Mysteries of health care

Several months ago, I had to have some tests done at a hospital. (Don’t worry, this isn’t going to get distressingly personal.) I was billed $1,875.41. I have health insurance, which I pay for myself, as I am not on staff at The Times or anywhere else, Day Job notwithstanding. Because of some transition issues related to our move from New Jersey to Georgia, there was confusion about pre-existing conditions and all that, so there was a delay in determining whether I was on the hook for that amount, or for the amount that my insurance carrier “negotiated” with the hospital. The latter figure was $937.70.

So that’s not trivial. I would much rather write a check for $937.70, than for $1,875.41. Wouldn’t you?

I jumped through the various hoops. I ignored the bills and urgent letters from the hospital. Eventually, I got word from my insurance company that the lower rate they’d “negotiated” was now in effect. So I waited for the hospital to send me the new paperwork.

Today, I got a phone call. From the hospital. With a sense of dread, I returned the call. I explained the situation and asked the rep what I owed. She said $937.70. I was relieved, and said I was just waiting for the paperwork. According to her, it had been mailed weeks ago — but then she explained the reason the hospital was calling. The reason was this: If I would pay up right now, via phone, using a credit card, debit card, or (somehow) a check, then I would get a 30% discount.

I said: Okay. My cost at that point falls to $659.39. Done.

So. The hospital’s fee was $1,875.41. The insurer-negotiated rate was $937.70. But if I fork over $659.39 right now, we can all call it a day.

Is this hospital on the brink of bankruptcy? What is its business model? What is the true cost of my procedure? Is someone out there paying $1,875.41 for the same thing that cost me $659.39?
How dysfunctional is the health care business?