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“Modern medicine” in America- buyer beware

How long would your business last with no printed prices?

Can you imagine people going to a McDonald’s and ordering a Big Mac then getting a bill for $300 after you finish eating it?

Or, you take your car into the shop for an oil change, and later get a bill for more than the car is worth?

No other business (except maybe defense contractors) operate without stated prices for services, estimates, approvals and the ability to comparison shop- except our “medical system.”

So we have stories like this in the Dayton Daily news today:

[UPDATE] according to a reader, there is no Dr. Stanley Edwards, but there is a Dr. Stanley Alexander. DDn Can’t get the name right. [/UPDATE]

In May 2011, Steve Mahoney took his youngest son, Ryan, then 6, to the emergency room at Children’s Medical Center of Dayton after the boy sliced off his fingertip in a door.

Doctors at Dayton Children’s told Mahoney they’d have to call in a plastic surgeon to re-attach the boy’s fingertip. But no one told Mahoney that the plastic surgeon, Dr. Stanley Edwards, doesn’t accept health insurance.

Edwards doesn’t work for the hospital. He’s one of two plastic surgeons who currently serve on an “on-call” basis for the hospital, said Chief Operating Officer Matt Graybill.

Hospitals are “somewhat constrained” in what they can tell families, Graybill said.

The same federal law that requires hospitals to treat anyone who comes to their emergency department whether they have insurance or not also limits what staff can say to families about paying for that treatment, he said.

“Hospitals can’t tell parents anything that might in any way encourage them not to be cared for there, anything a parent might construe as telling them not to be cared for at Dayton Children’s. And that includes telling things like, ‘You might have a big co-payment’ or ‘Your insurance might not cover this.’ ”

Edwards’ bill for the procedure, which included several follow-up visits, was $8,200. Mahoney’s insurance company paid $2,600 — 80 percent of what it considers to be the reasonable or customary charge for the procedure.

Mahoney said he tried to negotiate with Edwards’ office for the remainder of the bill, but was told to make monthly payments with 1.5 percent interest. He refused, arguing the charges were unfair.

via Dayton Daily News : Billing dispute spurs changes at hospital [1].

Not only are hospital bills outrageous, so are the ways they bill. You get several different bills with each visit- one from the facility, one from the actual doctors and then maybe one for supplies, all delivered at different times, all from people you didn’t know you were doing business with. For a profession with a code of conduct, they don’t have one on ethical billing practices.

One of the most popular posts on this site was dealing with ridiculous bills sent by Miami Valley Hospital to a friend who went there for 3 stitches. Cost, over $1,400. [2]

My 84-year-old mother needed a test the other day according to her physician. They are on a fixed budget and she always asks how much something costs- and the lab said $300. She declines. Then a smart staffer realizes if they “code” the procedure differently, it’s covered by her supplemental insurance. She gets the test. If our health care system were truly focused on making people healthy, instead of navigating an arcane system set in place by insurance companies that have zero role in making people healthy, we might have a true health care system.

One of the big questions in the implementation of the “affordable care act” or “Obamacare” as the wingnuts like to call it, is how do we deal with people like Dr. Edwards who refuse to take insurance, yet do work without fully disclosing that fact? Maybe it’s time to color code our health care workers- if they wear white, the processes they do will be covered by the bill provided by the facility that you are in and are covered by your insurance, if they wear orange- they aren’t. In order for anyone in orange to work on you- they have to provide a full firm estimate of services before they work on you, or they are liable for their actions, not the patient.

If you wonder how this system became as screwed up as it has, one only has to realize that you can go from being a County Administrator to running a children’s hospital where a large portion of their income is from federal programs [3]. Despite being the person who handed federal welfare money over to a convicted welfare fraud ex-con and not be held liable. [4]

We also have the wonderful people at CareSource who single handedly have saved Dayton from going under with their income tax and sales tax revenues generated by being government contracted middlemen to distribute federal health dollars to the poor. To be in charge of a process that was once handled by some senior level government service employee who made well shy of $200,000 a year, we now allow their CEO to have her salary set by the people CareSource doles out money to (the hospitals) and she makes $3 million a year. When I wrote this post: Who’s the criminal? SCLC, Montgomery County, Caresource? [5] I lost a few longtime friends who are now suckling at the teat of this federal boondoggle.

You can read about the fraud and deception of Reverend Trammell daily in the media [6], but no one questions the Queen of CareSource any more than they question our soon to be former County Administrator for their culpability in the misuse and abuse of federal welfare dollars.

This is why health care in America is not only a buyer beware, but, it’s likely to kill you with the bill.

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There’s also the large-picture problem that health care shares with education and government; too many high-paid administrators.

If you went to a hospital 60 years ago, decisions were made primarily by the medical staff.  The chief administrator worked for them.  Hospitals often had a single administrator, who was well-paid but not so much as the doctors.  Now, every hospital has a CEO, CFO, several executive assistant administrators, department directors, public relations staff, etc. etc.  They all get paid six-figure salaries–and the CEO and CFO earn seven figures.  None of these administrators does much to improve health care; rather they work to increase occupancy and to enhance revenues.

This trend is reflected in education, where 60 years ago a small-town school system would have one superintendent and one principal per building, but today will have superintendent, two or three deputy superintendents, grants-writer, eight or so curriculum managers, and in each building a principal and one or more assistant principals.  The same comparison works in government, where in addition to having too many chiefs and not enough indians, there’s the propensity to hire exorbitantly-priced consultants to do the thinking that our elected officials and their staffs ought to be capable of doing on their own.

Big businesses used to play this game but economics dictated that they right-size their executive suites.  Since health care, government, and education are not ruled by supply and demand, economic forces won’t right-size them.  Voters must do so, and one day we all might figure out how.


The doctor’s name is STANLEY ALEXANDER, NOT Stanley Edwards. In fact, there is no Dr Stanley Edwards in Dayton which means Dayton Daily News lied! They claim he didn’t return calls left at his home and office. Since there is no Dr Stanley Edwards then who did they call?!?! They either didn’t call or they called Dr Alexander and just changed the name for the article. Did they use the wrong name to spare him bad publicity….?


It does not have to be like this and, before I moved to Dayton, I had the perfect alternative, Kaiser Permanente.
Kaiser was started during World War II at Henry Kaiser’s ship[yards in Oakland. It replaced fee for service with a fully prepaid health plan. It is still available everywhere where the United Electrical Workers (that’s the BAD electrical union) has contracts and covers everything. I was able to choose Kaiser as my health plan thanks to my union’s contract with the Cleveland newspaper publishers.
No sooner had I signed up (and before I had even paid my first premium), I suffered a heart attack at work and was taken by EMS to the nearest hospital, St. Vincent Charity. In those days heart patients were kept in bed and immobile for a month. The bill at Charity Hospital came to more than $60,000. Kaiser paid.
In following years, I had a Triple-A, an aneurysm of the abdominal aorta. I was operated oon at St. Luke’s Hospital. Kaiser paid all. Then I contracted cancer. Kaiser paid for more than a year of chemo.
Of course my coverage included my wife and David.
We chose our vacation sites according to the proximity of Kaiser, and so we spent many Februaries in Palm Springs. On my last one, I was rushed to the hospital with a pulse over 350. Kaiser paid. My wife injured her ankle. Kaiser paid.
We were reluctant to leave Cleveland when David invited us to Dayton. No Kaiser. But the VA took up the  slack for me and I pay about $175 a month to insure my wife.


Correction: My wife’s supplemental insurance has just gone to $225 a month.


Since health care, government, and education are not ruled by supply and demand, economic forces won’t right-size them. – truddick
All economic activity is eventually ruled by supply and demand.  It cannot be escaped.   I think what you are getting at is that government actions can pervert incentives and prices (different from cost) which in turn promotes inefficiencies, misallocation of resources etc….  Eventually though the economics of supply and demand win out and move to equilibrium.


You hit the nail on the head.  No one knows how much anything costs!  Until consumers have a vested interest to know and care, nothing will change.
I have a high deductible health plan (that I am a huge fan of) and am on the hook for the first $3k of expenses each year.  I always ask how much things costs before hand and get a receipt when done.  Everyone always looks at you as if you are crazy and sometimes express how much of a hassle it is to print off a receipt and get you a copy of the doc visit paper work.
How many people get 3 estimates for car repair work and a receipt but don’t care when it comes to health care?
My wife recently had to have an MRI.  Because we care how much it costs, we chose to ‘shop around’ as much as possible.  It turns out the local kettering health network monopoly bought up about every stand alone practice with an MRI machine in 3 counties and they now all charge ~$1400.  We finally found an independent MRI facility with the same equipment that only charged $400.  Again, until people have a vested interest to know the prices and care about them, nothing will change.  We might be able to shut down the entire system if everyone just starting asking these questions next time they received medical treatment!
I always joke around that people need to change their views of health insurance and treat it more like they do their auto insurance.  Auto insurance is largely for catastrophic coverage.  What would your insurance company say if  you tried to claim coverage for your next oil change and tire rotation?  I believe that health insurance should be mainly for catastrophic coverage and people need to be more responsible for their own ‘preventative maintenance.’  Again, until people have a vested interest to know the prices and care about them, nothing will change.


The company is Dayton Open MRI on 725.  Using a tool my insurance company, Aetna, provides to HDHP plan holders, you can look up ‘negotiated rates’ for various procedures at various facilities.

Using this tool, the costs for a lower back MRI w/o dye contrast at various facilities is below:
Dayton Open MRI:  $404-$466
Kettering Medical Center & all kettering owned facillities: $1170-$1386
Grandview Medical Center: $1068-$1621
Miami Valley: $1904-$2338
Good Sam: $1926-$2467
Atrium Medical: $2353-$2909
Childrens Medical Center: $2122-$3081
You have to wonder how one place can afford to change $404 dollars and another place up to $3081.
Again, nothing in the healthcare system will change until people have a vested interest to know the prices and care about them.  I know many people have differing views on providing health care in this country, but at the end of the day, there is no such thing as a free lunch.


My brother got an MRI done on his own, took it to his doctor, and he wouldn’t look at them or help further… Apparently it wasn’t done by someone who they pat on each other’s back.

David Lauri

Forbes has a fun article from 5/27 on this subject, “Why do Hospitals Charge $4,423 for $250 CT Scans? Blame Arizona Republicans,” that quotes another story in the Los Angeles Times, “Many hospitals, doctors offer cash discount for medical bills.” From the Forbes article:

Chad Terhune of the Los Angeles Times told the story of Jo Ann Synder, a woman who was charged $6,707 for a CT scan, after she had undergone colon surgery. Her insurance plan, Blue Shield of California, billed her for $2,336, and paid for the rest. But Snyder was shocked to discover that, if she had paid for the scan herself, out-of-pocket, she would have only had to pay $1,054.


One of the reasons that health care is so expensive in America is because people have no idea what they’re paying for it. Hence, it’s important for reformers to encourage hospitals and doctors to become more transparent about the prices they charge for these services. But an Arizona bill to do just that was killed—by the state’s Republican legislature.


Further into the Forbes  article “In fairness, the state’s Democrats were nearly uniformly opposed to the measure, as well.”
Third party payment is more of a driving factor than not listing prices.   If I  pay 12K a year for health-insurance and have a 4k deductible…. I don’t care whether a procedure costs $20,000 or $5,000 because the price is the same for me assuming its covered by insurance. 

Robert Vigh

I think that HSA’s are the best thing to happen to healthcare in a long time. Having a tax shelter health account with a large annual deductible gets people to care about prices and pay intention. Bryan’s post is exactly correct. I have only had health insurance 1 out of the last 10 years. I tax sheltered as much money as allowed and dropped my insurance. I shop everything. I have 4 pharmacies in my cell phone. I know several labs around town. The prices are dramatically different.
So, I thought I would add another resource for people that need to save a few bucks:
Crystal Clear Imaging in Springfield, Oh. ran an Ultrasound test for me for $132.00. The quoted and scheduled the test in less than 5 minutes.
Kettering: $300 and 48 hours to get the quote.
Good Sam: $550 and about 24 hours to get the quote.
These and the MRI above are dramatic differences.
I do feel that the control that the AMA exerts over the government in conjunction with requiring a license to do everything in the medical field is stifling to the market. By artificially limited licenses and medical school entrants, the government effectively controls the supply, driving price way up.