundation for care that could eliminate the terrible waste of an ER visit.

    Kennedy tried to convince Congress that a national network of community health centers would go far in providing/improving health care for nearly all Americans; unfortunately, in 1966, much of our national treasure was being poured into the Vietnam conflict, so he was only able to fund a small number of centers. But federal funding (however small) has continued, essentially without interruption, for 43 years; it was included in Obama’s stimulus bill last year. And when Kennedy died in the summer, employees of health centers all over the country went outside to watch their buildings’ flags lowered to half staff.

    So it occurs to me that a big piece of the puzzle has been in front of our eyes all this time. The problem is, whether we’ve been at war or not, the funding for a proven, successful subsystem has been too small to make the impact that it should.

  13. So essentially what we have is a totally socialized system in which the hospitals are “forced” to redistribute their costs so as to make ends meet.

    Sorry, I simply do not understand why, if we’re socializing the costs already, we need private insurers?

    Single payer is the only solution left to us that makes any sense. The bill that came out of the Senate is completely unacceptable.

    We can do better, we must do better.

    • Sorry, I simply do not understand why, if we’re socializing the costs already, we need private insurers?

      We’d be way better off without them. I’ve been arguing for years that a private insurance system cannot deliver 21st century health care to more than a privileged and cherry-picked slice of the population, and until people get that through their heads we’re all going to be hobbled.

      Single payer is the only solution left to us that makes any sense. The bill that came out of the Senate is completely unacceptable.

      In the real world, your choices are to take the Senate bill, which would be enormously beneficial to a lot of people, and incrementally build on it to reach something like a single payer system; or, kill the bill and give up any hope of health care reform for another ten to fifteen years. During which time hundreds of thousands of Americans will die or be bankrupted by the system. I think anyone who believes defeating the current bill would inspire Congress to cough out a better one in the next year or two is insane.

      We can do better, we must do better.

      Good luck with that.

  14. It’s a self-perpetuating downward spiral that does not bode well for anybody.

    Yet the status quo is preferable to the bill presently on offer, or so I am frequently told.

    • Yet the status quo is preferable to the bill presently on offer, or so I am frequently told.

      Wrong wrong wrong wrong wrong. Anyone who says that is utterly clueless. And I regret that I’m getting ready to go out and cannot provide a long argument why that is true, but here is a recent post by Nate Silver that I think is persuasive.

  15. I’m not sure that the free riders are the major expense to our overall health system costs. A high percentage of uninsured are healthier, lower cost patients, plus lot of them do pay out-of-pocket. Not to say it isn’t a problem, but not as big as a few other big bills.

    I carry the following Single-payer vs Multi-insurer numbers around in my head. (I don’t know where to actually find them in a tidy, well documented way.)
    – 15-20% Insurance over head (staff, profits, etc.)
    – 10% Doctors office paperwork and billing staff.
    – 5-10% Uninsured

    That doesn’t say that single payer would save the entire system 30-40%; you can’t just add up those numbers. For one, the system is so fragmented you can’t reduce it to simple formulas. For another, private insurance is only 35% of the total health care dollar. See Paul Krugman’s chart the other day.

    Transparency

    The other big expense comes from cost shifting and lack of transparency. Maybe we should say it differently: “Profit shifting enabled by lack of cost transparency. Just as an aspirin doesn’t cost $10, the staple gun and treatment doesn’t really cost $1,654, even if that is what is billed. The payment changes depending on who’s paying, and who has the power to negotiate.

    FQHCs (Federally Qualified Health Centers), that receive government funding have transparent books. As a result, their costs of treatment are far, far lower than the private hospitals.

    You want to see wailing and gnashing of teeth? Pass a regulation requiring transparent accounting on all health care providers!

  16. Davis x, yes, there are anti-health reform folks who believe we should maintain the status quo. Trouble with that is there is no status quo to maintain because we are not dealing with a static situation. If no action is taken, the downward spiral will not only continue, it will will worsen with increasing rapidity.

    In effect, doing nothing will actually do something — it will cause our health care system to collapse over time.

  17. Sounds like my experience in a Florida emergency room. Daughter had a severe ear ache (bleeding from the ear, a lot of pain) and went to the ER because that was the only choice. A lot of people were there getting routine care, as far as I could see. Doctor saw her for, maybe, 5 minutes and diagnosed her with an ear infection. Prescribed anti-biotics. Headed home on the 20 hour car ride the next day. Daughter still in pain and still bleeding from the ear. Went to our doctor here in Cheeseland, it was swimmer’s ear, not an ear infection. Doctor in Florida had to look past the swimmer’s ear and the bleeding in the ear to ‘see’ the ear infection. My insurance, which is awesome, paid the hospital bill and doctors bill to what they had negotiated (almost $2K combined). The doctor wasn’t fully reimbursed to his charge so we were getting nasty calls from his employer in Philadelphia saying we owed them an extra $200. I was damned if I was going to pay that $200, usually I wouldn’t care a great deal, but he had misdiagnosed and my daughter had been in pain on a long-ass drive, I was not going to pay it. After several months of haggling we finally called the head of the hospital in Florida, told them what a crappy doctor they had and the situation and that we would shortly start a malpractice if the $200 charge wasn’t taken care of. Haven’t heard from them since. Giselson, you’re exactly right, we already have socialized medicine, just in the most inefficient manner possible. My insurance company paid the over inflated cost of almost $2K for swimmer’s ear. Absolutely crazy. But I do agree with Maha, we are much better off getting something on the table now, and tweek it later as the ineffectiveness of the entire system becomes obvious. Besides, if will be another nail in the coffin of the Republicans, which is always a good thing.

  18. A friend of my daughters (recognized as one of the smart one in high school) just put an appeal on facebook. Does anyone have any extra antibiotics? I need a full course for bronchitis. I can’t afford a doctor visit, let alone a prescription. Yeps, we are third world!!!! This woman is 40 years old and should be close to the prime of her earning potential. Welcome to 2010. Hope she gets her meds.
    Spread the word, health care is a civil right, nothing more nothing less needs to be said.

  19. While I am a contentious person, that is not my intent here.

    I sincerely believe that if we do not kill this bill, we will never get any kind of meaningful reform. No bill will force real action (because something has to be done). This bill will result in no real action for years, and many bad actions once it goes into effect.

    The insurance industry has forfeited its right to participate in this process. They have greeded themselves out of the picture. Let the government cherrypick the best from the private sector, and let the claims deniers suck on unemployment for a year or two while the economy rebuilds.

    An industry filled with carpetbaggers cannot move us forward into the 21st Century. They will instead drag us back to the 19th Century, just like Wall Street is trying to do.

    The right legislation in 2011 could still be implemented by 2014. Killing this bill is not burning our bridges, but rather it would be building a bridge to another chance for redemption.

    • I sincerely believe that if we do not kill this bill, we will never get any kind of meaningful reform. No bill will force real action (because something has to be done). This bill will result in no real action for years, and many bad actions once it goes into effect.

      I think this bill is real action, even if flawed action. The wonks all say it really will benefit enormous numbers of people and go a long way toward getting costs under control. And, once we have taken this big step, discrete incremental steps (such as a public option) won’t be as big an effort.

      You don’t seem to notice that large numbers of people have yet to admit that something must be done, and even many of those who think something must be done are clinging to “solutions” that are even less progressive than the Senate bill — tort reform, deregulation of insurance companies, etc. A majority have no incentive whatsoever for crafting a progressive bill, and it is absolutely unfathomable to me that if this bill is killed all the deadheads will magically see the light and move toward progressivism. That flies in the face of everything that’s happened this year in the health care reform fight.

      Your argument boils down to saying that once Congress has taken this big step it will be incapable of taking further small steps to make the bill better, but if it fails to take this big step it will be motivated to take a bigger step in the near future. That makes no sense.

  20. But what’s happening is that people who aren’t insured are running up bills that are being paid by people who are insured, which is one reason why insurance costs so much.

    That’s what I used to think as well. In 2008 I had surgery & the hospital’s original charge for room & board was over $6000/day. No medical care, mind you, just [email protected]#$%^& room & board. But I had insurance, and the the insurer got a discounted room rate. Instead of the $6000+ per day I would have been charged as uninsured, they were charged only $1400/day. Meaning the prices charged to the uninsured were subsidizing the prices charged to the insured. At a daughters of charity (non-profit) hospital no less. Bastards.

    Health insurance costs so much these days because their damned executives need their multi-million dollar “bonuses“. Single Payer NOW.

    • Meaning the prices charged to the uninsured were subsidizing the prices charged to the insured.

      But the prices charged to the uninsured are fantasy charges, because only a tiny fraction of those charges will be paid. I’m not entirely sure what was going on with your bill, but the conclusion you draw is nonsensical.

      Thinking. It’s an effort, but sometimes it’s useful. Try it sometime.

  21. Thanx for the dig but the surgery I had wasn’t optional – it was either get the surgery or find myself at an ER some months later getting a colostomy. I spent a lot of time w/the billing department trying to find out what I would have been charged as an uninsured patient and the answer appeared to be what the charges were in the itemized bill I received. (Nobody would come out & actually verify this in plain words but that’s what was at least implied) Maybe I would have paid the bill at $10/month but I would have been on the hook for the entire $24K for, yep, room & board. Not including any of the charges for the actual surgery. Maybe I would have had to declare bankruptcy but I’m one of those dull people who do their damnedest to pay their bills and nothing I’ve seen has caused me to believe that I wouldn’t have been on the hook for the full amount.

    Here’s another – saw a doctor last fall for a chronic condition. Later found the total bill was ~ $200 for the office visit, insurance company discounted payment was ~ $100 of which I paid a $25 copay. Did get the doctor’s billing department to admit they would have given me a 25% discount if I had paid cash.
    W/insurance – I’m out $25 {+ premium), UHC is out $75, total cost $100.
    W/o insurance – I’m out $150, total cost $150. Net subsidy to insurance company, $50 or $75 depending.

    You can call me lots of things but “not thinking” isn’t one of them, I’ve been reading their statements & billing info for a long time. Lately I’ve read that a reason hospitals are showing such large charges for uninsured care is that those big numbers inflate their “charity writeoffs” at tax time whether or not they actually get their money. (BTW my COBRA expires in 2 months & to get on my wife’s plan is almost $600/month. Oh & I’m in “good health” w/no pre-existing conditions, either, the bowel surgery was the only major problem I’ve had in 40+ years & the chronic condition is an annual attack of bronchitis which I’ve learned to ward off w/generic meds)

    • darms — that’s all very interesting, if not all relevant, but the fact remains that most services performed for uninsured people are never paid for. It may be that the hospital you went to is doing some creative bookkeeping for tax purposes, but your conclusions remain nonsensical.

      Groups insurance plans keep costs down by negotiating standard, reduced payments from the physicians in their network, so the amount billed would depend on which insurance company carries your policy. This isn’t exactly news.

      Good bye.

  22. My daughter fell off the edge of the couch a couple years ago and dislocated her elbow. We took her to the local hospital’s ER.

    Just like a NYC taxi that has a minimum fee just to sit in the back seat for a second, the hospital charged $435 for less then 5 minutes of doctor’s time to come in and go ‘click’ and reset her elbow.

    Obviously I have no insurance, because I live in America, so I had the common pleasure of paying it all out of my pocket, because American Health Insurance is the best in the world!

    • About 15 years ago my son broke his arm while roughhousing with some other boys after school, and the bills for his arm added up to about $15,000. He had some insurance coverage through his father, but as I remember I ended up paying a few hundred dollars I could not afford to pay. I hate to think what fixing the arm would cost now.

  23. Another hospital’s ER chief told me that they went from being a net loss for the hospital to becoming the single biggest profit-maker for the hospital. I asked him how they did that and he explained it this way.

    If a patient came in with stomach complaints, the staff would spend some time running tests and diagnosing the problem. When it was determined that it was something innocuous, like bad gas pains, they would give the patient some medicine and send him home. This would get written up as ‘upset stomach’ and the charges would be minimal.

    Now they bill for everything they can think of, all the tests, the staff time spent on that patient, as well as the medicine. This may be triple the original fee or even more.

    I am torn about this, on the one hand, I agree that they should get paid for their costs, but on the other they just added a huge amount to the skyrocketing costs of healthcare.

    Ultimately I believe we should join the rest of civilization and institute a national single-payer system.

    And that same ER chief told me that he also wishes there were a single-payer system. Why? To cut down his department’s huge bureaucracy costs inherently involved in the ridiculous US insurance system.

  24. The hospital doesn’t control what it charges, and we don’t know what we’ll be charged. If the woman knew beforehand what the staple would cost, would she have been able to request something else? Why don’t we ever know the costs of health care procedures and treatments? Check out this fun, short video.

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