What Does Breast Cancer Cost?
By Susan Shargel
What does health care really cost? What are our insurance premiums really paying for?
We at Shargel & Co. were inspired by the recent health care stories on NPR’s This American Life; specifically, the way Ira Glass and his team take complex policy issues and make them understandable. I wanted to create a piece that brings some light to the very murky area of health care costs.
So I decided to work with one of our clients who has recently completed treatment for breast cancer. She had been very satisfied with her medical care and very pleased with her insurance coverage. The client had a pile of statements from the insurance company showing what had been billed and what insurance had paid. She knew she had paid $12,900 but had no idea what her care had actually cost. We volunteered to find the answer for her.
We set up a spreadsheet and recorded all 71 claims statements, which are called “Explanations of Benefits”. Our client’s treatment consisted of a lumpectomy, which included an overnight hospital stay, a second outpatient lumpectomy to get clearer margins, and radiation therapy. The total amount billed by her heath care providers for her cancer care was $255,200.
But that’s not the amount that was paid for her treatment. Why not? Because she has insurance. If she had been uninsured she would have been responsible for the full billed amount. With insurance, the amount paid for her care is determined by the prices that her insurance company has negotiated with the doctors and hospital that are part of its preferred provider network (PPO). In this case, Blue Shield of California’s negotiated pricing reduced the cost of her breast cancer treatment to $124,500; she paid $12,900 and her insurance paid the rest.
It is hard for most us to grasp why this kind of care is so expensive. The treatment itself did not require major surgeries. It did not require weeks or months of hospital care. Yet the cost exceeded the price of a house in many parts of the country; it exceeded the cost of 4 years of public university education.
We can draw several key conclusions from this story about what is going right in our healthcare system as well as what is wrong. First, we all are grateful for the successful treatment of diseases such as breast cancer. We value the research and the care of medical professionals that have made many cancers and other chronic health conditions treatable. Secondly, we realize the value of insurance; without it, these costs are unaffordable for almost all of us. But we also know that the cost of insurance is becoming unaffordable for too many.
Our call to action is that health reform must directly address the cost of care. The cost of our insurance can’t be controlled if the cost of care continues to skyrocket. Health reform must promote, support, and fund health care innovation that focuses on the delivery of quality care at a much lower price.
About Susan Shargel: Susan Shargel is a California health insurance broker and small business owner. This site provides information on health insurance issues. I welcome your comments and questions.
Breast cancer is the most common cancer among women in the United States other than skin cancer. It is the second leading cause of cancer death in women after lung cancer. Dont wait…survival depends on early detection!