When my wife delivered our second child in 2008, the hospital sent our health insurance company a bill for $8569. The insurance company then wrote off $4117 of that bill, paid $4352, asked us for a copayment of $100. When we found out last year that we were expecting again, we noted that my wife's new insurance plan requires us to pay 20% coinsurance for all non-preventive care. That would have amounted to several hundred dollars of our 2008 bill, and knowing the rapid rate of health care inflation, we thought it would be good to find out how much it would cost this time around. So we went back to the same hospital, where we expect our third child to be born in a few weeks, and asked if they could give us an estimate of the charges. It seemed like a reasonable enough request, especially since the pre-admission consent form we signed specifically said that patients had a right to know what the hospital charged for its services.
We're just looking for a ballpark number for our flexible savings account, we said. The charge for an uneventful labor, vaginal delivery and single overnight stay. We understand that unexpected things can happen in childbirth, and we won't hold you to it.
The hospital representative we spoke with clearly wanted to be helpful. She called the billing office, the labor and delivery floor, every place in the hospital she could think of that might have that information. But in the end, no one could give us an answer to a seemingly simple question: how much does it cost to have a baby at your hospital?
And the truth is, even if they had, we would have had no way of knowing how much our insurance company would have actually paid. Hospitals routinely inflate their listed charges, knowing full well that insurers will want to negotiate deep discounts. The only people who actually pay the listed hospital charges - analogous to the sticker price on a new car - are uninsured patients who aren't poor enough to qualify for free or discounted care.
The whole idea of "consumer directed health care" is that patients who anticipate medical expenses in advance can shop around to get the best prices. We had nearly nine months to get ready for having a baby, and that should have been plenty of time. But consumer directed health care doesn't work when no one can tell you the price. A federal report issued last October confirmed what most doctors have known all along: most medical practices and hospitals either can't, or won't, provide estimates about the costs of commonly provided services such as diabetes screenings and knee replacements. Several years ago, health economist and Princeton professor Uwe Reinhardt called the pricing of hospital services in the U.S. "chaos behind a veil of secrecy," and things haven't gotten any better since the passage of health reform.
In the end, my wife and I were forced to make an educated guess about how much money to put away for her labor and delivery. We're both family doctors, by the way, and between the two of us have personally delivered hundreds of babies. And if we can't figure out how much it costs to have a baby, good luck to all of the other women who will be giving birth in the U.S. this year.