This past Wednesday, my wife and I earned new titles: Mom and Dad. For the last several days, I’ve been thinking of what I’d write about it. It’s such a momentous occasion that I figured I’d have an equally momentous, insightful, article about it.
What I do have is one observation that I hadn’t heard in the millions of nuggets of information passed to me over the months…
Becoming a parent is amazing… no shock there. However, it is predictably amazing, which I think is unique experience. Maybe it’s a lack of sleep, but I can’t think of anything else that’s so predictable. We had a full nine months of preparation. We had many friends go through it. Billions and billions of people on Earth have gone through it. It couldn’t be more natural. At the same time, if all is going well, the end result is completely predictable… ten fingers and toes, two eyes, a nose, and some other anatomical stuff.
If anything comes up that’s a surprise, it’s a bad thing. There are no pleasant surprises. No baby comes out singing with perfect pitch or throwing perfect spirals. Yet, they are still amazing.
I’m sure everyone has something unique that they noticed about their baby. It’s our first, so maybe all babies have this. However, we noticed that in the beginning stages of his cry for attention sounds very much like Peter Griffin’s version of Axel F:
I realize that up to now, I’ve got nothing related to money in this post. I can’t leave it at that. While on zero sleep I think I figured out a big issue with health care billing in the United States. I went for a TDAP vaccine booster and flu shot. The TDAP is a simple tetanus, diphtheria, pertussis vaccine. Pertussis (whooping cough) can be dangerous to kids, so they advise anyone with close contact to the baby to get it.
I called up my health doctor and told them about the baby and that my wife’s doctor recommended I get it. My doctor agreed and scheduled me to come in. While there, she offered to give me a flu shot… seemed like a great idea. The two shots were administered by some kind of nurse’s aid (if the girl was a day over 22 I would be shocked) with no doctor present (the doctor came in earlier and asked a couple of basic questions). The office visit, less than 15 minutes long, was billed to my insurance for $369. A quick internet search shows that flu shots are $30 at CVS, making the TDAP a $339 shot according to the doctor’s office. My insurance decided to pay $196 of it, which the doctor’s office took as payment in full.
The mark-up on the visit was incredible. A look at the this website suggests that the TDAP should have been $30. One wonders why health insurance prices are going up. Perhaps it’s because something that should have cost less than $60 was billed for $369 and settled for $196. At the very least you’d think that my insurance should be able to negotiate a better rate than CVS offers the general public.
I know you are going to love being a Dad.
Good call getting the TDAP, despite the frustrating pricing.
C O N G R A T U L A T I O N S !
Don’t even get me started on insurance and health care. I did medical billing for a short while, and boy did it open my eyes. I am paying about $10k a year, on top of a healthy co-pay and prescriptions. Insurance companies pay what THEY decide they will pay, and people with no insurance pay top dollar because they don’t have insurance. Seriously, I am all from starting the whole system over from scratch. But there is too much money at the top for that to happen.
Kosmo @ The Soap Boxers says
How did the EOB break down the charges? It wouldn’t surprise me to see a $300 charge for the doctor and $30 each for the vaccines.
Another thing to keep in mind is the amount of indigent care a facility may provide – in addition to a good chunk of people who aren’t technically indigent or can’t/won’t pay.
My wife works in the acounting section of a hospital (under the control of the state). There’s a local Department of Corrections facility nearby, and the inmates receive their care at this hospital.
Who picks up the cost of the care? My thought would have been the Department of Corrections – but the hospital is actually forced to provide the care for free.
The cost of the indigent care ends up being spread across all paying customers.
Lazy Man says
Good question Kosmo,
There are 5 items billed. One for $200, one for $75, and three for $30. For those doing math at home, a closer examination reveals it was $365 and not $369 as I recalled from memory. There are different billing codes, 5 digits long, but no meaning description… just a number and “Medical Office.”
The indigent care thing is a good point. This is a medical office. I don’t know how many people just show up at this office park-like place without insurance. I guess CVS doesn’t have the problem of indigent care.
CONGRATS! I am 2 years deep and it is so amazing.
Your realization is exactly why Obamacare won’t solve the problem…costs aren’t being controlled. While I don’t think the gov’t should get involved in the controlling of costs (we know how that worked out for Nixon) it is almost like a gov’t full of waste is only going to exacerbate the problem and not fix it.
Lazy Man says
I’ve got a mixed feeling on the gov’t being full of waste. My wife’s works for the government in health care, so I see an interesting side to it. There’s an odd level of waste in my opinion. On one hand, my wife would probably need signatures of 3 bosses to get a replacement mouse if her’s broke (I exaggerate slightly for effect). On the other hand, the government paid something like $2000 a pop for Windows tablets from 2003-2004 (the ones that no one really bought) because it ran the specialty Windows XP app they had created. The computers were beyond slow and extremely heavy compared to today’s tablets.
If they had put the costs to updating the application to work on the web and/or in Android/iOS, the cost and worker efficiency would go way up.
Kosmo @ The Soap Boxers says
“I guess CVS doesn’t have the problem of indigent care.”
CVS also has the advantage of selling toilet paper, greeting cards, and Hot Tamales. Even if they barely break even on the shots, they come out ahead by getting customers to come in.
Not a lot of impulse buys in a medical office. “Hey, doc, how ’bout one of those colonscopies, just because I have some money burning a hole in my pocket.”
Lazy Man says
I don’t think the shots are big loss leaders for the CVS. From the website that I found, the offices are supposed to be fairly competitive.
Also, couldn’t insurances just cut a deal with CVS/Walgreens and say to people… “We’ve hooked you up at any CVS/Walgreens. Just show your card and you’ll get a free shot there.” It would be better than the insurance having to pay $200 for something that would cost the consumer $70 at CVS. Presumably the insurance could work out a bulk deal with CVS and get the cost down to $50 for the two shots I got.
I’m guessing that the doctor’s office stuffed some other costs into my visit. I think they took my blood pressure and asked if I was allergic to anything. That’s certainly $60 worth of medical care right there ;-).
One Frugal Girl says
Congratulations! Our son will turn 1 in a few weeks. It goes by so quickly! Suck up every single minute of it!
We’re getting ready for #3 next month. Being a dad is incredibly fun. Do your future self a favor and set aside time to keep a journal, especially once baby starts making intentional noises and talking.
As far as health expenses, did you see the Ars article yesterday that mentioned simplee.com and Manilla.com? Have you tried either of them? I signed up for Manilla and so far I like it (it’s kind of like Mint, except more about managing bills/statements than tracking spending) but simplee.com doesn’t work with my health insurance yet.
Kosmo @ The Soap Boxers says
Maybe the insurers have an agreement with the providers not to steer people to low cost providers? I’m just throwing darts, and I’m probably wrong.
The kids and I always get flu shots when the visiting nurses association visit the mall (my wife gets hers earlier, due to work).
Our co-pay ends up being $1 each. About 4 months after the shot, we got three bills in the mail, each for $1.
Let that sink in for a minute. They paid to have a bill printed, inserted, and mail – to collect $1 (at which point they have additional costs to process the check). I’m not disputing the fact that we owed the money, and I paid promptly, but it seems likely that it costs them more than $1 to collect the dollar.
(OK, far enough down that tangent – I’m just puzzled at business practices sometimes).
In my opinion, the problem is the exorbitant charges that the care is priced at in the first place, not the negotiated rate that gets paid. It’s not that the sole issue is that costs are out of control – the billing is! Since almost all hospitals play the game, there is no price competition. Since most of us have insurance companies to negotiate the charges downward, we the masses aren’t fired up. When you don’t have insurance, you are forced to claim bankruptcy in most cases and then you end up in the same pot as those who don’t pay. Those inflated charges are inflated bad debt write offs and suddenly retained earnings and net profit are reduced. The public doesn’t get it. Yes, costs have outpaced inflation and I think that it would be wise to see how the government can intervene without interjecting itself in to the free market. These pricing practices are just another way to skate disclosing the true profit and it helps a non profit system stay that way. The government can’t and shouldn’t limit what the hospital can put down as its (inflated) cost, but it can limit what it will pay, just like insurance companies do. Truthfully, those limits are low for Medicare but as a taxpayer, I’d rather we underpay. At least with an exchange and requirements on how of your premium can fund administrative costs and profit (in the healthcare law), you stand a decent chance of getting a refund. My parents are receiving $600 because the insurance company didn’t spend 85%of the premiums collected on actual claims. In future years, the insurance companies aren’t going to want to incur the cost of sending out notices and refunds and will have to adjust benefit negotiated rates or (gasp) premiums accordingly.
Update – it appears that ASU 2011-7 attempts to address some of the bad debt expense claims by requiring that hospitals reduce their net revenue instead of claiming an expense. This doesn’t change the net cash flow but it does have an effect on bond ratings and such. I’m not a CPA so I am not putting together hospital financials but I know enough to question the practice.
Okay one more thing: Here’s an article that speaks to my first two postings. The author said it well. It’s a price based, not a cost based, system: http://www.modernhealthcare.com/article/20070205/MAGAZINE/70202016?template=smartphone
Congratulations! What an experience it is becoming a parent! Time is going to start really going by fast now. Try to enjoy each moment!
Did you open a 529 account yet?
Lazy Man says
I’ve had a 529 account set up for a couple of years now… in my own name. Little man doesn’t have a birth certificate or an SSN yet, so I don’t think I could get a 529 plan for him. That said, my wife’s ability to transfer her GI Bill looks like it will cover a good portion of college expenses (all of them for a public school).
Revanche, I meant to send you an email about him with a picture. That’s the danger of writing people individually rather than a mass email I guess.
May your first child be a skeptical child!
J. Money says
CONGRATS!!! So exciting!!! Feel free to email me at 3 am when you’re bored and going insane, haha… I’ll be up too ;)
I have been remiss Lazy! I have meant to say heartfelt congratulations to you and your wife a million times but have forgotten! This will be life changing for you! I am sure it already is, 3 weeks into papa-hood!
He will be very proud of his daddy when he is old enough to understand how you are trying to make the world a better place by ridding it of all of these harmful scams.
On this other issue, we have socialized medical care here in Canada so I have difficulty comprehending your system. I have friends that have moved there and are truly aghast at what they have to pay when they go to a doctor, even as a co-pay. They always comment on how lucky we are here in Canada and they didn’t appreciate it when they had it. Of course the cost of living here is ridiculously high….
Congrats, Lazy! I have no babies and thus no wisdom to pass on. I already know you’ll get that kid started on Joss Whedon stuff early, so I think you’ll be fine ;)
Lazy Man says
I’m not sure what’s an appropriate age to get him on the Whedon stuff. I think you have to go with Buffy first, but that’s probably still a middle school age, thing, right? I don’t know these things.
The other sad thing is that it looks like they’ll never have a Blu-Ray version of Buffy, so it will look pretty terrible on the fancy televisions in 8-10 years.