Business

Medical equipment pricing is completely broken when a sling costs this much

Medical equipment pricing is completely broken when a sling costs this much

Cathy Birker-Hake tripped over a hose in her Valley Village backyard not long ago, dislocated her shoulder and made a beeline for the emergency room.

“It was one of those really stupid accidents,” she told me, still embarrassed to have needed urgent medical care for such a trivial mishap.

Birker-Hake, 63, said her shoulder was put back in place at Providence St. Joseph Medical Center in Burbank and she was given a sling to keep her arm immobile while it healed.

The hospital charged $6,223 for two ER visits. Birker-Hake said her insurer, Oscar Health, paid nearly $4,400 of that amount.

Then, a few weeks ago, a bill arrived from a Carlsbad company called Breg, which describes itself as “the second-largest U.S. provider of orthopedic bracing.” (The largest appears to be DJO Global, formerly of Carlsbad, now based in Texas.)

Birker-Hake may have settled accounts with Providence, but Breg wanted an additional $200 for the cloth sling she’d been given — or as the bill more grandly named it, the DLX Shoulder Immobilizer L.

Her experience is yet another example of in-your-face medical pricing that often reflects not what things really cost but what healthcare businesses think they can get away with.

From hospital stays and prescription drugs to medical equipment and related supplies, Americans spend about $3.5 trillion annually on healthcare.

The average American faces more than $10,000 a year in medical costs, according to the Organization for Economic Development and Cooperation. Out-of-pocket costs are often lower because of insurance.

Per-person healthcare spending in this country is about twice the average amount for all comparable countries, the organization found. France, Canada, Japan, Britain, Australia — their citizens pay less than half of what we pay.

I’m not laying this disparity at the feet of a single maker of orthopedic gear. But what Birker-Hake is going through helps underline how goofy our system is.

Multiply her $200 sling by all those stories of $50 Tylenols and $3,000 MRIs, and you quickly understand how our healthcare spending obscenely surpasses that of other developed countries that long ago decided gouging the sick is not an acceptable business practice — and took regulatory steps to prevent it.

“In general, we pay higher prices for everything — drugs, supplies, hospital services, physician services,” said Lawrence Casalino, a professor of healthcare policy and research at Weill Cornell Medical College.

He told me the higher prices “often result from market power” — that is, a lack of competition and transparency — and “the ability to surprise bill.”

Surprise billing is exactly what it sounds like: Hitting patients with unexpected charges after treatment has been administered.

Most other businesses disclose their prices up front, which is only fair and is crucial to a competitive market. Healthcare is one of the few industries that tells you what things cost after the fact, when you have little recourse but to pay.

Birker-Hake was surprised, to say the least, that the sling she’d been given at the hospital would carry a $200 price tag — especially after she’d already coughed up about $1,800 of her own money to add to the $4,400 paid by her insurer.

And that doesn’t include the nearly $1,500 she pays in annual insurance premiums.

Birker-Hake showed me some pictures of the Breg sling. It’s not a particularly complicated contraption.

Your arm rests against your body in a horizontal pouch. One strap goes over your shoulder. Another strap goes around your waist.

The DLX Shoulder Immobilizer L is presumably the large-size Deluxe Shoulder Immobilizer, which Breg’s website says “is made from soft, breathable cotton material. It can be used for left or right applications. Plush, full-foam straps provide added patient comfort.”

Birker-Hake pointed me toward several similar if not identical slings on Amazon. They range in price from $12.99 to $16.99.

The Breg version is nice-looking, as slings go. I’m not sure if those plush, full-foam straps justify a roughly 900% markup over similar products.

Birker-Hake complained to her insurance company, which looked into the matter. In a letter dated Aug. 15, the insurer admitted that the Breg charge “qualifies as a surprise bill.”

As such, Oscar Health agreed to cover $5.86 of the $200 cost.

“Six bucks?” Birker-Hake told me. “I mean, really?”

Now she’s wondering what to do. “It’s a piece of fabric with a shoulder strap and a belt,” she said. “Two hundred dollars seems pretty unreasonable.”

Hillary Schuler-Jones, a Breg spokeswoman, declined to answer questions about the price of the Deluxe Shoulder Immobilizer.

“It is important to note,” she said, “that Breg’s customer is not the patient, but the healthcare provider.” In most cases, “we don’t sell our products directly to patients, and we therefore don’t have a patient price list.”

Hospitals or clinics can buy Breg’s products at a discount and then apply whatever markup they please. Or, as in Birker-Hake’s case, they dispense the product on Breg’s behalf and Breg follows up with its own bill.

The company is aware that its gear can be a lot more expensive than similar goods online. It has a web page devoted to the topic.

Basically, what the page says is that receiving a sling directly from a doctor or hospital takes all the guesswork out of the equation, so that counts for something.

“This immediate availability of product is a benefit that is not offered by purchasing the item online and then waiting to receive it,” it says.

Does that justify a 900% higher price? Breg’s position is that you get what you pay for.

But you don’t. The healthcare market isn’t like other markets. Its customers generally have no choice when seeking goods or services — they need immediate attention.

Moreover, most people probably would decline a sling from a doctor if they knew up front that it cost $200 extra and they could get something almost identical for a fraction of the cost, including whatever charge may be required for expedited delivery.

My advice to Birker-Hake is that she pay the bill. She doesn’t want to add insult to injury by having debt collectors come after her.

But this is yet another illustration of a healthcare system that’s focused more on profit than on patients.

Why do we spend so much more than other countries on healthcare? It’s not because of a single company.

It’s all of them — and a government that, unlike the governments of other developed countries, refuses to do anything about the problem.

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