My son and daughter in law just had a baby. The doctors and hospital (for a four-day stay) presented bills totaling $48,898. The insurance company paid its negotiated rates totaling $16,627 (my son paid his $3,200 deductible and 20% coinsurance).
The payment of $16,627 is what drives the plans premiums, so now you tell me where the problem lies in our health care system.
If you say the insurance companies, please go back and re-read each post under Healthcare on this blog or move to Canada.
What you should be asking is WHY the charges are nearly $50,000.
What you should be asking is if the charges are all legitimate, why are major discounts given to certain payors.
What you should be concerned about is the ridicules system that allows different payors of the same service to pay vastly different amounts to the point where nobody knows true or fair prices and costs are shifted to those with the least leverage.
QUINNSCOMMENTARY 
I think it’s a pity, but accurate statement. It captures public sentiment perfectly. I’ll bet anybody who reads this thread will go “Damn Right!” and remember the last time they got screwed over by a health insurance company like it was just yesterday, because it probably was just yesterday, as it will be tomorrow, as well.
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Congratulations on the new grandchild! It’s been my experience that where you live can make a bid difference in how much a delivery costs. I delivered my two babies in Omaha, NE. My sister had her baby in Chicago. My c-sections were less expensive than her non-surgical delivery. I’d have to look to be sure, but I think my c-sections were more like $10,000 and her bill was more like the $50,000 your son had. I’m guessing what the hospitals charge varies, but what insurance will pay is more standard. I wouldn’t think insurers would tolerate such a big difference.
The problem of price transparency in the healthcare industry is a big one. I’ve been surprised more than once about how much something costs (think $60 pregnancy test at hospital for “just in case”). As a consumer, I have no way to know what a reasonable charge is for physicians, hospitals, labs, and pharmaceuticals. It’s particularly maddening since I’m on one of those consumer-driven healthcare plans now. I frequently feel like doctors don’t know or consider the price either.
I developed a website (http://www.emilysproject.com/) that addresses a small part of this problem for local pharmacies. Retail pharmacies don’t publish their prices (outside of their promotional generics list) and the difference can be substantial. For example, my son was recently diagnosed with strep. He was having trouble with vomiting and was given the generic for Zofran (Ondansetron). The high price I found was $47.96 and the low price was $9.32. That’s a big deal. Sometimes insurance will blunt the effect of those differences, but not always. My strategy is to find the lowest cash price and then if insurance is not helpful, I’m still getting the best deal.
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Costs vary all over the country generally following the cost of living in an area, but not always. The insurance company payments vary too. The more leverage one company has the bigger the discount they can squeeze out of providers. That is why the concept of more competition among insurance companies is wrong. You need the most leverage to keep premiums low. If you dilute that in an area by having too many insurers, the price leverage shifts to the health care providers. That’s what comes from thinking the problem is premiums rather than underlying health care costs.
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It would be very interesting to thoroughly follow up and trace every dollar of that charge.
That being said, I am so glad to be Canadian.
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