Preemies and Health Care Costs



Jaime Rosenthal, a senior at Washington University in St. Louis, called more than 100 hospitals in every state last summer, seeking prices for a hip replacement for a 62-year-old grandmother who was uninsured but had the means to pay herself.
The quotes she received might surprise even hardened health care economists: only about half of the hospitals, including top-ranked orthopedic centers and community hospitals, could provide any sort of price estimate, despite repeated calls. Those that could gave quotes that varied by a factor of more than 10, from $11,100 to $125,798.
One of the many problems with our health care system is that hospitals often have different ideas of what procedures should cost, and for some procedures, “quality” data doesn’t accompany “price” data, so it isn’t clear, for example, if paying for a “Mercedes” hip transplant is better off in the long-term than cheaper options. One good thing about this study was that top-ranked hospitals in the country often offered some the lowest prices for procedures, which: my mama told me, you better shop around, etc.
Photo: Cindy Funk
This is the story of what happens when there are billions of dollars wrapped up in a prosaic piece of technology that at its core is closer to your kid’s science-fair entry than the Human Genome Project, one that despite all the commercial success and some 4 million or so patients still has its share of doubters in the medical community. It’s a story about luck and timing and the squeezing of the health care dollar. It is about betrayal and wrangling over patents. And mostly it is about invention, the tenuous and uncertain act of breathing life into an idea that may or may not have been yours all along.
Fortune Magazine’s story about how a simple medical device that closes wounds made millions for its inventors ($250 million in royalty fees), for Wake Forest University (which split the royalty fees after applying for a patent on the inventors’ behalf), and for the device’s marketers (KCI, which licensed the patents from Wake Forest University), and the patent battles that came soon after, really demonstrates some of the greed involved in the American health care system. It’s something to read if your cable goes out.



Ezra Klein has a piece looking at how the Affordable Care Act will affect businesses with more than 50 employees, which is basically: They don’t need to offer their employees health care, but if their employees apply for federal subsidies and buy coverage themselves, the employer must pay a small fraction of the cost (“a penalty equal to about 1/8th the cost of the average employer-provided health-insurance plan“).
Papa John’s isn’t happy about this because it’ll raise the cost of doing business. They’ve warned that they’ll have to raise the price of their pizzas by “11 to 14 cents per pie.” Which, I think people would be willing to pay! Or at least, I’d be willing to pay that knowing that the extra 14 cents is helping to give those pie makers some benefits.
Photo: mrsdkrebs

