Tagged Health Care Costs

Obama Strikes Serious Tone As He Implores People To Sign Up For Health Law Coverage Before Deadline

“No jump shots. No ferns. No memes. Not this time. I’m going to give it to you straight: If you need health insurance for 2019, the deadline to get covered is December 15,” tweeted former President Barack Obama, who in the past has taken more light-hearted approaches. “Pass this on — you just might save a life.” Enrollment news comes out of Maryland and Georgia, as well.

Health Industry Groups: Congress Must Act To Protect Patients From Surprise Medical Billing

“When doctors, hospitals or care specialists choose not to participate in networks, or if they do not meet the standards for inclusion in a network, they charge whatever rates they like,” wrote the groups, which include powerful lobbyists like the Blue Cross and Blue Shield Association, America’s Health Insurance Plans, the National Business Group on Health, and the Consumers Union. “The consequence is millions of consumers receiving surprise, unexpected medical bills that can often break the bank.”

One Implant, Two Prices. It Depends On Who’s Paying.

Kim Daniels didn’t have to pay a penny for her double mastectomy or the reconstructive surgery she had after treatment for breast cancer in June 2018. Her health insurance, PennCare, administered through Independence Blue Cross in Pennsylvania, fully covered both procedures.

Knowing that, cost wasn’t an issue for Daniels when selecting the type of breast implants. She asked her plastic surgeon at the Hospital of the University of Pennsylvania, “If I were your wife, what would you [choose]?” He went with Mentor MemoryGel implants.

According to Daniels’ hospital bill, those implants came with a price tag of $3,500 apiece, or $7,000 total.

Such a high charge for the exact same item would have been unthinkable if the procedure was cosmetic breast augmentation, which is generally not covered by health insurance. When patients pick up the tab, cosmetic surgery packages for breast augmentation cost about the same — $7,000 — but that includes the doctor’s fee, implants, operating room time and anesthesia.

The radical difference in price demonstrates in stark numerical terms how costs often depend on who is paying the bill.

Dr. Anupam Jena, a health economist at Harvard Medical School, said it’s precisely because cosmetic patients pay out-of-pocket that their costs for implants are far lower than what hospitals charge reconstructive patients.

“Cosmetic surgery providers have to compete with each other,” he said, and “one of the big ways they’re going to compete is to compete on price.”

“Whatever the cost is for the implant, they can’t up-charge too much, or a patient will just go somewhere else.”

Dr. Alex Sobel, a cosmetic surgeon and president of the American Board of Cosmetic Surgery, said the price he charges cosmetic patients for breast implants is pretty close to the price he pays for the implants from the manufacturer. High-end implants like Daniels’ would be priced at a maximum of $3,000 for a set, he added, if Daniels had been undergoing cosmetic breast augmentation surgery.

Sobel operates a cosmetic surgery practice in Bellevue, Wash., which is in the region of the U.S. with the highest cost range for cosmetic breast surgeries. He said he usually pays around $250 to $700 per implant for saline and $700 to $1,000 per implant for silicone. The most expensive form — stable silicone or “gummy bear” implants — are usually priced around $1,350 each.

Similarly, Dr. Brent Rosen, a cosmetic surgeon with a practice in a northern suburb of Philadelphia, said the silicone implants he buys range from $1,500 to $2,000 per individual implant.

For the entire cosmetic breast augmentation procedure with silicone implants Rosen charges $6,500. That’s $500 less than the charge for just Daniels’ silicone implants at the nearby Hospital of the University of Pennsylvania.

Jena, the Harvard health economist, said the reason behind many of these price markups is that hospitals are like any other business trying to make a profit. They can ask more from a company like an insurer than they can from an individual.

“Why does Apple charge $1,000 for an iPhone? It doesn’t cost that much to make an iPhone. It’s so they can extract surplus money. Same goes for hospitals,” said Jena.

Breast implants are just one example of how medical devices are significantly marked up by hospitals.

A 2017 study published in JAMA found that for knee and hip implants, insurance companies were paying double what the hospitals paid when they purchased the implants from manufacturers.

It is hard to define a reasonable manufacturing cost or wholesale price for a medical-grade bag of silicone. Mentor Worldwide and Allergan, the two biggest manufacturers of breast implants in the U.S., declined to share their products’ wholesale costs or their price negotiation practices with providers. Manufacturers regard their pricing as a trade secret.

Hospitals typically obtain medical devices through health care group purchasing organizations, which are supposed to negotiate with manufacturers to get lower costs for items. Bigger hospitals or providers that offer to use more of a certain product often get steep discounts over wholesale.

In 2016, Medicare, which has huge leverage in negotiations, paid $516.59 for a “silicone or equivalent breast prosthesis.”

So, the hospital markup for patients who pay for the procedure or are commercially insured is even more extraordinary.

A Penn Medicine spokesperson told KHN in an email that they were unable to comment on specific patient cases, but that the hospital receives a single “case rate” or bundled payment for all breast reconstruction surgeries and that reimbursement is not related to the type of breast implant chosen.

Of course, when dealing with powerful insurance companies, hospitals don’t get paid the full asking price conveyed on their bills. The price is often merely the starting point for negotiations with insurers.

“Hospitals are absolutely marking up the prices for medical devices,” said Jeffrey McCullough, a health policy professor at the University of Michigan. But, he added, “you can almost guarantee the list price you see on a hospital bill is not what the hospital is getting paid by insurance companies,” which bargain for discounts.

Even so, not all patients have health insurance coverage as comprehensive as Kim Daniels’. In such cases, all or part of the hospital’s high charge for breast implants could be billed directly to patients.

“If you don’t have an insurance company bargaining on your behalf, the default is to charge the patient,” McCullough said.


KHN’s coverage of women’s health care issues is supported in part by The David and Lucile Packard Foundation.

Weeklong Strike Set To Start For 4,000 Kaiser Mental Health Professionals In California

“This strike is a clear message to Kaiser that its mental health clinicians won’t stand by silently while their patients can’t get the care they need,” union leader Sal Rosselli said in a statement. Kaiser claims the union is most interested in raising wages that are already among the best in the nation.

Weeklong Strike Set To Start For 4,000 Kaiser Permanente Mental Health Professionals In California

“This strike is a clear message to Kaiser that its mental health clinicians won’t stand by silently while their patients can’t get the care they need,” union leader Sal Rosselli said in a statement. Kaiser Permanente claims the union is most interested in raising wages that are already among the best in the nation.

Small Drug Companies Closely Watching Supreme Court Case On Patents

A Swiss drugmaker is challenging a 2011 change to the law that no longer allows a company to patent an invention if it was for sale for more than a year before filing a patent application. Meanwhile, Congress also plans to focus on the issue of pharmaceutical patents and lawmakers continue to question the industry’s pricing decisions. And as Capitol Hill gears up for potential action on drug costs, there may be some lessons to be learned from China.

Small Drug Companies Closely Watching Supreme Court Case On Patents

A Swiss drugmaker is challenging a 2011 change to the law that no longer allows a company to patent an invention if it was for sale for more than a year before filing a patent application. Meanwhile, Congress also plans to focus on the issue of pharmaceutical patents and lawmakers continue to question the industry’s pricing decisions. And as Capitol Hill gears up for potential action on drug costs, there may be some lessons to be learned from China.

Podcast: KHN’s ‘What The Health?’ Is Health Spending The Next Big Political Issue?

The Republican-led Congress was unable to repeal the Affordable Care Act in 2017, but the Trump administration continues to implement elements of the failed GOP bill using executive authority. The latest change would make it easier for states to waive some major parts of the health law, including allowing subsidies for people to buy insurance plans that don’t meet all the law’s requirements.

Meanwhile, in states that are transitioning from Republican governors to Democrats, GOP legislators are using lame-duck sessions to try to scale back executive power and lock in some key health changes, such as work requirements for Medicaid enrollees.

And there is growing evidence that even with health insurance, patients who use significant amounts of medical care are increasingly unable to afford their share.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Margot Sanger-Katz of The New York Times, Joanne Kenen of Politico and Rebecca Adams of CQ Roll Call.

Among the takeaways from this week’s podcast:

  • The Trump administration outlined last week what type of waivers it is willing to consider for states’ ACA markets. Options include changes in who gets premium subsidies and how much they receive, and making short-term insurance plans that are not as comprehensive as current marketplace plans eligible for subsidies.
  • Any changes are likely to end up in court, as have most of the revisions that the Trump administration has proposed.
  • In Wisconsin and Michigan, Republican legislatures are seeking to restrict what the new Democratic governors can do to change GOP policies on Medicaid and challenges to the ACA.
  • A recent study has highlighted that health problems can create financial hardships well beyond the illness. For example, loss of income from a debilitating illness can make paying other bills very difficult and sometimes other family members must give up their jobs to be caregivers.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read too:

Julie Rovner: NBC News.com’s “FDA Approves Drug for Dogs Scared by Noise,” by Maggie Fox

Margot Sanger-Katz: The Washington Post’s “An Experiment Requiring Work for Food Stamps Is a Trump Administration Model,” by Amy Goldstein

Joanne Kenen: The Atlantic’s “The CRISPR Baby Scandal Gets Worse by the Day,” by Ed Yong

Rebecca Adams: The New York Times’ “Why Hospitals Should Let You Sleep,” by Austin Frakt

Also mentioned in this episode:

The New York Times: “1,495 Americans Describe the Financial Reality of Being Really Sick,” by Margot Sanger Katz

Kaiser Health News: “No Cash, No Heart. Transplant Centers Require Proof of Payment,” by JoNel Aleccia

CBS News: “High Cost Has Many Diabetics Cutting Back on Insulin,” by Serena Gordon

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcher or Google Play.

No Cash, No Heart. Transplant Centers Require Proof Of Payment.

When Patrick Mannion heard about the Michigan woman denied a heart transplant because she couldn’t afford the anti-rejection drugs, he knew what she was up against.

On social media posts of a letter that went viral last month, Hedda Martin, 60, of Grand Rapids, was informed that she was not a candidate for a heart transplant because of her finances. It recommended “a fundraising effort of $10,000.”

Patrick Mannion received a double-lung transplant in May 2017 after being diagnosed with idiopathic pulmonary fibrosis, a progressive, life-threatening lung disease. Through a transplant fundraising organization, HelpHopeLive, he has raised nearly $115,000, twice the original goal to help pay expenses that insurance didn’t cover, including copays for costly anti-rejection drugs. (Courtesy of Patrick Mannion)

Two years ago, Mannion, of Oxford, Conn., learned he needed a double-lung transplant after contracting idiopathic pulmonary fibrosis, a progressive, fatal disease. From the start, hospital officials told him to set aside $30,000 in a separate bank account to cover the costs.

Mannion, 59, who received his new lungs in May 2017, reflected: “Here you are, you need a heart — that’s a tough road for any person,” he said. “And then for that person to have to be a fundraiser?”

Martin’s case sparked outrage over a transplant system that links access to a lifesaving treatment to finances. But requiring proof of payment for organ transplants and post-operative care is common, transplant experts say.

“It happens every day,” said Arthur Caplan, a bioethicist at the New York University Langone Medical Center. “You get what I call a ‘wallet biopsy.’”

Virtually all of the nation’s more than 250 transplant centers, which refer patients to a single national registry, require patients to verify how they will cover bills that can total $400,000 for a kidney transplant or $1.3 million for a heart, plus monthly costs that average $2,500 for anti-rejection drugs that must be taken for life, Caplan said. Coverage for the drugs is more scattershot than for the operation itself, even though transplanted organs will not last without the medicine.

For Martin, the social media attention helped. Within days, she had raised more than $30,000 through a GoFundMe account, and officials at Spectrum Health confirmed she was added to the transplant waiting list.

In a statement, officials there defended their position, saying that financial resources, along with physical health and social well-being, are among crucial factors to consider.

“The ability to pay for post-transplant care and life-long immunosuppression medications is essential to increase the likelihood of a successful transplant and longevity of the transplant recipient,” officials wrote.

In the most pragmatic light, that makes sense. More than 114,000 people are waiting for organs in the U.S. and fewer than 35,000 organs were transplanted last year, according to the United Network for Organ Sharing, or UNOS. Transplant centers want to make sure donated organs aren’t wasted.

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“If you’re receiving a lifesaving organ, you have to be able to afford it,” said Kelly Green, executive director of HelpHopeLive, the Pennsylvania organization that has helped Mannion.

His friends and family have rallied, flocking to fundraisers that ranged from hair salon cut-a-thons to golf tournaments, raising nearly $115,000 so far for transplant-related care.

Allowing financial factors to determine who gets a spot on the waiting list strikes many as unfair, Caplan said.

“It may be a source of anger, because when we’re looking for organs, we don’t like to think that they go to the rich,” he said. “In reality, it’s largely true.”

Nearly half of the patients waiting for organs in the U.S. have private health insurance, UNOS data show. The rest are largely covered by the government, including Medicaid, the federal program for the disabled and poor, and Medicare.

Medicare also covers kidney transplants for all patients with end-stage renal disease. But, there’s a catch. While the cost of a kidney transplant is covered for people younger than 65, the program halts payment for anti-rejection drugs after 36 months. That leaves many patients facing sudden bills, said Tonya Saffer, vice president of health policy for the National Kidney Foundation.

Legislation that would extend Medicare coverage for those drugs has been stalled for years.

For Alex Reed, 28, of Pittsburgh, who received a kidney transplant three years ago, coverage for the dozen medications he takes ended Nov. 30. His mother, Bobbie Reed, 62, has been scrambling for a solution.

“We can’t pick up those costs,” said Reed, whose family runs an independent insurance firm. “It would be at least $3,000 or $4,000 a month.”

Prices for the drugs, which include powerful medications that prevent the body from rejecting the organs, have been falling in recent years as more generic versions have come to market, Saffer said.

But “the cost can still be hard on the budget,” she added.

It’s been a struggle for decades to get transplants and associated expenses covered by insurance, said Dr. Maryl Johnson, a heart failure and transplant cardiologist at the University of Wisconsin School of Medicine and Public Health.

“It’s unusual that there’s 100 percent coverage for everything,” said Johnson, a leader in the field for 30 years.

GoFundMe efforts have become a popular way for sick people to raise money. About a third of the campaigns on the site target medical needs, the company said.

But when patients need to raise money, they should use fundraising organizations specifically aimed at those costs, transplant experts say, including HelpHopeLive, the National Foundation for Transplants and the American Transplant Foundation.

There’s no guarantee funds generated through such general sites such as GoFundMe will be used for the intended purpose. In addition, the money likely will be regarded as taxable income that could jeopardize other resources, said Michelle Gilchrist, president and chief executive for the National Foundation for Transplants.

Her group, which helps about 4,000 patients a year, has raised $82 million for transplant costs since 1983, she said. Such efforts usually involve a huge public-relations push. Still, 20 percent of the patients who turn to NFT each year fail to raise the needed funds, Gilchrist said.

In those cases, the patients don’t get the organs they need. “My concern is that health care should be accessible for everyone,” she said, adding: “Ten thousand dollars is a lot to someone who doesn’t have it.”

Every transplant center in the U.S. has a team of social workers and financial coordinators who help patients negotiate the gaps in their care. Lara Tushla, a licensed clinical social worker with the Rush University transplant program in Chicago, monitors about 2,000 transplant patients. She urges potential patients to think realistically about the costs they’ll face.

“The pharmacy will not hand over a bag full of pills without a bag full of money,” she said. “They will not bill you. They want the copays before they give you the medication.”


KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

State Highlights: Violent Attacks Against Staff At Washington’s Largest Psychiatric Hospital On The Rise; St. Louis School Still Grappling With Fallout From Decade-Old HIV Outbreak

Media outlets report on news from Washington, Missouri, Virginia, Massachusetts, Wisconsin, Illinois, California, Maryland, Florida, Colorado, Texas, Ohio, Oregon, Kansas, Arizona, Connecticut and Iowa.