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I had small persistent growths on the back of my scalp. A year later, I decided to have it removed due to concerns that it might be cancerous. It was less than half an inch in size.
I made an appointment with a surgeon at a local medical facility. During that visit, I was hopeful that the growth would be easily removed at the clinic. However, the surgeon was concerned about excessive bleeding from the scalp and wanted to schedule the surgery at an outpatient surgery center. I respected his decision, but I was concerned that this would turn into a “big job for nothing.” What an underestimation that was!
During my small scalp removal surgery, I received the same high level of care as a larger outpatient surgical procedure. I was placed on a stretcher and given a complete pre-op exam by a nurse. The surgery was performed in a fully equipped operating room designed for major outpatient surgical procedures. There were at least three of her nurses with me in the operating room along with the surgeon. There was only local anesthesia, no sedatives, and no IV fluids.
I want to be clear that I have no concerns about care or compassion…both were wonderful.
The surgery time was approximately 20 minutes and there were no complications. After that, I was examined at the outpatient clinic for about 30 minutes, and then drove home.
I received an explanation of the benefit details from the insurance company. The total charge for the 10 minute clinic surgical consultation was $400 (I paid him $40). The cost for surgery is $10,440. Insurance paid $10,000. I paid $400.
This far exceeded my most cynical estimate – $10,840 for half an inch of skin removal.
If I were not a doctor myself and suddenly realized why medical and health insurance costs are so high today, I would think this is a complete scam. But it's a huge medical conglomerate, and I'm sure the doctor who scheduled my outpatient surgery had no idea, in good conscience, what he was going to incur. The left hand has no idea what the right hand is doing in these huge corporations. Unless physicians themselves have run small private practices, they may not realize that relatively simple decisions can result in significant costs.
And the company's insurance claims department has no idea that this claim for the procedure is obscene.
The total cost of this procedure was supposed to be $440 instead of $10,840. But the long-standing goal of all insurance companies has been to maximize profits and minimize payments to doctors, clinics, and hospitals. The main reason I left private practice was because the insurance company was a nightmare. A system has evolved in which doctors, clinics, and hospitals over-inflate their fees to cover the shortfall in insurance.
In my case, the insurance company paid almost the entire amount of the claim without any questions asked. This is partly due to the fact that insurance has always paid well for surgical procedures, but significantly underpaid for cognitive interventions such as disease management and preventive medicine. From my professional experience, I know that clinics and hospitals overcharge for surgical procedures to make up for the meager payment for a clinic visit.
Hospitals should provide mid-level outpatient surgical care that does not require a full-fledged operating room…but where emergency back-up support is readily available when needed. There is no preoperative evaluation, no postoperative observation, and no fully equipped operating room with three nurses.
What insurance companies should do is to reduce the hassle and cost of services provided at clinics and hospitals so that doctors and clinics are not tempted to provide excessive services or charge excessive fees. It's about paying a fair amount without going through bureaucracy.
This is just one small example of the ongoing game between healthcare providers and insurance companies. Unless all participants contribute toward reasonable solutions, health care costs will continue to rise unfeasibly.
Wayne Kaniwski, a Minneapolis resident, is a retired physician and small business owner.
