I do not understand horror movies or novels; they make no sense to me. I enjoy fiction because my time spent with it is enjoyable. If the horror genre and being horrified is somehow enjoyable to people, why mess around with fiction? Real life far exceeds the imaginations of fiction (like this example and another). Well, this book by Marshall Allen about the unsexy topic of medical billing is firmly in the "true horror" genre.

Some might wonder why would I read this kind of book? I am not paying any medical bills at the moment and historically never have. (I actually want to get this back to the library ASAP so it can resume helping its real target audience.) For someone not staring down horror genre medical bills this would seem kind of off topic. But just as the safety of nuclear warheads is not off topic for any human, medical billing is a grave topic that all Americans need to be facing squarely and taking very seriously. Sorry, it’s simply not optional. I spent months in college learning how to solve differential equations (without a computer!) and no one would think of calling that use of my time frivolous — taking a few hours to learn what I can about medical billing is by far a much better educational investment.

I’ve traditionally operated under the belief that medical billing is really quite simple. I have traditionally believed all medical bills were essentially identical. They ask you to pay a certain amount of money and my assumption was that the amount never changed. Whether you were getting a simple checkup or a heart transplant, the cost was the same: infinity dollars.

It turns out that simplification may have been a slight exaggeration. I was amazed and delighted to see actual finite numbers emerging from the medical industry’s RNG. I found encouraging stories like the one on page 192 about an incident that the author wrote about on Propublica.org — the title of the article says it all: A Doctor Went to His Own Employer for a COVID-19 Antibody Test. It Cost $10,984. Note that the materials cost $8. Frankly I’m simply relieved to see finite numbers such as 10984 and 8 involved in US medical billing. My mind is much more at ease.

(Actually there is one other kind of bill, for a procedure that my personal billing system codes as "The Washington". For that the patient pays zero dollars.)

Before scoffing at my conception of US health care, ask yourself what is the practical difference between a price of infinity dollars, and a price far in excess of all the money you will ever acquire in your life? None. My simplification is much closer to reality than it might at first seem. For example, one of the topics that is not discussed is a problem I typically find with "health" "insurance": the maximum coverage payout amount. I can’t remember the exact details but I remember it typically being in the $100k range which left me pretty nervous. My health care needs tend to run either $0 per year or $50 million for rebuilding all of my internal organs after getting smashed by a hit and run driver. One of the lessons of the book is that if you’re in the latter situation, you probably will want to be paying bankruptcy lawyers instead of your doctors. Sorry doctors, but you yourselves are ultimately responsible for this whole mess.

US "healthcare" is famously a big mess. Why we suffer this is somewhat mysterious. Yes, the US is backwards compared to otherwise comparable countries, but why? No one really knows. I personally believe that the 55% of the population having employer sponsored "health" "insurance" introduce a subtle well-meaning yet catastrophic bug into the entire system. If employer "health" "insurance" "benefits" were simply prohibited, health care would quickly become much saner.

People think there are two major groups in the US with respect to health care: people with insurance through their employer and those who don’t have that. But there are really at least four groups: people with employer supported "coverage", people paying for their own private plans, people who use the US’s perfectly ordinary socialized medicine (i.e. old people, veterans 34%), and the uninsured (8%). That fact that children do not have a basic human right to medical care is one of the most damning and embarrassing aspects of the USA.

Employers acting in good faith are in fact badly obfuscating any potentially sensible free market mechanism. The book hints at this (p133) as it highlights the counter-intuitive notion that your "health" "insurer" is actually not interested in making the system not terrible.

The Affordable Care Act…included provisions that tried to keep insurance companies' profit margins in check. The "medical loss ratio" said insurers had to spend at least 80 percent of what they took in from premiums on medical care. That sounds like a good idea, because it limits ridiculous administrative costs and profit margins. But it also contributes to rising health care costs. Insurance companies like to say their profit margins are small, and that may be the case. But their duty and obligation are to make the company money, not save yours. So let’s say they just give themselves 3 percent profit. In that case, the company increases its revenue by spending more.

Gosh, that’s hardly ideal. No matter. Fortunately/unfortunately, this is moot in a rich country. If someone tries to sell you a used piece of chewing gum, how much is that worth to you? Before you answer, imagine the someone — they’re chewing the gum, oh, and pointing a gun at your head. Ok, comrade capitalist, how much? I’m pretty sure the latest thinking in academic free market economic theory is still "your entire wallet, promptly".

Well, the medical business is nothing like that, right? No. It’s more like you’re trapped down a mineshaft with some poison gas seeping through a crack that you might be able to plug up with some used chewing gum. If negotiations with the gum chewer at the top of the mineshaft fail, it’s not like they murdered you. But do note that the price is likely the same: your entire wallet. Praying to the gods of free market capitalism will do you no good when one party has no freedom. This is a bigger problem philosophically than any simplistic quick fix or blame game can address.

So that mostly covers my personal misgivings about the medical profession’s serious structural defects when it comes to solving coordination and resource allocation problems. Moving on.

What can be done? What actionable advice can help limit the losses of these daylight robberies?

Right away the title provocatively suggests: never pay the fist bill. I didn’t get a strong sense that this involved some kind of law of nature or immutable code in some billing software. I think the idea is that if you get a shocking medical bill, question it, look into it. Don’t trust the medical profession to be looking out for you at all once you leave their presence. (Makes you kind of wonder about them the rest of the time, doesn’t it?)

So you’ve been hit by that car and are bleeding to death in the ER — one interesting tip is to amend the forms that establish your financial agreements. The book recommends to add the following text:

I consent to appropriate treatment and (including applicable insurance payments) to be responsible for reasonable charges up to two times the Medicare rate.

If you’re still lucid enough to get all that right, having done that can be a very helpful move in the case of disagreements later. And what are the hospital staff going to say? "Oh I’m sorry sir, could you go bleed in the parking lot until you’ve agreed to let us charge infinity dollars for your treatment"? Actually, don’t answer that.

Another good tip is to be super vigilant and diligent about getting all billing codes. You know how some people check their receipt as they walk out of the grocery store? You need to do that live while you’re conscious constantly in medical situations. These "billing codes" refer to CPT codes or Current Procedural Terminology. Some specific resources mentioned were FairHealthConsumer.org and HealthcareBluebook.com to get an idea of what health plans are paying for various services. Also, don’t assume an "insurance" plan covers the thing you need!

Another tip is to avoid hospitals. Obviously you’re doing your best to not need any medical care ever, but hospitals in particular are apparently especially expensive. This applies to labs and facilities associated with them.

Oh, and if that car has smashed your collarbone, do not get into an ambulance; get back on your bike and ride to the nearest medical facility that is not a hospital. (Actually with a collarbone fracture that’s still somewhat intact, you might want to follow my example and just ride back home — there was nothing the medical profession could have done for it besides torture me with forms, waiting rooms, nosocomial infections, and bills.) The book affirms the dystopian situation with ambulances that John Oliver covers better here. Not assuring care for sick children is a hallmark of an evil population; not making ambulances a free public service is the sign of a stupid one.

If you must be at a hospital, check to see if they are complying with federal regulations to post their prices. Apparently many flout this legal requirement — which is frightening. What other public safety requirements do they also feel are beneath them?

The next messy topic relates to your "health" "insurance" if you’ve got it. Much of the book is really just making the case that in many situations "it’s actually more expensive to have insurance than it is to not have insurance." (p144) An example case is explored on p145 where a woman cut herself in her kitchen and went for three stitches at the ER. The "insurance" rate was listed as $5805 which is what the woman and her "insurance" company had to pay. The cash price on that exact same thing was listed at $257.

What’s going on with that? Well, that’s related to the insurers making more money when they process bigger bills. This is why dentistry, cosmetic surgery, and veterinary medicine are so reasonable by comparison. Not only that, but there is plenty of billing fraud. The title on p203 sufficiently describes a fact that is later more carefully detailed: "It’s just not worth it for your insurer to ferret out fraud". Again, they don’t want costs and transactions going down, not from a rational profitability perspective.

Always ask what the cash price would be for the service, even if you have "insurance". It is often a much better deal. If you’re not going to come anywhere near your deductible (which are often very high these days) it is often best to pay cash, even if you are "insured".

For drugs, GoodRX and Good Shepherd Pharmacy are specifically mentioned as some kind of drug dealers who are not quite part of The System. It’s confusing, and I avoid magic beans so I’m no expert, but if you think you need some and your "insurance" seems way out of whack, these specifically mentioned resources may be worth a look.

There is a whole section in the book designed to help small employers navigate the funhouse mirror version of distorted capitalism that is "health" "insurance" brokers. Seems these brokers have a big misplaced incentives issue. Shocker! I didn’t pay super close attention, but it’s there if you need it.

What’s crazy is that I read this entire book on the topic of not doubling your medical calamity with the iatrogenic costs, and yet I get the feeling I just scratched the surface. Still, my chance of barely surviving a serious car wreck is far greater than encountering a pressing calculus problem which I have, in theory, spent years preparing for. So reading this book was probably time reasonably well spent. Let’s hope I’m never forced to learn more while down a mineshaft, at gunpoint.