Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 9, 1993 TAG: 9305090253
SECTION: HORIZON PAGE: F1 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Long
The surgery, done in his office under local anesthesia, was successful, although Ferguson had to return for follow-up work because of one particularly deep-rooted problem. The bill, including the $210 cost charged by an outside laboratory to determine that two of the four lesions were malignant, totaled $500.
One year later, Ferguson went under the knife again to remove a potentially cancerous spot on her hand. She also elected to have four smaller areas on her face removed. Her surgeon, an associate of her now-retired doctor, recommended the operation be conducted inside a hospital on an outpatient basis because of the possible need for skin grafting.
That decision turned out to be an expensive one.
By the time she paid her doctor $2,342, the anesthesiologist $430.50, an independent laboratory $520, and the hospital $3,796.74, the grand total for her seven-hour hospital visit was $7,089.24.
"I was furious," said Ferguson, who lives in the Garden City area of Roanoke.
Like thousands of other Americans, Ferguson is reeling from medical sticker shock. But if there is a lesson in Ferguson's brush with the American health-care system, it is this: Ferguson's experience is more the rule than the exception.
It is sagas like Ferguson's that have fed the growing unease of Americans, and spawned a health-care reform movement that is destined to revolutionize the way medical care is delivered in the United States.
Unlike many Americans, Ferguson's ability to pay her debt was never in question. Although she has only nominal insurance coverage because of her pre-existing condition, Ferguson and her husband were well off enough to pay the balance.
She didn't flinch at the $2,342 fee charged by her doctor, Young Kang, and willingly wrote the check for her anesthesiologist.
But Ferguson still doesn't believe it really cost $3,796.74 for her short stay in Roanoke Memorial Hospital.
For the past six months, she has become a kind of medical Nancy Drew, deciphering complicated bills and questioning hospital officials about duplicative charges.
"I never went in thinking they were going to reduce the bill," she said. "I just wanted some answers."
She never got any, or at least any that satisfied her. After she and her attorney met with the hospital's vice president for finance, Steve Wesby, she came away even more convinced the hospital had no clue as to how some of the charges originated.
She still doesn't know why the hospital charged her $1,864 for use of the operating room for 210 minutes, and then added an additional $647.50 for anesthesiology equipment inside the operating room.
"Isn't that equipment part of the operating room?" she asked.
Or why the laboratory, Pathology Associates, charged her $130 each to examine four tissue specimens, when a year earlier a different lab charged $60 for the first specimen and $20 for each subsequent specimen examination.
After she questioned that bill, the lab agreed to charge her for examining only two specimens, reducing her $520 tab by $260.
Wesby declined to be interviewed about Ferguson's hospital bill, citing patient confidentiality. Her doctor also declined to discuss the case.
But even without the hospital's interpretation, there are clues as to why Ferguson paid the price of a compact car for her one day of care.
Technology. Ferguson's doctor worried that one spot on her hand would require a skin graft and determined the operation should be conducted inside the hospital. She acquiesced.
Although no skin grafting was required, Ferguson had at her disposal thousands of dollars of high-tech equipment. Even though she didn't need it, she helped pay for it.
Defensive medicine. Malpractice lawsuits are a reality in modern-day medicine and doctors take every precaution to avoid setting themselves up for one. That means going the extra mile for each patient - even if some precautions turn out to be unnecessary.
University of Virginia Law Professor Kenneth Abraham has come up with a plan called "enterprise liability" that could lift that burden from doctors. Embraced by the President's Task Force on National Health Reform led by Hillary Rodham Clinton, the proposal calls for relieving individual health-care providers of the threat of malpractice by making the hospital or provider network the only defendant in cases.
"We've long since given up the system of individual blame," Abraham said, noting that pilots are not held liable when their planes crash. "Yet we have retained an effort in which an individual is to blame for problems of the system." Under his plan, institutions could purchase malpractice insurance from the regional cooperatives.
Cost shifting. Hospitals have developed a convoluted pricing structure that has nothing to do with how much items actually cost, and everything to do with making sure the books balance in the hospital's favor at the end of the year. Roanoke Memorial, part of the Carilion Health System, is a not-for-profit hospital; it can make a profit but the proceeds are plowed back into the facility for future building and growth, which in turn benefits the community.
In Ferguson's case, it is hard to decipher just exactly what she paid for.
There was the $73.50 item for "Chem 7," the $24.54 for the "Versed inj vial 1mg-or," the $13.86 for the "ADM fee piggyback-OR" as opposed to the $16.12 each for two "ADM fee IM/SQ-OR."
It is easier to understand - but perhaps harder to swallow - that she paid $120.13 for staples and sutures, $60.56 for surgical supplies, $8.83 for surgical blades, $280.80 for surgical packs/drapes and $17.10 for surgical dressings/packing.
Medicaid and Medicare. Hospitals are reimbursed for medical services to the poor and elderly through the federal government's programs. But the government reimbursement doesn't meet the actual cost of tending to the patients. Ferguson probably helped make up the difference.
Ferguson's brief foray into the belly of the beast already has convinced her that change must be made - including, if necessary, price controls. The Clinton administration has suggested such controls will be a facet of the new health-care plan, although they will be voluntary at first.
The president's task force is expected to begin the process of dismantling and reassembling the $900 billion behemoth when it introduces recommendations later this month.
Those recommendations are expected to shape the outlines for a new system based on "managed competition" - a concept that advocates say will improve access to medical care and lower costs.
Already, those in the health-care business - from the doctors who examine the patients to the employers who pay for health insurance and the insurers who approve the procedures - are poised for change.
The managed competition model involves creating large insurer-provider networks, likely run by the states, that would be able to negotiate substantial discounts for individuals and businesses. Because the risk would be spread out over a greater number of people, more of the nation's 37 million uninsured would be brought in under the umbrella of the health insurance purchasing cooperatives.
But doctors warn that managed competition - with its emphasis on cost containment - would diminish freedom of patients to choose their doctors. The independent physician, who has his office and sets his own fee, would be largely a relic of the past except in rural areas where managed competition wouldn't work.
Dr. Jack Ballenger, president of the Roanoke Valley Academy of Medicine, is worried that the task force, so intent on declawing the powerful American Medical Association early on in the debate, has gone too far in diminishing the importance of the physician.
"Nobody knows the strengths and weaknesses of the system like physicians because we live it every day," he said.
Focusing primarily on reducing the escalating cost of health care and rewarding doctors for holding down costs in their provider network, "jeopardizes the ability of the doctor to be the patient's advocate," Ballenger said.
"Sure, think about what you're spending, but don't link what you are spending with how much you make," he said.
Hospitals, like the Carilion Health System, would also likely undergo significant changes with a revamping of American health-care delivery.
Lucas Snipes, senior vice president for Carilion, acknowledges that hospitals have come under attack for runaway costs, but he said systems have little information upon which to base changes.
"Health-care reform just had no face during the election," and to a certain extent hospitals, like other health-care providers, are flying blind until the commission unveils its regulations.
"You're basically reconfiguring the economics of the delivery of health care," Snipes said. "Tell me more about the alternatives. That's what we need to know."
In fact, Roanoke Memorial, and the other hospitals that make up the Carilion System, are well-positioned to take advantage of the kind of health-care model - dubbed "managed cooperation" - that likely will be implemented in areas with large rural populations.
In that scenario, health-care providers would work together instead of compete against each other, as in the managed competition model, and then link up with large facilities in urban areas for more specialized services. Consumers would reap the benefits of lower costs.
"We have strived to be a regional hospital system," said Snipes. There have been opportunities to enter other markets, he said. "But our philosophy has been to stay close to home, and home we define as Southwest Virginia."
Under managed competition, Ferguson probably would have suffered less of a financial setback. For one thing, she would have had a better insurance policy because companies would not be allowed to discriminate against people with pre-existing conditions.
With more at stake, her insurer likely would have asked more questions, second-guessed decisions of both the hospital and the doctor.
Under the current system, Ferguson had few avenues of appeal. There are no state agencies that mediate disputes between patients and hospitals.
The Virginia Health Services Cost Review Council, which publishes an annual survey of hospital and nursing home charges, does evaluate aggregate costs by region and compares charges for common inpatient and outpatient procedures.
Although none of the 10 outpatient procedures corresponds exactly to Ferguson's experience, one - local excision of skin lesion - is somewhat comparable (although not as complicated).
In the latest survey, conducted in February 1992, Roanoke Memorial ranks third highest in cost at $2,063.08, behind Lonesome Pine Hospital at $2,482.41 and Smyth County Community Hospital at $2,201. Lonesome Pine, located in Big Stone Gap, is part of the 12-hospital Carilion system.
The cost for the procedure at Lewis-Gale Hospital, Carilion's major competitor in Roanoke, was $1,505.35.
It has been an expensive education for Connie Ferguson, but an instructive one.
If she had to do it over, she would have asked more questions, demanded more answers. Maybe she would have sat down with her doctor and really debated outpatient vs. office surgery. Maybe not.
She says now she certainly would have designated the laboratory she had used in 1991, Southwest Virginia Medical Lab, for the tissue examination rather than relying on the doctor's choice.
But would her doctor and the hospital have allowed that? She never asked. (The hospital says a patient can designate a laboratory.)
She also understands, deep down, that comparing procedures a year apart, with different doctors, in different settings and under different circumstances, necessarily comes fraught with complications.
But like the policy wonks in Washington who work around the clock for Hillary Clinton, Ferguson is born-again when it comes to the absolute necessity for health-care reform.
Almost lost in her saga is the good news that came out of her experience. Her skin lesions turned out to be benign.
by CNB