I am in the middle of reading what looks to be a very important piece by Steven Brill in Time Magazine entitled Bitter Pill: Why Medical Bills Are Killing Us. I’ll be keeping an eye out at my new favorite medical policy blog, the Incidental Economist to see if they have any thoughts on it.
Early on in the piece, he talks about the chargemaster and how the hospital administrators would try to steer discussions away from it:
However, I quickly found that although every hospital has a chargemaster, officials treat it as if it were an eccentric uncle living in the attic. Whenever I asked, they deflected all conversation away from it. They even argued that it is irrelevant.
People rarely pay those prices, was usually the reason for being dismissive about it. One problem with that rationale in Indiana, however, is that our state Supreme Court has told Hoosiers that, in the absence of contractual language to the contrary, they’re bound by the prices in that chargemaster. By virtue of Indiana Rule of Evidence 413, the chargemaster rates also effectively set the default amount you’ll have to pay for someone’s medical expenses if you get in an accident with them — regardless of how much that person actually paid.
Brill’s article shows that this chargemaster rate can be on the order of 1,000% of the market value of the service. I expect this article is going to make me very angry by the time I get to the end. “[W]e spend more on health care than the next 10 biggest spenders combined: Japan, Germany, France, China, the U.K., Italy, Canada, Brazil, Spain and Australia.” In return we get outcomes that are no better and often worse.