One morning out of curiosity I asked my home caregiver how much she thought all my hospitalization, including operations, therapy, pharmaceuticals, the whole nine yards, cost? She was a young woman without much experience involving catastrophic injury. Perhaps that explains her lowballing.
“$10,000?” she replied quizzically.
“Higher,” I said, privately surprised at her answer.
“$20,000?” a look of incredulity on her face.
“Higher,” I said.
“$30,000?” Incredulity replaced by genuine disbelief.
When I told her that up to now my medical costs were more than three-quarter of a million dollars on the open market, her face is best described in terms of the generic crossword clue for the five-letter word “agape.” She went slack jawed.
I can't blame her. I, too, went slack jawed when I learned of the cost. The long and short of it is that I haven’t paid a penny for my rehabilitation. But had it not been for having served in the Air Force, I would have been financially ruined. I estimate that my time with therapists alone over two years would have cost me $200,000, roughly 2000 hours at $100 an hour. So cost is what would have stood in the way of me becoming as whole as possible. I very quickly developed an intense curiosity about it.
To find out more I called the MGH accounting office. I asked them if they could send me an itemized list of the charges, everything from the ER (emergency room) to the OR (operating room) to the MR (men’s room). They were more than willing to comply. My 33 days cost a grand total of $545.374.33. That’s $16, 527 a day. That was a jaw-slackener if ever there was one.
But there was another figure I didn’t quite understand. It was described as the Medicare Contract Allowance. The amount was $427,273.19. Under the description Medicare payment was the figure $116,885.14. And under the description Blue Cross payment was the figure $1216. You don't have to be a CPA to figure out that if you add those last two numbers together ($118,101.14) and add that number to the mysterious Medicare Contract Allowance ($427,273.19), you come up with the total cost of my stay at MGH ($545,374.33).
I called the MGH accounting office back.
“What does Medicare contract allowance mean?” I asked the obliging person who answered the telephone.
“That's the amount of debt forgiveness,” she replied.
“Whose debt? “I asked.
“Well, yours,” she supposed.
“Where does that number come from?” I asked.
“That's the unpaid amount left over after Medicare and Blue Cross have paid us,” she said.
Of course! If you take the total cost of my stay ($545.374.33) and subtract from it what Medicare and Blue Cross paid (($118,101.14), then you come up with $427,273.19, the amount that MGH “forgave.”
“I don't get it,” I said. “MGH tells the insurance companies what my hospital stay cost and they tell MGH they're only going to pay a part of it? That's like a supermarket checkout clerk telling me I owe $100 for my groceries. I say here's $35. The clerk says fine. We’ll forget about the $65.”
“That's about right,” my informant tells me.
“But who's going to pay the rest?” I asked.
“Nobody,” she replied.
“So the hospital’s payment program is a forgive and forget plan?”
She laughed. “That’s right. We forgive. You forget.”
“How does the hospital stay in business?” I asked.
“I’ve asked myself the same question many times. I have no idea,” she replied.
The whole thing reminds me of a joke about the automobile dealer who bragged that his prices were so low that while he lost a little bit on each car, he made up for it in volume. That seems to be the basis of our medical costs and payments system.
Unless, of course, the hospitals know what to expect from the insurance companies and mark up their costs accordingly. The insurance companies know this and so they mark down what they are going to pay. It’s like a game called “Name That Hospital Care Cost.”
I have discovered one tiny bit of evidence that this might be the case. I asked the Spaulding Rehab hospital to send me the same kind of accounting that MGH did. Once again they were more than happy to comply.
As was the case with the MGH accounting, I couldn’t make heads nor tails of it. The account sheet listed drugs I'd never heard of, procedures whose names I wasn't sure how to pronounce and equipment whose use was a mystery. I had no way of knowing whether the charges listed were reasonable or not. Except in one case.
Spaulding Rehab scrupulously listed a drug I was very familiar with. I had been taking it for several years before my accident in order to control the size of my prostate. The drug is called Proscar. Its generic name is finasteride. I had routinely ordered it under that name from Express Scripts, a private corporation. The last time I looked they charged me $16 for 90 5 mg tablets. That comes out to $.18 a tablet.
Now here was something that I could use to compare the prices that Spaulding was charging. I was at Spaulding for 40 days. I took finasteride on 39 of those 40 days. For 22 of those days Spaulding charged $5.43 for one 5 mg tablet. For 17 days they charged $6.16 for the same tablet. The total cost was $224.18. That comes out to $5.75 a tablet; or 3200% more than I paid for it. If Spaulding was looking to save money, they should have talked to me. Maybe they weren’t. Maybe that was the price the drug company charged them. Either way what they charged me and what I paid Express Scripts was really out of whack. It reminded me of those reports of the Pentagon paying $700 for toilet seat.
Spaulding was a bargain compared to MGH. Spaulding charged Medicare and Medex $3170.75 a day for my care, of which $1570 was the cost of the room. The total cost was $123,659.44. The insurance companies paid them $71,220.30. So Spaulding forgave and I forgot $52,439.14.
At MGH I was charged $8397 for 20 days and $3667 for 10 days for “Room and Service.” I suspect the former is for my time in the ICU and the latter for my time in a regular ward. In any event it averaged out to $6280 a day.
One way to look at this is to say that the insurance companies believed Spaulding's prices were 42% too high and that MGH’s were 78% too high. So they paid 58% of the bill to Spaulding and 22% to MGH. The hospitals took what they could get and forgave the rest: $52,439.14 (Spaulding) and $427,273.19 (MGH), a grand total of $479,712.19. Now that's a lot of forgiveness, even for a Christian.
Because so much of my time in MGH was spent in dire circumstances, I think it doesn't make sense to compare MGH with a rehab hospital. It really is comparing apples and oranges.
The only other rehab hospital I know, of course, is the VA hospital in West Roxbury. So how does Spaulding Rehab stack up against them from the point of view of cost? That's hard to tell. Because I was a veteran who had suffered a catastrophic injury, I fell into the VA category of “un-billable” patient. There was no detailed statement because the government paid for everything.
But here was something.
About two weeks after I entered the VA hospital I received a bill for $1210. We hadn’t expected a bill. So Nancy took it to the social worker connected with the SCI ward. She took a look at it and said that it was a mistake.
“They didn't realize you were un-billable,” she said. “I'll take care of it.”
And indeed she did. The bill was canceled. However, I was curious. I wanted to know what the charge was for. Someone in the finance office told me that the $1200 was kind of like an admission fee.
“And the $10?” I asked.
“That's your room cost per day,” the finance office person explained.
Instead of asking how much it cost, suppose the question is how much has it cost me? I haven't gotten off scot-free. I have had to pay rent on a monthly basis because the house we owned—it was free and clear—could not be made wheelchair friendly. I have had to incur the costs of selling the house and the cost of moving. This was especially hard because we loved the house. But you can't put a price tag on that kind of thing. I have had to invest in a van that is wheelchair friendly. But as far as my medical expenses are concerned, I haven't paid a penny.
Well that's not completely true. About a year after I left MGH, the hospital sent me a bill for $48.09. I paid it immediately. About a month later I received a check from the hospital for $48.09 with a letter of explanation saying that I had overpaid.
Obviously I'm not complaining. But all this seems like a hell of a way to run a railroad. It also seems like a tremendous argument in favor of the kind of treatment I got at the VA.
Medicare and MGH’s forgiveness paid for my trauma hospital stay. Medicare and Spaulding’s forgiveness paid for my rehabilitation stay. But once I’d left Spaulding I was entitled to three weeks at an unpromising assisted living facility. Then it was all over.
That’s when, thanks to that unsung heroine at Spaulding, I went to West Roxbury. Four and a half months later after intensive daily therapy I was walking. Then I went home and continued as an outpatient for three more months of therapy.
When I settled in my new apartment, my medical expenses were close to zero. And they remained there even though my insurance had been exhausted. The VA offered no forgiveness because none was required. And their largesse kept coming. I was outfitted with a Hoyer lift because I still couldn’t get up on my own, a wheelchair that enabled me to stand up and exercise so that one day I could get up on my own, a walker once I could walk, a hospital bed, a package that made my van wheelchair accessible, various and sundry gadgets to help with my ADL’s, caregivers twice a day, a monthly infusion of supplies and drugs and weekly visits to VA rehabilitation as an outpatient and the total cost? Unknown because it was completely forgiven.
If it weren’t for my being VA eligible, I would’ve been financially ruined. There would have been absolutely no way for me to make up the costs that my normal insurance didn’t cover. As odd as it sounds, I am more incredibly lucky person. My optimism, my current freedom of movement, my ability to live a far more normal life than I ever expected all comes down to a health care system that was able to see my potential and make it a reality. Today, if someone were to ask me what the best route to healthcare peace of mind might be, I would answer, not completely tongue-in-cheek, join the armed services. That is what I did 60 years ago without ever thinking that at the end of my life it would be the smartest move I ever made.
Sometime into my second or third month as an inpatient at the VA, the secretary of Veterans Affairs, came for visit. There was a lot of excitement in the hospital about preparing for the occasion. News cameras from 60 Minutes were going to be filming to visit. An entourage of hospital dignitaries would take him around to various showplaces in the building. One of those was the room where the Locomat was located. I was asked to demonstrate the machine. I was looking forward to it. But at the last minute the powers that be decided to show off my skills using a dictation program to write a book.
When Secretary McDonald came in, I was working on this very manuscript. He looked over my shoulder and we struck up a conversation. We must have talked for 20 minutes. In the course of the conversation he asked me about the medical care that I was receiving. I told him that I thought I had died and gone to spinal cord injury heaven.
He nodded and said, “I think this system should be available to every American.”
“The country is lucky to have you,” I replied.