A Look At Health Care Costs

by Gabe Bullard on May 20, 2009

Earlier this month, President Obama called on Congress to tackle the issue of health care reform this year.   House Speaker Nancy Pelosi predicted there could be a bill under consideration in her chamber by the end of July.

WFPL’s Gabe Bullard has been speaking to some local officials about why health care is so expensive, and what kind of legislation might emerge from Capitol Hill.

“The surgery was over like so but I get pain in here and down, almost into my knee,” says Mary Danzeisen. When she broke her hip, she went to the doctor for a stress test to see if she could undergo joint replacement surgery. “My whole body was in the machine they were using, but I think the pictures were just of the midsection of my body.”

Later on, her daughter Karen got the bill.

Health Care“It’s listed as cardio-pulmonary and that’s like $1,537.82. Medical imaging – $7,169.97, and the drugs and pharmacy – $237. So it comes out to $8,944.79,” she says.

“Look at it in terms of a value proposition,” says Dr. Steve Hester. “I think the important thing is to say, what do you have access to? What services are you able to get? How fast can you get those services?”

Hester is the Chief Medical Officer of Norton Healthcare. He says medical costs not only include procedures and treatments, but various hospital services needed to offer those treatments. For example, the bills help pay for doctors of all specialties—from anesthesia to heart catheterization—to be on call around the clock. “Some of those costs are put into the overall cost of health care because those are all services as a community that we want available. We may not realize we want them until we need them.”

With that in mind, Hester says health care costs, on average, break down like this. For each dollar, 21 cents goes to care, ten cents to drugs, 7 cents to administrative costs, 8 cents to home care, 21 cents to clinical services and 23 cents to maintain the building and other costs.

And some of the money covers people who can’t pay their bills. Hester says Norton spends about $40 million each year on charity care.    It’s a cost that might not exist if the United States, like many other countries, provided health care for all citizens. But Hester says so-called universal health care is not necessarily high quality health care.

“Some of those systems offer delayed time you can get the services,” he says.

“Well have you tried to get an appointment with an allergist or a dermatologist lately?” says Congressman John Yarmuth. “There are long waits for certain care in the United States, too.”

Yarmuth is a proponent of government provided health care. But he says the single-payer system of nations like England and Canada isn’t coming to America anytime soon. “The Democratic agenda is to try to create a system, first of all, that covers everybody to make sure that everybody has health insurance, and uses competition to not only give consumers a choice of how they get their coverage but also to promote the type of innovations and efficiencies that competition can.”

Under Yarmuth’s plan, the millions of Americans without insurance could sign up for a government plan.   People with private coverage could keep their plans or enroll in the government’s system.    Ideally, he says, that would create competition among private insurers; competition that in other industries has led to lower prices, better service and innovations.

“That will force the private sector to compete effectively on some way or another, either on extra services or extra quality,” he says.

But some health insurance providers aren’t happy with the prospect of government involvement. Tony Felts, communications director for Anthem Blue Cross/Blue Shield, says the best way to help the uninsured is to have the government help them pay for coverage, and not for health care.

“We believe that some sort of subsidy would be necessary for those who otherwise are not going to be able to afford a private health insurance,” says Felts.

Congressman Yarmuth argues that that type of plan would pour money into a broken system. Yarmuth and Selts do agree on one thing: the need for better preventive care and education, which would help drive down health care costs.

Even with a healthier populace, emergencies will happen and surgeries will be necessary.    And how to help Americans pay for those costlier procedures will be at the heart of the debate this summer on Capitol Hill.

As for the Danzeisen’s $9,000 medical bill, the government and private enterprise will cover it. Kathy Danzeisen says that’s the only way her mother’s bill will get paid.

“If she did not have Medicare and the secondary insurance, would we have paid for it ourselves?” she says. “I don’t think so.”

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