The problem is the control of medical costs that is driven by a medical industry that plays those with health insurance off against those without it. The reality of the medical care cost scam hit home last month.

A member of my family was billed by a hospital for an MRI scan for $2,600. But when the insurance plan paid the bill here’s how it played out: The “billing charge” was set at $2,400, not $2,600. The “less provider discount” was set at $1,400. The “balance eligible” was set at $1,000 which is what the hospital got. The patient ended up with a zero bill due.

So with an initial bill of $2,600, the insurance plan paid a bit over $1,000.

Now the question I have is, “What is the real cost of an MRI?” (During a Magnetic Resonance Imaging session you are put through a tube by a technician who takes pictures of your innards.) An MRI machine doesn’t come for free – most estimates start at about $1 million. But after hundreds if not thousands of MRI scans the hospital must break even at some point and begin making a profit.

But with this type of price structure in play who knows or even cares what the real price of an MRI is? Clearly the hospital and insurance company would not negotiate a price below cost nor below keeping a profit margin for both. So if the $1,000 includes a profit margin for both - then why does the billing process begin with $2,600? The answer may be that the initial inflated bill is designed for the non-insured. Lucky them!

Of course most non-insured patients can’t and often don’t pay anything. So hidden in the negotiated billing process is a cost factor which hospitals use to recoup losses from patients who are “free riders.” Guess who pays their bill? Obviously those with insurance – especially those with high deductibles pay the freight of these hidden inflated prices. In the insurance game not all insured are equal; some are more equal than others.

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