I am a pretty healthy person and, until recently, the absurdity and expense of the American healthcare system were problems I could hold at a distance. They were subjects of cocktail party or breakfast table fulmination, sure, but did not impinge much on my own time, sanity or bank account. Then I got pregnant.
My subsequent misadventures in the health insurance jungle are in no way remarkable—their very ordinariness is what's so disturbing. They show that the fantasy of a free market solution to our healthcare mess is misguided, and that the Affordable Care Act, popularly known as ObamaCare, will not bring much rationality to the system anytime soon.
My husband and I pulled into the parking lot for our first prenatal appointment 15 minutes early, excited to see the first ultrasound of the gummy-bear-sized creature in my belly. But before we laid eyes on a nurse or an ultrasound technician, the receptionist ushered us in for a meeting with a far more important person: Tami, the “financial counselor.”
We pulled in an extra chair from the waiting room and squeezed into her tiny office. Tami, a middle-aged blond woman with a soothing Southern accent, handed us a worksheet that looked like it had been photocopied in 1986 (Tami had updated it with several cross-outs and corrections). The dense paragraphs of numbers and percentages explained the $1,100 “global fee” that we had to pay up front for prenatal care and delivery. This fee, however, was not “global” enough to include hospital charges or anything else on a long list of exclusions.
“How can we tell how much we’ll have to pay in total, assuming it’s a routine birth?” my husband asked.
“Oh, I couldn’t tell you that,” Tami said. Despite churning through droves of pregnant patients each year—many of whom are, like me, insured by the Blue Cross Blue Shield state employee plan—she had no information on what anything would ultimately cost. “Call your insurance company,” Tami said. “Are you ready to sign the Global Agreement Contract now?”
A few days later, I spent twenty minutes navigating Blue Cross’s automated customer service line. I finally got through to a woman who told me that the average total cost for a routine vaginal birth was $10,000. But how much of that would we have to pay?
“You should look at our summary of benefits,” she continued, directing me to a handy online chart of “coverage examples.” The costs itemized under “Having a baby (normal delivery)” didn’t match the figure she quoted me. When I asked about the discrepancy, she said, “Well, your actual costs may be higher,” and pointed out the page’s disclaimer: “Don’t use these examples to estimate your actual costs under this plan.” I asked her how Blue Cross came up with these numbers, and whether they were relevant in any way to the hospitals in my area. She was baffled by the question; it wasn’t her job to know such things.
This is the evil genius of the American insurance system. No one has any information, and no one is responsible. I was reminded of the opening scene in Franz Kafka’s The Trial, when the officials who rouse Josef K. from bed to arrest him on an unexplained charge tell him they have no idea why he is under arrest: “We’re lowly employees who can barely make our way through such documents,” one says.
Okay, I thought. Perhaps I was going about this all wrong. Instead of trying to find someone who could give me an estimate of the total cost of having this baby, I needed to break down the individual expenses on my own and collect the data that way. I began with the simplest cost I could think of, the fee for some routine blood work I had scheduled for later that month. I called my ob-gyn’s office, hopeful.
“I have no idea what that costs,” the receptionist told me. “Since it goes out to a lab, it’s billed by a third party. You’ll have to ask your insurance.” After another 10 minutes on hold with Blue Cross, I was told: “Sorry, those fees are confidential. We can’t reveal the rates we negotiate with each provider.”
The hours passed and I descended further into the underworld of hospital billing departments and voicemail boxes of cheerful-sounding women named Dana and Leanne who were perpetually out to lunch or on the other line. All are part of the growing economy of people—all very nice people, I’m sure—who have college degrees in medical billing and coding, who make their living feeding the bureaucratic beast that cost consumers $200 billion in excess administrative fees in 2009. Much of that waste would vanish if the United States adopted a public single-payer system of the kind that most developed countries favor.
As I perused our phonebook-sized policy handbook, my eyes watered in a fog of charts, percentages, exclusions, “in-network” providers and “prior review” requirements. I learned that if a health crisis strikes our family once our child is born, Blue Cross may require that we spend as much as $20,000 a year out of pocket in “coinsurance” and deductibles. But let’s put aside the specter of financial ruin for a moment. The problem is not just that these costs are astronomical. It’s that they are essentially secret.
A truly free market requires all parties to have access to the same information—and the time and expertise to interpret that information. Healthcare, by contrast, is an economy of specialized goods that most lay people don’t fully understand, in which insurance companies and many healthcare providers have a vested interest in concealing prices from consumers. And I’m always surprised by how few doctors seem to know the cost of treatments they prescribe. The Affordable Care Act may be better than no reform at all, but the law subsidizes this broken private insurance system. It also adds over 10,000 pages of regulations to the already byzantine bureaucracy that makes American healthcare one of the least cost-efficient in the world—behind even Venezuela and Iran.
I am a professional historian, which means I do research for a living. I’m used to solving complex problems by gathering a lot of data and sorting through it. But in this case, there is almost no reliable data available. My husband, a Cold War historian, jokes that it’s like trying to get information from the Russian archives. But at least in Moscow, a bribe or a good connection stand you a fighting chance to get what you need. There was nothing I could do to persuade Blue Cross to cough up “confidential” information—before I receive the final bill, of course.
What we have here is not a free market, but a failed one. Healthcare seems to be the only unpriced good in America. Most of us wouldn’t even buy groceries without comparing prices first. Imagine a store with no price labels at all—only the products aren’t corn flakes and cantaloupe, but appendectomies and hip replacements. Even in non-emergency cases, when consumers might have the luxury of comparing hospitals rather than calling an ambulance, most of us would rather trust the advice of our doctors than shop around for, say, bargain-basement chemotherapy.
If I, with my fancy PhD and free time to spend on the phone with clerks and bureaucrats, haven’t been able to figure out the cost of something as commonplace as having a baby, how must other people fare? Considering the long string of investigative articles that The New York Times and other media have published exposing the inanity and injustice of the American system, why isn’t there more public outrage?
The power of a huge bureaucracy lies in its ability to envelop the individual, to control our logic and our expectations without our realizing what’s happened. To paraphrase one of Josef K.’s acquaintances, we may not accept the system as true and good, but we seem to accept it as necessary. I know that by the time our little bundle of joy arrives, we’ll be too loony with love and lack of sleep to worry much about medical bills. But I hope Americans ditch the farce of the healthcare free market and demand meaningful, single-payer reform before the kid starts falling off her bike, sticking popcorn up her nose, and otherwise making us regulars in the local ER.