My Recent Bill for Lab Work
I just got a bill today for labwork.
CBC: $37Metabolic Panel: 46 Lipid Panel: 93 TSH: 94 Total: $270
ADJUSTMENTS: ($234.41) Meaning, the write-off that my insurance company has negotiated.
INSURANCE PAID: ($28.48) The amount (out of $270 that my insurance paid)
BALANCE Due: $7.11 -- What I owe.
Why is the original fee so outrageously out of proportion to what they got paid, which is a grand total of $35.59?! Do people without insurance pay the total? Does anyone? What is going on here?
In my job I personally run TSH's, and it costs ( just for supplies) around $10 to run. That is before considering drawing he blood, and the human work involved, not including disposal of waste, etc.
I am baffled by this. Someone is paying the difference. Who is it?
CBC: $37Metabolic Panel: 46 Lipid Panel: 93 TSH: 94 Total: $270
ADJUSTMENTS: ($234.41) Meaning, the write-off that my insurance company has negotiated.
INSURANCE PAID: ($28.48) The amount (out of $270 that my insurance paid)
BALANCE Due: $7.11 -- What I owe.
Why is the original fee so outrageously out of proportion to what they got paid, which is a grand total of $35.59?! Do people without insurance pay the total? Does anyone? What is going on here?
In my job I personally run TSH's, and it costs ( just for supplies) around $10 to run. That is before considering drawing he blood, and the human work involved, not including disposal of waste, etc.
I am baffled by this. Someone is paying the difference. Who is it?
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Well... it's what the Doctor would LIKE to be paid if he/she were charging a customer cash.
In pharmacy we must submit "Usual And Customary" charge to the insurance company... They proceed to ignore it and pay us whatever they want to anyway.
Example:
You come in with an Rx for Keflex 500mg #40 and you have insurance.
I enter the data and submit the claim. I tell the insurance company my U&C is $19.99.
They accept the claim... tell me to collect $5 from you (your co-pay)... and they will send me a check A MONTH FROM NOW!!!! for $3.26
So... In total I get $8.26..
...and I have to wait a MONTH to get it all!!!
So... In walks a cash paying customer (i.e. No Insurance) with the exact same prescription.
I will collect $19.99 from that customer.
Here the thing. If insurance companies weren't flat out KILLING me with their pitiful re-imbursements my U&C could possibly be something like $9.99
But because a script COSTS me $12 to fill (Because I have to pay my pharmacist, my Techs, my bookkeeper, the bank, insurance, maintenance and repairs, taxes, etc... etc... etc... etc...)... But all I get is $8.36 ... I have in effect LOST $3.67 filling that Script.
Somebody has to make up that loss or I go out of business. Simple.
Cash payers will be the ones who pick up the slack.
Now... having said that... I am not completely sure how a doctors billing works. I assume it's similar to what I've just described... but I could be wrong.
For example: It could be that doctors don't have to bill for "Usual and Customary"... It could be that they can bill WHATEVER number they're able to dream up. It could be that the number submitted to the insurance company has little or nothing to do with reality. It could be they are just trying to see what they can get... and who knows? Maybe they get lucky every now and then.
But please understand the example I gave. (The situation is actually worse because the insurance companies don't give a "reverse handshake" at the time of filling. Ultimately this means that although they said they would send me a check for $3.36 a month from now... they can change their mind in the meantime... and a month from now I get a check for $2.99 instead... )
The numbers you read may not necessarily be accurate. I can assure you that if there were no insurance companies to determine what my profits would be... then there'd be true competition in the market... The pharmacies would compete to offer the best prices... (and if they were to enforce some antitrust laws it would help even more)... I started in pharmacy before insurance was such a huge thing. Birth Control pills were $9.99 per month. Now, with insurance (and Big Pharma - 'cause they're in bed together) a one month supply is well over $40...
That's a story for another day...
I hope I've helped you understand the dynamic a little bit better.
October 29, 2009 9:12 PM | Reply | Permalink
Hey Icky. Good Stuff. Great info!!
October 30, 2009 2:52 AM | Reply | Permalink
My PCP tipped me off recently to check out a local pharmacy that doesn't deal with insurance at all - she wasn't sure that my insurance would cover a prescription she gave me. Sure enough this place had it for about $10 less than my co-pay. Obviously they have lower overhead, and to be fair, only stock a limited list of relatively common drugs. But I shopped around and did some more research - the big chain that my family usually uses, and the other big chains, had prices ranging up to $500. The no-insurance pharmacy had it for about $50. I ended up getting it at Costco for about $40 - cash price.
There was a huge discrepancy between cash prices between the different big national chains - I mean prices ranging from $100 to $500. And then the one place, $40, and I don't think they were selling it to me at a loss...
Moral of the story: even if you've got prescription coverage, shop around.
October 30, 2009 1:45 PM | Reply | Permalink
Chain Stores are funny like that.
Many independents belong to "Buying Groups" that allow us to purchase as a rather large group from a particular wholesaler. This means we often have some pretty good buying power and our prices are usually very competative - if not less!
PLUS, the independent is usually much more focused on SERVICE. (i.e. quicker, friendlier, and more understanding) We have to be!! That's the biggest difference between us and the Big Guys... All things being equal, the customer should choose the best service, right?
(See my next post for some thoughts on that)
October 30, 2009 7:14 PM | Reply | Permalink
What you are describing is very similar to what the bills I get from my doctor look like. There is an outrageously high initial charge, then Medicare pays the usual and customary charge for this geographic area (which, as I recall, is based on the charges the previous year and adjusted down somehow.)
The result, though, it that the prices we see for services, medications and medical products carry no economic information at all! How can a market work when the prices are devoid of economic information regarding supply or demand?
Answer. They can't. There is no market there.
We as consumers have no way of determining what a fair price is or what is high or low. And that's because the market is segmented into so many different classes of customer, each with a different set of allowable prices. And those classes of customer are not based on medical need or cost of medical services. Those classes are based on the way we are going to pay for those services. This is entirely an artifact of an insurance industry made up of hundreds of different insurance organizations with different power to control what they charge and what they pay.
The health insurance companies are in the catbird seat, and they want to stay there.
I see no real difference between planned health insurance and the way government and large health insurers can force suppliers to take amounts in reimbursement that are below the cost of the services provided, forcing them to then overcharge other customers to make it up. The ability to do that depends on predicting the mix of customers and forcing some of them to subsidize the care provided to others. That's supposed to be done by insurance companies in a planned manner based on actuarial statistics, but instead it is being forced on the healthcare suppliers and their accountants.
At least, that's what it looks like to me. I've been angry about it for years. Markets only set reasonable prices when the products and services that are bought and sold can be compared to each other, fair prices are set based on supply and demand and those prices are publicized so that others can see what just happened as they go through the same price-setting decisions. Even without considering the fear factor (what happens if I get sick and I am one of the uninsured/underinsured? I'll pay anything to avoid that fate!) The entire medical market is stacked against the consumer of medical services.
No one actually knows what anything really costs. That, by the way, is the flaw that keeps a centrally planned economy from working efficiently. No one knows what anything costs because prices are centrally set instead of being based on supply and demand at the points of exchange.
The biggest organizations in the market outside government are motivated by profit and the dollar sign rather than by a focus on providing needed health care to people who need it. When your cost of health care starts cutting into their profits, your insurance will be canceled on the slightest pretext. The only thing they fear is publicity. As long as they can keep the prices they charge, the reimbursements they pay hidden and the millions of variations on insurance policies inscrutable, they can chunk it through their internal computers and make sizable profits.
They need a pool of uninsured that anyone can be thrown into to make it work. They need a set of prices that have no economic data built in to work. They need a million different types of insurance what a variety of coverages and costs to work. And most of all, they need to avoid government oversight and control for it all to work. And God forbid they should ever get government competition!
October 30, 2009 3:31 PM | Reply | Permalink
These chain stores are really screwing things up... I'm pretty sure these "$4 Rx's" are illegal (Unfair Business Practice or something).
I know for sure that the pharmacies doing this are losing money (from conversations I've had with pharmacists who work there)... It's a trick to get you into their massive store in the first place...
Then you give them your Rx and they tell you it will be an hour or two before your order is ready...
IF you go buy ANYTHING else in the store, they will have made money off of you.
In my little pharmacy I don't have that luxury.
I find it quite interesting that when the script isn't $4...then it could be $500... Hmmm...
October 30, 2009 7:18 PM | Reply | Permalink
Do people without insurance pay the total?
Yes we do, there is no negotiating with blood test labs, how would one even go about it? You're not the customer, your doctor is, but you get the bill directly after he gets the results.
You have no control over the lab he has chosen to work with for blood or urinalysis or the like. Only insurance cos. can do that, they tell the doc which lab to use. If he doesn't take insurance, he choses the lab he wants to work with.
It's interesting that the big chain pharmacies started offering savings plans for out-of-pocket payers in the last year or so. But in the past you could also get samples from a kindly physician, and talk with him about generic possiblities, etc.
But with labs, it's the full price. I haven't had many lately except the pap smear but that has been going up by astronomical increments in the last 5 years or so, in NYC it used to be something like $20 not that long ago, now it's $75.
You do TSH? I had one like 12 years ago and I remember it was astronomical back then, something like $400, I was shocked at the price! I should really have another because I was taking thyroid supplements at one time, but just stopped when it was a hassle and expense to get my prescription renewed. But I think how much it would cost along with going to the doc twice to get it and the follow up, and how much hassle that would be, and then going again to get the dose adjusted, and how much hassle and cost that would be, and how the supplements never made me feel that much better anyway, and I think fuggeaboutit, it was just a minor hypo condition and I'll make due with caffeine....
October 29, 2009 11:25 PM | Reply | Permalink
We are a profitable growth industry, crows one of the biggest labs in the world:
October 30, 2009 12:20 AM | Reply | Permalink
This is one of my biggest sore points aa. The "deals" worked out between health care co.s and the insurance industry.
It's called Collusion. And it's just flat out wrong. Pay to stay (alive) as it were.
Worst form of extortion. And it needs to be stopped.
C
October 30, 2009 8:36 AM | Reply | Permalink
Oy, I use Quest. Maybe I shouldn't, but they are the only ones that are open so early and easy to get to.
Yeah, the docs push them.
October 30, 2009 8:12 PM | Reply | Permalink
I used to work in a (teaching) hospital clinical lab and was the flunky-in-charge of the stat lab off the ER at the very beginning of the revolutionary automation of blood chemistries.
Considering the probable advances in the intervening years, I can only wonder at the ease and simplicity of running these tests now and was shocked to see a bill from the lab for $140 for a glucose and 2 lipids.
On inquiry, I find that the doc sends the specimens then the lab bills the patient if you are a cash customer (a rarity). Insurance "providers" cost was $19 and change. One can be sure that the lab's costs and profits were covered at that figure.
This gouging of the desperate is grotesque. I wonder what % of the industry profits are generated by those forced to pay retail-on-steroids for standard labwork because they can't afford an insurance provider.
October 30, 2009 1:14 AM | Reply | Permalink
'tis, yet keep in mind the cash customers aren't payin $400 a month.
It's a sucky gamble and reality, but one too many have to deal with.
October 30, 2009 8:14 PM | Reply | Permalink
You know, drug stores in Mexico near the border is a multi-billion dollar industry for Mexico. I can get my scripts filled in Mexicali for about ten cents on the dollar, and they're still making a great profit in Mx.
Last year I got a power chair through Medicare. The street price on the Internet for several retailers was around $3200, batteries included ($60 shipping?) But noooo, I had to get a prescription to buy one from a local med supply business, who charged Medicare over $7000, plus another $400 for batteries. If Medicare just allowed me to do my own shopping, I could have saved the system $4k.
October 30, 2009 2:35 AM | Reply | Permalink
Related to Neoboho's as well as Ickyma's comment above, I discovered shopping for my prescription meds in Mexico last year too. The upshot of doing so has decreased my prescription costs by $197/month over the cash US price. I do pay about $46 more than my copays would have been if I had decided to try to pay the $1700/month they were charging me for coverage. From what I can discern, the system in the US is set up to scam as much from an ignorant and unsuspecting US public as possible.
October 30, 2009 6:37 AM | Reply | Permalink
Having travelled deep into Mexico within the past year, something else I've noticed is that I tend to get better prices on my prescription meds the farther away from the border towns I get. I've been wondering if the border towns are exploiting their market conditions and offering two different prices, one for locals, and one for gringos.
October 30, 2009 6:58 AM | Reply | Permalink
Maybe, I get good priced north and east of the border.
You figgered out the premium scam, eh?
October 30, 2009 8:17 PM | Reply | Permalink
Thank you for this Cville. One of our other friends related the same type of charging going on that related to his wife's illness. They had full insurance so that the company cut the hospital bill by 80% or some such.
Taken together with Ickyma's comment, this is all very strange to me.
October 30, 2009 2:55 AM | Reply | Permalink
As one of the recently uninsured, I have been deferring getting tests as well as the appointment with my MD and sometimes in turn a specialist who would order the tests. The reduction in your, (or your insurance company's), costs is significant to say the least. The obvious question from my perspective is that if costs can be reduced that much with the purchasing/negotiating power of an insurance company and it's subscribers, how much better costs could be controlled for everyone if we had a unified single payer system.
October 30, 2009 6:54 AM | Reply | Permalink
If everyone were insured and there were competition in insurers, the "negotiated price" would be higher, your portion would be about the same, and nobody would pay the ridiculous list price (so that the list price could be the more reasonable "negotiated price" in the first place).
October 30, 2009 7:47 AM | Reply | Permalink
Interesting. I was getting a workup at the 8 story clinic associated with the Osteopathic Medical School here in fort Worth in September, and my uninsured kid needs a TSH test run. I am convinced she is sub-clinically hypothyroid, as I am, and that causes depression, sluggishness, weight-gain, increased cholesterol, etc. If you have metabolic syndrome and medication is not controlling it, sub-clinical hypothyroidism should be tested for, and the lab tolerances are set too high. Correct it and six or so months later you will realize that you are thinking a lot more clearly and remembering things from your childhood you haven't remembered for years.
The price the lab quoted me was $104 dollars for a cash customer, which included drawing the blood. Medicare pays about a third that amount, but it does not reimburse the doctor for drawing the blood.
How in Hell can anyone create an efficient and effective health care system when the prices throughout the system are all fictional and mostly inflated? There is literally no price signaling to suppliers or to customers that realistically reflects what the cost or demand really is.
Anyone who is going to save money with the health care system is going to have to demand truth-in-pricing everywhere.
October 30, 2009 6:08 PM | Reply | Permalink
The submitted prices are inflated because the reimbursements are soooo small. I think these doctors just bill as big as possible hoping it will somehow raise their reimbursement a little bit..
I don't know. But that's what it seems like.
If the reimbursements were substantial enough that the doctors didn't have to run through as many patients per hour as possible... that doctors could actually take the time to practice medicine... I'm thinking all the unnecessary testing and inflated billing might go away...
But then again... because the insurance companies have been soooo SHITTY for so long... they've forced the doctors into this kind of system...
The Genie may be out of the bottle as the Doctors have learned what to do. If the reimbursement rates went up, the doctors may ramp up unnecessary testing even more! EGADS!!!
October 30, 2009 7:40 PM | Reply | Permalink
That's why "Outcome Based" reimbursements seem like a good idea.
The only trouble is Patient Compliance.
I mean.. the doctor can tell the patient to change their diet... exercise... and take these cholesterol lowering meds...
But the patient doesn't do what he/she is supposed to do...
The cholesterol doesn't fall...
The doctor get punished for this? Really?
That doesn't seem right either.
October 30, 2009 7:42 PM | Reply | Permalink
Early this year my 15 year old daughter went to the ER on a weekend. We suspected acute appendicitis but it turned out to be mono. She was admitted and had some blood-work done and an ultrasound and spent about 16 hours total at the hospital. I don't remember my out of pocket, but it was on the order of $200. The bill the hospital sent to my insurer was $18,000. I still don't know what they actually paid. My older sister spent three days in intensive care in Vera Cruz plus four more days in a hospital there when she had a diabetic emergency, and her total cost, without insurance paying anything, was about $2000 (I know because I paid the bill). Cost controlling the scams is key.
October 30, 2009 9:39 AM | Reply | Permalink
$270.00 for lab work is pretty pricey considering, but how does $72,336.63 for a 5-day hospital stay grab you? (Speaking from the perspective of one who is insured.)
Date of Service: 6/5/09 - 6/10/09.
TriCare Amount Billed: $72,336.63
TriCare Allowed: $8,607.29
TriCare Paid: $8,552.29
Cost Share/Copay: $55.00
Deductible: $0.00
Note: this is what socialized can do for you. TriCare is the governement-run insurance program in which military personnel and their families are enrolled (including retirees).
I didn't have surgery, or an organ transplant, or anything like that and am normally healthy. This was for 5 days worth of intravenous immune globulin infusions (2 hours per day) as well as CT-Scan, Ultrasound, and 3X daily blood tests. Long story.
Anyway, I showed this bill to a physician at a health reform kick-off meeting I attended and asked him how the hospital came up with this figure. He explained that it wasn't a "real" figure and went on to tell me that the hospital wouldn't even be able to produce an itemized list of the charges. However, had I not been insured, I would have been required to pay the full amount of $72,336.63.
Granted, the TriCare system has its issues, but had I been forced to pay this bill, we'd be selling our home in order to pay for a five-day hospital stay.
Pretty scary, isn't it? I don't know too many people who have 70 grand lying around the house.
October 30, 2009 10:32 AM | Reply | Permalink
I meant to say: this is what socialized medicine can do for you.
October 30, 2009 10:45 AM | Reply | Permalink
So the health care insurance industry really amounts to having to pay "protection" to a "health care gang" who will pressure a health care provider into not gouging you when you need care - that is if the gang will let you in, and if your provider recognizes your gang colors, and if you can afford to pay the protection.
Whatta setup!
Most of this mess is due to health care insurance not really only being insurance but also being a scheme for pre-paid routine health care. The insurance industry understands how to take advantage of this very well. They have traditionally sold "whole life" insurance, which combines life insurance with investment features in various complex combinations that the mark (aka policy holder) is completely bamboozled by. Their current favorite is a variety of annuity products.
It is too bad that we can't avoid this whole system by:
- require all medical care providers to post their standard prices for services on the web,
- require all medical care providers to provide written estimates prior to care upon requests,
- providers may not charge more than 150% of the written estimate,
- having people pay 100% out of pocket for medical care up to 2.5% of their gross annual income,
- allow an 80% tax credit for medical care between 2.5% and 15% of their gross annual income,
- allow a 100% tax credit for medical care above 15%,
- allow filing monthly of a 1040 EMC (estimated medical care) with receipts to receive the tax credit in advance.
I'm sure there is something wrong with this proposal, since it is too simple.
October 30, 2009 1:06 PM | Reply | Permalink
Don't forget that there is the Health Care Savings Account program which has the federal government subsidizing these retail prices by giving the consumer a deduction for paying them out of their Health Savings Account. I haven't investigated this, but my general impression is that they aren't masses of people enrolled in the program to make a huge difference, but still it's a little extra tip to the providers (as opposed to insurance companies.) That it isn't real easy to get the high deductible catastrophic insurance plans (in certain states especially) that are a requirement for having a Health Savings Account makes me think that the main beneficiaries aren't insurance cos., that they don't see it as a profitable place to go?
require all medical care providers to provide written estimates prior to care upon requests
We payers out of pocket could sure use that if for no other reason than to plan or know what to expect. Usually a doc can't even tell you how much a test is going to cost, you're just gambling you can pay for it, you do it because he says he needs it. And often you never see it, often the only way you know he got the results is the receipt of a surprise bill in the mail. If you're lucky and have a doc that treats you like a partner in your health, he'll show the results to you, but I think that's unusual, many seem to think that that blood reports are dangerous info. that dumb patients shouldn't be looking at, or that it will affect their psychology.
October 30, 2009 5:30 PM | Reply | Permalink
My wife and I (having been laid-off several years ago, now employed as a 1099-misc contractor) pay $453.31 per month for a $5000 deductible policy, connected to a health savings account.
Since we are (very fortunately) healthy, we are essentially paying $5440 per year to Anthem for a catastrophic insurance policy and negotiated rates for appointment, lab & drug services. The fee goes up about 10% per year.
Couples, make sure both of you work, and have plenty of money saved. If one gets laid off, you are in trouble. If both get laid off, DO NOT GET SICK.
Rep Grayson is exactly right on American health care: Don't get sick. If you do get sick, don't get sick. If you *insist* on being sick, die quickly. Failing to die quickly will render your spouse immediately and irretrievably poverty stricken, probably for the rest of his or her life.
Culture of life, indeed.
October 30, 2009 6:04 PM | Reply | Permalink
In pharmacy the Health Savings Accounts aren't quite like what you've described (unless I misunderstood you).
Usually the patient has an insurance card... I run through the claim... and I am told what to collect from the patient.
It's not like I could charge them a regular cash price for their prescription. I am told what to charge them.
This does NOT apply to Over The Counter (OTC) medications... So, I could raise my OTC prices in order to get more from the Health Savings Account people... But as you noted, this would do me more harm than good because there simply aren't that many of them yet... And it would make the customer see my OTC prices are high... and they'd assume my Rx's must be high too...
October 30, 2009 7:22 PM | Reply | Permalink
My understanding is that those you are talking about are different from what I am talking about, what you are referring to is the HSA offered by employers, they are part of an insurance coverage package (often I think still sold by insurance companies.) I've been in medical lines where I've seen people use the cards, talked to them about it, and I know they got them from their employer.
But individuals can set up a HSA like you set up an IRA, that's what I am talking about, the plan introduced and pushed by Bush:
http://www.ustreas.gov/offices/public-affairs/hsa/
That is where you contribute money into an tax deductible account for yourself and use it to pay for your own medical expenses. There is no one controlling your payments, you pay like any other out-of-pocket customer for whatever you get, fee-for-service. Though the annual amount an individual can put in and use is not that high, I've read it's popular with people with money enough to purchase a lot of health services and don't like the idea of an insurance company guiding their health care, as everything that the I.R.S. says is a medical expense in their code can be included--contact lens solution, dental....The part I don't understand is how you present to the insurance company covering your catastrophic that you have met the deductible, I would think they would not count contact lens solution or plastic surgery expenses as meeting your deductible.
October 30, 2009 7:54 PM | Reply | Permalink
I think you are referring to what is known as
Flexible Spending Accounts, see this New York Times article,
which are modeled after the Health Savings Accounts idea (Treasury link in the above comment,) but not the same thing, as they are part of an employer-provided plan and are controlled by the employer.
October 30, 2009 8:05 PM | Reply | Permalink
That's right. Thanks.
October 30, 2009 9:31 PM | Reply | Permalink
Just got a notice yesterday that my insurance co. paid $176 on a $1,875 bill (for a single test!)
That's less than 10%. But too out of line with the norm. Just eyeballing this calendar year's allowed amounts compared to billed amounts, it's about 20% to the World's Biggest Cancer Hospital. Payouts to my local PCP were much better, about 80%, and frankly I wish they paid her more, she deserves every penny.
October 30, 2009 1:30 PM | Reply | Permalink
Ain't that the truth. At least with the mob - they will only send someone around to break your legs if you ate late in paying.
The healthcare industry lets you die in torturous pain and agony.
C
October 30, 2009 2:36 PM | Reply | Permalink
My better half recently needed a life saving drug after being rushed to the local ER following a massive pulmonary embolism (blot clots in lungs.)
Upon release, he needed to inject himself with 'Lovenox' twice daily for 7 days.
Cost at hospital pharmacy was $1000 per injection. Let me repeat that, ONE THOUSAND DOLLARS PER INJECTION. Insurance would pick up 75%. Our out of pocket expenses would be $3,500, and insurance would pay $10,500.
Insurance suggested I try a retail pharmacy (Walgreens, Rite Aid). Out of pocket expenses would be $9 - $22 (brand name v. generic) per prescription, with insurance picking up difference.
While annoyed at the cost disparity, I didn't get angry until I found out the true cost of the drug. Lovenox was sold in a box as 10 pre-loaded syringes for around $250. Let me repeat that, the hospital could purchase the drug (10 pre-loaded syringes) for TWO HUNDRED AND FIVTY DOLLARS.
Each injection would cost the hospital $25. They were in turn going to sell it to us for $1,000 per injection. That is a 4,000% increase.
Anyone willing to try to explain this usury?
October 30, 2009 4:03 PM | Reply | Permalink
Is there NO regulation as to mark-up for medications? This is ridiculous! Scratch that -- it is a crime!
October 30, 2009 7:06 PM | Reply | Permalink
You misunderstand the process.
The insurance company pays VERY LITTLE to the pharmacy for filling the Rx.
I once ordered a drug that COST me $700. I was to charge the patient $20...
And a month later I got a check for $682.
I made $2 ABOVE COST ... and it took me a MONTH to get that!!!
It's not like the pharmacy is "Marking Up" the price.
In the case of Lovenox... It's just plain EXPENSIVE.
If the patient was paying $3,500... and the insurance was paying $10,500... Then the pharmacy who filled it was probably making less than 3% markup...
The REAL EXPENSE comes from the Drug Manufacturer.
EXAMPLE:
I remember when XANAX was Brand Name Only (No Generic available because Upjohn still held the exclusive rights through their patent).
#100 tablets COST me $120. i.e. $1.20 per tablet at COST!!! So to fill the Rx for #60 tablets would probably have cost the patient around $89 or so...
When Xanax went Generic... I could buy #1000 ALPRAZOLAM for about $5.00
FIVE DOLLARS!!!
And you have to imagine the Generic Company was making a Profit doing this (or they wouldn't be doing it!) And the wholesaler was making a profit too...
Then I could sell the same #60 for $29.99 (Saving the Customer $60 !!! And I was making $15 MORE per Rx.
IMAGINE the kinds of margins the drug companies are making on the Brand Name Only medications.
they say they need to charge this because R&D is soooooo expensive... But the truth is as much as 40% of all R&D dollars come as GRANTS from the Federal Gov't. (i.e. You and Me!!!). Why don't we get part of the profit for the drug we helped discover??? Instead, we get to Pay through the NOSE for that drug we paid to develop.
The drug companies should have their prices regulated.
Imagine, CVille, if I was unable to charge the cash paying customer what was NECESSARY for me to stay open for business.
Since Insurance companies determine what my profit will be... if any!!! ..and I have NO SAY WHATSOEVER in the matter... then I have to be able to get my margin somehow.
If all pharmacies were regulated and unable to charge what was necessary... then I guess there'd be no pharmacies and you'd very limited access to medication. (We simply can't survive on the margins provided by insurance company reimbursement unless we are doing a HUGE VOLUME!!! And that kind of volume is not good for anybody... Not the patient (because the pharmacist is likely to be very tired... and not paying close attention to the details of what's going on...)... and not the pharmacist because he/she will be working VERY VERY hard and will indeed burn out pretty quickly (horrible life).
The way to get control of the price of drugs is to start at the Manufacturer. Canada does it. Other countries do it. It works.
October 30, 2009 7:35 PM | Reply | Permalink
I am so glad that you are here to give the perspective of someone in the trenches -- it isn't only that I misunderstand the process -- the process is not understandable!
Ickyma, what is your solution to this? Do you make enough in mark-ups for Robitussin to cover the nightmares you describe above? I've heard that "supply and demand" should govern pricing. How about cost plus a reasonable profit? I mean, the supply and demand concept would mean that H1N1 vaccines would be unaffordable, since they are undersupplied. Cancer meds could be overcharged for because without them people would die. I think "supply and demand" should not apply to medical products. How much does it cost to provide it, and what is a reasonable mark-up?
It is obvious "cost plus" has nothing to do with the prices that show up on our bills. How can we regulate; how can we even identify fraud; how can we fairly charge for services when we have such a ridiculously absurd pricing system in place?
October 30, 2009 7:47 PM | Reply | Permalink
No... OTC's make up less than 1% of my sales (but then again, I am not Wal-Mart. I am strictly pharmacy with VERY LITTLE front end...
IF I were to mark my OTC prices up not only would it not make a difference to my bottom line... it would likely REDUCE my bottom line because people would associate those OTC prices with EVERYTHING I sell...
i.e. If my Tylenol is more expensive than Kroger's or Wal-Mart, then EVERYTHING I sell must be more expensive.
I usually just sell the OTC's at cost or just slightly above.
Truth is, I could probably give it away and not notice.
........................
In pharmacy, anyway... AND apparently for doctors, too... The insurance company will "MAC" (Maximum Allowable Cost) their reimbursements.
They control the "Mark Up" for the Doctor and the Pharmacy.
They have complete control over our profit margin.
My best answer is flat out Universal Healthcare... and Gov't regulation of drug prices.
..........
There are many brand name drugs that a pharmacy in Canada can purchase for 1/4th the price I pay.
Why? Because the Canadian Gov't says, "If you're going to sell that in this country, you may not charge more than $X." The drug companies say, "OK!" and they do it.
That's also a (false) argument made by drug manufacturers to justify their prices. They say, "Because we aren't getting the price we need from Canada, we need to charge more here..."
I call BS.
October 30, 2009 9:23 PM | Reply | Permalink
But then they couldn't afford all of those commercials, free samples, pens, clipboards, and nice lunches that they provide to doctors offices.
October 30, 2009 7:52 PM | Reply | Permalink
Ding!
October 30, 2009 9:16 PM | Reply | Permalink
To be fair... they don't give as much stuff away to the Doctors anymore. There are a bunch of new rules in place to prevent that...
I'm curious to see what loopholes they find.
But the "Direct To Consumer" Advertising (TV in particular) is DISASTEROUS!!! That has really screwed things up.
October 31, 2009 11:20 AM | Reply | Permalink
Yes. Kind of criminal, isn't it?
October 30, 2009 7:57 PM | Reply | Permalink
Let me clarify, C'ville.
Yes, uninsured people pay the whole thing, like I did for 2 or 3 years for my kid, who needed even more extensive labs than that. They'd run me about $300, twice a year. Her Neurologist, about $300 a year, her pediatrician, about $400 a year.
Compare that to your premiums. (what you pay plus what your employer pays)
The drug costs, I won't discuss, because they were insane, I get her drugs from England or Canada, still less than a drug plan.
I am, however, no longer self employed.
Who pays full price?
The engines of our ingenuity.
October 30, 2009 8:02 PM | Reply | Permalink
Criminal on who's part?
If I don't make enough money to stay in business, then I am out of business... then you have nowhere to get your Rx's.
There has GOT to be enough margin to stay open... I don't see it as criminal that I keep my business open so that I can continue serving my community.
Criminal the way the whole damned system is set up?
You betcha!
October 30, 2009 9:26 PM | Reply | Permalink
Incidentally...
When MEDICARE PART D (Federal Prescription Drug Program) went into effect my profit was cut in HALF!!!! (I had budgeted for a 25% cut... that really screwed me up.)
I said almost 2 years ago that Part D was a "Test Balloon" and that any healthcare reform would be based upon it.
IF Private (for profit) Insurance Companies are allowed to "Administer" this program then I will have been right.
The difference is: ALL the millions of people who could finally see a doctor would increase volume enough to offset the lower reimbursement rates...
...at least I hope so.
October 30, 2009 9:30 PM | Reply | Permalink
So.
PLEASE! For the love of Gawd!!!!
When you have insurance... and your pharmacist tells you that your Rx has a $50 co-pay...
Do NOT ARGUE with him/her.
They are NOT just pulling this number out of their ass.
They are NOT lying to you!
They are NOT trying to take more money than they should.
They ARE collecting what your insurance company told them to collect.
IF you have a problem with it, just say, "Hold that Rx for me. I'm going to call my insurance company and ask them about it."
Then go away and do that. (Do NOT stand at the counter for 45 minutes holding up everybody else while you call).
Just sayin'
:) :) :) :) :) :) :)
October 30, 2009 9:34 PM | Reply | Permalink
Ickyma, you'll be happy to hear that I almost always go to a small private pharmacy near me. They are sometimes slightly more expensive, but I really like them. When my son had Strep throat years ago, I drove him there with the Rx in my hand. We got there just as it was closing (the pharmacist was coming out the door with the keys in her hand). I told her what we needed and she went back in, filled the Rx and gave us each a candy while we were waiting. I have been a loyal customer ever since.
October 31, 2009 12:50 PM | Reply | Permalink
There you go! :)
Thanks C'Ville.
October 31, 2009 3:16 PM | Reply | Permalink