When Health Care "Coverage" Increases Costs

I'm a healthy 48-year old anesthesiologist. At least I was healthy until an unintentional 20 pound weight loss over the summer, accompanied by unquenchable thirst, insatiable appetite, blurry vision, and the bathroom frequency of an elderly prostatic. My lab workup would reveal a fasting blood sugar of 310 mg/dL, an A1C >14, positive urine ketones, low C-peptide, and a glutamic acid decarboxylase antibody (GAD-65) level that was off the charts. So, today, I'm an insulin-dependent diabetic with Late Autoimmune Diabetes of the Adult (LADA). That will definitely alter your daily schedule,... as well as put you in the market for a fair amount of pharmaceuticals and medical supplies.

Now that I have my diet well-controlled with careful carbohydrate intake, resulting in a relatively low insulin requirement, I've started to look for ways to improve the diabetic lifestyle impediments that can interfere with a busy O.R. schedule and active life. My initial daily regimen has included four glucose checks a day (involving meters, lancets, test strips, swabs, and cotton balls), and up to four insulin injections: long-lasting NPH insulin twice daily as a base, with a sliding scale of short-acting regular insulin at meals and bedtime – all with syringes and vials. That's a lot of stuff to manage and carry.

I'm transitioning to a single daily injection of ultra-long lasting Triseba® (insulin degludec), supplemented with a once or twice daily dose of Novolog® regular insulin for fine-tuning: all by injection pens. The next step is to convert to a more streamlined glucose monitoring system. After looking at the few continuous (and flash) monitoring options out there, I'm purchasing the Freestyle Libre® system. It consists of a small 14-day subcutaneous sensor which transmits your glucose level to a hand-held scanner, or to an app on some cell phones.

The savvy reader might have questioned how much all this stuff costs. The short answer: it ain't cheap. Goodrx.com will show you that the most basic insulin vials of regular and NPH can cost $150 each on the low end, with other types of insulin running $300 to $1000 per vial or pen. The other necessary supplies can add $100 per month. Finding out the costs and insurance coverages, formularies and deductibles, co-pays and participating pharmacies is an exercise in frustration – and for the patient reader, that's where this article is headed.

When I priced out the Freestyle Libre system with the medical supply company, applying my private insurance coverage with the $3,000 deductible, the costs to me for Year One would be:

Handheld reader – $300 each, one for work and one for home: $600

14-day sensor – $193 each x 26 (12-month supply): $5,018

So, of the $5,618 subtotal, insurance will pick up the remaining $2,618 after my $3,000 deductible. I believe that my co-pay for the sensors after the deductible was met was quoted around $70 each.

That seemed a little pricey for a technology that cannot be more complicated than my Android cell phone, Chromebook or Playstation 4 – any of which cost me about that of one single, quoted glucose reader. So, I started looking for direct pricing. Goodrx.com priced me readers and sensors for about $70 and $55 each, respectively. That calculates to a Year One cost of roughly $1,600 – by paying out-of-pocket at Walgreens. Hmmmm… $1,600 versus $5,600. For the exact same products. A FOUR THOUSAND DOLLAR DIFFERENCE! A 350% markup, if my math is correct.

So, it appears that I (coupled with my employer/group contribution) can pay roughly $6,000 per year in insurance premiums for health care “coverage,” then a $3,000 deductible before that coverage takes effect, at which point I may still be liable for co-payments… and then I get the privilege of being in the covered network for which I will pay a markup of unnecessary, additional thousands. A 350% tax? Again, the savvy reader might question where all that money goes, if just directly paying for a more transparently-priced medical service or supply can be had so much more affordably?

The thoughtful among us might also question:

What services are insurance corporations actually providing today?

Has the catastrophic medical insurance market morphed into an expensive, non-transparent, buyers' club which surreptitiously raises prices for everyone while financially benefiting a potentially useless class of interlopers by skimming excess profits… perhaps to the tune of many billions of dollars per year?

What are the economic distortions in the medical market when true costs are difficult to acquire?

What is the cost of supporting the streams of third-party individuals, entities, organizations and bureaucracies that stand between a patient-consumer and a physician end-service, medical supply service or drug manufacturer?

What role is the FDA playing in encouraging or inhibiting competition, price transparency, and corporate protectionism?

What if you and your doctor have no idea what anything in the system really costs?

What if your doctor would happily provide you a service at a fraction of what your insurance “coverage” bills you?

What if your insurance company profits more in the health care transaction than your physician… potentially paying her even less than what she would have been happy to charge you directly in a doctor-patient interaction… rather than participate in an awkward “provider-insurance corporation-subscriber” threesome of purposefully disjointed communication and secrecy?

What does it mean that in order to essentially avoid being defrauded of large sums of money, a physician-patient must spend many hours searching for solutions outside of the accepted “system” which enables that fraud?… And how much more difficult must it be for patients without health care experience to maneuver through that system?… Especially if sick and financially disadvantaged?

This physician-patient, for one, has been awakened to the power of price transparency and interloper-reduction. Health care “coverage” is, admittedly, very expensive. In contrast, what do the actual medical services and supplies cost, absent the interference and markup? What if we could cut the price tag of our health care by 350% just by pulling the costs out into the sunlight and eliminating the unnecessary intermediaries in exchange for direct and transparent care models?