A member of my family has a jaw related problem where the little pads behind the mandible bone are displaced upwards causing mal-occlusion of the teeth, popping, and some significant pain. Unfortunately this is classified as TMJ which is not covered by either dental or medical insurance. (I never have figured why this particular body part is unique.) It tums out that there is a surgeon in Florida who fixes this by taking a bit of belly fat and transplants it behind the bone where it transforms into new cartiledge relieving the problem. Success rate is 100%. Cost is $50,000 not counting travel and lodging for the week in Florida. (Remember—not covered by insurance.)

Anyway, diagnosing this problem leads me to my latest rant. In order to identify that TMJ was indeed was the culprit, a MRI was used. Imaging my surprise when when I got a bill for $1890.00. ( They didn’t have my insurance information and somehow this procedure slipped through a crack in the authorization process—I guess discovering that the problem is TMJ related IS covered—at least once.)

After giving them the revised insurance information, the new bill was about $200.00. Fascinated, I delved into the explanations of benefits—that fine printed gobbly-gook that insurance companies send to you that makes very little, if any, sense. The original $1890 was discounted by $920 since this was part of the agreement with the insurance company. 80% of the balance was then covered leaving me with a portion of the deductable and the 20% to pay.

I asked about the $920 discount. If I paid cash for the entire original amount minus the discount, the hospital could receive their money 6-9 months earlier (this is Illinois and our Governor is balancing the budget by not paying the State’s obligations.) No. Not allowed. If you actually pay for the procedure you have to pay the full $1890.

So why the hell does a MRI cost $1890 in the first place. The reason stated is that the machines cost over $3,000,000 and they have to recover the cost. Well, the hospital cost $48,7000,000 and the cost isn’t allocated over the 295 beds in one night. A night in the hospital isn’t $165,000. A MRI system should remain serviceable for at least 10 years.

Unfortunately hospitals are all about competition. The replacement cycle for a MRI seems to be about 18 months. They want the entire cost of the equipment fully amortized in that period, so they can buy a new one to keep patients from going to “that other hospital”. That, and the fact that the State is entitled to “most favored rate” in clauses in State insurance contracts, insure that paying cash will always be more expensive than going through the insurance paperwork mill. The system is definitely broken!

Imagine if the Government, seeing as how they are so hot to get into health care, funded the acquisition of MRI machines for hospitals. The logic would run somewhat along the lines— the [insert your favorite agency] will purchase an MRI machine for the hospital, but will assume a 12 year service life. You are eligible for a new machine only after 12 years. Hospitals could of course pony up the $3 million for a new machine if they wanted, but with the cost borne by the Government (read taxpayer), the other hospitals in the program would be able to offer MRI scans for around $50-$100. This would cover the electricity and the skilled operator labor.

One benefit of this would be that they would be used more (further reducing the allocation of recurring costs and making them cheaper still) and serious diseases would be identified earlier reducing heath care costs. This strikes me as a more reasonable Government intrusion into health care than doling out benefits in accordance with the folks that brought you the IRS in all its simplicity.

Some units actually do MRI for a business. These businesses amortize over 10-15 years and sell MRIs for a fraction of the cost hospitals do. True, government subsidies to hospitals might drive these small busines owners out of business, but that should be icing on the Congressional cake.

Maybe if we start chipping away at the stupid stuff in healthcare insurance, we can actually make it better without becoming Sweden or Canada.

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