You are viewing this article in the archives. For the latest breaking news and updates in Ann Arbor and the surrounding area, see
Posted on Sun, May 12, 2013 : 5:59 a.m.

U-M Health System has some of the highest charges in the state, but patients rarely face them

By Amy Biolchini

The University of Michigan Health System has some of the highest hospital charges in the state, according to a set of new data released by the federal government this week.


The University of Michigan Health System's campus in Ann Arbor.

Melanie Maxwell | file photo

But that doesn't mean patients or their insurance companies are paying those charges. Both Medicare and most commercial insurance reimbursements are calculated using formulas that don’t factor in the charges. Patients then pay whatever's left after the insurance or Medicare payments.

The federal government’s Center for Medicare & Medicaid Services attempted to shed light on hospitals’ charges by releasing a massive data set on average figures from Medicare patient data.

The data is available under provisions in the Patient Protection and Affordable Care Act of 2010.

Experts contend that the data can’t be taken at face value, and doesn’t help consumers in making decisions on where to go for health care as it doesn’t include hospital quality and safety considerations.

However, the data does add to the national dialogue on the practice of hospitals tabulating charges when they’re typically irrelevant to everyone except the most vulnerable patient: The uninsured.

The charges, which continue to rise each year, have become out of touch with the costs that a hospital actually incurs for procedures, officials contend.

The numbers

The newly released data averages charges from hospitals across the country for a set of top 100 inpatient diagnoses in Medicare patients from 2011.

In Michigan, the most expensive hospital charge is for ventilator support for 96 hours or more at the University of Michigan Health System: $203,249. That’s about $70,000 more than the second-highest charge at a Michigan hospital for the procedure - which can be found at William Beaumont Hospital in Royal Oak, where $134,511 is the charge.

Just a few miles away from UMHS’s Ann Arbor campus at St. Joseph Mercy Hospital in Superior Township, the charge is $119,767 for the same procedure.

And the lowest charge in the state for ventilator support — $41,199 — is at Garden City Hospital in Garden City.

The disparity between hospital charges is strikingly evident across the board.

For small and large bowel procedures, UMHS also ranks at the top of the pack in Michigan with a charge of $188,881 — about $40,000 more than the hospital with the second-highest charge for the category, which is Sinai-Grace Hospital in Detroit.

St. Joseph Mercy Ann Arbor charges $96,349 for the procedure. The lowest charge in the state is $39,838 at Marquette General Hospital.

For pneumonia treatment, Karmanos Cancer Center in Detroit has the highest charge at $24,466, and Mecosta County Medical Center in Big Rapids has the lowest charge at $6,172.

Here’s what hospitals in Washtenaw County list as charges for pneumonia treatment:

  • UMHS: $21,888
  • St. Joseph Mercy Hospital: $14,498
  • Chelsea Community Hospital: $8,856

Here are hospital charges from Washtenaw County facilities for joint replacement:

  • UMHS: $40,588
  • St. Joseph Mercy Hospital: $36,266
  • Chelsea Community Hospital: $24,649

The most expensive charges in the state for joint replacement are at Detroit Receiving Hospital and University Health Center in Detroit at $63,590, and the least expensive is a $17,752 charge at Tawas St. Joseph Hospital in Tawas City.

UMHS is at the national average for hospital charges, said Chief Financial Officer Paul Castillo, plus or minus several percentage points.


Paul Castillo

Courtesy photo

“The University of Michigan Health System has a very reasonable profile compared to the national average,” Castillo said. “If I were comparing us to other academic medical centers, we would be well below the national average. … We should be compared against national academic medical centers.”

Hospitals all have very different contexts and burdens, Castillo said, citing teaching costs, the number of uninsured and poor patients they serve, as well as the degree to which the patients who are arrive are sick.

“Clearly U-M has a different mission than most,” said Rick Murdock, executive director of the Michigan Association of Health Plans.

Murdock explained the teaching facility status of UMHS, and the referral system that brings in sicker patients for treatment alters its cost structure.

The figures are not useful or relevant for most consumers, said Marianne Udow-Phillips, director of the Center for Healthcare Research & Transformation.

“It’s a little misleading,” she said. “If you have health insurance, you’re not going to face charges or even the total payment.”

The more relevant question is quality, Udow-Phillips said.

“It’s a very small slice of a picture,” Udow-Phillips said. “It doesn’t help consumers to figure out where the value is. … As a consumer, you want to know where you’re going to be treated with the most effective outcomes.”


In addition to having some of the highest hospital charges in Michigan, UMHS also has one of the highest Medicare reimbursement rates in the state, according to the government’s data.

But, they’re not directly correlated.

The reimbursement rate for Medicare and for most commercial insurers— including Blue Cross Blue Shield, which insures about 70 percent of patients with private insurance in Michigan — is calculated on a formula independent of hospital charges, Udow-Phillips said.


Marianne Udow-Phillips

Courtesy photo

For some smaller rural hospitals with limited services, hospital charges are used to calculate reimbursement rates, Udow-Phillips said.

Medicare’s formula has a series of metrics used to determine reimbursement. There’s a base payment established by Medicare for each type of diagnosis, which is adjusted based on the average wage.

Ann Arbor’s base Medicare reimbursement is at the national average, Castillo said, putting it higher than the base reimbursement that Detroit hospitals receive.

Hospitals qualify for more Medicare reimbursement if they treat a disproportionally larger share of the population that’s not able to pay for health care.

UMHS qualifies in that case, Castillo said, which garners UMHS an additional 17 percent more than the base reimbursement.

UMHS’ status as a teaching hospital also guarantees an additional 37 percent more reimbursement, Castillo said.

“To the extent that you treat a disproportionally higher poor population, and to the extent that you’re a teaching hospital, you’ll get Medicare support for those activities,” Castillo said.

Even with the combined 54 percent increase from the base payment for Medicare reimbursements, the figure only covers about 90 percent of the hospital’s cost for the service, Castillo said — meaning UMHS loses money on Medicare patients.

The Medicare reimbursement is typically less than that of private insurers, Castillo said.

However, the Medicare system does pay more to hospitals for specific patients that are considered to be outliers — in essence, sicker patients who require more than a standard routine of care for a diagnosis.

As UMHS receives a high number of referrals of patients who are the “sickest of the sick,” Castillo said UMHS does receive those additional surplus payments from Medicare.


A hospital’s charges for a procedure are the same across the board — no matter if the patients are uninsured, under private insurance or on a federal, state or local program.

However, charges don’t reflect what the hospital’s actual cost is to perform the service.

“Over the years, the charge structure has simply tried to keep it moving at the rate of inflation (in the health care market),” Castillo said. “The charges have less relevance to what (hospitals) get paid, but we continue to inflate them.”

It’s a practice conducted at hospitals across the country.

For UMHS, Castillo said the charge is about double the cost of the service.

“Charges (have) largely lost (their) relevance in the health care world, because what we get paid will be determined by Medicare and by commercial insurers,” Castillo said.

About 30 years ago, charges were used by many insurance companies to determine patient deductibles and premiums — which changed during the last wave of health care reform under President Bill Clinton’s administration, Udow-Phillips said.

Those that do face the charges — which tend to increase annually, based on hospital market rates — are the uninsured.


Patients without health insurance may not pay their medical bills, leaving hospitals with uncompensated costs they must find ways to cover.


Rick Murdock

Courtesy photo

In 2011, UMHS provided $197 million in uncompensated care — a figure that includes unpaid patient debts, as well as the gap between state and federal health plan reimbursements and the cost of care.

Those uncompensated costs can work themselves in to consumer insurance premiums, leaving patients paying for their insurance to help foot the bill of the uninsured.

“This continues to be a part of our whole cost-shifting issues that we have with different providers,” Murdock said. “There’s definitely uncompensated care costs — those are paid for by premiums in private insurance.”

An analysis conducted by CHRT found that one percent of the expense of a private insurance premium is due to hospitals’ uncompensated care costs, Udow-Phillips said.

Murdock said the real question is if those costs are being fairly shifted to each insurance provider.

As hospitals continue to increase their charges year after year in accordance with the market, the problem is that the uninsured patient is saddled with an inflated debt, Murdock said.

“We should focus on why we have these charges,” Udow-Phillips said. “The only people that get billed these ... amounts (are) the uninsured — and that’s wrong."

Amy Biolchini covers Washtenaw County, health and environmental issues for Reach her at (734) 623-2552, or on Twitter.



Mon, May 13, 2013 : 1:12 p.m.

Personally I believe most of the problems people have with the "health system" is from the fact that it has turned into a many billion dollar business run mostly by large corporations. Anything that large gets it priorities warped as those at the top become the first priority and the "mission" is way down the list, regardless of loud cheap talk saying otherwise. Profit or non, makes no difference in the long run, only the non profit does not pay taxes.

Michigan Man

Sun, May 12, 2013 : 11:09 p.m.

Time for many of the Ann Arbor/Washtenaw county readers of this article to head East to the St. Joseph Mercy Hospital system! Can't go wrong!


Sun, May 12, 2013 : 10:38 p.m.

Well written article. I feel that it shows the bureaucracy of our healthcare system and demonstrates who confusing it all really is. Unfortunately I feel that with every healthcare law, the system gets more confusing and the actual pay structure gets further from reality. For instance, medicare pays well for procedures, such that at any hospital's surgical patients are a minority volume, yet make up a majority of the revenue. So when you have your appendix taken out, you're actually paying for the loss on the geriatric pneumonia patient that was forced upon the hospital. As I read these comments, it's obvious that the personal experience by a minority are setting out to demonize a large, top 10 hospital in your own back yard. UofM is no better at common than any other hospitals, that's not why it's here. So if you have a common problem, expect the sort of treatment a large bureaucracy would provide. However, when you've been referred to UofM because you have something too complex for your local hospital, you'll start to understand what UofM is all about. When I worked at Mayo, the citizens disliked actually going to Mayo, yet Mayo has one of the largest referral networks in the world for a reason. Please think of the system as a whole and the type of treatment you expected with your given condition, then comment.


Sun, May 12, 2013 : 11:10 p.m.

I wish there was an edit feature to this blog, as reading my post, I would like to fix several typos!


Sun, May 12, 2013 : 9:47 p.m.

A public institution should be held publicly accountable and not permitted to operate like a private entity. Most U of M patients are likely public employees with insurance plans paid for by tax dollars. Medicare and Medicaid are defintely paid for tax dollars and they make an effort to control costs while "private" insurance probvided to public employees and paid for via tax dollars see no need for cost control efforts since they merely continue to raise the rates that are paid for with tax dollars. Nice.


Sun, May 12, 2013 : 10:40 p.m.

"most U of M patients are likely public employees ..." You talk with certainty, yet you use a guess to define UofM. Now that is what I call, "Nice." The rest of your paragraph is not readable. Could you please proof read and re-post?

glenn thompson

Sun, May 12, 2013 : 9:27 p.m.

My experience with the U of M Health system has been very poor. My wife had a very simple prosthetic device, basically a glove, made as an out patient. It did not fit. When she returned for a second visit we were told "this often happens the manufacturer does not made the devices to our measurements". They measured again, and again the device did not fit. My wife became too ill to return for multiple outpatient visits. Calls to the "customer service department" for invoice discussions were met with recordings "our new service is designed to better help you, the next operator will be available in approximately 25 minutes". My wife died. Before her ashes were even buried, the U of M turned this small invoice over to a collection agency. My wife and I met at U of M grad school. I am a U of M alumnus. We do not have children and discussed including in U of M in our final estate planning. That consideration has been removed as a result of our experience with the U of M hospital system.

glenn thompson

Mon, May 13, 2013 : 12:24 a.m.

When we returned the first time after the item did not fit the U of M person said this was a very common occurrence. In that case, yes is the fault of U of M not to resolve the problem or to find another supplier. Instead they just continued to produce and bill for useless devices. That is very poor health care. When I called St Joes, Huron Valley Ambulance, and others that were involved with my wife' care I never had a significant wait. All, except U of M were willing to be patient until the estate is resolved.


Sun, May 12, 2013 : 10:43 p.m.

You're upset at UofM for a manufacturer not having a well made glove? I'm sorry your wife passed, but did you think that tragic event would stop UofM's bill collectors? When I call comcast or the NorthWest airlines, I'm often on hold for over an hour, I guess I expect to be on hold for a hospital also.

Jay Thomas

Sun, May 12, 2013 : 8:45 p.m.

"U-M Health System has some of the highest charges in the state..." It's reflected in the salaries (like the whopping 46% increase for the new head of Motts). I recall the hospital making me go through a long set of uncomfortable and even painful procedures for a SECOND TIME. Whoops, they just lost all the data. Can you come back and do it again? A few years later I watched the local news on tv talking about how the government had caught UofM DOUBLE BILLING... and I knew that was what was done to me.

Jay Thomas

Tue, May 14, 2013 : 6:20 a.m.

M.M. It was covered and to be honest I didn't look at the bill at the time. I trusted them. It was only after watching the tv news that I realized WHY they had lost the data (more $$). I had thought it was just incompetence.

Michigan Man

Sun, May 12, 2013 : 11:08 p.m.

JT - Come on? Did you check your EOB? Did you have two sets of identical EOB's? If not, they did not bill you twice. More important, did you pay out of pocket a bill twice? If so, that is on you!


Sun, May 12, 2013 : 8:57 p.m.

The Mott building cost almost 750 million dollars!!!! I have had procedures done at UM and St Joe's. UM had pompous docs (who are really well trained auto mechanics!) who thought you were a piece of meat to do with what they wanted. They just wanted money for the new Jaguar. No care for the patient. St Joe's was staffed by caring docs, nurses, and techs who had tons of time for you and realized you knew what you wanted to have done. Like night and day. Because I complained about the care at UM they refused to serve me again! Talk about out of touch with reality!!!


Sun, May 12, 2013 : 7:35 p.m.

As stated earlier: ""U-M Health System has some of the highest charges in the state, but patients rarely face them" Not true. Health Insurance premiums reflect the cost of services. Higher costs, higher premiums." Also NOT true as a lot of the rest roles to the taxpayers. Guess who that is.

Ann Arbor Parents For Students

Sun, May 12, 2013 : 7:16 p.m.

U of M was a huge support of the Obama Care, single payer system. Just watch what is going to happen to you all!


Mon, May 13, 2013 : 2:21 a.m.

joejoe, that's an opinion piece that's just repeating the same silliness. Note, for instance, that it says the president has no need for health care because he's the president of the US. So you know right away it's a bunch of BS.


Mon, May 13, 2013 : 1:51 a.m.

Turns out, your source doesn't tell the whole story.


Mon, May 13, 2013 : 12:34 a.m.

And yes, joejoeblow, I do have proof, not political opinion. I will count myself, and my family, as beneficiaries of the ACA. And yes, it will cost money, lots of it. There is no free lunch. That's about all the proof I need to show, don't you think?


Mon, May 13, 2013 : 12:30 a.m.

Thank you, snark12.


Mon, May 13, 2013 : 12:08 a.m.

joeblow, like many others online you're just promoting this favorite "Congress exempted itself from Obamacare" line. There's no truth to it.


Sun, May 12, 2013 : 11:41 p.m.

If it's a fact, than you must have proof, right? No? Well, than it's political opinion! I will argue that Obamacare will cost hundreds of millions there already good affordable healthcare. Need proof of that? Congress right now is creating a bill to except their staffers from Obamacare because under Obamacare they would lose many of them due to a limited budget. Remember, they already exempted themselves. So, somehow a system written by congress and Obama isn't good enough for themselves or their staffers. I would say that's pretty good evidence about what they've done.


Sun, May 12, 2013 : 11:18 p.m.

It's not about "finding" health insurance, joejoeblow. It's about "affording" health insurance. There are millions of people who will benefit from the ACA. That is a fact.


Sun, May 12, 2013 : 11:13 p.m.

Obama care has only found 100,000 people who couldn't find health insurance. However, those 100,000 people the federal government has refused to cover and are forcing states to cover them at astronomical costs. Having those 100,000 people file bankruptcy would have been much worse.


Sun, May 12, 2013 : 10:11 p.m.

Yes, we definitely need to watch out for all of the people who are now going to be able to afford health insurance, after being priced out of "the system" up until now.


Sun, May 12, 2013 : 10:10 p.m.

The ACA law, Obamacare, is not a single payer system.


Sun, May 12, 2013 : 5:38 p.m.

"The reimbursement rate for Medicare and for most commercial insurers— including Blue Cross Blue Shield, which insures about 70 percent of patients with private insurance in Michigan — is calculated on a formula independent of hospital charges, Udow-Phillips said." Huh? This says it all. BCBS is reimbursed for services NOT based on hospital charges. Then why have these outrageous charge lists at all? They don't reflect reality, insurance companies and medicare are reimbursed NOT using these charge lists, but the uninsured, who can least afford it are asked to pay a random, jacked up charge? This really sums up the US healthcare system. Random, excessive charges that are not related to real costs dumped on the most vulnerable, the uninsured. The insurers and medicare are reimbursed based on opaque algorithms NOT related to this phony charge list. And all of us pay more and more and more in premiums, co-pays and deductibles. Great system.


Sun, May 12, 2013 : 10:03 p.m.

No one pays these "trumped up" insanely over-inflated charges except the uninsured, who get no discount at all. Could the hospital please explain why everyone cannot have the discounted prices, especially those who cannot afford to pay for health insurance in the first place? And why on earth do insurance companies pay "different" prices for the same services? What a racket! I, for one, am hugely in favor of the ACA. It may not be perfect, but it is the first step in changing the status quo, which is grossly unfair to millions of consumers. At the very least it is going to demand accountability from those that would like to keep the current system under wraps.


Sun, May 12, 2013 : 6:09 p.m.

I don't get it either. Are the charges ramped up so that when uninsured don't pay them, they can be written off as a loss? Thus the incentive to have them as high as possible?


Sun, May 12, 2013 : 5:31 p.m.

"As a consumer, you want to know where you're going to be treated with the most effective outcomes." Agreed. Then that data needs to be available in a clear, understandable way, across all hospitals in the country, for easy comparison between specific hospitals. Close to 200,000 patients nationally die in hospitals from preventable medical errors. How about seeing that data for all hospitals, listed by hospital name, in a clear manner? Why isn't that data available? I would bet hospitals don't want it released, just like they didn't want this "charge master" data released either. This cost data should only be the beginning of data on hospitals that is publicly available.


Sun, May 12, 2013 : 5:22 p.m.

"U-M Health System has some of the highest charges in the state, but patients rarely face them" Not true. Health Insurance premiums reflect the cost of services. Higher costs, higher premiums.


Sun, May 12, 2013 : 4:44 p.m.

And probably just as true next winter.


Sun, May 12, 2013 : 4:51 p.m.

Ignore this - wrong placement.


Sun, May 12, 2013 : 4:26 p.m.

For a real eye opener look at Dr. Devi Shetty's Narayana Hrudayalaya hospital. Can you imagine a heart surgeon at the U of M or anywhere in the USA listening to a nurse tell him how he could have done a better job after an operation? I hope I am wrong, but that does not seem to be the culture of the medical environment. Maybe some have been paying attention to what goes on in the rest of the world but there is no incentive for this to occur here, Does the U of M know what it actually costs for a procedure – I don't mean what they charge? Does anyone really care? Do patients really care? If you had to be treated for pneumonia would you rather go to a hospital that charges $22K or one that charges $9K.? Good care costs money. Great care costs more. Are you thinking there must be something lacking in the quality of care you would get if the hospital only charges $9K. For a non-emergency heart operation which assumes that you have some time to make arrangements, you could fly to India and have the procedure done there with a better probable outcome and lower cost even if you had to pay everything out of pocket including transportation than if you stayed here and just paid what your insurance did not cover. We egotistically think we have the best in the world but we pay more and get less medical care than many other countries. We thing we need the $22K care option. We have no way to know otherwise.


Sun, May 12, 2013 : 3:51 p.m.

The last I knew, Chelsea Community Hospital was part of the U of M Hospitals system.


Sun, May 12, 2013 : 7:21 p.m.

Chelsea Community Hospital is affiliated with St. Joe's.

Michigan Man

Sun, May 12, 2013 : 3:07 p.m.

U of M Hospitals, with this charge structure, we be useless, helpless and basically a non-player in the ACA state insurance exchange system, starting in 2014, due to high charges. The insurance exchange entities will be unable to negotiate payment rates with the U of M system - thus ACA patient will not utilize U of M Hospitals - thus being forced to less able, less prestigious and less quality oriented providers. Very little in the new ACA systems changes.


Sun, May 12, 2013 : 11:43 p.m.

There are also exceptions to the rules. There is a reason that places like Mayo, Cleveland Clinic, and UofM were at the negotiation tables.

Basic Bob

Sun, May 12, 2013 : 9:21 p.m.

Don't confuse more expensive with higher quality. For most treatments, any hospital will be adequate.

Laurie Barrett

Sun, May 12, 2013 : 2:15 p.m.

Reminds me of when the big three just kept cranking out cars and people paid for them because they had to have them. The hospital industry gets like this . . . they demand the money and the patients (commonly referred to within the institution as customers) supply it. But the big three fell and had to deliver quality to get back on their feet. Huge money machine hospitals are slowly getting the picture but the government has to force their eyes open. The UH is stuck in an old profit-reaping mode, probably because of intertia, and it will take them a while to get with the program and, I hope, ahead of the curve. I'd rather heal someone than take their money.


Sun, May 12, 2013 : 2:03 p.m.

This is ALL baloney and nobody knows or understands the costs/prices and what gets paid. Nobody really knows. Our hospitals and to some extent doctors practices are stupidly regulated not only by the government but also by separate insurance companies. Its carziness! That stupid regulation and the various and conflicting laws require huge administrative staff (that have very little to do with actual patient care) and HUGE (HUGE!!) prices. There is no better argument for cutting out the middle men (at many levels but especially the insurnace companies) than the numbers - 'executives' pay and bonuses, administrative fees, the administrative burden to work with those companies - how diluted do our healthcare dollars have to be before we get smart and go to a single payer system? There is not competition in healthcare - its never going to be a free market. get 'em out of the profit-by-interfearence business and reduce the baloney all over. Its just a start but a hefty start - certainly more than malpractice issues!

Sandra Samons

Sun, May 12, 2013 : 1:59 p.m.

You say "Both Medicare and most commercial insurance reimbursements are calculated using formulas that don't factor in the charges. Patients then pay whatever's left after the insurance or Medicare payments." but that is no always accurate. Insurance companies DO have what they call an allowable amount, which is the amount they will pay for any particular service, but patients do not always pay the balance. Most of what they pay is a co-pay or a stated percentage of the allowable amount or some other flat amount determined by the insurance company. By accepting the insurance company's payment, the provider agrees to accept the lower payment on the part of both the insurance company and the patient. In other words, the insurance company decides the amount that the patient will be responsible for, and if it happens to be less than the total bill, the provider is only allowed to collect that amount from the patient. Is there any question that insurance companies are in control of our health care system?


Sun, May 12, 2013 : 1:38 p.m.

I'm still irked by a UoM deal I went through when I fell and broke 2 ribs. Yes I knew they were broken. I went to 'their' ER and 'they' took 14 xrays. Then I heard the ducklings (That's a House M.D. reference) in the hallway joking about how they knew the ribs were broken , but I had a GM '8' card from BCBS and they would pay for it all. I'll NEVER return to a UofM Anything. My Vet gives better service value to my dogs. No wonder GM was paying 43 BILLION every 3 months for healthcare costs to its employees.

say it plain

Sun, May 12, 2013 : 1:33 p.m.

This report may not be 'relevant' to patients, because there is little relationship between what they pay and what providers charge, in many cases. But not in all cases, and *that* is shameful for the health-care industry... because nor is there much relationship between what is charged and what care *costs*. We must stop accepting this as a reality in health care. It is a large part of why health-care costs distort our economy. One can argue that in some settings, patients are sicker, or costs are higher. But how is everything *marked up*?! The same line-items would apply hospital-to-hospital, and this analysis included very specific costs. Sure, we can get even more specific, and see what the mark-ups are like from provider to provider. Recent attempts to look at how, say, large national teaching hospitals charge for trivial items like tylenol showed that if anyone bothered to try and get at all those little components of a full hospital bill, they'd see 1000% mark-ups everywhere, and then the argument about 'quality of care' and 'national reputation and outcomes' blahblah start sounding hollow and disingenuous. It ends up just like the thousand-dollar screwdrivers from Pentagon contractors...when the bill isn't "real", we all end up paying for the obscene profit for some.


Sun, May 12, 2013 : 1:09 p.m.

I am amazed that the health insurance/medical industry continues to get away with murder. The fraud and fakery involved is at LEAST on par w/ Wall Street, possibly worse, since no one seems to have distrust of the medical profession. There needs to be some serious, intense scrutiny of the medical and insurance industries. Like televised congressional trial type stuff. We keep seeing these stories on $200 cotton swabs, we all keep getting bills 14 months after our ER visit with charges the hospital can't explain when you call them about it. We keep hearing about people who round up other people to take them for unnecessary services just to charge the insurance. We know Medicare and Medicaid are bloated bureaucratic cash milking machines. And yet it continues.


Tue, May 14, 2013 : 11:59 p.m.

It has a very efficient spending ratio Sparty. It says so right on the HHS website, so it MUST be true. The process for sucking money out of the government is very efficient, so efficient, it WASTES money very efficiently, but they (and you) don't mention that. If you want to argue with the attorney general about $60-90 billion in fraud, waste, and abuse (the higher number is close to 10% of the yearly budget), go right ahead -


Tue, May 14, 2013 : 4:23 a.m.

Doesn't change the the FACTS on Medicare and Medicaids most efficient administrative spending ratio relative to medical spending of any health care organization, period. (They spend far less on administration and bureaucracy and more on medical claims than any other insurer.) You failed to do your research again, AC.


Mon, May 13, 2013 : 9:31 p.m.

Not nescessarily automatic Sparty, it' just that your dogma is consistently wrong. The $60-90 billion cited for waste, fraud, and abuse comes from... Wait for it... US Attorney General Eric Holder. He's "furious" and we'll see how "fast" he works on it.


Mon, May 13, 2013 : 2:02 p.m.

Yes, I did. Try doing some research on it before spouting individual cases of fraud or management. As I said, Medicare and Medicaid are the most efficiently run health care organizations in terms of their administrative cost structure. They pay less on administrative and bureaucratic costs than any health insurance agency in existence. Some just like to automatically dispute everything I say, right, AC, despite the facts?


Mon, May 13, 2013 : 2:33 a.m.

It's actually much worse than that, but thanks for pointing out that figure, Arbor. I wasn't trying to say Medicare/Medicaid were the worst of the problem (although I certainly recognize it as a possibility), but anyone who sees Medicare/Medicaid as a lean well-oiled machine is naive at best. I don't know how it is Wall Street can call down such animosity and ire, but hospitals and insurance companies get a free pass. I think it's just the perception of "bank" vs. "doctor" or "medicine," but the same thing's going on. Big time.


Mon, May 13, 2013 : 12:04 a.m.

You including the $60-90 billion in Medicare and Medicaid fraud and abuse there Sparty? Didn't think so


Sun, May 12, 2013 : 7:21 p.m.

Actually Medicare and Medicaid have the lowest administrative cost structures of any health insurance organizations in existence, e.g. they are the most efficient and least bureaucratic by far and spend the most money on medical benefits vs administrative costs than any others. Try getting educated about it before posting inaccurate information.


Sun, May 12, 2013 : 1:09 p.m.

My sister used to be a resident in Dermatology at UM hospitals. Each month the department would have a business meeting where each resident would be evaluated for the amount of money charged for each office visit. Residents who made more money for the department were given praise. That meant that residents were expected to find ways to convince patients to have moles removed or other procedures in order to drive up their value to the department. You need to be very wary of what incentive your doctor works under. He or she may not have your interests as their highest priority.


Sun, May 12, 2013 : 12:44 p.m.

Well when you have a large organization, such as this that is a huge corporation, the priorities almost always become making the administrators (and in this case their buddies the doctors) rich, then taking care of patients comes somewhere down the list of priorities. Nothing unusual. Just the way business works, profit or nonprofit regardless, those at the top take care of themselves and their buddies.


Sun, May 12, 2013 : 11:56 a.m.

The U of M often does things b/c they can NOT b/c they should. I am amazed at the waste of technology and medicine that they decide to use rather then be honest about death. We all die, it's a part of life. If the CEO's didn't make 7 figure salaries then costs might not be so out of control. DIdn't they just hire a new one for Mott paying them $450,000? It's not about the patients it's about the $$$ all the way to the bitter end.


Sun, May 12, 2013 : 5 p.m.

You exhibit a complete lack of understanding of finances. One CEO is NOT the reason costs are out of control. You are talking about a few people at most. Their contribution to the hill of expenses is a few lumps of dirt. The truth is more complex than that. Labor is a much more of an issue as there are FAR more nurses and doctors than CEOs. By sheer numbers alone they make up a larger percentage of the financial pie than CEOs.Now add techs, clerks, physician assistants, union employees, and the swollen bureaucracy of hospital management, and it is easy to see where the greatest expense in terms of labor lies. Your first paragraph is correct. Hospitals do need to re-evaluate how they use technology and medicine. But a factor in that is litigation. If someone is dying and the deceased request more efforts(tests, drugs), but the hospital turns them down they risk being sued and being portrayed with more concern with their bottom line than the patient's life. It's a no-win situation for the hospital.


Sun, May 12, 2013 : 11:55 a.m.

This will all change under Obamacare. The salad days for the medical community are coming to an end.


Thu, May 16, 2013 : 2:50 a.m.


Thu, May 16, 2013 : 2:44 a.m.


Thu, May 16, 2013 : 2:37 a.m.


Thu, May 16, 2013 : 2:34 a.m.


Thu, May 16, 2013 : 2:33 a.m.


Thu, May 16, 2013 : 2:32 a.m.


Thu, May 16, 2013 : 2:31 a.m.


Thu, May 16, 2013 : 2:27 a.m.


Thu, May 16, 2013 : 2:25 a.m.


Thu, May 16, 2013 : 2:21 a.m.


Thu, May 16, 2013 : 1:45 a.m.

Yes, I remember that point. Lots of folks favoring ACA cite the "30 million" number (of the uninsured). Laudable goal. Examining that number finds it is significantly less - either by choice (the young and healthy) already covered (by programs like CHIPS for children) and illegal aliens (which the majority of the American public balks at paying the health bill for). So, when/if ACA comes in with usual big government efficient mechanisms (not) costs more (already $1T over proposed estimate) and hits Joe Public with increased costs and lousy service, will that "laudable goal" survive?


Wed, May 15, 2013 : 2:23 a.m.

"Most surveys indicate that people are satisfied with their insurance (but not rising costs). You do remember that was an Obama selling point right?" What about those that don't have (cannot afford) any health insurance to be satisfied about? You do remember that including those people (in the millions) is one of the selling points of the ACA, right?


Wed, May 15, 2013 : 12:16 a.m.

Revolt sHA? Nothing so violent. Simple things like elections - which almost happened in 2010. History has a habit of repeating. Most surveys indicate that people are satisfied with their health insurance (but not rising costs). You do remember that was an Obama selling point right? What happens when the costs go up even more for/because of ACA? And as I mentioned, I do like the German model. 2016 will have about 18 months of operations (if the current implementation train wreck manages to get back on the rails). We'll see.


Tue, May 14, 2013 : 10:45 p.m.

Or what, a revolt takes place? I actually already have health insurance, Arborcomment, which I pay for myself. I am just weary of paying way too much for way too little. And so are many, many others, from what I've observed. Those that are happy with their health insurance (people who have someone else paying the bulk of their health insurance, such as government workers and those on Medicare) prefer the status quo. Who can blame them? It's human nature to want what works best for oneself. If I had government-subsidized health insurance, I would be protesting the ACA too. Unfortunately, the status quo does not work for all, and it is unsustainable for many others. Perhaps "Singe Payer" won't be that far off. The ACA is a step in the right direction. It's interesting that it was actually a "conservative" idea from the beginning.


Tue, May 14, 2013 : 10:16 p.m.

When your "something" is subsidized by an electorate that could become fed up with higher cost, bureaucracy, and personal privacy concerns, you may get "nothing" when they change their minds. Tis the risk taken when the government attempts to do "big" and "all at once". Will there be a break point? Uncertain. Most folks wouldn't mind paying a small insurance increase to cover all, or a equitable cost (tax) for choosing not to get insurance. But increase better be small, and most important, the service better be excellent - we'll see.


Tue, May 14, 2013 : 10:33 a.m.

Something is better than nothing for those that currently can afford no coverage at all.


Tue, May 14, 2013 : 1:16 a.m.

The electorate has spoken based on what was sold them sHA. We both may be grasping - on what they actually get or balk at. But wish us all luck. Hopefully, your benefits won't take as long as the current VA backlog: 362 days in some areas.


Tue, May 14, 2013 : 12:34 a.m.

I will sign up for affordable health insurance with everyone else this coming October, and I will be covered as of January 1, 2014, thanks to the ACA. You are grasping at straws, Arborcomment. The electorate has already spoken.


Mon, May 13, 2013 : 9:47 p.m.

In this and in other posts I do detect an urgency in your needs sHA. Ironically, the passage by a supermajority of a 2100 page bill (pass it, then see what's in it), followed by over 20,000 pages of regulations, coupled with the federal government's sorry track record of implementation - you may end up waiting ten or more years. How? First, an implosion and rejection of Obamacare by a majority of the electorate - followed by a "do over" of measured incremental items - all in the fur ball of good olde US politics.


Mon, May 13, 2013 : 11:17 a.m.

I appreciate your suggestions, Arborcomments, many of which are excellent; only problem is, I and many others, will be dead and long gone before the results of your "plan" will come to fruition. I need affordable health insurance NOW, i.e. today, not after the several decades it would likely take to fight all the lobbyists, drug companies, inept congressmen, et al, to make the changes you suggest.


Mon, May 13, 2013 : 1:48 a.m.

Continued: 9) competition across state lines, transferable electonic records, tort reform, open cost, billing, and health quality comparisons, fraud crackdown, a weak "maybe" for MMC. 10) one last chance for "market" based reform - give it ten years.  Not working? Hello Germany: Sorry it took so long, I had to call my mother and wish her a happy mother's day.


Mon, May 13, 2013 : 1:47 a.m.

I'll take your inquiry as a tacit admission that RU has the better odds, and I do appreciate the entire three minutes you gave me to come up with a health plan. But here goes: One last chance for non-socialized healthcare. 1) Scrap regional "exchanges" and bloated bureaucracy under Obamacare. Institute health care plan availability nationwide - similar to the Federal Employees Health Care Benefits program. Shop for plans, compete for market share. 2) Institute tort reform, not just throwing tax dollars at it to "study" that was a sop under Obamacare. 3) Nationwide FEHBP-lke system mandated to go electronic, we have programs in private industry logistics systems that deliver stuff to your door - in hours. The only thing the government mandates here is that the systems are secure and talk to each other, let the best Oracle or Microsoft win the program market share. 4) Reduce, enforce, prosecute the ease of fraud, waste and abuse in Medicare and Medicaid, estimates run as high as 10 percent or $60-90 billion a year. 5) Yes, touch a third rail. Examine and adjust Medicare as life expectancy has increased, and the quiet little secret, grandma is often quite well off (adjust means testing/benefits). 6) I am somewhat open, but leery,of minimal mandatory catastrophic coverage - bare bones only, with a similar "tax" penalty if the young and reckless choose not to partake. Those that truly can not afford? See item 4 above, use those funds to pay for MMC. 7) Continue and improve efforts like the one in this story, (and you can pass a law to do this without Obamacare) to illustrate hospital cost, effectiveness, and competition. 8) Don't cave like Obama did to big Pharma on drug prices.


Mon, May 13, 2013 : 12:41 a.m.

When you come up with something, let me know.


Mon, May 13, 2013 : 12:38 a.m.

And your alternative plan is?


Sun, May 12, 2013 : 11:57 p.m.

sHA, RU is working with pretty good odds: 1) Chief architect of Obamacare in the Senate calls the implementation of Obamacare by this administration a "train wreck". 2) IRS will spend $1.2 billion for administration of IRS rules related to Obamacare through 2014. 3) Exchanges delayed again. 4) Obamacare costs over initial budget. 5) Excellent Federal track record: a)Veterans Administration behind processing 900,000 veterans claims. b) GAO highlights $95 billion in duplicative federal programs (examples: 46 different jobs training programs over nine different federal agencies - one side of TSA issuing the same contract as the other side of TSA).


Sun, May 12, 2013 : 11:12 p.m.

Excuse me, but the full effects of the Affordable Care Act come into play after January 2014. Since this is May of 2013, how is it that you know it is already a failure? I am led to believe that you already have in place, and can afford, health insurance.


Sun, May 12, 2013 : 10:36 p.m.

Actually, Snark, there is overwhelming evidence that money pouring into the (often failing) administration of Obamacare is much much more than any that might be saved from the occasional region in which a few health insurance providers try to compete. The thing happened that always happens; the plan was expensive to develop, impossible to implement, and because of that entire new batches of government employees and contracts and services were created (doubtless at three times the price of private industry) to oversee it. Health Care needs a serious overhaul, but bloated government bureacracy won't help. Some doctors and hospital board members and health insurance boards of directors going to jail might. There are thousands of mini-Madoffs all over the medical and insurance industry, and so far none of them are getting caught.


Sun, May 12, 2013 : 10 p.m.

Actually the early results indicate this public information will lead to lower rates.


Sun, May 12, 2013 : 1:41 p.m.

Yes. The cost of health care will go up some more as a result.

Nicholas Urfe

Sun, May 12, 2013 : 11:49 a.m.

So are patients expected to pay more for the privilege of being treated by residents who are inexperienced and are not yet fully qualified doctors. Almost as bad, each resident they bring in to get the "experience" of your treatment bills you. They call it a "consultation", but why would you want to pay top dollar for a consultation with someone who isn't even a fully licensed physician?

Nicholas Urfe

Mon, May 13, 2013 : 2:33 a.m.

@Janis: The bills I have received related to care at the umich hospital suggest otherwise.


Sun, May 12, 2013 : 1:06 p.m.

You are not biled for resident services. An attending physician must also see the patient. The resident may see you several times each day but you are not billed for each visit - only when the attending is present. And, residents are fully licensed physicians.


Sun, May 12, 2013 : 11:54 a.m.

Nicholas I seldom if ever agree with you. But we are on the same page here.


Sun, May 12, 2013 : 11:48 a.m.

The cost to the patient of medical care in just about any medical facility is a far cry from the actual cost to provide that care. It's enough to make a guy sick.


Sun, May 12, 2013 : 9:30 p.m.

Sparty, the article points out the disparity between the hospital cost burden and patient billings


Sun, May 12, 2013 : 7:15 p.m.

And your analysis is based on ?????

Nicholas Urfe

Sun, May 12, 2013 : 11:47 a.m.

So how do the very high charges jive with their status as a non-profit with tax-free status? Where does all the money go? It isn't like the students are getting a price break.


Sun, May 12, 2013 : 11:43 a.m.

"Patients then pay whatever's left after the insurance or Medicare payments." Not correct. If one has insurance or Medicare, the fee charged for the service is adjusted, then the plan pays some or all of the adjusted rate. Then the consumer pays the remainder of the adjusted rate, not the original fee.


Sun, May 12, 2013 : 11:34 a.m.

The thing I detest is the complexities of the billings. We go in for a specific treatment and we are billed by so many different entities that it is impossible to know if the bills will ever stop. I would rather be charged one amount by the Hospital even if it is more (which it certainly would be) than by 15 different entities from the doctor to the door man as much as 1 year later.


Sun, May 12, 2013 : 12:07 p.m.

We got double billed by the ER. It was entirely intentional too, they had hoped we wouldn't catch it and would just pay it. When we pointed it out the insurance company investigated and discovered they had indeed tried to double bill by sending a bill for the EXACT same service from two different departments. Did a google search on it and turns out this is VERY common practice by hospitals. They double bill all the time just hoping it wont' be caught. Everytime it slips through they make 100% profit on it. There's been something missing from the medical industry for a LONG time...ETHICS. It's been gone every since medicine became more about making money and less about helping people.


Sun, May 12, 2013 : 11:28 a.m.

Please please please don't start extolling the high quality of care at the U of M without telling us the mortality rate for specific treatments at the U of M vs Hospitals that charge less!


Sun, May 12, 2013 : 12:19 p.m.

And please don't extoll the high quality of care at that place. After spending quite a bit of time in the hospital, I can attest that the quality of care is simply poor. The nurses are overworked, the docs rush from one patient to the next, patient food service is a joke, but the worst is the complete absence of communication between the staff and the patient. They simply do not listen to their patients, and one gets the idea that they simply are too busy to really care.

Silly Sally

Sun, May 12, 2013 : 11:22 a.m.

So they know that their charges are Monapoly Money charges, especially for te uninsured who pay cash, yet they still bill them and send debt collectors after them for a bill that was 35% of that for someone who had insurance. How imoral! How does she sleep at night?


Sun, May 12, 2013 : 11:13 a.m.

So.......... Society has decided that we can support this process, we can support these costs and this concept of health care and treatment at any price is acceptable? Go figure!

Elaine F. Owsley

Sun, May 12, 2013 : 11:05 a.m.

So, here we have a big, long feature telling us about a whole bunch of facts that in the end are not relevant. Kind of like "Oh, oh, the sky is falling. But not on us."


Sun, May 12, 2013 : 11:02 a.m.

"Patients then pay whatever's left after the insurance or Medicare payments." Well....what your insurance will cover...and nowadays they just LOVE to not cover stuff... We pay nearly $300 a month for our insurance....and it still only covers about 30% of our medical bills. It barely pays for itself...and it hasn't paid for itself at ALL in this past year... Know what hurt us more than that financially though? Being lied to by a doctor in an attempt to make us keep our child in the hospital an additional day to the tune of $5000. Ever seen a doctor sweat because they tried to double talk you....but you actually knew what they were talking about and called them out on their lie? I have. I won't go back to St. Joe's ER because of it either now. I should probably file an ethics complaint against that doctor too now that I'm thinking about it.


Sun, May 12, 2013 : 10:55 a.m.

Clarity is the last thing the Medical Industrial Complex wants. Treat symptoms, ignore root causes, extract as much wealth as possible. That's the AMA way. The best thing to do is to keep yourself healthy and avoid the system as much as possible. Unfortunately our government makes it difficult to illegal to acquire healthy food. At the very least it's discouraged by official nutrition guidelines. You'd think that there's a conspiracy or something.


Mon, May 13, 2013 : 6:11 p.m.



Mon, May 13, 2013 : 2:17 a.m.

"Yeah, it is real difficult to acquire healthy food. Oh, wait, it isn't. Meijers, Trader Joes, local grocery stores…healthy food is everywhere." Do some pricing out of things sometime. Healthy food isn't cheaper. When you add in labor costs/time it takes to prepare food....that drastically increases it's cost....and quickly makes fast food the cheaper option. Not to mention that "organics" usually get a premium added to them, not only because they cost a bit more to produce, but because they CAN. The pricing of organic foods is horribly exploited because so many people are completely ignorant of the actual costs in the system.


Sun, May 12, 2013 : 8:14 p.m.

Raw milk is difficult, since the USDA likes to throw farmers in jail for offering it. Pasture raised heritage breed pork? The DNR and AG are doing their best to run Baker's Green Acres out of business. Want grass finished beef? That you can get, but it's relatively expensive because it's competing against CAFO cattle that are unhealthily fed taxpayer subsidized GMO corn so few farmers bother to try. Want real lard and tallow? That's considered a "manufactured" food so you'll probably have to make your own from leaf lard and suet, if you can find some from pastured animals for sale. Watch "Farmageddon", read "Folks, this ain't normal" by Joel Salatin, read the Farm to Consumer Legal Defense Fund's Facebook page. If you think that soybean derived vegan sludge is healthy you've been brainwashed and are in for a world of pain, if things haven't started going wrong health-wise yet. Meanwhile you can buy all the nutrient depleted petrochemical additive laden highly processed food-like products you want and wonder why your kids have ADHD, type 2 diabetes, etc.


Sun, May 12, 2013 : 7:38 p.m.

Illegal to acquire healthy food? Where do you live and what "healthy" food are you trying to acquire?


Sun, May 12, 2013 : 4:44 p.m.

Yeah, it is real difficult to acquire healthy food. Oh, wait, it isn't. Meijers, Trader Joes, local grocery stores…healthy food is everywhere.


Sun, May 12, 2013 : 2:29 p.m.

A good comment. I tried to express my appreciation by clicking on the 'Vote Up' tab and I am surprised to see that it caused a negative effect. It may not be a conspiracy, it is that 'something'.


Sun, May 12, 2013 : 10:37 a.m.

Please please please don't start writing stupid (I mean, uninformed) things about UMHS and the associated costs there. Patients are sicker. Costs are higher. Part of the price of high-quality tertiary/quaternary care is... the price.


Sun, May 12, 2013 : 4:47 p.m.

Craig's comment will probably be just as true next winter. (Please ignore my stupid misplacement of this note further down.)

Craig Lounsbury

Sun, May 12, 2013 : 12:19 p.m.

DennisP , a fantastic couple of comments. Well summerized.


Sun, May 12, 2013 : 11:55 a.m.

Just to finish my point. We are thrust into a care system where the costs are secret and disguised by hieroglyphic billing codes that would leave an Egyptologist scratching his head. While this forced exposure may not be a Rosetta stone, it invites a discussion that shouldn't be suppressed and should take in the stories and the opinions of all of us because we are all affected by this greatly. When you seek elective surgeries or dental care that has only limited or no coverage, you can find out what the costs are before you sign the dotted line. You can get an idea of what you will have to pay out-of-pocket. Why can it be done for those types of care but not for regular medical care? The fact is, it was. This system of payment wasn't the norm 50 years ago. It's evolved largely over the past two-three decades. The hospital industry and all those that suck at its teat are all in big time damage control. It's time to stop putting our head into the sand, time to put more light in the dark corners, and time to chase out more cockroaches.


Sun, May 12, 2013 : 11:47 a.m.

People are free to write what they want and any attempt to shame them into silence is wrong with declarations that contrary opinions begin with the label "stupid" or "ignorant". The solutions of experts are driving us off a cliff. Certainly we can do better than to simply shrug our shoulders and shout "that's the way it is". The fact is we need this conversation and we need all voices to speak out especially the common voices. First, the article states: "Patients then pay whatever's left after the insurance or Medicare payments." What the hospitals refer to euphemistically as "uncompensated care" is the single highest cause of bankruptcies in the US. "" People are forced into bankruptcy at the most vulnerable times of their lives without even the vaguest of ideas of how much something will cost them when accepting treatment. They and their families then face devastation and ruin from billings that come 1 year even 2 years later that the insurance companies didn't cover or, after the fact, elected not to cover. That's a medical reality. Then we are told by another one of these ubiquitous experts that "The figures are not useful or relevant for most consumers, said Marianne Udow-Phillips" I invite you all to the web link to the CHRT where this expert hails: The board is composed entirely of UM executives and BCBS network executives. I'm sure this group is charged to represent the interests of the patient consumer above all else. (Sarcasm). The hospitals are in damage control. We are told these figures are meaningless, yet they can't be that meaningless because the federal government, at the insistence of other experts decided to pass a law requiring this disclosure. Indeed, they aren't meaningless at all. What they highlight is just how and charges for med