As you may or may not remember, Mrs. PFD and I had a baby several weeks ago and I’m settling up some bills right now. The total hospital charges are $9,795.25, of which we pay $526.94. Total OB/GYN costs are $4,170, of which we pay $334.90. This was for an uncomplicated birth with only two nights in the hospital.
Some points about all this:
- I don’t know whether the $14K of charged expenses are reasonable.
- I don’t know whether the $862 we’re paying out-of-pocket is a good deal or not. It seems like a good deal to me, but then I suspect the hospital numbers might be inflated.
- I don’t know whether or not I should be concerned about my ignorance of (1) and (2).
- Given the constraints on my time, I’m not sure how to go about becoming less ignorant.
- I don’t know if becoming less ignorant about (1) and (2) would be worth the time spent.
I do pretty well with credit card arcana, but health insurance is another matter. I’ve started fooling around with simplee.com, and it actually is a much nicer interface for looking at health expenses, yet the healthcare process remains financially inscrutable.
And now you know why US healthcare is among the most expensive in the world. About 3x the cost of most European countries. Infant death rates are also lower in most OECD countries. Mine were about the same. I could easily have saved money (insurance or my own pocket) buy leaving the hospital earlier. In many OECD countries you can go home the same day. Not so in the US, they want to squeeze as much money out of you as possible. Let individuals make educated decisions. US healthcare is a big rip off. You can get equivalent service or better abroad for much cheaper price.
http://www.dailymail.co.uk/femail/article-2352687/How-cost-giving-birth-U-S-TRIPLED-1996-9-775–thanks-expensive-fees-epidural-placenta-removal.html
And this
http://www.nytimes.com/2013/07/01/health/american-way-of-birth-costliest-in-the-world.html?_r=0
I do not recall the exact numbers from 10+ years ago when our boys were born, but we had no insurance and the total we prepaid to the hospital and Dr. was around $4000 for each of them, that covered everything. IIRC the amount billed to an insurance co. would have been at least double that.
I still remember that 10+ years ago, I paid $500 a year for health insurance (very good coverage) for my family. Now I am paying 10 times!
Cash cost? About $9-12 for OB/Gyn, hospital and anesthesiologist. Epidural alone costs around $2000.
It’s not like a birth is a surprise event so call around as soon as you get her knocked up and see who has best cash prices. If insurance is paying, then who cares right?
The year of my 1st and only child’s birth was my company’s last year of reasonably affordable health care with a reasonable ($1000) deductible. That was before the days of Aggregate deductibles and co-insurance after deductibles were met. The bills for C-section birth and 3-day hospital stay (umm, you try telling your wife to leave same-day after a 36 hour labor!) ran $18,000. Total out-of-pocket, $1000 in 2007.
We did have the epidural, and your point is valid: insurance pays, so I’m not about to shop around.
Healthcare cost is extraordinarily complex. The short version is, sounds like you paid a reasonable rate. A slightly longer version is that every insurance company PAYS something in the range of what medicare gets away with paying. If Medicare has negotiated to pay 70% of what a physician charges and the commerical insurances pay 75% of what a physician charges, eventually, the physician must charge more to break even (afterall, their margin is small as the expenses of care provided is high). So the price raises.
It’s gone on long enough that the “charged amount” is a crazy number and insurances has commensurately agreed to pay even small and smaller fractions.
The true losers, then, are the uninsured who pay the “flat fee” or “unnegotiated rate” and get stuck paying $1000 for a bag of $38 IV fluid that medicare and the insurers are paying $40-50 for.