The other day I got an invoice from the hospital for Rachana’s 100 days in Clements hospital, before we were moved to the rehab clinic for another 8 days. Take a wild guess as to how much it was for…… the number is further down in this blog.
For those of you who are not familiar with the US healthcare system, here is a quick 101. Disclaimer: I’m mostly talking about the norm and there are exceptions. Healthcare is a large and complex ‘industry’ and is largely a private sector business in the USA. It’s like walking into a restaurant/hotel for a quick meal or a few days stay. You pay for the services you receive; that’s not the crazy part. Now imagine not knowing the exact price of the products and services you are getting until you come back home and the invoice comes in the mail. You can’t ask the cost at the reception or front desk, can can’t call a number and ask for a menu of the charges; can’t compare the service and costs and choose the most cost effective option from the many hospitals and clinics; there is no way to know the price of healthcare, until after your receive the service. Is your mind blown yet? Read this $629 bandaid story. Almost everyone here gets a massive sticker shock the first time they see their health care invoice. Now it’s questionable why in this instance the father took his daughter to the Emergency for a what sounds like a small cut, but understand that most clinics are not open in the evenings and weekends, and depending on where you are, the Emergency or Urgent Care might be the only option to see a doctor. Anyways, if you can, forget the cost for a few minutes because the healthcare insurance market is another exciting topic.
Most decent jobs in the US include a perk that offers private health care insurance that covers the employee and their immediate family. Again, there are exceptions and fine print, but most insurances have a deductible (amount you pay each year before insurance kicks in), a coinsurance (amount you pay, typically 20%, and rest is covered by insurance), and copay (a fixed amount paid at time of service, eg: regular doctor $40, Emergency $150, etc. This is not the cost of the service but kind of a entry fee). These are still understandable concepts, but the thing that blew my mind when I first heard it was the concept of ‘out of pocket maximum’. This is the maximum amount you pay in a year and the rest is paid by the insurance without any upper limit. Ya, there is no upper limit!!! So, say you have a insurance whose basic terms are Deductible $1,500, Coinsurance 20% and Out-of-pocket-maximum $6,000; this mean you pay the first the $1,500 of the bills in a year, pay 20% of all bills in the year but only till you hit $6,000, after that the insurance pays 100% and you pay nothing else in that year. As you can imagine from the numbers above, most people who are healthy will pay their monthly premiums, pay the deductible and coinsurance but never really hit the maximum out of pocket and the insurance companies stay profitable. Till 2015 Rachana’s health care costs were quite normal; we paid the crazy medical bills for small ailments, but never came close hitting the maximum limits. Then came March 2016 and we hit the out of pocket limit in about 2 days.
So, the 100 days (Oct 2nd to Jan 9th) stay in the hospital that covered the room and the services she received in the room, but did NOT include professional services (a separate invoice) for the army of doctors who saw her, was a 194 page PDF file totalling to $1,281,042.90 i.e. $1.3 Million USD. The insurance has a discounted rate pre-negotiated with the hospitals which is roughly half of the invoice amount, so they paid about half a million to the hospital. The total cost of Rachana’s treatment and medicines in 2016 was close to $2.5M, of which the insurance negotiated and paid about $1.3M and we paid around $7000. Now imagine if we didn’t have insurance, which unfortunately and lot of people don’t.
Now, if you ask someone in the US what they think about their health care system, their love or hate for the system will depend mostly on their political bend. Health care reform is a big part of President Obama’s legacy and is partly the reason President Trump won the presidency. For a rich and leading nation like the US, my personal opinion is that healthcare should be available to all. I’ve been lucky to see health care from 3 completely different global perspectives – India, Canada and US. India is a pay-per-use model just like the US, but the insurance models don’t have a out-of-pocket maximum. Health insurance in India is similar to car insurance, i.e. the insurance has a upper limit cap as to how much it’ll pay out. If that was the case in US, we would have exhausted all our insurance, assets and life savings in about 30 days. Canada has a publicly funded health care model where all citizens receive health care. There are exceptions in terms of certain procedures and medicines that are not funded by the government, but basic health care if offered at no additional cost.
I’ve seen first hand how difficult health issues can be and how quickly they can turn our world upside down. One of the big reasons we could sustain these challenges is because we didn’t have to worry about finances, in spite of the ridiculously large costs. I didn’t have to keep an eye on the costs while searching for the best medical facility; the doctors didn’t have to worry about the tests and equipment needed to support Rachana and if I was capable of paying for it. I didn’t have to make a choice between Rachana’s future and the kids future; and for that I will forever be grateful to the US health insurance model. I hope someday healthcare becomes a basic human right and not limited to the ones who can afford it.