melissa: hello, everybody, i'm -- i'm gerri willis. we'll bring you a users guide to health care. i will give you tops, tools, strategies to help you better understand and take control of your health care including saving money. among the issues we're exploring tonight, are you getting most from your insurer. i spoke t to dr. pamela galen. she is working mom, practicing physician and author of, how to survive your doctor's care. let's start with talking about people feel intimidated by insurers. what a the games they play? >> there are many games.

the goal is not to reimburse the provider and in turn the patient. so the firsta one is, we lost ur paperwork or you didn't fill it out correctly. another one p is, you're not covered anyway. therefore we will not reimburse you. the other is, your doctor did it wrong. so there. are cereal hurdles, so on each hurdle people get tote next point which is you reimbursement. gerri: we shouldso establish you're a practicing physician. you know what you speak of. you're in the middle of all of this. >> i'm a parity. i'm a wife and mother of four. yes, i'm onea both sides. gerri: you're on both sides. you talked about this prtice of coding up, what is that and what disit mean for consumers? >> everything is based on the code which is a transaction fee. think of it as a sku number for what your doctor gave you. it is very specific. the insurers basically don't want to pay, providers and hospals and physicians do want to pay and patients want their

services-- covered. however it is fraud-- to say you gave a service you did not provide. that said there is very much a gray zone. there are degrees for in how to code, if you have two equal, if you have two equal, if a procedure has two explanations. one might be rebill used at higher level than the other so you're told to do it. in fact when i go to professionalig meetings there ae classes to code to your advantage. gerri: code to insure ear's advantage, the doctor's advantage or the patient's advantage? providers the advantage. we are given class, all legitimate please use this code because you will be reimbursed at a higher level. behind the scenes i large institutions there are people who are expert figuring out what to do. gerri: i think what you're saying here between the lines a littl bit that insurers are trying to get the lowest price tag assessed to whatever service or test or procedure the patient has, am i right?

>> yes, ma'am. gerri: well, that's disturbing. that is the first time i ever heard about coding up. the other thing i think you say that is really interesting, deductible, well it is not the deductible. >> i'm not an accountant. you need to ben accountant. you need to read fine print in your policy. whatt, happens you might go for 250-dollar examination and think $250 is being applied to your deductible. in fact it is usually, depending on your plan, medicare plus 10%. $250 fee might be 8 plus 10. in fact you might not reach the dectible. plus the. deductibles are allocated into three buckets. win is your medications. one is your hospital-based treatments and three are your providers treatments and there are three different areas. soon it's, very complex and exceedinglyonfusing. gerri: no kidding. so, it sounds like it is vy hard to reach that deductible and in fact you have some experience yourself with this? >> yes.

if you are in a no deductible plan and only go to doctors within your insuran you're really okay except for the small co-pays. if, for example, for myself, self-insured, my son had surgery a endf the year, i thought it was clear that i would be using deductibles. in fact i did not much to my surprise. that's when i found it out. i didn't know that before. gerri: you can have surgeries and all kind of testing and still being paying out-of-poct? >> depends on the fine print of your plan. gerri: so what do i do? who are my allies, a a consumer who can can i turn to? >> in are a few. if youre in a large institution, find the person in hr theyill run interference with the insurance and cover this w person. if you're individual there is a little more challenging. there are companies and individuals arising who will represent you. in each state the attorney general can be your friend,

doctor pamela galin thanks for coming on the show and hope to see you soon. >> this is very timely. gerri: as you change in age, as health insurance companies consolidate the likelihood you have to change your doctor is growing. my next guest says consumers do little due diligence choosing a doctor and likely to spend more time pickig out future. we have the ceo of american institute for pventative medicine. the autr of, "healthier at home, your guide to self-care and wise health consumerism." glad to have you here, doctor. tell us why peopleay so little attention to the doctors they choose? >> i think as you say as consumers we td to spend more time on consumables items. four hours on buying a computer, hour 1/2 shopping for shoes and only 45 minutes on average selecting your provider. unfortunately that is not enough time particularly when you talk about somebody that dermines your health and well-being and how l long you may live. >> what are the critical things

to do tat will pick a doctor right for you and will do a great job? >> one, you want to make sure the doctor is accepts your insurance and part of your insurance network as that could be very expensive if they're not. you want to find out about their office hours and is it convenient in terms of their location? who will be able to see you when the doctor is not there? have there been any lawsuits that have been brought against the provider? if so, how many? what were the outgrowths of those. that is a matter of public record for many people to access. how trained are they? are they board certified or simply board eligible. board certified means they passessed an exam after their residency. board eligible meaning they have taken a residency but never passed the exam. even deciding whether you want an md or do are all different decisions. >> what is a do. >> those are all different decisions to make when people

selecting a provider. >> what is do? >> dr. of as teopathy. gerri: i never even heard of that. i find very critical and important to our viewers, picking a doctor the doctor has to be in network otherwise you pay big bucks every time you see them. you had some astonishing numbers. medicare payment for average patient is $153. you will see doctors that charge you as much as 6200? tell me about that. >> yes there is a lot of variation based upon what physicians charge. we recommend consumers even before they select a doctor, find out what various fees are for various types of procedures. hat gives you more ammunition to actually negotiate with your doctor regarding fees. we try to teach patient to become wiser consumers so they don't simply acce everything wheer it is the fees or what the doctor tells them to do. research shows that an empowered consumer actually ends up gettng bett care, is more

satisfied with their care and has better outcomes. so by arming and being forewarned and forearmed as a consumer we can go a long way improving our well-being. gerri: the industry does not make it easy to find about the doctors. there is no american medical association annual grade of doctors. i mean you really have t do yo homework if you want to find something other than just the basics. where did they go to school. that could be pretty easy. you can read the wall in their office. otherwise finding some data, not easy. >> right. i would like to know what sort of grades my doctor got when they were in medical school. if i want them to have surgery i want them to have high honors in surgery classes as opposed to barely passing it. so, yes, there are some website you can go to but they're biased in nature. one is they may not have a lot of reviews about that doctor. so it's a very small sampling. two, the doctor may have family or friend wte-in reviews

themselves so they're quite biased in nature. and then you also have, you know, patients that may be complain about a doctor, not because of the doctor's competency because they didn't like the bill they received or had to wait a long time in the office of the so those are criteria you may want to nsider but doesn't really hit home at the top of the physicians themselves. gerri: matters how long you wait. that is not an unimportant consideration given people often wait quite a bit of time and spend very little time with a doctor themselves. you know i think friends and family are a good place too go for suggestions but certainly not the only place. one of the questions people ask me is, look, i could pick a very young doctor and have access to the very latest medical training, or, i could pick an older doctor having access to years and years of experience. which is the better? >> well it depend upon the individual. i actually switched from an established doctor because he had a very poor bedside manner as it relates to a health

condition i have to a younger doctor, although i did query that docto a lot about his experience, particularly if i might have to have surgery, how often he has done the surgery what his outcomes have been related to that surgery. when you spend time selecting a doctor, it may not only just be looking online about what their criteria are or their experience or credentials but also meeting with the doctor, interviewing the doctor, the same way you might have two or three contractors come out to your house before doing an addition, you want to go around and visit several doctors and feel how it is with them. are you comfortable? do you feel like you could discuss anything with the doctor, even sexual concerns? do they listen to you? the average patient has four questions but only gets 1 1/2 of them answered during a typical doctor visit. gerri: that's so true. >> doctor will interrupt a patient 90 seconds after the patient starts talking. that is not a doctor you want. you want somebody you feel you can converse with.

you want somebody that will not just tell you what to do but rather take your opinions into account. they're not afraid to queion them if they recommend a medication if they recommend a procedure or even recommend surgery. wh are the alternatives to that? what are your success rates, et cetera? gerri: pardon me, the doctor i choose though i will want them to talk on the telephone with me when i need them. i want them to respond to email. how likely is it that i will find somebody that will be able to communicate at that level? >> more likely they're going to call you back, maybe 24 hours later. only about 17% of doctors are now communicating with their patients through email. that is certainly going to change as more and more doctors become wired and as we move toward electronic health records but still doctors tend to be somewhat traditional in nature the ay they communicate with patients. gerri: well, all of that is going to change in the weeks and years ahead. dr. powell, thanks for coming on. great information. i appreciate your time. >> thank you, gerri, nice to be

here. gerri: and next, our users guide to health care continues as we point out what consumers should look for to make sure their medical bills are correct. don't go away. thank you orville and wilbur... ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us vesting billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it.

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gerri: medical billistakes. it is unbelievable. we' continuing our indepth verage how to manage your health car giving awe user's guide to your health care and medical bills full of complicated coding and terms the health care industry insiders hope you don't understand. common mistakes like duplicate billing and typos in medical coding may be costing awe ton of money. here to explain, martin rosen, executive vice president and cofounder of health advocate. martin, thanks for coming in. >> thanks so much, gerri. gerri: i want to talk about these bills. we've been looking at them all week. you sent us to some of them. seems to me they're trying to make it impossible to understand what they're saying, am i right? >> that is a pretty good interpretation unfortunately. when you look at bills you almost need a microscope to figure o where the information is. gerri: to be clear here you do this for a living.

you contest these bills for a living. who are people responding to these now that they're so complicated? >> i think most consumers are baffled, they get t eob, explanation of benefits. kind of an oxymoron when you think about i it, not explaining very much unfortunately but at the same time it is somportant for the consumer to be aware and understanding this. it is big, big money that's on the table. one of the things i should add is, when they get one of those envelopes open it up, because if they don't act quickly enough they could lose their right of appeal. gerri: what is the deadline? >> generally, 45 days. gerri: if you don't open up, 45 days,wh take some action you cod be in trouble. definitely want to show that. show you onef the bills. this is blue shield from california, one of the busines you sent to us. there it is right there take a look at that we're going to zoom in on the part that might not capture your attention. it is right here. and it is in the notes. small type.

and, martin you tell us, explain, don't read it. explain what it means? >> well, basically what the note is saying that they sent a separate communication to the member, saying that they needed additional information. and, the fact is, is that that they got two-pieces of information. in this case the elb which basically said nothing is covered in the fine print. basically it said you have to respond to this other letter, if you don't, you're responsible. gerri: c i tell what you is crazy about this? the eob says we don't have information we need. which is an address and that we'll send you another letter. why? that is crazy. i want to touch briefly on cpt codes. these are done by the american medical association. they make a ton of dough off this. essentiallyse describes any tes, any kind of procedure you could have and price tag associated with it. when youa pick up your bill you don't see a description of what you got.

that doesn't happen. >> no. gerri: what you see is a number which is another reason people don't understand the bill. >> let me give you an example. this is kind of a funny one. there was a bill we worked on for sinus surgery for a child. the cpt code was wrong and it turns o that it was what was the condition, cytus which has to do with organs being in the wrong part of the body. totally miscoded and, how would you even know that? your child had a sign news surgery and obviously the second procedure was a lot more money. we, we sort through it all the time. gerri:e you sort through it all the time. but if i'm an individual what is my next step if i find some kind of anis error? >> being educated consumer is the a the heart of this. pick up the phone. don't let time go by. call the insuran compay. they have customer service associates to be able to answer those questions. and you have the right of appeal. so, i think what's really

important is don't igne this. we're talking about, big, big money. if some cases if it gets really complicated, you might have to turn to a company like us. gerri: martin, thanks for coming on. greattuff and thanks for explaining it beca it is really complicated. i think you help ad few people out there. >> thanks a lot. gerri: coming up your user's guide to health care continues with tips how to compare prices before you have procedures done and how to negotiate those overpriced medical business. any last requests mr. baldwin? do you mind grabbing my phone and opening the capital one purchase eraser? i need to redeem some venture miles before my demise. okay. it's easy to erase any recent travel expense i want. just pick that flight right there. mmm hmmm. give ia few taps, and...it's taken care of. this is pretty easy, and i see it works on hotels too. you bet. now if you like that, press the red button on top. ♪ how did he not see that coming?

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gerri: next as part of our users guide to health care how to cut your medical costs. that is

gerri: cutting your medical bills. consumers are intentionally left in the dark when it comes to the pricing of their health care. whe you go and what you say can literally save you tens o thousands of dollars. our week-long users guide to health care continues for important tips to negotiating a fair price on all of your medical bills. joining me now, dr. jeff price, health care blue book and a ceo of medical costs advocate. both experts in their own right on the issue of costs and reducing costs. derek, i will sta with you. i've been looking at this for weeks now and it seems to me the providers, the doctors, hospitals, they're doing the st they can to hide prices. am i right? >> yes. in fact pricing is very difficult to determine in health care. there's not a direct relationship the way you would find in other industries in terms of the quantity of health care and how much you pay for it. and, in particular, the quality aspect is, is a lot of tim

missing. typically what we'll. the way pricing is determined it is based on volume, competitive -- gerri: not in this case. >> yes. so what happens is because it's very difficult to determine and because there are codes that are involved in creating that, that cost, it is tough for a hospital or a provider to provide an estimate to a customer. gerri: all right. >> it is tough for that customer to understand what -- gerri: absolutely true. jeff, right to you. this is an issue you've been deeply involved with. we've been looking how much costs varies. it is unbelievable. you can pay anything you want to for a procedure for a test. let me give an example here. for a simple appen deck toe my, you can pay $1500 or can pay $183,000 according to one study. tell me what you know about this. you are very deep look at costs how theyd vary. >> what you said, gerri, is exactly right and consumers need to be aware of this.

whether you on medicare or private health insurance, prices vary by surgeries, mris, colonoscopys, by five-fold or teefold. you can get an mri $3500 in one building and $7500 in one. my son had outpatient procedure on his foot. the first place would charge 15,000. we worked with our sgeon that was more convenient, 1500 versus 15 to 25,000. that is the difference patients face every day. if they look up a fair price like health care blue book.com, they find out what they should pay before looking for care. gerri: before we leave the example of your son because i think this is really instructive. we talked about this, you and i, were you worried about the level of care you were getting because you were paying such a reduced price? what was your reality? >> we talked to the doctor, he assured both facilities had very

similar quality. there is no reason to be in one building versus the other. the lower cost facility was more convenient and mor aessible that is important when you have a childnd -- it was a win-win. so and the surgeon really drives the quality for surgery. if the surgeon is comfortable with one facility, then that's, you know the gold standard for the patie, right? gerri: absolutely. derek, to you, we've been promised that health care costs are going down because of obamacare. do you believe that? >> loaded question. very difficult to determine at this point but, the, probably best way to address it to talk about elements of care, costs for care. that is there's a lot of uncompensated care in this country right now. so people uninsured or have difficulty paying create a lot of costs on the system. in addition, the, in the past, pricing is typically been based on quantity of care and not quality of care. so, there's a lot of tests done, a lot of defensive medicine

practiced. health care reform very much i think will be like, universal insurance. more people will be insured which should take care of unagain sated care but doesn't address the cost equation. gerri: doesn't address the cost equation. we've been talkingbout that for some time. dr. jeff, to you, your health care blue book is one of the solutions out there for people i think. it's a great website if you go the and trying to figure out what the average cost of care in your area. tell us about your offerings? is it countrywide? what can i see online? >> gerri, it is countrywide for every zip code. i started ts to help patients find affordable health care because there is a large cost variation. if you find fair price provide hes you can afford care. go to the website. free core consumers. health care blue book.com. you can download and mobile app. you can ask your employer plan if they have the customized

version of hlth care blue book. you can yo see a fair price but provide that's will offer you fair value. gerri: derek, you find the average price for your area, then what do you do? do i call up the doctor? do i talk to the hospital? who will listen to me if i want to negotiate? sure. we think it is very important in our business, every call and negotiation is completed with personalized call. we dot preparation. we make sure we find comparable pricing and we share the siation of the patient with the providetory make sure we get to a good outcome. gerri: tell me the steps i can take though. i know you guys do a good job, but if i want to mimic what you do, what do i do? >> do research up front. use jeff's site, health care blueook. cms.gov is good for base rate of health care. find comparable procedures. make a personal call and share personal aspects of thi relationship with the doctor about your ability to pay or

inability to pay. wheryou are economically. and --er gerri: don't bembarrassed to do that? >> not at all. doctors are there to help. for the most part, if you're able to pay when the negotiation is cpleted very often they will work with you because through eliminating their collection risk. eliminating amount of time. in return for bying awe discount they would expect to be paid. that is probably the right way to make sure both parts get wat they want out of the negotiation. gerri: thanks for coming on tonight. great information. pe desperate how to know how to do this negotiation. check out gerriwillis.com where we describe in detail what you nice y say is the best methodoly for that. thanks again fr coming on tonight. really appreciate it. a lot more still to come this hour including more of our "user's guide to health care." how soon dna testing may be available to everybody at affordable cost. next the story of a one guy that went to a doctor with a little

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yeah. i heard about progressive's "name your price" tool? i guess you can tell them how much you want to pay and it gives you a range of options to choose from. huh? i'm looking at it right now. oh, yeah? yeah. what's the... guest room situation? the "name your price" tool,

making the world a little more progressive.

and thanks again for coming out tonight, really apprecte it. gerri: how does price negotiation play out in the real world? we wa to find out how average americans deal with it on a daily basis. we paid a visit to one man and his family in nashville, tennessee to find out his personal experience. rich wolfson is a business executive and avid golfer. he was looking for a simple test to chek out pain in his elbow. he has health insurance. what he didn't expect when he went for the simple procedure is the price tag that came with it. rich joins me from tennessee. appreciate your time today. tell us your story. so you waned to have your elbow looked at, what happened? >> i didn't want to have it looked at. unfortunately was scheduled to go on a golf trip with a bunch of buddies. and ended up injurying a my elbow a little bit. needed to have it looked at

before i got on a plane to go on this trip. after consulting with your physian,th decided that i needed to have an mri and, they gave me the name of a facility to contact. and i asked them, our company, that i work for, had just switched to a high deductible health care plan which effectively meant i would be paying for this procedure out-of-pocket. and. gerri: you were smart enough to decide, y hey, i will figure out what these costs are right? >> whether i was smart enough or whether i was personally vested now, thisrs i another question. but i asked, quite simply what does this cost? andhe woman i asked the question to couldn't tell me. and what she told me, this is something you will have to take up with the facility. so when i called to make the appointment i asked the woman i was speaking with there. she said the procedure would coste $1,000. that is $1,000 i would be paying now out of my on pocket. gerri: wow. >> i hung up the phone. and i was sitting in front of my

computer and i heard of health careblew boobing.com. i went on loon as the, online as previous guests described. i looed for pric of mri online. gerri: what was the price? >>he variability discussed was right there in front of me. so the high price if i remember correctly was neighborhood of 16 or $1700, down to a low of $500. gerri: what did you do with that information? did you take it back and negotiate something tougher? >> actually, as they were just mentioning they had a list of the providers, there were actual providers on the site that would do the procedure for the $500. so i actually called, one of the facilities which was right down street from me and i, confirmed that they would do it for $500. so actually feeling little emboldened at that point, i said, is that the best that you can do? and, to my surprise she said, well, can you get here at

8:00 tonight? i said sure. if you can get here 8:00 tonight, we'll do it for $400. gerri: wow. you must feel extra special smart. and i think the kind of thing that you just did will become much more common as americans take on much more of the cost of health care themsels. they will be forced just like yo to say, i don't want to pay $1600 out of my pocket for a test, an mri. do y feel like you learn ad lot herend have there been any other lessons? >> no question i leard lot. as you said it all comes down to the simple incentive, right? the biggest thing i learned, quite frankly was that when i'm paying for that, those costs ot of my own pocket i tend to focus on them a little bit more than i do when someone else is paying @or them and the other thing that i saw in black and white on health careblue book.com, was variability much those case

costs. sa thing that costs $1600 in one facity and in my case, $400 in another makes no sense and it was very eye-opening. gerri: can you imagine if you went to pick up a box of cheerios at kroger and it costs $5 and went to a store across the street and it costs 10? people would bep in arms. they don't know and we're telling them with your help, richard. thanks for coming on the show tonight and showing us how you saved money on health care. thank you very much. >> tanks for having me. gerri: when we come back, more of our "users guide to health care." what about dna testing? we'll talk about when and if you should take advantage of dna testing to see if you're predisposed to the pursuit of a better life for our children is something we all share. but who can help prepare them for the opportunities ahead? who can show them how to build on your success, but not rely on it.

who can focus making your legacy last for generations to come? that someone is a morgan stanley financial advisor. and we're ready to work for you.

neil and buzz: for teachingng us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it. gerri: what are your genes tell you aout your health? as part of our ongoing users guide to health care we uncover

the potential risks inside your dna. actress angelina jolie made headlines recent having a double mastectomy after a dna test revealed she had a 80% chance for developing breast cancer. is dna test right for everybody and. we have at director of national human genome institute. welcome to the show, eric. i have to tell the viewers you're a celebrity in the world of science because you were at t forefront of mapping the human genome and i think people are really interesd in what you do for a living. tell us if you will, dna testing back in the headlines with angelina jolie. she thought she was very likely to get breast cancer as a result of genic testing. ier this the right diagnosis or the right way to diagnose any disease? >> well, it is not necessarily the case for any disease. in the case of the situation wi angelina jolie it clearly is genetic defect we know,

predisposes someone to very high-risks for getting breast canr and one way to avoid it is the kind of treatment she decided to undergo. gerri: so the gene you're talking about, the brca gene, the kestor this costs 3,000 bucks. a lot of people say why is this so expensive? why does it cost so much money? >> and that is likely going to change. one of the reasons why it costs soomuch the one company basically offered the fest and others were not allowed to becausent of intellectual propey constraints associated with it. that will now change because after recent supreme court ruling. i suspectng we'll talk about th. indeed what has happened particularly over the last 10 years is some remarkable new advances in how we can look at dna. how we basically sequence dna for diagnostics that will greatly reduce the costs looking at one particular gene such as

the brca gene. gerri: i asked you before whether you can diagnose any kind of aisease with this nd of test. what can you diagnose and are all diseases in the genes or is it nature versus nuture? >> let's be clear. practically every single disease that you would name there is evidence at least a genetic component, if not an overt genetic cause. but for at love diseases, hypertension, diabetes, cardiovascular disease, there is both, environmental contributions and genetic contributions. gerri: 23 and me, apparently, does this online. you can pay 99 bucks. get thene kit. i know, you basically spit into a box. send it back to them. they analyze your dna. how accurate is that. >> what they're looking for are specific, known, differeeces in dna between people and from can infer information about possible disease risks of various types. but that is just a preview of

what the future's going t bring when we will be able to quite affordably, maybe not for $90 but we can now do it for a few thousand dollars reading now to every single letter in your blueprint. and that eventuallytt will gives much more powerful information than just getting a somebody set offthose letters which is what 23 and me is doing now. gerri: when will be the right time to have that kind of work done? >> that's a great question. it could be prompted by, if i had a medical condition where i would feel i would gain some information. i haven't had a circumstance where, getting genomic information on me would change anything i'm h doing. i rely on family history. i know certain things i'm predisposed to like melanoma. i make sure i am checked by my dermatologist every year. i don't need a genetic test. i know that by family history. both side of my family i'm predisposed. gerri: ec, happy to have you on the show. >> happy to be here. gerri: still to come, a look at a secret committee behnd these

rising prices. plus i will give you my two with the spark miles card from capal one, bjorn earns unlimited rewas for his small business take theseags to room 12 please. [ garth ] bjors small busiss earns double miles on every purchase every day. produce delivery. [ bjorn ] just put it on my spark card. [ garth why settle for less? ahh, oh! [ garth ] great businesses deserve limited reward here's your wake up call. [ male announcer ] get the spark business card from capital one and earn unlimited rewards. choose double miles or 2% cash back on every purchase every day. what's in your wallet? [ crows ] now where's the snooze button? [ crows ] nascar is about excitement. but tracking all the actn and hearing everything from our marketing partners, the media and millions of fans on social dia can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar

wiwith our fans. gerri: next our special investigation on medical costs in this country. we'll take you inside the secret committee that sets the prices

♪ gerri: in our users guide to health care we uncoverhe secret committee setting doctors pay in america. it's a panel set up by the american medical association. now it assigns thousands of special codes for every medical procedure imaginable but this pricing model has not kept pace with the times or new technology what that means is, this pricing structure allows some doctors to bill for putting in a 50-hour day. with us now, dr. scott gottlieb, former policy advisor at centers

for medicare & medicaid services and royce, senior fellow at the manhattan institute. i read prices government pays for medicare services are up 58% over the last 10 years. you say this might be part of the reason. is this a racket? >> it's a total racket. it is the fox guarding the henhouse. right, the ama is conducting surveys with their own doctors, they as you, they never err on the side of ssying it is too little work. they say this is so much work, this procedure is so challenging we have to be reimburse ad lot for it. gerri: doctor, wealked about this last week, and you said how some of this pricing ge set makes no sense at all. give us an example. >> well the pricing gets set based on assumption, quote, intensity of work required to do certain things and time it takes and some measure of the overhead costs t basically gives incentive for higher reimbursement for procedures. so you can do a procedure like removing ingrown toenail

literally and get paid more than you would spending half an hour counseling a pient. it incentivizes doctors to do more proceres and try to chart so they can, code for more things. gerri: you know, i don't know any otherfo part of the american system, avik, when colgate-palmolive deciding how to pricc toothpaste, it doesn't say, let's put this price on it ando out in the marketplace and see what the marketplace bears. that is how that works. why is medical pricing working this way. >> this was deloped by a harvard economist in the 08's t was enacted by the reagan administration and bush administration as a way trying to bringth costs down. medicare costs were oing out of control. gerri: did it work? >>co no. basically costs kept growing because people gamed the system. one aspect the way this distorts the way people change the system. as go entory rolling, --

gastroenter rollgy, one of the biggest things is hepatitis-a, hepatitis-b. they don't get paid triesting those patients. so all the gi docs paid colon no, sir scopepies. gerri: they want you to have a colonoscopy every 20 minutes. and think can costshousands of dollars. that i es unbelievable. dr. sct, respond to the ama had to say about these. we got a statement. cbc, codes we're talking about is one of several sets of codes used within the health care system to provide a common language that accurately and consistently describes, medical, surgical, diagnostic services provided by physicians and other health professionals. medical doctors and other qualified health professionals write cpt codes and hundreds of experts provide input. does thatco really explain whats going on here? >> well, basically the federal government punted to the physician organization to the american medical association, the job of coming up with how

they will pay for all the discrete services doctors deliver. the reason they did that because they essentially tried to cap what doctors were paid and said okay, here's a fixed pie of money.an you doctors fight over it and figure howu you will carve it u. now caps what physicians are paidup overall, i'm a physician, never were honored. so what doctors are paid overall that pot continues t grow more than what they assume. gerri: grows and gw. >>edicare doesn't want to get involved in this. they would rather have doctors fight this out. what happens specialists do more procedures have more situation in this process so theyened up overcompensating procedures. gerri: let me just, this blew me away. not just that the ama ends upsetting prices basically by consulting with w doctors but ty also make money off of ts. they make 72 million, which is far more than they get from member dues. $72 million from this. basically the federal government, uncle sam said, here's a monopoly. you set these prices.

you make this money. >> there's a reason for that. gerri: how do they make that money? >> the reason why this all happened the ama used to be the biggest bulwark against socialized medicine. when lyndon johnson was trying to get medicare and medicaid through congress he basically said we'll let the doctors charge whatever they want and that way the ama won't oppose medicare. that is why medicare costs have -- gerri: bribe to get the deal done. >> that is basically why they let the ama be in charge of it. they don't want the ama get mad. if they're okay with it, the government can -- gerri: a way of getting medicare in place. scott, i need your rction here. i know you have serious questionsbout this. what is the biggest problem with this system? >> the biggest problem it doesn't value physician services on basis of how a patient would value. values on basis how a doctor would value them. incentivizes wrong part of bevior on physicians. emphasizes spending a time with the chart to write long notes to justify the codes because that is how you will be reimbursed

and ought didded by medicare. gerri: doesn't this also incentivize doctors to increase prices? at end of the day this is just one big fat check to the medical establishment to increase prices every single year? i mean if you're going to the a-ma and the ama in turn is going to trade associations that represent various specialties, doesn't that guaranty escalating prices as far as the eye can see? >> it does to a degree and that's why the so-called, sgr, price control all these things were brought in the first place because it is like you're at a dinner with 10 other people and at a restaurant and you're going to split the check evenlyo every t person at the restaurant has the ientive to order the mostiv expensive tng on the menu and they will vet the check equally. that is the how doctors a. they have the incentive to bills bill, bill because they have the price controls. it doesn't aect them specifically but overall system and global budgets. it's a big mess. gerri: doctor, you have something you want to add here

quickly. >> i was going to say as a physician you know what codes you can bill and you know which are higher paid codes. doctors are very cognizant of that. that drives wrong kind of behavior in terms of services you perform on behalf of patients. gerri: i think it is outrageous and viewers email us, gerriwillis.com, send as you quick email. get in touch with us. let us know what you think. i'm shocked this is the way the country does business. thank you for coming on tonight. great job as always. we'll be right back with my two cents more. [ male announcer ] these days, a small business can save by sharing. like carpools... polly wants to know if we capick her up. yeah, we can make room. yeah. [ male announcer ] ...office space. yes, we're loving this communal seating. it's great. [ male announcer ] the best thing to share? a data plan. at&t mobile share for business. one bucket of data for everyone on the plan, unlimited talk and text on smart phones. now, everyone's in the spirit of sharing.

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gerri: finally tonight, most of us think if we have health care coverage from our employers we're safe. face it coverage provided by employers has been the backbone of the health care industry sie world war ii. even these dayshat coverage is der assault. blame obamacare and health care inflation for what seems to be the new less is more philosophy. less care, less cerage, more out-of-pket spending by consumers. but here's the thing. even if you have coverage, you want to spay special attention to it now. because insurers are consolidating, trying to get ready for the revolution in health care that obamacare introduces. many are tightening their grip on their wallets. as our guests told us tonight, doctors and insurers battle every sinle day behind the scenes over money. make sure you know what the policy covers. stay in network for hospitals and as well as doctors. if you have to get a health care advocateo help you negotiate with insurers. fasten your seatbelts because health care reform is going to

be a bumpy ride. that is my two cents more. that is it for tonight's "willis report." dvrhe show if you can't catch us live. have a great ni ♪ lou: good evening, everybody, thank you for being with us. obama obama as senator and candidate often mocked the foreign policy of president george w. bush. but as president himself obama can not escape his mounting foreign policy follies and he and his administration and the american people are now bearing then embarrassing consequences. former egyptian president hosni mubarak, president obama helped force him from power more than two years ago. today he was ordered to be released from prison by an egyptian court. he is to be released within 48 hours. mubarak's release is another slap in the face for