The Night A Hospital Charged Me and My Friend $60,000

What was left of my SUV after crashing into a tree on the interstate

One night in my sophomore year of college, I was coming home for Christmas break in bad weather. I hit a big puddle on the interstate and lost control of the vehicle. Once I was off the road it all happened so fast. I just went diagonally right into a big pine tree. I’m very grateful my friend and I both escaped the accident without serious injury or worse. Now that it’s been almost five years and I’m able to talk about it more openly, I was horribly taken advantage of by our nation’s healthcare system that night when the hospital charged me more than the price of new car. If I hadn’t had insurance, I would have been ruined financially. Let’s look at how this crash shows how broken our health care system is in America, even post Obamacare, and how we need a major societal change to bring down sky high costs.  

When I hit the tree, the vehicle actually flipped after colliding diagonally. My friend took the brunt of the impact but was thankfully OK. He had been knocked unconscious but woke up once help arrived on his own. The paramedics strapped him into the gurney and placed him in the ambulance. I just got up in the front seat with the driver with some blood on my shirt because no one was looking at me and I didn’t want to get left behind. The driver looked over at me and asked if I’d been involved in the crash. I said yes I was the driver. She then proceeded to freak out because they hadn’t stabilized my neck with a brace. That’s how organized the care was.

Exams, Exams, and More Exams, Oh and Some CT Scans

We got to the hospital and that’s when the tests began. I walked in under my own power and sat up on the hospital bed for a quick checkup of my vital signs. The doctor took a look at me and decided that I didn’t have a concussion or anything but ordered CT scans of my body just in case. The radiation tech then took what must have been two dozen different pictures to see if anything was the matter. After I got done with that first round of tests, they wanted to keep me longer and do more tests on my kidneys and another on some other organ. I refused the tests because I felt fine and there were no indications of blunt trauma to signify that I could have internal bleeding. There were very insistent and only my insistence back that I was refusing the tests stopped them from happening.

My friend was definitely in worse shape, but beyond the bits of glass in his forehead there wasn’t any major damage. They ordered more tests than they had on me and wanted to keep him longer for observation. Thankfully, we both got to go home with our parents that night. We were happy to be alive.

The shock came a few weeks later when this healthcare facility billed us for their services. The total came to $40,000 for my friend and $20,000 for me. HOLY COW! THAT’S RIDICULOUS! There was no surgery. They didn’t brace my neck at the scene of the accident to protect me from spinal injury. My checkup took less than an hour, and the only other test that didn’t involve household instruments like stethoscopes was when I had to give a urine sample to check for internal bleeding.

In other words, there was very little value provided in the tests that they performed. Should they have ordered many of the tests that I had done? I’m not a doctor and if someone has just been in a bad car accident you probably want to err on the side of caution and get it checked out I get that. However, taking dozens of CT scan pictures and requesting even more extensive kidney diagnostics beyond the simple tests that they did screams of conflict of interest. The hospital was located in a semi-rural area and they had the CT scan machine, so they were sure as heck gonna use it when they got the chance.   

I believe the cost of something should be commensurate with the value provided. There was a remote chance that there was any major bleeding in me after that crash due to the fact I was walking fine, showed no evidence of bruising or trauma, and had never blacked out during the entire ordeal.  Also, they didn’t even pay enough attention to put my neck in a brace when I was coming to the hospital in the ambulance, so any major damage that could have happened could have already taken place. Furthermore, the bill would have been even higher if I’d allowed the further testing they wanted to do.

When the Hospital Charged Me So Much, They Were Trying to Make a Profit Off a Person in a Desperate Situation

If someone has insurance, which they must have assumed after both me and my friend’s parents showed up there in the middle of the night, of course they are going to do every procedure they can possibly medically justify. They had all this fancy equipment there and they need to make a return on investment, so there’s a huge temptation to take more pictures of the patient’s body than you really need. To make sure you don’t get sued in case you miss something, you ask to run every test in the book. Then, you charge more than the price of a brand new Mercedes for 1-2 hours of work.

That value proposition is the most insane part of our medical system. We have no concept of value for what the public spends. Because this spending comes out of our federal budget instead out of our pocketbooks, the health care industry can bill for everything our politicians let them get away with. We as consumers bear no cost whatsoever directly. However, the cost of the broken healthcare system affects us hugely in unforeseen ways. We pay for healthcare mostly through our taxes and deficit spending. When we pay out billions for Medicaid, Medicare, and taxpayer subsidies for employer provided health plans, we are spending less on things like education, infrastructure, national parks, and national defense.

There is no cost sensitivity in medicine at all. If you can afford it, they will bill you a ridiculous sum and hope you have insurance. If you are poor, they will write off the care by overcharging the paying customers. I don’t often say this, but I think Europe’s cost sensitivity on medical spending is a better approach for the part of our health care provided by the government. In Europe, they are willing to reject extremely expensive treatments and negotiate better rates as a result.  This more aggressive stance towards medical service providers is what led to the fear mongering about death panels in 2010.

There are so many policies we could try in this country. Now that the ACA is the law of the land and most healthcare spending in the future will fall on the taxpayers to fund, its the government’s responsibility now to get costs under control. I think giving greater legal protections to doctors is a great first step. We can reward outcomes instead of procedures like my 25 CT scan photos and kidney tests.

Obamacare Is Not Stopping the Health Care Price Explosion

As a young, healthy male, the only impact I’ve seen from Obamacare so far is my healthcare premiums have tripled. The reason is that young people may not pay less than one third the premiums that the sickest, oldest people are paying. The young and healthy subsidize the sick and old. In some ways I could be ok with that, but not under the current broken healthcare system. Healthcare reform did nothing to bend the cost curve like it promised, and the prices for those sickest, oldest people continue to rise. That means the cost at the low risk end of the spectrum for people like you and me continues to go up fast as well. The poor are immune from this because of the subsidies from the government so they can afford insurance no matter what. Once my higher income from 2015 rolls off the books, I’ll get big subsidies as well as an early retiree (there’s no asset test for ACA subsidies, only an income test, which further disincentivizes work).

I hope there is a major overhaul to Obamacare. I hope it includes loosening the restrictions on foreign doctors so they can practice in the US, imposing caps on malpractice claims, aggressive cost benefit analysis on publicly funded health procedures and drugs, and more consumer responsibility for healthcare expenses. We had a great market for high deductible health care plans operating in this country before the Affordable Care Act came onto the season and made them illegal, contrary to the President’s promise. These are precisely the kind of plans that I believe can help keep costs under control. It’s only when that CT scan is going to be $5000 out of my pocket and they’re required to tell me that it’s $500 a photo that I’ll speak up and say “hey why can’t we just take two?” It’s only when consumers ask these kind of questions that the cost curve will finally begin to bend. Our nation has a very high rate of debt, and the level of unfunded liabilities from healthcare are terrifyingly high. Let’s all agree to reward outcomes over pointless tests and try to help society by being a cost advocate against excessive medical spending. No one should ever receive a $60,000 medical bill for 2 hours of work.

That said, now you know one of my motivations for starting this site and why I didn’t feel fulfilled in my corporate 9-5 job. Since that day, I’ve wanted to help people and have a bigger purpose in my life than making money and climbing up a corporate ladder. Hopefully I’ll be able to accomplish a little bit of that here over time. It’s the only way I can begin to pay back getting a second chance at life after that night. 

6 thoughts on “The Night A Hospital Charged Me and My Friend $60,000”

  1. Just my thought, but I don’t think the doctors are sitting there thinking let’s run more tests so we can give these guys a higher bill. What incentive do they have? I don’t think they get paid by the procedure or test. I think they want to err on the side of safety. Also, isn’t one of the biggest problems of the US health-care system readmittance to hospitals or discharging too early. Lots of patients come in like yourself get a couple tests done and then complain about being kept until they are “allowed” to leave, only to show back up later?

    But let’s focus on what I think is really the main issue. Why did 2 hours of treatment for mostly tests cost 40,000 dollars? I know doctors and nurses make a lot of money and all the equipment and capital needed for a hospital is a lot, but is the rate really $20k per hour? I think that’s where your anger should be directed. Not towards the doctors and nurses wanting what’s best for you, but whoever sits in one of the nice offices deciding that a urine test costs 1k (just an example of the overcharging, don’t know what your urine test cost was actually).

    So to sum up my thoughts, just be mad and wanting to take action against the billing insurance practices of the hospital (and the whole system), not against the doctors who spent a decade learning how to best treat patients. Because do you really think when they have car crash victims come in that they are ordering more tests for their employer’s bottom line or for the health and safety of the injured?

    1. While I completely sympathize with your anger at the high cost of healthcare in the United States, and as a doctor myself, I agree that costs are out of proportion, I agree with Jonah that the doctors were likely doing their best to prevent any tragic sequelae of your accident. After major traumatic accidents, young people can often compensate to the point of looking completely healthy. However, hours later, they die of internal bleeding. That’s likely why, even after a CT (which is standard protocol after a major trauma, and which I doubt was 15 separate scan, and more likely one head/abdomen/pelvic scan), they wanted to observe you, and they were more worried about any abnormality in lab values (likely some blood in the urine analysis). The paramedic at the crash certainly should have stabilized your neck, but that’s poor medical judgement on his/her part rather than cost-saving. I would be interested in seeing the line by line itemization of your hospital bill, and what each test costs.

      Do doctors often order too many tests? Yes, certainly, but that is the fault of a culture of malpractice lawsuits and sometimes demands of the patients themselves. But in the end, what really drives up costs are hospital systems trying to recuperate money in a field that is often costly (think equipment, maintenance, experienced docs, lawyers, etc), and pharmaceutical companies that drive up costs of medications that should be much cheaper. I would love to hear your view on whether pharmaceutical companies are holding healthcare hostage, actually!

      I would suggest these two very great podcasts about the cost of healthcare in America, if you’re interested!

      Great website btw. Very accessible even for non-financial folk. Keep up the good work!

    2. I think there are a lot of things that modern medicine still cannot know or fix. Because of the tolerance in American society for massive medical expenditures, health companies spend huge sums promoting equipment and devices that cost a ton to operate. Car crash deaths in the 1960s were in the 50,000s per year. That declined and in the 90s and 2000s it was down around 40,000 a year. Today that figure is in the low 30,000s. How much of that is due to new fancy equipment that can detect internal bleeding easier than the methods of yesterday? How much of the decline is due to better car crash safety features and strict laws against drunk driving? I would guess that the decline is almost entirely due to cars being safer rather than our medical system being more effective. The problem with medicine in America is people don’t ask first “How much healthier is this making us?” If you have a cool new robotic arm that you can use in surgery instead of traditional cut you open methods but have the same surgical results, is the extra week of recuperation worth the extra $50,000 in costs? I would say no its not. We spend a lot of money without proven results and that’s incredibly wasteful. Our legal system doesn’t help matters making doctors incredibly nervous not to order every test they think could be warranted as necessary by a jury in case something goes wrong.

  2. Here’s my proposal. When you’re not in an emergency situation where time is of the essence to save the patients life, any medical procedure or test resulting in a bill greater than $1000 should be disclosed to the patient before continuing. The doctor should be well versed enough in cost benefit analysis to tell you if the test is worth it for the amount of money it costs, because he or she doesn’t know your financial situation. When I got that bill I was floored. Imagine if I’d been uninsured and they presented me a bill for tens of thousands! After just performing tests and not explaining to me that those were among the most expensive non surgical line items in the hospital. If you showed a similar amount of non disclosure in finance you would be sued. Why shouldn’t doctors get involved in controlling the cost of care rather than just continue ordering tests and procedures because of the horrible incentives of practicing defensive medicine no matter what it’s cost to the patient or society?

    I agree with a lot of what you’re saying. Christine yes pharma is a massive contributor to high costs. However, its a systemic problem that can’t be boiled down to one factor. My point is that healthcare in this country is completely devoid of any connection to value of the service provided.

    I don’t think doctors deserve a complete absolution for high costs. They are certainly acting as I would act in prescribing defensive medicine because of the risk of liability. Truly this little hospital could have an existential risk if one of us had died and hence it’s worth it for the hospital to do all these tests to eliminate that risk. However, what if you were a professional providing another service acting as an agent of a larger company and you knew that service was not going to be affordable? You would need to tell the customer that before continuing. Doctors are not involved at all in the cost of care conversation and I think that should change.

    They are trained in medicine and can answer what the most effective treatment is, but not the most effective per dollar spent. Maybe a urine test tells you w 99% accuracy if there’s internal bleeding. Maybe the 1% of cases it misses can be picked up 100% of the time w a CT scan. The value of a statistical life that the govt uses to set environmental regulations is about $7 million I think. If there’s a 1% chance that life could be lost in the absence of a CT scan, the 7million*0.01 = $70,000 benefit should be weighed against a cost of $20,000 or so. Clearly in that case you really would want to do the procedure.

    However, what if the probability is significantly lower? What if the chance that you die from internal bleeding after an accident and passing a urine test is 1 in 100,000. Then the benefit is $700 (7million * 0.0001) vs a cost of $20,000. Clearly the cost is much heavier than the benefit of doing this test.

    In other areas of life people run risks such as not using seatbelts on buses, driving above the speed limit, and jumping out of airplanes. We make statistical decisions about what level of risk is acceptable every day. But in medicine we refuse to do that as a society. We should because when someone is paying $60,000 for medical care even if it wasn’t us that money isn’t going to productive uses in society.

    Would love to hear if you think doctors should bear a cost of care burden in discussions with patients.

    1. I do agree to some extent that patients should be informed of expensive treatment. But I still find a couple problems with that in our current system.

      1) The seemingly random nature of medical costs. How can they tell you what the price is when it varies so much yet alone what the price can be negotiated down to, either by the individual or the insurance company. I think hearing a number can at least help ballpark things but the haphazard nature of costs really needs to be fixed before this consultation is of any value. I don’t know if there are still $1k toothbrushes ( but really besides normal items or procedures how does an average Joe know what is reasonable, and therefore the amount they will actually pay.

      2) I think if we could make pinpoint approximations of the likelihood of some situation, then you have a valid point. But even giving that information, are people capable of making these statistically or logically calculations in their head while their health could be on the line? Were you thinking and feeling normal and logically right after the crash? Or did you still have an adrenaline rush going on and possibly not feeling any small but developing effects? I also have a feeling you are over simplifying your own case of the urine test and CT scan. If the CT scan was merely a backup to cover 1 in 100,000 cases, I’d be on your side but I have a feeling that the odds of complications were more towards your 1% number number. If only there were professionals who could come up with more accurate percentages? Oh wait, there are! The ones who treated you! Now I’m not saying all doctors are living saints, but since you like playing the numbers game… If doctors are looking out for your best interests 99% of the time and they know more about whats best for your health (over you) 99% of the time, that means its worth taking their advice 98% of the time. Only in those 2% of cases should you have to look at the cost for yourself. So again I still think that you should default to the professional’s opinion, not your guestimations.

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