Book Excerpt: The Cost of Hope

The first thing that surprises me from our research is simply the sheer number of the procedures that Terence had. If Chuck had asked me how many CAT scans I believed Terence had had, I would have guessed sixteen. One for each cycle of the clinical trial and, say, a half-dozen more throughout the years. Wild guess.

The answer is seventy-six. Seventy-six CAT scans during a seven-year illness. More than ten a year. I’m sure Terence’s guess would have been more accurate than mine, but I’m also sure he would have guessed low too. Way low. Some of the scans were ordered by Dr. Pierce, some by Dr. Bukowski, and some by Dr. Flaherty. But many others were ordered in various hospitals across the country, some by doctors we never met for purposes I can’t now explain. Since none of us—Terence and me included—had to account for the cost of these procedures, all of us, doctors and patients alike, could casually afford to pop them like cherry Twizzlers.

Were all of them useful and ordered for a good reason? I’m positive of that. Were all of them necessary? I’m just as sure not. And how much did they cost? Some scans were done on the old enclosed-tunnel machines. Some on daintier machines that had more open space and made less noise. Some were done “with contrast”—that is, with a special dye used to help see the cancer. Some were done without. Some were done in hospitals, others in stand-alone imaging centers that do nothing else. Overall, though, each of the scans was pretty much the same.

Yet from Portland to Philadelphia, from 2000 to 2007, the price of the procedures ordered by Terence’s doctors ranged from $550 in April 2001 at EPIC Imaging in Portland to $3,232 in 2006 and 2007 at the Hospital of the University of Pennsylvania in Philadelphia. In between were charges like $1,252 at St. Joseph Hospital in Lexington, Kentucky, in 2002 and $1,750 at the Cleveland Clinic in 2003.

The most expensive charge was more than twelve times the amount reimbursed by Medicare in 2007, the government health program for the elderly and disabled that is the biggest U.S. payer of medical bills.

What’s more, we discovered that the amounts the hospitals and providers billed the insurance companies bore almost no resemblance to the amounts the insurance companies actually paid. And each insurance company made a totally different calculation of what they would pay for the same procedure.

The turmoil at the Inquirer provided a startling insight into this fact. Because the Inquirer’s new owner immediately changed our health insurance plan, Chuck and I are able to see something strange: what two different insurance companies paid for the same procedure. In late 2006, following an Avastin cycle, Terence had a scan at the University of Pennsylvania hospital, which billed the insurance company $3,232. My insurer that month was UnitedHealth Group, which paid $2,586.60, or 80 percent of what the hospital asked.

Three months later, another Avastin cycle, another scan. Same patient. Same hospital. Same machine. Same $3,232 bill. The only thing that has changed is that my employer has switched insurance companies. The new insurer, WellPoint Inc.’s Empire Blue Cross and Blue Shield, paid the hospital $775.68, or 24 percent.

At that time, Medicare was reimbursing $250.94 for the same procedure. And what would someone without insurance pay the University of Pennsylvania hospital for a similar scan? We accidentally found that out too, when a stray record found its way into our pile. This unfortunate person, who was paying the bill out of pocket, paid $1,657—or $881.32 more than Blue Cross paid the hospital, and $1,406.06 more than Medicare paid.

What did Terence and I pay?

Nothing.

What was this all about? Why did these prices vary so much? And why was what actually got paid so wildly different from hospital to hospital and from insurance company to insurance company?

It takes a lot more calculating, a lot more calling—and something I observed during another trip to China—before I can finally wrap my mind around what was going on.

Excerpted from The Cost of Hope by Amanda Bennett. Copyright ©2012 by Amanda Bennett. Excerpted by permission of Random House, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.