Wednesday, June 24, 2009

Outraged Part 2: A Sticky Situation

It's been three weeks since Emma's cheek was glued shut and two since I learned the cost. An itemized bill indicated we were charged $190 for this:

Dermabond Topical Skin Adhesive

The cost for its correct application was $495 in addition to a $145 charge for the facility. This does not include an additional $42 charge for wound cleaning supplies — gauze and an anticeptic cleanser. The care was prompt and courteous and the wound has healed without complication, but a $836 grand total was and still is a bit hard to swallow.

I decided to do some investigating to determine how much Dermabond sterile skin adhesive might cost. The most expensive I could find online was $480 for a 12-pack, or approximately $40 per unit. The cheapest was $22 per unit. This prompted me to call the hospital administration to pose the question, "Why?"

Here's what I understood from my conversation with OSF St. Francis:
  1. Virtually no one pays the original list price. Insurance companies, Medicare and Medicaid all demand discounted rates and, thanks to a recent Illinois law, even the uninsured cannot be charged more than 35% above cost.
  2. Insurance companies want to be able to offer discounted rates to their clients. They aren't interested in lowering the original charges.
  3. If discounts were not demanded or expected, the hospital fees could be reduced by up to 50%.
Interesting, isn't it? Ultimately, after discounts and insurance, our family will be out-of-pocket $74 for the procedure. One might argue that's reasonable. I suppose. But what worries me is the inherent deception: price gauging to give the false impression of discounted rates. It's a sticky situation, and I'm not talking Dermabond.

Did you miss Outraged Part 1? Read it here.


  1. Several senators have talked about the importance of health care remaining profitable, which is the problem. The single-pay is not being supported by politicans who are bought and paid for by the medical/insurance complex. It is one of the reasons I am so say that my daughter was not able to find work outside the US and is trapped there.

  2. I agree with the outrage about the deception and the strange pricing strategies. But cost of treatment does cover more than just the medication itself, no? Like the charges for the running of the hospital, the salaries of the doctors, nurses, front desk-in check-in, the syringe, the cotton, etc.

    So $72 does not seem like an unreasonable amount to me. However, there are some onerous and ridiculous health-care charges in the U.S. of course.

    Hope Emma is doing well however. Poor thing, these two incidents must have been traumatic.

  3. I agree: the total cost of treatment should cover the expense of the medication, facility and staff. That said, if there are separate line items for facility and service charges, why are supply charges so grossly inflated?
    In the end, the hospital will be paid a grand total of $459 for the procedure, not $72. The smaller amount is what we were left to pay.