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YOUR BOTTOM LINE

Wasted Health Care Funds; Mastering the Fine Art of the Phone Interview; How to Trick Yourself into Saving; How to Score Free Stuff on the Web

Aired March 6, 2010 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


STEPHANIE ELAM, CNN HOST: Good morning. I'm Stephanie Elam and this is YOUR BOTTOM LINE.

Coming up, the Senate votes to extend unemployment benefits. What it means for you. Plus, how to master the fine art of the phone interview. Then, we all know how hard it is to save these days. We'll show you how to trick yourself into doing it. And from phone apps to downloads, our tech guru here to show us how to score free stuff on the Web. The show that savings you money starts, right now.

All right. We begin with health care reform. A hot topic everywhere from Capitol Hill to probably your kitchen table. And here's a fact that will wake you up this morning. For every dollar we spend on health care, 50 cents of it is wasted. That's very frustrating for so many Americans who feel like they're already charged way too much.

Senior medical correspondent Elizabeth Cohen joins us to explain the prescription for waste in health care.

(BEGIN VIDEOTAPE)

ELIZABETH COHEN, CNN SR. MEDICAL CORRESPONDENT: Stephanie, according to a 2008 report there's about a trillion dollars in wasted medical spending in this country. Now, a lot of it is crazy charges at the hospital. Take a look and see what I found on some medical bills.

When you or I go shopping for a toothbrush, how much do we pay? Two, three, maybe $4. Well, guess what one hospital once charged for a tooth it brush: $1,000. Can you believe it? A thousand dollars for a toothbrush. And you know who ends up paying for that? You and I. We end up paying for it. It comes out of our pocket in one way or another. And that's not the only crazy hospital cost I've run into. Come on. Come with me.

And at the store how much does a bottle of Tylenol cost? Ten dollars for 100 pills. Well, we know of someone who, at the hospital, was charged $140 for one Tylenol. Can you believe it? A hundred and forty dollars for this.

Now, here's a box of disposable gloves. When you buy them here at this store, they come out to 24 cents a pair. But I know of a hospital that charged $53 for a pair of gloves. That's right, $53 for a pair of disposable gloves. What the heck is going on here? So, I'm here in the home office of a medical billing advocate. This is Cindy Holtzman and she helps people cull through all of these crazy charges and she has all sorts of examples.

I got to tell you Cindy, this is one of my favorite ones. This is just like a little alcohol prep swab. We've all had these. How much did the hospital charge for these once?

CINDY HOLTZMAN, BILLING ADVOCATE: Twenty three dollars apiece.

COHEN: Twenty three dollars for this little tiny piece of cotton.

HOLTZMAN: And on one bill there were 44 of them. Becomes very expensive.

COHEN: Oh my goodness, but this isn't even the craziest thing you've ever seen. Tell me about one of your crazier charges.

HOLTZMAN: Well, recently I had somebody who was charged for 41 I.V. bags when she went to the E.R. for a two-hour visit.

COHEN: Oh, yes, you heard that right. A woman went to the emergency room with a migraine headache and they gave her one bag of saline and then charged her for 41 bags of saline to the tune of $4,182.

Now, the really crazy thing about this is that her insurance company actually paid this bill. They didn't even question it.

So, why did her insurance company pay for this when it was obviously wrong?

HOLTZMAN: There's not many people working at these companies anymore. They're very busy and usually any kind of bill that's under $100,000, they don't look at the detail.

COHEN: So, they just write a check?

HOLTZMAN: They just write a check.

COHEN: Now, I called the hospital that made that erroneous charge and it turns out they did fix it when the patient brought it to their attention. They declined to speak with CNN. And also the insurance company that paid that erroneous charge, they also declined to speak with CNN.

Now, if up insurance you might be thinking well, what do I care about this? My insurance company pays for these crazy costs. Well, think again. When medical costs go up, up, up, we all are paying for it in our premiums. Our premiums will also go up and up -- Stephanie.

(END VIDEOTAPE)

ELAM: That's just shocking. Thanks, Elizabeth. So, if you think you've been overcharged on a medical bill or know one who has, you're definitely going to want to listen to the next guest. He's going to tell you how to fight back. Andrew Rubin is vice president of Medical Center Clinical Affairs and Affiliates at NYU's Langone Medical Center and the host of Sirius XM's "Doctor Radio."

Andrew, thank you so much for being here.

ANDREW RUBIN, MEDICAL CENTER CLINICAL AFFAIRS AND AFFILIATES VICE PRESIDENT: Good to be here.

ELAM: All right, so you work in a hospital environment. When you hear some of these charges, you hear $53 for some disposable gloves, let alone the thousand dollar toothbrush what do you think is going on? What's going on into the cost of that?

RUBIN: Well, there's two things. And I want to separate the cost of certain items and medical billing errors. And first let's talk about the cost. You're not paying for just that aspirin or just that latex glove that we just saw in the piece. There's a lot of costs that go into that. Hospitals are very complex places to run. I know this is difficult for the public to understand, but you're paying for the nurses and technicians and the building ...

ELAM: Why not say this is how much you're paying for the aspirin and this is for the service.

RUBIN: That's a great question and you know what, we can do that if that's the direction the country moves in. This is historical. This has been going on for years and years and years where the insurance companies reimburse hospitals for things. And the things they get reimbursed for are the supplies, are the drugs, are the equipment that's used. They're not reimbursing them for power and the lighting.

But if a managed carrier, insurance company, came to the hospital and said, you know what, I want to reimburse you and you're going to charge us for the aspirin and we're going to pay you for the power and nurses we could do that.

ELAM: All right, so when you at the charges, you are overcharged. You're saying the main thing you need to do is look at the bill, but a lot of that is in medicalese. So, what do you say is the best way for a patient to do that?

RUBIN: You just got to look at your bill. Plain and simple, look at your bill. It's going to be hard because you're usually in the hospital or getting a service. You don't know exactly know what's going on, but you get a good sense. Again, in that piece 41 I.V. bags versus one or 14, whatever the number was. You know you didn't have 41. You want to look at that. And if there is, in fact, a mistake you want to make sure it gets fixed.

ELAM: And so, if there's something you don't understand even if it is in medicalese take it back and ask questions and get clarity. That's the final say on that.

RUBIN: Get clarity and there's two ways to it. You call the hospital or the doctor and you call the insurance company. ELAM: All right, Andrew Rubin, thanks for breaking it down for us, getting us some advice on what to do, there.

All right, the Senate's big vote on extending jobless benefits. The final tally and what it means for you. And if you're looking for a new job, important tips on how to nail your next phone interview.

(COMMERCIAL BREAK)

ELAM: One renegade senator and one long filibuster later, jobless benefits will continue for at least the next 30 days for more than 200,000 unemployed Americans. They are some of the 11.5 million currently dependent on jobless benefits, but were set to lose them this week. In the same action, the Senate voted to push the deadline to apply for unemployment insurance until April 5 and the federal subsidy for COBRA health insurance until the end of March.

All right, if you are on the hunt for a job, chances are you've encounter the phone interview. So, what makes you a success over the phone and what makes you a flop? Well, Donna Rosato is a senior writer for "Money" magazine.

I remember phone interviews used to be what you did if you were long distance, only because you were really far away, but it's being used more often, now.

DONNA ROSATO, MONEY MAGAZINE: It's much more common. And there's a simple reason, really. Eight million people are out of work, today. Companies are deluged with applicants, so the phone interview is a way for them to screen out people who look good on people, but they want to see whether that he good.

It's also less costly and less time-consuming. But, remember when they're talking to you on the phone they're also testing you to see how you conduct yourself on the phone because that's the way a lot of people do business today, too.

ELAM: That's true. So, how do you prepare for an interview like this if you're going to be on the phone?

ROSATO: That's a really great question. Treat it just like you would as an in-person regular interview. That means do your research on the company. Bring -- have notes in front of you. Have all the talking points about why you are so great for the job and be sure to write down follow-up questions as well for the end of the conversation.

ELAM: And when's the best time in your day to plan a phone interview?

ROSATO: You want to try to schedule it at a time when you're going to be able to lock yourself away in a room so it's quiet, the kids aren't bugging you, the dog isn't barking and you can have some quiet time. You don't want to be interrupted. You want to make sure you're on a land line if your cell phone is kind of, you know, has shaky reception. And just make sure that you're not -- if you're on a cordless, your battery is not going to run out.

ELAM: And then, if you're on the phone, though, how do you make yourself stand out?

ROSATO: You know, it really is, it's a lot more challenging to stand out on the phone than it is in person. But here's a couple of good tips for you. One thing, stand up during the phone interview. Your voice will sound stronger, you're going to be more focused and smile during the conversation. That really, really comes through when you're having that conversation, it will make you sound more upbeat.

ELAM: Yeah, that's a good trick for a lot of people to keep in mind. And, also you're saying it's important to follow through at the end of the conversation. You need to have follow-up questions, right?

ROSATO: That's right. You know, the conversation's coming to an end, you want to let the interviewer kind of dictate things. But if it's coming to an end and they haven't brought up next steps, you bring that up. Speak up and say, "I really am enthusiastic about this job. I'd really like to come. Can I meet in person with somebody. What is the timing for the job." And make sure to get that person's contact information, as well.

ELAM: Yeah, and when you should finish up, you should still send a thank you note. Here's my question, can you send an e-mail or do you need to handwrite a thank you note?

ROSATO: That's a really good question. Whether you have an in- person or phone interview people wonder that. If most of the communication is by e-mail, it's fine to send it by e-mail as well, but I really recommend a handwritten note. It's another way for you to stand out, keep yourself top of mind, and fewer people are going to do that. And remember, in that thank you note you can say again why you are so great for the job.

ELAM: Donna Rosato, thank you so much for those good tips.

ROSATO: Thanks Stephanie.

ELAM: All right. Everyone wants a little extra cash in their pocket. Tips to trick yourself into saving, next.

(COMMERCIAL BREAK)

ELAM: So many folks struggling to cope with tight budgets. My next guest is here to help us trick ourselves -- trick ourselves into saving a few bucks. Janet Bodnar is the editor of "Kiplinger's Personal Finance" in Washington.

And Janet, thanks so much for joining us today. I got to say, though, tricking yourself to save money. It seems like almost like setting the clock five minutes early. You still know it's early, right?

JANET BODNAR, KIPLINGER'S PERSONAL FINANCE: Well, but it works. I do that. The clock trick works. It really is very much, I think -- saving is a question of mind over money, because I hear this all the time from people who say if only I had more money, I'm living paycheck to paycheck. But the truth of the matter is no matter how much you make you're always living paycheck to paycheck and you'll never change unless you have change that mindset. And sometimes it takes a few tricks to do it.

ELAM: You say it's really important to know what kind of person you are, to know your plastic personality. Explain that to you.

BODNAR: Oh, gee. We got into this huge debate on -- with our users -- our viewers at kiplinger.com, debit cards versus credit cards. You've got to know your plastic personality. If you're a credit card user, then you tend to charge everything on your credit card or put everything on the credit card.

But pay the bill in full every month so you're not paying fees, you're not paying annual fees, you're not paying interest rates and you're getting rewards. Some people say -- and told us very frequently at kiplinger.com, no, no, no you don't want to get into credit difficulties, you want to go with the debit card, you want to pay on a cash basis.

So, if that's the way you want to go because you need that self discipline and you need to be stopped after you've spent a certain amount, then that's the way to go. In either case you can use the bill, the statement that you get every month to track what you're spending.

ELAM: Track what you're doing. All right, but you're also saying you shouldn't be up to your own devices. Most aren't good at savings if left up to their devices. So, what kind of resources are out there to help people save?

BODNAR: Instead of paying yourself first, which is a wonderful rule, get someone else to pay you first. So, you know, sign up for your employer's retirement plan, sign up with a bank to take money out for your next year's vacation. Even the IRS will deposit your tax refund in an IRA, so you can jumpstart your retirement plan. But you can get that help from somebody else instead of depending on you.

ELAM: All right, and then another trick, you say when you get your paycheck don't have half it deposit it into your checking account, put it into your savings account. Again, it seems to me you can still access the money. How does this trick work?

BODNAR: Hey listen, this is -- my 21-year-old college student son thought this one up. He keeps his money in his savings account and then he transfers money when he needs it. And it's, again, it's psychological because he says, you know, when you move the money from your saving to your checking, that really hurts. It's in there and now you've got to spend it. And again, it's a great tip for everyone and I would give it to any adult, but my son actually thought it up on his own.

ELAM: Yeah, that is a pretty good one. Maybe he's got a career in this one. BODNAR: I think so.

ELAM: The last one I want to ask you, though, is the whole idea of rounding up a check. How does that work?

BODNAR: Well, you know, when you're subtracting a check in your checking account, you know, you can round up the amount that you're subtracting so you're actually, again psychologically, you're taking out a little more than -- than really is there. So you're creating a little slush fund, a little cushion for yourself.

And banks will do this for you. You have seen this advertised on TV. A lot of banks will advertise this and you think, oh, this is just pennies, it's really not a lot of money. But you know, I was talking to someone when I did a TV appearance a few weeks ago and she said, you know, I do this on my own and every couple of months it adds up to a hundred bucks or so and that's really money, over the corps of a year, that's over a thousand dollars. You can do a lot with a thousand dollars.

ELAM: Yeah, you really could, just like you could toss that extra change into a jar and it works as well. Janet Bodnar, thanks so much for all of your tips. Janet Bodnar, the editor of "Kiplinger's Personal Finance."

Up next, buyer beware. We have the biggest rookie home buyer mistakes. We'll tell you what not to do if you're in the market for your first home.

(COMMERCIAL BREAK)

ELAM: If you're in the market for your first home, my next guest says don't act like it. that's because rookie mistakes can cost you big time. Rick Newman is the chief business correspondent for "U.S. News & World Report" and he is here help break this break down for us.

Now, you know what, I remember when I bought my first place, it was a daunting task. You feel like everybody knows what they're doing, what they're talking about and you're just like, I just want to kind of own my house. So, when you start off, you're saying the first thing you need to do is check your credit report and score, right?

RICK NEWMAN, U.S. NEWS & WORLD REPORT: Yeah, I think so. One thing we've learned through the whole housing meltdown and his so- called recovery, which is taking quite a long time to get underway, is house prices are not just going to keep going back up, so the finances matter more than ever.

You really need to know that you can afford what you're going the buy and the best way to do that is find out what kind of loan -- how much of a loan can you get and know what your credit score is in advance. And get all of that stuff squared away so you're going into the buying process knowing here's exactly what I can afford. That's really important.

ELAM: And you can get your credit report every for year free. Right? And you don't have to pay for it.

NEWMAN: Yeah, that's right. Despite all the ads, you hear, you can actually get this for free, I think the Web site is annualcreditreport.com. Everyone is entitled to one credit report per year.

ELAM: All right and so, when you're saying you're ready to start looking for a home, how long before should you do that, like three months before, four months before.

NEWMAN: Well, keep in mind, the home-buying process takes a long time. so, if you're going to do this, it could take six months to find what you really want, prices are up and down, it's hard to figure out. So, I think just get it done before hand or even while you're looking, but clearly before you start to make a serous decision...

ELAM: And what's a good score that you should try to target, right now?

NEWMAN: Well, they've gone up a little bit. So, the best you can get is 850 and if you've got 720 or better that's good credit. That means you will get the best interest rates or close to it with the fewest restrictions. And if it's lower than that, higher down payment, probably, and higher interest rate. You need to know that before.

ELAM: And it affects your bottom line, again...

NEWMAN: Absolutely, it's the most important thing.

ELAM: All right, so you also say you need to get preapproved for a loan. Why is this important to do?

NEWMAN: It's the same thing, so you know what kind of house you can buy. We all want to go in, we're thinking act the Jacuzzi, the big kitchen within the island in the middle and if that's not in your budget, you may as well know that right at the beginning so you don't end up disappointed and looking at homes that are bigger than you can afford.

You've got to think about all those costs in addition to the mortgage. You know, when you do those mortgage calculators, often you just punch in the amount of the purchase price and you forget about all those other things, the taxes, mortgage insurance and things like this, and home repairs down the road.

ELAM: Yeah. But you can't call the landlord anymore. So, you really have to budget for these things as well.

NEWMAN: Right.

ELAM: Also, you're saying don't be willy-nilly about how you pick your agent and you're your lender.

NEWMAN: Right, so a lot of times you'll see a house listed and you'll just call that agent. A lot of times that agent will represent the seller, not the buyer, so that agent has a fiduciary obligation, not to you, if you're the buyer, they'll going to help the seller get the best deal.

ELAM: The other side.

NEWMAN: And this is just critically important now, because you can have a lot of bargaining room and negotiating room as a buyer, these days. So, what you want, you want a buyer's agent who represents your interests exclusively, not the seller. There's a way to do this. You can ask at realtor's offices, they know this. You can find them on the Web, too. I think the Web site is naeba.org. And ask your friends who...

ELAM: That's a good way, too. And also just keep it realistic. Don't get all emotionally involved, right? Because that could get things in the way. Well, Rick Newman, thanks so much for joining us and breaking it down.

NEWMAN: My pleasure.

ELAM: Because a lot people I know who could use that help.

Everybody loves free stuff. From the latest downloads to apps for your phones we'll tell you where to find them for no cost at all.

(COMMERCIAL BREAK)

ELAM: It's time for our free-for-all and this week we're talking tech. Here with the best in free apps, down loads and more is technology contributor to NPR and host of the Sirius XM radio show, "Digital Spin."

Mario, thanks so much for being here with us.

MARIO ARMSTRONG, TECHNOLOGY CONTRIBUTOR: Hey Stephanie, it's my pleasure. Thanks so much for having me in.

ELAM: Of course. Now, tell me about this first one. Now, you're got this Web site called gazelle.com.

ARMSTRONG: Yes.

ELAM: What exactly does Gazelle do?

ARMSTRONG: This is awesome. Check this out. All of us probably have some junk laying around the house and we don't know what to do with these old iPods or old technology and consumer electronics. Well, Gazelle enables you to not only recycle those products and get them out of your house, but to send you a check for the value of those items, as well. So, essentially what you do is, you walk around the house, you find items that you want to get ride of, maybe even movies, you could do old cell phones, you could do digital cameras...

ELAM: What about a two-pay pager? I have one that's just hanging around my house that I need to get rid of.

ARMSTRONG: I don't know if you'll get any money for that, but they'll certainly recycle it for you. I brought in this old-school Motorola flip phone, so.

ELAM: Wow, that's old school there. With the yellow numbers.

ARMSTRONG: That's right. You remember that. Some items you will not actually receive value for because they're too old. But what you do is you logon to the Web site for free, put in information about the item, whether it still works, it's usable, all these things, you have the manuals, the cords, and then off of that, they'll tell you what you can expect to receive in a check. They'll ship you out a box prepaid and then you put all your items in a box, send it out to them, they'll verify everything and send you a check.

ELAM: And they'll wipe those devices for you?

ARMSTRONG: Yeah, and that's the really good thing about this. Because I pressed them hard about, well, what about the data and the information? Because they take everything from laptops to digital cameras. And they said they wipe the data clean off of these devices. Now I would recommend that users do that themselves first anyway.

ELAM : Yeah, just to make sure.

ELAM: All right, let's go to the next one, mint.com. What can you get for free from a personal finance Web site?

ARMSTRONG: Well, what you can get for free is to help you save money and to have better access, on the go access, on your device. So, they have a great iPhone application that's free. But, the reason why I like Mint, I actually use that service is because it helps me have a better track of my investments, my financial portfolio, my savings, everything all in one dashboard. So, I'm not looking at multiple sites trying to find information from different places.

ELAM: That's good.

ARMSTRONG: I can go to one location on my hand-held and be constantly updated. Hey, I just went over my spending budget. I need to pull back.

ELAM: That's what people need, they need to make it all together. Now, you say there's an easy way to comparison shop.

ARMSTRONG: Oh, my gosh. So, there's this application on the iPhone and android phones called shop savvy. And what you do, Stephanie, check this out, you're your own bar code scanner. So you, basically, you take an item that you see in the score, you take your digital camera of your phone, aim it at the bar code of the device.

It will scan that device and then tell you where you can find that item cheaper or if you can find it somewhere nearest you that's at a lesser price or at a lesser price online. So, it helps you make sure you're getting the best deal possible for that item that you have interest in.

ELAM: That is so cool because it just makes it so much easier to get a cheaper price. Mario Armstrong, great ideas. Thanks so much for joining us today.

ARMSTRONG: Thanks for having me in, Stephanie, really appreciate it.

ELAM: All right, we'll see you right back here next week for YOUR BOTTOM LINE. See time, 9:30 a.m. Eastern. And don't miss Christine Romans and CNN's chief business correspondent Ali Velshi on "YOUR MONEY." That's today at 1:00 p.m. Eastern and tomorrow at 3:00, right here on CNN.

Time now for a check of your top stories in the "CNN NEWSROOM." Enjoy your weekend.