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Stealth Inflation
prostoalex writes "The New York Times on the Web explores the topic of incorrect bills and numerous surcharges with names like 'assessment', 'handling', 'restocking', etc. David Pogue quotes Business Week magazine, where it says that such small charges $100 million annually for hotels, $2 billion for banks and $11 billion for credit-card companies. Users of landline phones, cell phones, checking accounts and credit cards are starting to suspect that such huge revenue might imply the mistakes are made on purpose. Is it just another conspiracy theory, or are we becoming victims to the stealth inflation?"
Maybe I'm REALLY paranoid, but I figured it was intentional long ago, and have since merely accepted it. Since when does "handling" in the shipping and handling for a two pound item justify an extra $10 expense? Online, I've taken to shopping where I can get free shipping. It feels more honest, and I like making the statement that I appreciate it.
Damon,
http://actionPlant.com
This shouldn't really be a surprise unless you still believe in the essential goodness of humankind (!)
It's a simple-enough risk calculation - how much will I gain by people not noticing or not bothering for $xxx, how much will I lose by annoying customers. If that comes out positive, it's a good business (and only business) decision to do it. You'd need to re-analyse the figures periodically, and figure in public opinion when news breaks like this, but essentially it's money for nothing.
So, why are we surprised ?
Simon.
Physicists get Hadrons!
no, makes a lot of sense. For those places where you pay indirectly (ie through insurance), you must remember that you still pay. The insurance companies are never going to lose money by paying out outrageous fees without fleecing their customers in turn.
.. something, a lawyer could give you a list :), and that would be ok, as her insurance would pay for it......
Trouble is, everyone thinks that its free as they don't have to pay any of it, and so the fees are increased and increased, and the premiums go up and up.
The other thing to watch out for is compensation paytments for everything. (you should have sued your doctor for
its those that cause inflation, not a 0.02 here and there.
Now I doubt that the companies intentionally make the mistakes in order to extract more money from the customer...
Now that being said, I think that the companies intentionally do make extra charges all around and hide them intricately in deals as they see there. It wasnt 800 minutes but 700 plus 100 minutes. Now no one in the world is going to ask about that. I know to ask about extra hidden charges, but no that.
I think that the companies then through the complication of such systems easily profit from mistakes related to calculating the charges and fees. And they are not going to do anything to fix such errors.
So the question remains by not doing anything is that the same as actually cheating the customer... This client says YES.
30% Troll, 50% Underrated, 10% Interesting
Score:5, Troll
Wouldn't that be mail fraud?
Assume a background of random errors. Now in usual circumstances, clients are able to fix mistakes quickly: if someone overcharges in a shop, or if you get shoddy goods or service, it's easy to complain and get your money back. As more and more sales get done online, as credit card statements get longer and more complex, as suppliers get futher and further away, we will see the less disciplined suppliers making more profit.
Example: the company I use for registering domain names made a mistake and charged for a domain name that was actually not available. Now, after some hours of trying to get service, I just let it fall. Hours' work to get $35 back is just not worthwhile. I'm not even annoyed with the company, it's my choice to let it slide.
So, over time, there will be an inflation in the greyness of transactions, ironically quite the reverse of what you'd expect from a more and more automated system.
Haha, this gives me a terrible idea. In decades from now, I guess we'll have shifted to a system whereby basic consumables are paid by taxes levied on our level of income. Much simpler and eventually the same result. Think RIAA taxes, but on the entire arena of consumer products.
OK, sorry, ruined your evening.
Ceci n'est pas une signature
Call me insane but there is absolutely no way she had the right to charge $103 for a 2 minute deal.
You have to consider a couple of things here. The "two minute deal" was the time she spent with you. I suspect more time was spent actually "reading" the results of the EKG. Also, you need to realize that many times insurance companies will only reimburse physicians a portion of the total bill and its stuff like this that prevents many (including me) from wanting to practice medicine. I do research instead. Lemme give you an example: For instance, when my mother had her medical practice, there were certain procedures that ended up costing her money. An example is the cost to her of delivering babies. We sat down to run the numbers and found out that based upon her insurance rates, and the reimbursement from the insurance companies, each child she delivered was costing her $250. Furthermore, because physicians can be sued for delivery issues until a child reaches 21 years of age, she still has to maintain an insurance trailer until the last child she delivered reaches 21. Unbelieveable.
It is not the medical system that is out of control, it is the insurance companies and the managed care systems that foisted a con on the American public by saying managed care can do medicine for less. Instead of lowering costs, managed care has created an entirely new middle level of management that simply soaks up more money than ever before. Do a little experiment here. Go to your local HMO and look in the parking lot. The Porsches and BMWs you see do not belong to the physicians as much as they do the management staff of the hospital.
Visit Jonesblog and say hello.
OK, yeah, of course I'm being sarcastic. It's amazingly easy to underestimate exactly how much it costs to provide medical services. You're considering the apparent work that went into your 5-minute consultation. She's considering:
Sure, some doctors ( NOT ALL! ) make a pretty good living, but you'd be surprised to see how slim their profit margins probably are.
Dewey, what part of this looks like authorities should be involved?
I did see that she charged my insurance company $103 for an "EKG Consultation Fee". Call me insane but there is absolutely no way she had the right to charge $103 for a 2 minute deal.
Let me defend my profession a bit. $103 dollars for an evaluation of an EKG is very, very cheap. An EKG is an easy way to rule multiple life-threating illnesses. Compare an EKG to an CT scan, for example. and it probably saves many, many more lives per dollar than many other studies.
With insurance the way it is, the doctor probably billed for twice that much... but only took what the insurance was willing to pay.
Included in that fee is the cost of the machine including upkeep, malpractice insurance, and the greater than 7 years of training that the doctor has received.
"Did you need an EKG" is another question completely. If you are an older man/woman with hypertension, then an EKG is not a useless test... especially if you were having any symptoms. Some docs (like myself) might use a different blood pressure medication if there are related EKG changes.
If you are 20 with hypertension, then it's harder to defend. Even then (thanks to the lawyers) anybody with pain above the belt will probably get an EKG because cardiac disease is so common.
Looking at a normal EKG for 2 minutes is probably about 1 minute too long. However, it's normal... but it's not useless. If we knew the answer without the EKG, then it wouldn't be a very useful test, would it? If the EKG would have been abnormal, then the doctor would have had to spend more time on it.
Anyway, rant off. Medicine as a lot of thing wrong with it. $100 EKG is not one of those things.
Davak
Similar situation: When I had my wisdom teeth taken out by an oral surgeon, I was given the option of having general anaesthetic (i.e. being put out completely). The surgeon was apparently required to brief me on the risks and dangers involved -- which meant he sat me down in front of an 8-minute video tape and left the room. I was ushered into all this as if it was part of the procedure -- I had no choice whatsoever.
When the surgeon eventually returned into the room, I asked, "Look -- do I have to have general?" He looked at me like I was nuts: "Of course not!" More carefully, I asked, "Am I going to want general? Like -- is it going to hurt so bad I'll wish I was put out?" He replied, "Not at all. I doubt you'll feel a thing." I said, "OK, I'll pass."
(Sure enough, it was no big deal -- some blood, some bone chips, but nothing that I'd really describe as "pain" -- though the surgeon did comment that I was "a very tolerant patient.")
Anyway, when the bill eventually arrived, sure enough, there was (I believe) a $65 charge for "anaesthetic consultation fee." That's right, finding out the health risks of being put under anaesthesia was the most expensive video rental in the world.
But there's more! When I got the summary from my insurance company, they denied the charge -- because apparently the law says you cannot have the consultation and the procedure on the same day! I guess I'm supposed to be able to go home and think it over. (Never mind that I declined to have it anyway.)
Anyway, I later got another bill from the surgeon where he basically reversed the consultation charge. So my insurance company didn't pay it, and I didn't pay it either. The doctor just ate it.
Now, before you say "everything worked out" here, think about how f'ed up the medical system is and how it has to deal with the insurance companies. In that case, the insurance company said "no, we won't pay this fee" and the doctor, looking at his options, just shrugged and said, "OK, I guess I won't get paid, then."
And this kind of thing happens all the time -- and not just for questionable charges like this "video consultation fee." My mom worked for many years in the medical billing field (yes, there's an entire industry devoted to working out these billing problems for doctors) and she tells me that most doctors never see the full amount they bill for the procedures they conduct, if they have to bill an insurance company. Got that? Never. The power of the insurance companies is such that they -- despite being private corporations, not government regulators -- can essentially set the prices doctors are allowed to charge for procedures.
I have another friend who works for a large national HMO and he tells me lots of stories, too. You may not realize it, but there are a lot of people out there who, say, have their legs put back together through reconstructive surgery -- they can walk again, that kind of thing -- and then they turn around and say their bills were unfair and they won't pay. They get a lawyer and they flat-out tell the provider that they won't pay a dime. Again, mark me now: They don't try to re-negotiate, they don't try to set up a payment plan, they don't try to talk the doctor into rolling back a few charges. They flat-out say that they will not pay the bill, and in some cases, because of the structure of the industry, the way that it is regulated etc., they will absolutely get away with it. (Their credit might get messed up, but that's a different story.)
So my point is: Lest you read my initial story and say, "Yeah, doctors screwing the patients again," consider that the medical industry in the United States is maybe a different case than, say, sneaking an extra $2 charge onto your phone bill. Healthcare in this country has almost completely broken down. Personally, I place the majority of the blame on the insurance companies, though doctors are at fault as well. But the way the industry is set up now, both sides pretty much have to play these stupid little billing games just to keep the money flowing, and personally I'm hard-pressed to figure out how this is going to change without some serious regulatory hammer falling.
Breakfast served all day!
To quote and rebut:
Her salary
All Professions
Her rent
All Professions
Her electricity
All Professions
Her heating/AC
All Professions
Her transcriptionist
All Business related professions (Computer Consultant for example)
Her malpractice insurance
Liability, though not as high, but there
Her receptionist
All Professions
Her phone system
All Professions
Her disposable supplies
All Professions
Her equipment investment
All Professions
Her student loans
Most all professions
So now,tell me now where a doctor is special and gets off charging three times the rate of any OTHER profession!
ALL PROFESSIONS have these charges. As a computer tech you have outragiously expensive equipment, strange arcane knowledge, a bizzare incomprehensible language, and all the other trappings of any of the High Priests of our culture. So how come I can't charge Lawyer/Doctor rates? A con gents is still a con. Even when you drive a BMW to the con.
- Minutus cantorum, minutus balorum, minutus carborata descendum pantorum.
Last month I visited a friend in North Carolina and rented a car. When we returned the car there were all sorts of fees with names like "Airport Surcharge Recovery Fee", "County Mandated Foo Fee", etc. The fees and taxes added up to roughly an additional 30%.
.
I have mixed feelings on this. On one hand I like it when the government tax gouging is made obvious. On the other hand I want things to be standard from place to place.
What lots of companies have been doing (hotels, car rental firms, and telcos are among the worst), is to make their prices look lower by "converting" a bunch of their overhead to "fees" that get tacked onto the bill (always phrased to sound like taxes but often including the overhead of handling the supposed manditory tax)
It's like buying a cup of coffee for $0.30 but going to the cash register and finding your receipt reading:
Coffee: $0.30
Property tax recovery fee: $0.10
Business license recovery charge: $0.02
Government mandated workers compensation surcharge: $0.25
Health board inspection fee: $0.08
Employee income tax recovery charge: $0.35
Corporate tax surcharge: $0.20
Sales tax: $0.05
City waste disposal charge: $0.15
That will be $1.50, sir.
As an aside, in a country where one of the rallying cries was "No taxation without representation" our politicians try to subvert that wherever possible. The prime example is outrageous hotel room taxes. Soak the tourists, they won't be able to vote against me.
~~~~~~~
"You are not remembered for doing what is expected of you." - Atul Chitnis
What if one of the guys hurts himself while performing this unsolicited mowing? Why should my homeowner's liability insurance rates have to go up when I didn't even want the guy there in the first place?
At the very least, they should ask first.
Edward Burr
Having a smoking section in a restaurant is like having a peeing section in a swimming pool.