The High Price of Feeling Low

A Surgical Emergency Exposes the Crisis of the Young and Uninsured

Many years ago, a few months after I had made the decision to leave academic medicine for the greener pastures of private practice anesthesia, I was called in one night to evaluate a young man in his early thirties with a presumptive diagnosis of appendicitis. He had classic symptoms, was febrile, and had an elevated white blood cell count. A quick ultrasound followed by a CT scan confirmed the diagnosis. Unfortunately, the scan also demonstrated free air in his abdomen indicating that his appendix had ruptured, making his surgery urgent. 

We had some time together before the rest of the surgical team arrived at the hospital to get the operating room ready, so I was able to chat with him a little. I learned that he was an accountant with his own small firm. He rented an apartment in the Marina, was married and was thinking about buying a house in Marin near where I lived, as he and his wife were expecting their first child. I could tell he was nervous, and assumed he was worried about the anesthesia and surgery, so I did my best to calm him. 

“Anesthesia is safe”, I told him. “Surgery will go quickly, and you will do just fine! You are young and healthy, and you should recover easily.”

I explained to him that a laparoscopic appendectomy usually takes less than an hour, and that he would have very little in the way of post-op pain. He nodded and said, 

“I’ve been having bad pain and fever for a few days, and it just kept getting worse. I didn’t want to come in at all, but my wife made me…Any chance we don’t need to do surgery?” he asked. 

“No,” I told him. “That’s pretty unlikely.” Despite my attempt at a friendly reassuring pep talk he still seemed doubtful and was obviously anxious and hesitant to proceed.

So, I tried again. I explained that a ruptured appendix was a true surgical emergency and that he was lucky he sought help before he became really sick. I told him that he should thank his wife profusely for convincing him to come in. I laughed and made some dumb comment about how men are pretty bad at figuring out when they need help. I had just gone through some health issues of my own and told him that even doctors are often subject to self-denial. He became quiet, seemed to think about this a bit. Then in a low voice, as if he was afraid someone else would hear him, he said, 

“How much do you think this is going to cost me doc?”

Aha - I thought, this was what he was worried about, not so much the surgery, but his co-pay or deductible. I explained that depending on his insurance, this could run from nothing, to a few hundred dollars to at most a few thousand. 

“Don’t worry…” I said, “Your insurance will cover almost all of it. This is emergency surgery.”

And then I went to his chart, and found his hospital face sheet to see what kind of insurance he had. In the box where the form lists patient insurance were the words “self-pay package”.  The space that usually shows a photocopy of the insurance card was blank. 

“Did you forget your insurance card?” I stupidly asked. 

“No…I don’t have health insurance.” He hesitantly said. “That’s why I’m worried. I can’t afford more than a few thousand dollars?”

I considered the best way to allay these concerns without alarming him too much. I didn’t want to panic him, but I also didn’t want to lie. So, I started doing some rough calculations in my head. The emergency room fee, the ER doctor’s bill, CT scan, radiologist’s pro-fee, stat labs, IV set up and fluids, pain medications, antibiotics. The mental list grew and grew. I could visualize every line item and its ridiculously inflated price. The bill before he even went into the operating room was easily going to be over ten thousand dollars. Now add to this the operating room costs at several thousand dollars per hour, professional fees (mine and the surgeons), pathology, surgical and anesthetic supplies, recovery room fees and medications, and on and on - all line itemed at prices that are designed for a system in which the cost and what is paid are disconnected by contract pricing from the twilight zone of insurance reimbursement. In this alternate bizarro world, a single Tylenol tablet can be priced at twenty dollars, a bag of IV saline solution, over a hundred. Nobody actually pays those prices…unless you are paying cash. Then all bets are off. 

As my accountant patient was undoubtedly good at math himself, I am sure he was capable of adding numbers more quickly than I was. What he probably didn’t know was that the real world of price versus cost does not apply to American healthcare. It is far more similar to government military contract spending, where a hammer or a single bolt can be billed out at many times the actual cost. 

Unfortunately for my young accountant, his ruptured appendix was a truly life-threatening event and surgery could not be delayed. However, this was also only the beginning of his treatment. He would end up needing several days of inpatient hospitalization, intravenous fluids and antibiotics to ensure an adequate cure and recovery from his ruptured purulent appendix and subsequent peritonitis. Had he come in just a day or two earlier, he could have saved himself an incredible amount of money, and more importantly the risk of further medical complications. 

By the end of his stay with us, his bill easily exceeded a hundred thousand dollars. On my post-op visit the day after surgery, we talked more about his money concerns than his medical ones. I explained to him that he did have some financial options. For instance, he could try to negotiate with the hospital for a cash discount. Or he could set up a payment plan. I heavily discounted my professional fee, and I discussed his situation with the surgeon as well, who also agreed to a steep discount. The hospital, I thought, would be a harder sell. I suspected it would be difficult to convince the finance people of a large “not-for-profit” institution that a college-educated accountant with his own business didn’t know better than to go uninsured and not carry any kind of health insurance at all. And I also knew there were many other young people in his position

After four days of inpatient hospitalization, my new accountant friend was deeply in debt. This was before “Obama-Care” or any provisions of what would become the Affordable Care Act. Had he simply enrolled in a reasonably priced Kaiser plan, or at least bought a catastrophic insurance policy at a few hundred dollars a month, he would have been protected from the threat of a bankruptcy over this one episode. But like many young, healthy Americans who are either self-employed, or unemployed, or who work at firms that don’t provide insurance, he hadn’t. This incident left me deeply affected and made me wonder like David Byrne in The Talking Heads’ song “Once in a Lifetime” – well, how did we get here??

In the good old days of medical practice, the relationship between the price of a service provided and the amount paid for it was more or less the same thing and bore some passing resemblance to the reality of cost. A hundred years ago, health insurance as we now know it simply did not exist. Actuaries declined to provide medical insurance to individuals owing to their inability to assess and quantify this particular type of risk. In-depth medical knowledge was an oxymoron and most popular therapy was unproven quackery. Statistics was a nascent science. An excerpt from an article in an insurance industry publication, stated, "the opportunities for fraud [in health insurance] upset all statistical calculations.... Health and sickness are vague terms open to endless construction. Death is clearly defined, but to say what shall constitute such loss of health as will justify insurance compensation is no easy task" (The Insurance Monitor: July 1919, vol. 67 (7), p. 38).

Insurers lacked the ability to determine whether doctors or patients were less than honest in their claims. As always, death, taxes, and cheating were seen as the only sure thing. Instead, insurers offered “sickness insurance”, an early form of disability insurance. Lost income rather than the cost of treatment was the justification for compensating those who missed work as a result of illness. The poor, alas, were out of luck and depended entirely on charity or the church. Fortunately, health care was relatively inexpensive, and hospitalizations were rare.  Most people were born, treated, and died at home. Doctors made house calls, and cash or barter were the only methods of payment and compensation.

Although physicians were respected members of society, and did quite well financially compared to many others, they weren’t exactly rolling in cash. Perhaps the same was true of insurers. They collected premiums and paid restitution in the case of major catastrophes like fires, ship-loss, or crop failure. But unlike doctors, insurance brokers were businessmen, and sought to profit from their ventures. Some insurance executives became wealthy as a result of their enterprise, but I suspect few individuals were lighting cigars with hundred-dollar bills. And maybe some Park Avenue doctors did better than others due to the wealth of their clientele, but for the most part they were not multi-millionaires unless they were very good investors or made it the old-fashioned way, through inheritance.

This was all about to change, however. Prior to the late eighteen-hundreds, the cause of sickness was poorly understood, and remedies were not that far removed from blood-letting and leeches. The Gilded Age ushered in the twin promises of science and technology. In rapid succession progress in medicine included advancements such as reliable and effective general and local anesthetics, and in turn safer and more effective surgery. Antibiotics were discovered and improved upon, which followed the understanding of the germ theory of disease and anti-sepsis. Vaccines became common, and polio and smallpox were largely eradicated. Insulin was discovered. Later, imaging technology such as computed tomography, nuclear medicine, ultrasound, and magnetic resonance enabled diagnostic “vision” unimaginable only a generation before. By the late twentieth century with advances in genetic engineering and molecular biology, diseases such as cancer, strokes and heart failure, while still prevalent, had a chance of control if not outright cure. The major consequence of this rapid change has been longer and more productive life. 

In 1900, the mean life expectancy of a man in America was forty-seven years, now it is approaching eighty. We also expect to live these longer lives in a healthy and active state. Of course the cost of this progress is immense, consuming an enormous amount of our gross domestic product. By the early 1960’s the explosion in medical technology and cost became increasingly expensive for the average citizen, and inordinate numbers of people, particularly the elderly, simply could not afford medical care. 

Fearing a society in which many of its citizens could potentially be driven to the poorhouse, President Johnson initiated sweeping changes to medical reimbursement in his “Great Society” programs, and Medicare and Medicaid were born. Private insurers such as Blue Shield and Blue Cross expanded coverage to include “comprehensive” services, and Health Maintenance Organizations like Kaiser became increasingly popular as a way to contain rising costs while still providing good medical care. 

In these early days of health insurance, reimbursement became much better for doctors. Older, mostly retired physicians I know, still pine for the “golden age” of medicine in the nineteen-sixties and seventies. Middle aged, still working doctors like myself become greatly annoyed at this talk. The same generation that enjoyed relatively generous reimbursements from Medicare and other insurers, set by the doctors themselves, also enjoyed ridiculously inexpensive real estate, low college and medical school tuition, and other perks completely unavailable to the current crop of medical practitioners. 

I know… cue the tiny violins. We still make quite a good living relative to many others. However, if we do well, insurance executives do obscenely well. I remember when I was an anesthesia resident in Seattle, reading an article in the local paper about a public opinion poll on medical reimbursement. Participants were asked to guess and then opine on the salaries of a primary care doctor, a general surgeon, the CEO of one of the local private hospitals, and the CEO of a regional HMO. The guesses people made weren’t even close. Most people assumed that doctors made a bigger salary than they actually did, but not by too much. They were off by a factor of ten in the hospital CEO salary, and a factor of nearly ten times that in the insurance CEO’s compensation. The latter was actually in the tens of millions of dollars with stock options included. What really bugged me, however, was the follow-up opinions of those surveyed that it was the doctors as opposed to the business executives who made too much. Ouch! I remember thinking to myself Gordon Gekko was right. Greed is good.

These days, much has changed. Unfortunately for the worse. Income disparity is greater than ever. Great wealth is measured in billions, not millions, and to be simply “rich” we are told your net worth should exceed 2.3 million dollars! All the while, more and more middle-class individuals like my accountant patient of twenty-some years ago cannot afford even basic health insurance. This is occurring in a backdrop where healthcare costs are taking up an ever-increasing percentage of our GDP, exceeding seventeen percent in 2020.

For those aspiring physicians out there, medical education costs upwards of one-hundred-thousand dollars per year for four years of medical school. And that is after four years of incredibly expensive college. It is so pricey and out of reach for most people now, that many medical schools are offering low or no tuition for individuals who qualify financially, or who promise to spend several years of their early career in primary care in underserved areas. As generous as this is, it doesn’t cover everyone who wants to be a doctor, or people like me who want to become an anesthesiologist or some other kind of specialist. 

Far more important however, is what we must do to protect and preserve our health. If the pandemic has taught us anything, it is that we need to figure out how we are going to provide affordable, basic, and even intensive medical care to our aging and vulnerable population. As our technology improves, so do our costs. We live in a world where we are only one novel virus away from another pandemic, thus we have some reckoning to do. The miracle of rapid PCR tests for coronavirus, and the even more miraculous mRNA vaccines cost serious money. It was money well-spent, but we will need much, much more.

It would be nice to have a crystal ball, but we don’t, and speculation is a poor substitute for action. I often think of one of my favorite Yogi Berra phrases – “it’s tough to make predictions, especially about the future.” I do know that we have made great strides as a society in the past to help address the problem of affordable health care. The Social Security, Medicare and Medicaid programs were a start and Obamacare was also a giant step in the right direction. Whether or not we will see single-payer insurance, or universal basic health coverage is a mystery. What is clear to me and my medical colleagues, however, is that the system we have is broken and needs repair. No great society can last long while its citizens suffer, and no humane person can stand back and impassively watch. I know I can’t.