How to save money on health care, if you're on vacation and have all day

Here's just one example of why American health care costs so much more than anybody else's.

My husband is going to have outpatient hernia surgery in a couple of weeks. His doctor told him he had to get an EKG before surgery. He suggested that he go to the local urgent care facility to have it done. Being consumer-oriented types, we decided it would be a good idea to find out how much it was going to cost.

First, David called the urgent care center. They were sorry, but the billing office was closed. Could he call back the next day.

No problem. This morning he called the billing office. They were sorry, but they didn't know how much it would cost. He would have to contact his insurance company.

So he called Blue Cross Blue Shield Illinois. The EKG, they told him, would be billed as an outpatient procedure. There would be no co-pay, and since he had already paid his deductible, he would be responsible for only 20% of the cost. Right, said my husband, but how much will the cost be? They were sorry, they said, but they didn't know. That would depend on the provider's tax ID number and the diagnosis code.

So David called the urgent care center again. They gave him the provider's tax ID number and told him there was no diagnosis code, since this was a pre-op procedure. They thought, though, that the charge would be around $250.

At this point, David had to go meet an appointment, so I took over. I called Blue Cross Blue Shield, gave the information to the agent, and waited while she tried to figure out the answer. "We can't do pricing for hospitals," she told me at one point. Hospitals, it seems, have just too labyrinthine a discount policy for even the insurance agents to figure out. But bless her, she kept trying.

She needed a procedure code, however, which is different from a diagnostic code. After eight minutes of checking her own resources, she put me on hold and called the urgent care center herself. They referred her to the hospital's billing center, so the agent put me on hold again and called the hospital. (Say what you will about Blue Cross Blue Shield, they do have excellent customer service.) The hospital provided the necessary code, so the agent went off again to check.

Alas, she finally told me, this was indeed a hospital procedure, and therefore she would not be able to tell me what the cost would be. However, she thought it would be around $250, which means that our portion would be around $50.

Let me ask you something else, I said. Suppose David goes to a doctor and the EKG is done right there in the doctor's office. Would we then pay only the copay for a doctor's visit - $20 for a generalist, $40 for a specialist? The agent checked, and told me I was absolutely right. She sounded surprised.

She thanked me for my patience, and I thanked her for her excellent service (and indeed she was very accommodating). The phone call lasted 22 minutes, and I still was not sure what this procedure would cost.

Next I called a nearby medical group and asked if they are equipped to do EKGs right there in the office. Yes we are, said the receptionist. And, I pursued, if my husband sees a doctor who then immediately does an EKG, do we then just pay the copay? Yes indeed, she said.

So my husband has an appointment for tomorrow afternoon, and it's going to cost us $20 instead of $50 (more or less - we never did find out for sure), and it took only about an hour of our time to figure this out, plus of course whatever it cost Blue Cross, the hospital, the urgent care center, and the doctor's office who helped us.

In France, by contrast, charges are posted on the doctor's office wall for all to read.

Interestingly, the per-capita cost of health care in the U.S. is nearly double its cost in France. Personally, I think socialized medicine is a great way to keep costs down and increase efficiency. But if I were a total free-market type, I'd be equally disgusted with the U.S. system. How can consumers possibly influence the market if providers make it almost impossible to know costs?

If this is the invisible hand at work, it's giving us the finger.

Fixing health care - or, when the demon you DON'T know is better than the one you do

Last week a federal judge from Virginia ruled that part of The Patient Protection and Affordable Care Act is unconstitutional, and now the legal battle is moving to Florida. Also last week a Bloomberg poll found that 55% of Americans would like to repeal the health-care law, while only 40% want to keep it as is (5% aren't sure).

Now, I'm not sure what all of those 55% were thinking. I can imagine wanting to repeal the Affordable Care Act if I were fully persuaded that a better health-care law would immediately replace it - one that was funded either by a single payer or by not-for-profit private insurance; one that would put price controls on pharmaceuticals, medical equipment, hospitals, medical salaries, and other out-of-control expenses; one that would dramatically lower the cost of medical education so that we'd have more doctors, and so that more of them could afford to go into primary care; one that would assign a lot of primary care to pharmacists, midwives, physician assistants ...

Yes, I like socialized medicine. Not every aspect of it, and not necessarily the way it is practiced in every country that has it (though I'd be quite happy with France or Switzerland pretty much across the board). But even so, I don't think I would have answered yes to repealing the health-care law, because I don't think America has yet figured out how to do health care better.

Alas, most Americans are completely unaware that health care as practiced in other developed countries costs considerably less than our patchwork system, and that the results are nearly always equivalent or better. In fact, an October 2010 study by the Commonwealth Fund shows that "even as health care spending per capita has increased in the U.S. over the last three decades, the nation has fallen behind 12 other wealthy nations in 15-year survival for men and women at ages 45 and 65." Furthermore, the study points out, these rates can't be explained by smoking (we smoke less) or obesity (we're obese, but our obesity rate has increased less).

Steven Miles, MD, Professor of Medicine and Bioethics at the University of Minnesota Medical School in Minneapolis, has put together a fascinating Power Point presentation comparing health care in 15 developed nations. To see it, go to his faculty web page, scroll down (reading his impressive credentials as you go), and click on "US and Developed Countries:  Comparing Health Care Systems - 2009." In 48 slides he not only compares systems, he also dispels myths and offers alternatives. Here are a few of his findings:

• Of the 15 countries surveyed, the U.S. spends the most per capita on health care.
• The U.S. has the highest infant mortality and the lowest female life expectancy at birth.
• The U.S. has the highest rates of preventable death.
• The U.S. has the lowest number of MDs per capita.
• Hospital stays are shortest in the U.S.
• Heart patients are likely to get more high-tech treatment in the U.S., but survival rates are the same as in countries that rely primarily on meds.
• Hip replacements are done more quickly in the U.S., but the fewest number of people get them.
• Americans should be healthier than others: we smoke and drink less than most, and we are on average younger than the others. We are more obese, however.
• The U.S. government - before the Affordable Care Act - was already spending more per capita on health care than were the governments of most of the other developed nations. U.S. individuals were spending way more.
• A major reason that Americans spend more, with poorer results, is that (unlike people in other countries) we do not make adequate use of  primary care. A minority of us have a primary care provider that we see regularly. Too many of us neglect maintenance and go straight to specialists when the machine breaks down.

In spite of all this depressing (for Americans) data, Dr. Miles is an optimist: he thinks the U.S. will eventually wake up and improve health care for political and economic reasons. "The US cost of health care is so high that it is hampering our ability to sell products overseas," he told me. "Consider that about 10% of a $40,000 car made in Sweden is the built-in cost of its health-care system. For a similar US car, the health-care component is $6,800. Who will pay $2800 for an invisible car accessory?"

Probably someone who thinks that socialized medicine is diabolical, and that American health care is the best in the world.

Social Security , individual responsibility, and the common good

Several of my conservative Facebook friends responded to yesterday's post about Social Security. I commented that "my dad, who was born in 1910, used to thank God every day for Social Security. Beforehand, he said, Grandpa too often lived in a tiny unheated room in the attic."

One of my friends responded, "LaVonne, I would be willing to bet money that your father would have done fine had he been allowed to keep what is taxed away in Social Security. What would he have been able to do had his lifetime income been 15-20% higher?"

My first response is historical: his income would not have been 15-20% higher, because payroll taxes gradually increased between 1937, when the first taxes were levied, until 1975, when he retired. Combining his tax and his employer's, he actually paid at a rate of between 1% and 5.85% (you can check the table here). If my dad had had that extra money, I'm sure he would have saved it - but it would not have financed his retirement.

My second response is practical. Yes, Facebook friend, at today's rates a person could take that extra 15% a year and finance his or her own Social Security. That is, if the person never was overwhelmed by huge educational loans, never lost his or her job, never lost a wage-earning spouse, never decided to use the extra money for the kids' college education or to pay down a mortgage or for catastrophic illness, never was disabled, and never ever spent the money on a vacation.

But now back to the real world.

Look at what's happening with 401(k)s. The theory behind 401(k)s, like my Facebook friend's theory about Social Security, was that individuals could save for their retirement more efficiently than their employers could. Maybe they could, but very few do. As I pointed out in my previous post, the average 50-something American has saved $29,000. If that person needs $50,000/year (before taxes and medical insurance) to live on during retirement, that person is going to need to have a savings account of $1.25 million dollars, or - if he or she gets the average Social Security benefit of $1164/month - a mere $900,800. According to this nifty goal calculator that takes varying interest rates, inflation, and personal parameters into account, our average wage-earner would need to save $1101.22/month for 40 years in order to save up that $1.25 million. And yes, it could be done - by perfect people in a perfect world.

My third response is moral. My dad would have provided for himself, and probably could have, since he was never jobless, had work with good benefits, was never widowed, and was retired for only 20 years, dying just before a debilitating illness completely exhausted his resources. But my dad wasn't thinking only about himself. He was thinking about his responsibility, as a Christian and as a citizen, to the people that used to be called "the less fortunate." He did not want public social programs cut - even if he would benefit by not having to pay taxes to support them - because he believed they were necessary for the common good.

Is Social Security the best way to assure the well-being of widows, orphans, the disabled, and the elderly? So far, it's the best we've got. No doubt it could be improved. There may be other, better ways to achieve the same goals: if our politicians were all working to serve the common good, their policy debates would serve to strengthen our programs. Sadly, the loudest voices in the land are preaching individual liberty without community concern, or community concern without individual sacrifice, or sacrifice for future generations but not for us.

4 reasons not to mess with payroll taxes

Now that President Obama's people have sent out glowing press releases about how wonderful the proposed tax agreement is ("A Win for Women, Mothers and Working Families"), and Bill Clinton has hailed it as "a significant net plus for the country," and even AARP has signed off on it despite earlier misgivings, may I timidly suggest that the proposal contains one really dreadful item that should terrify all of us in a totally nonpartisan way?

Reducing payroll taxes is a terrible idea.

1. The proposed reduction isn't a mere 2%, even though the amount removed from our paychecks will drop from 6.2% to 4.2%. I won't bore you with the math, but work it out (remembering that your employer will continue to pay 6.2%) or take it on faith - it's actually a 16.4% reduction.

2. Even though Congress says it will make up the difference from general operating funds, may I point out that Congress is also saying it will balance the budget? Bear in mind that Social Security is not currently part of the federal budget, but if general funds are used to keep it solvent, it will become a hostage of Congressional budget negotiations. Is that a good idea?

3. Once taxes are lowered - even if unwisely, and even if the results are devastating - it is almost impossible to raise them again. Hey, isn't that why the President and Congress are working on a tax cut agreement right now? Do we really think that people who plan to run for office in 2012 are going to suggest raising payroll taxes back to 6.2% at the end of 2011?

4. We need the Social Security safety net. If we damage it now, do we have alternate plans for taking care of seniors? Are we still thinking about privatizing Social Security the way we privatized pension plans? Now that was a big success, wasn't it! Did you know that a yearly retirement income of $36,000 requires investments of about $900,000? And that the average American in his or her 50s has saved ... (drumroll) ... $29,000?

An AARP poll last August found that the vast majority of Americans of all ages want Social Security to continue as a guaranteed benefit. Few younger people, however, think it will be there when they need it. If the payroll reduction makes it through Congress this year, Social Security's chance of survival grows still dimmer.

Folks, if we want the goods, we're going to have to pay for them. We can't keep on lowering all our sources of revenue while raising all our expectations of benefits, though a Bloomberg poll released this week shows that that's exactly what most of us want to do. And that's exactly what our politicians keep promising they'll do, even though it's impossible, and even though their efforts are already devastating our economy.

Yesterday Senate Budget Committee Chairman Kent Conrad (D-ND), referring to the Bloomberg poll, said that there's only one way for our elected officials to get us out of the mess we're in:

They have to be prepared to sacrifice their political careers to do what must be done for the nation. Look, if we fail to get our deficits and debt under control, America will become a second-class nation. We are going to slip over the abyss into a fiscal crisis that is as sure as we sit here. 

How many of our 535 voting members of Congress have enough integrity to insist that we need to keep Social Security strong and that we will pay to do so - even if this means raising taxes?