DAVID GREENE, HOST:
Each month, NPR and Kaiser Health News take a close look at a medical bill that you send to us. And today we're going to hear about an unexpectedly expensive bill for a skin allergy test. From KQED in San Francisco, reporter April Dembosky has the story.
APRIL DEMBOSKY, BYLINE: When Janet Winston goes to the doctor, she fills up on gas and packs a sandwich and two big thermoses of black tea.
JANET WINSTON: And that's what I need to make the 300-mile drive.
DEMBOSKY: Winston is an English professor in rural Eureka, Calif. When she needs to see a specialist, she often drives six hours one way to Stanford Health Care, just south of San Francisco.
WINSTON: I had this rash that wouldn't go away.
DEMBOSKY: She got that rash last winter after horseback riding. And it lasted four months.
WINSTON: It was itchy and, like, weepy, like poison oak.
DEMBOSKY: She made the trek to see a dermatologist at Stanford. And she suspected Winston was allergic to something in the skin cream she was prescribed, maybe her shampoo.
WINSTON: I started going back over my whole life and all the things that I had reacted to - lip balm, Neosporin.
DEMBOSKY: The doctor suggested coming back for a comprehensive skin allergy test.
WINSTON: Benzocaine, colophonium...
DEMBOSKY: They tested her for 119 substances usually found in beauty products.
WINSTON: ...Bacitracin, thimerosal...
DEMBOSKY: They put each substance into a tiny plastic capsule, then they drew a grid on Winston's back in magic marker...
WINSTON: So that they know what substance is going where - and then they use some kind of medical tape, and they tape these plastic capsules to your back. That's it.
DEMBOSKY: Winston left and came back two days later.
WINSTON: And they take everything off my back. And then they, quote, unquote, "read my back.'
DEMBOSKY: Turns out - Winston was allergic to 11 substances they tested. She was so relieved to have answers. But then, 2 1/2 months later, the bill came.
WINSTON: I was in total shock - $48,329.
DEMBOSKY: To tape some plastic capsules to her back.
WINSTON: I didn't have any needles stuck in me. I had no scalpels stuck in me. I had no anesthesia.
DEMBOSKY: In a statement, Stanford said the procedure was highly specialized and required extensive technical resources and knowledge. But medical billing expert Michael Arrigo says there's not enough information to understand the charges. Imagine buying a car for $48,000.
MICHAEL ARRIGO: We'd want to know if it had a four-cylinder, six-cylinder or eight-cylinder engine. Does it have the top-of-the-line Bluetooth stereo system? Does it have the more comfortable seats? We want to know what we're paying for. And here we don't have any of that.
DEMBOSKY: Winston's insurer, Anthem Blue Cross, agreed to a negotiated rate of $14,000. The company says it tries to strike a balance between affordability and provider choices. But Arrigo says that's still really high.
ARRIGO: The math just doesn't add up.
WINSTON: Arrigo says the customary charge for this test is $35. That includes a 26-percent markup for the expensive San Francisco Bay Area. Even if you charge the fee 119 times for each allergen...
ARRIGO: I just did the math on that. It's $4,165, less than 10 percent of this entire bill and only slightly more than this patient is being left with to pay out of pocket. So the math still doesn't make sense to me.
DEMBOSKY: In the end, Winston was personally on the hook for about $3,000. She negotiated that down to 1,500, and she put it on a credit card. But she thinks of all the people who couldn't afford that or don't have insurance like hers.
WINSTON: When I walk into the clinic and I see a grand piano - and on this last visit, I saw monogrammed, embroidered pillowcases - I thought, hmm, that $48,000 is going to pay for those monogrammed pillowcases and that grand piano.
DEMBOSKY: Winston says if all that money went to pay for the care of low-income patients, maybe it would be worth it - but for a lobby befitting a five-star hotel, maybe not.
GREENE: All right, that reporting coming from April Dembosky from member station KQED in San Francisco. But we wanted to take an even closer look at how a simple allergy test can produce such an expensive bill. Dr. Elisabeth Rosenthal is editor-in-chief of our partner Kaiser Health News, and she spoke to our co-host Noel King.
NOEL KING, BYLINE: That was a lovely image at the end of the story, this grand hospital lobby - but $48,000 for a skin test?
ELISABETH ROSENTHAL: Yeah. You know, it's nice to have a grand piano in the lobby. But that's a fairly simple test. I mean, basically, what we're seeing here is a kind of test at a sophisticated level that you could do at a more rudimentary level in your home. I mean, I have skin allergies. So a lot of products come with something advising you to put a little on your arm the night before and to make sure you don't react to it. This is a much more sophisticated version of that - but $48,000 more? - uh-uh.
KING: Was part of the reason that this bill was so expensive because she was going to a hospital in the Bay Area, which is just an expensive place to live?
ROSENTHAL: Well, no. The Bay Area's an expensive place to live, but it's also an expensive place to get medical care. Many markets are highly consolidated. That means there are few hospital systems in the Bay Area. There are four. They can compete with each other. And you would think that would bring down prices. But instead, basically, high prices become the norm because insurers look at what's usual and customary. So if everyone is charging high prices, they all get away with charging high prices.
KING: It's not about competition. It's about what's customary. That's interesting. For people who find themselves in this position, what should they do?
ROSENTHAL: Well, there are a couple of things they can do. First, don't write the check. That's the general advice for health care. Second, if your provider says - hey, this might get expensive - ask what expensive means to them because expensive in health care - you might think, well, the allergy test - oh, how could it - expensive could it be, a thousand bucks? But here, we see it can be $48,000. And the other thing is I would say, when you look for comparison prices to bargain to say that's unreasonable, don't just look in your area. I mean, the expert in the piece says that $35,000 per skin test is normal in the Bay Area. Well, in other places, it might be $4 or $6 or $10. So I think we have to look nationally for references.
KING: Dr. Elisabeth Rosenthal of Kaiser Health News, thank you so much.
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