White House wins ruling on disclosing health care prices(apnews.com)
apnews.com
White House wins ruling on disclosing health care prices
https://apnews.com/article/donald-trump-politics-kayleigh-mcenany-courts-f0700210fe86004255f68f15d12e9932
91 comments
This was not in my radar, but strikes me as really good news for American healthcare. Are there any substantial downsides? I was not even close to being convinced by the arguments given by insurance companies in the article.
I generally think this is a very good step in the right direction. The only negative that I've heard voiced by some people (here on HN) was that the penalty for non-compliance is negligible (if I remember correctly, something like a few hundred dollars; I don't remember if a few hundred dollars in all, or per day, but for a hospital both are a rounding error).
Edit: The penalty is $300/day [1]
[1] https://www.hhs.gov/about/news/2019/11/15/trump-administrati...
Edit: The penalty is $300/day [1]
[1] https://www.hhs.gov/about/news/2019/11/15/trump-administrati...
Do we know if this will expose physician fees? If not, I imagine physicians could charge the patients, then physicians and hospitals could settle the difference on the backend.
In other words, a potential downside of partial sunlight could come from the fact that providers may want to move costs/charges around to obscure prices therefore making the system even more inefficient.
In other words, a potential downside of partial sunlight could come from the fact that providers may want to move costs/charges around to obscure prices therefore making the system even more inefficient.
that's not possible. At least not possible on a large scale.
there are strict regulations (AKS and Stark) governing hospital <> Provider pay payments.
Any pay in excess of medical services FMV will be toxic to pay out and could land both hospitals and providers in big trouble.
there are strict regulations (AKS and Stark) governing hospital <> Provider pay payments.
Any pay in excess of medical services FMV will be toxic to pay out and could land both hospitals and providers in big trouble.
It isn’t a bad thing, but it won’t affect many Americans. Most of the country has insurance coverage, and even a high copay is probably cheaper than paying cash for most things. However, it will hopefully lower prices for people that have no coverage for some procedures by exposing any gross differences between the negotiated rates with big insurance payers and the cash rates offered to individuals. It will benefit people that are uninsured or undercovered, if they do their homework.
I have a feeling that while this is a step in the right direction, people can still be taken advantage of. Like, hospitals may offer a reasonable cash price for a baby delivery but still tack on all sorts of extra fees. Similar to the “underbody rust protection” scheme with car dealers. It’s supposed to be illegal but somehow the hospitals will figure it out.
I have a feeling that while this is a step in the right direction, people can still be taken advantage of. Like, hospitals may offer a reasonable cash price for a baby delivery but still tack on all sorts of extra fees. Similar to the “underbody rust protection” scheme with car dealers. It’s supposed to be illegal but somehow the hospitals will figure it out.
I'm a young healthy dude and have a high-deductible healthcare plan, so I absolutely care about finding low prices for things (since I don't hit my deductible). I got strep throat in 2019 and had a hell of a time comparing prices for test + antibiotics between different clinics. I usually had to physically show up at the location before they'd give me a price. Prices varied between $20 and $250!!! Hopefully this will help.
There is a fabulous place in OKC called the surgery center that does not take insurance and lists the upfront cost for all of their procedures on their website. I live about 6 hours drive away from it but just having that resource available makes it worthwhile to check if it’s worth it to drive 6 hours if I need something done: https://surgerycenterok.com/
I disagree. Even with insurance, it can be impossible to know how much you're going to pay in advance. I had a surgery a few years ago, and my insurer sat me down in advance and told me what was covered and what wasn't--the upshot of which was that I was told I'd only owe a $25 co-pay for the entire thing. And then after the procedure--wham--I was hit with hundreds of dollars of bills for things like an ultrasound, mandated as part of the procedure, performed in the same building by the ultrasound tech they sent me to ... who happened to be an independent contractor. WTF. The additional cost was mostly irrelevant to me, but the surprise billing, after the consultation, was maddening.
Having gone without insurance coverage, I have heard phrases like "our standard 85% discount" when notifying that I am paying cash instead of using insurance. (That said, I've also only received 30% discounts, so don't immediately jump ship :-) )
It's a good thing, and one of the very few things I will happily stand up and commend the Trump administration for. Unfortunately, the impact on private individuals is likely to be very low, because those negotiated rates are extracted from hospitals by insurance companies by sheer weight of the number of policyholders they have. You and I won't be paying those rates, nor will we be able to negotiate anywhere near them. Our starting point as individuals is something called the "chargemaster rate," which is, theoretically, what the hospital might charge Joe Schmoe who's uninsured.
In practice, even chargemaster rates aren't the real rates. Despite not being a huge insurance company, it is possible to negotiate with hospitals if you're either quite rich or quite poor.
On the rich side, oftentimes just saying you're going to pay cash up front will get you a substantial discount. On the other end, hospitals frequently have entire departments theoretically devoted to helping poor and indigent patients afford medical care. What those departments actually do is sign people up for government benefits, or, sometimes, just writing off entire bills.
Anyway, yes, it's a good thing. No, it probably won't make a difference to you.
In practice, even chargemaster rates aren't the real rates. Despite not being a huge insurance company, it is possible to negotiate with hospitals if you're either quite rich or quite poor.
On the rich side, oftentimes just saying you're going to pay cash up front will get you a substantial discount. On the other end, hospitals frequently have entire departments theoretically devoted to helping poor and indigent patients afford medical care. What those departments actually do is sign people up for government benefits, or, sometimes, just writing off entire bills.
Anyway, yes, it's a good thing. No, it probably won't make a difference to you.
> it is possible to negotiate with hospitals if you're either quite rich or quite poor.
It is possible to negotiate, no matter who you are. I can literally be described as both quite rich and quite poor using your criteria. Simply saying you don’t have insurance at one major hospital near us immediately reduces the bill by 49% (from the charge master rate, presumably).
It is possible to negotiate, no matter who you are. I can literally be described as both quite rich and quite poor using your criteria. Simply saying you don’t have insurance at one major hospital near us immediately reduces the bill by 49% (from the charge master rate, presumably).
There are no downsides to the consumer. Hope the Biden administration doesn't reverse this.
Are you aware that this statement cannot be true? It's like potheads holding marijuana up as a panacea. This will reduce income for some number of hospitals, and hospital administration gets a turn at the table too. If you make the business feel pain, they'll pass it on to their customers with some new policy of their own.
If those hospitals are relying on hidden prices to protect their profitability, they are not well run. Period.
It is time. There is no good reason for hiding the true costs. This is the beginning of a much-needed revival in the health-care industry.
It is time. There is no good reason for hiding the true costs. This is the beginning of a much-needed revival in the health-care industry.
I hope they make the penalties prohibitively high.
[deleted]
> "... A separate regulation that applies to insurers has not been finalized."
This part of the puzzle is still missing. IIRC the providers are required to use patient's insurance (and the associated prices), when patient does have an insurance. So, for example, if cash price is lower, than the effective negotiated price (factoring in the deductible and copay), one would still be required to pay the insurance-based price. Granted, in most cases patient would have no idea about what are those prices are until getting the bill. Hopefully, this part will get more transparent.
This is especially noticeable with the high-deductible plans available under ACA.
It's getting harder and harder to clearly see the interests of providers and those of insurers separately from each other. Especially with the recent consolidation in the healthcare sector.
This part of the puzzle is still missing. IIRC the providers are required to use patient's insurance (and the associated prices), when patient does have an insurance. So, for example, if cash price is lower, than the effective negotiated price (factoring in the deductible and copay), one would still be required to pay the insurance-based price. Granted, in most cases patient would have no idea about what are those prices are until getting the bill. Hopefully, this part will get more transparent.
This is especially noticeable with the high-deductible plans available under ACA.
It's getting harder and harder to clearly see the interests of providers and those of insurers separately from each other. Especially with the recent consolidation in the healthcare sector.
Indeed, I think insurance and health providers collude to jack up prices. “Saving” a heavily inflated price makes the insurance look good. The provider can use the high prices as a bludgeon against the uninsured.
n=1, but I've sat in the room in contract renewal negotiations between a big insurer and a hospital.
There was no collusion, it was two sides that nearly hate each other arguing over rates. Hospital wanted more, insurer wanted to pay less.
There was no collusion, it was two sides that nearly hate each other arguing over rates. Hospital wanted more, insurer wanted to pay less.
I can imagine this being true at a micro level. But at a macro level, Obamacare has a rule that insurers can have a maximum profit margin of 20%. So you have two ways to increase profits in the long run:
1) Increase number of subscribers. Possible to do, but the market is pretty saturated.
2) Raise prices of healthcare overall. 20% of larger costs is more than 20% of smaller costs.
Intuitively, lowering costs would seem to be a money-making proposition, but if you are already at the 20% margin, it doesn't actually help you.
1) Increase number of subscribers. Possible to do, but the market is pretty saturated.
2) Raise prices of healthcare overall. 20% of larger costs is more than 20% of smaller costs.
Intuitively, lowering costs would seem to be a money-making proposition, but if you are already at the 20% margin, it doesn't actually help you.
Correct. I received a refund check from my insurance company this year because they did not spend 80% of premiums on healthcare.
>Obamacare has a rule that insurers can have a maximum profit margin of 20%. So you have two ways to increase profits in the long run:
>1) Increase number of subscribers. Possible to do, but the market is pretty saturated.
>2) Raise prices of healthcare overall. 20% of larger costs is more than 20% of smaller costs.
The 20% profit margin also has to cover the insurer's operating expenses. After covering the costs, an insurer typically makes 2-3% in profit. Also, the insurance industry in aggregate is typically paying 85%-86% of premiums as medical services, so they still have incentive to negotiate prices with hospitals[0].
The insurance industry is likely to make a greater profit in 2020 due to the pandemic. Consumers have deferred a lot of their medical procedures, but their premiums have stayed the same.
[0]https://content.naic.org/sites/default/files/inline-files/20...
>1) Increase number of subscribers. Possible to do, but the market is pretty saturated.
>2) Raise prices of healthcare overall. 20% of larger costs is more than 20% of smaller costs.
The 20% profit margin also has to cover the insurer's operating expenses. After covering the costs, an insurer typically makes 2-3% in profit. Also, the insurance industry in aggregate is typically paying 85%-86% of premiums as medical services, so they still have incentive to negotiate prices with hospitals[0].
The insurance industry is likely to make a greater profit in 2020 due to the pandemic. Consumers have deferred a lot of their medical procedures, but their premiums have stayed the same.
[0]https://content.naic.org/sites/default/files/inline-files/20...
> The insurance industry is likely to make a greater profit in 2020 due to the pandemic. Consumers have deferred a lot of their medical procedures, but their premiums have stayed the same.
COVID will have drive up overhead, and also insurers will have COVID medical costs. If the net of the added medical costs of COVID and the reduced medical costs from deferring care is negative on medical costs, insurers will be driven over the 20% excess premiums cap and have to refund down; they don't get extra credit for COVID overhead.
If it increases medical costs in net, they'll have to pay the increased medical costs plus the increased overhead out of the same premiums, and so really lose.
The only way insurers win out of this is if medical costs are down enough to pay for the added overhead before hitting the 20% cap where refunds kick in.
(Or through external windfalls outside of the whole premiums and medical costs system, like if they manage to get forgivable PPP loans or something.)
COVID will have drive up overhead, and also insurers will have COVID medical costs. If the net of the added medical costs of COVID and the reduced medical costs from deferring care is negative on medical costs, insurers will be driven over the 20% excess premiums cap and have to refund down; they don't get extra credit for COVID overhead.
If it increases medical costs in net, they'll have to pay the increased medical costs plus the increased overhead out of the same premiums, and so really lose.
The only way insurers win out of this is if medical costs are down enough to pay for the added overhead before hitting the 20% cap where refunds kick in.
(Or through external windfalls outside of the whole premiums and medical costs system, like if they manage to get forgivable PPP loans or something.)
Then insurance’s negotiating position is much weaker than an individual, because it is likely the individual can get up and walk away and do business elsewhere, but the insurance must cover some hospitals.
> The provider can use the high prices as a bludgeon against the uninsured.
While I am sure that happens, my experiences in that past of being without insurance most places gave me a discount for paying in cash. Up to 30% at some clinics. This is especially true for smaller providers as dealing with insurance companies was a huge time and resource suck so they preferred cash patients.
While I am sure that happens, my experiences in that past of being without insurance most places gave me a discount for paying in cash. Up to 30% at some clinics. This is especially true for smaller providers as dealing with insurance companies was a huge time and resource suck so they preferred cash patients.
Right, but that is usually 30% off a big number. If the provider had to deal with customers walking away for high list prices then that number will likely come down more than 30%
Probably more-so collusion between health providers and medical equipment companies.
As long as the insurance company isn't losing money between total paid premiums minus total claims, they don't have any incentive to care about overcharging. Artificially high medical prices do however work to their advantage during claim negotiations with health providers (e.g. "We know that piece of plastic you charged $1000 for only cost you $10, how about we give you $200").
As long as the insurance company isn't losing money between total paid premiums minus total claims, they don't have any incentive to care about overcharging. Artificially high medical prices do however work to their advantage during claim negotiations with health providers (e.g. "We know that piece of plastic you charged $1000 for only cost you $10, how about we give you $200").
For most insured, payments that go towards the deductible make more sense than payments that don't, even with a fairly large difference in price.
That really depends on the individual/family. Most years our costs are much closer to zero than to our deductible.
In our case, specificly, the only exceptions have been things know significantly in advance where it would really be practical to be able to shop around.
In our case, specificly, the only exceptions have been things know significantly in advance where it would really be practical to be able to shop around.
Yes of course it depends on the size of the deductible and predictability of spending.
Average deductible is ~$1700, at that point the differences either need to be huge, or additional spending needs to be very predictable.
Source for $1700: https://www.kff.org/health-costs/press-release/benchmark-emp...
Average deductible is ~$1700, at that point the differences either need to be huge, or additional spending needs to be very predictable.
Source for $1700: https://www.kff.org/health-costs/press-release/benchmark-emp...
It's a clever success of the insurer lobbying effort. They have successfully convinced the US that it's the hospitals that are the problem not the insurers who control the revenue streams of hospitals.
[deleted]
Somewhat related: There are now services that negotiate or shop around your local pharmacies for cheap prescriptions. They claim they often are able to find the prescription drugs that retail for less money than insurance co-pays.
I’m not sure if these services are a scam or not, but anecdotally, the one time I needed medical care without insurance (due to a short inadvertent coverage gap), the out of pocket price was significantly lower than my co-pay would have been.
In fairness to the insurance companies, the doctor made it clear she charges people without insurance less money. This bill will prevent hospitals from subsidizing uninsured people with money from the insured; that’s a potential downside. We really need universal single-payer health care in this country.
I’m not sure if these services are a scam or not, but anecdotally, the one time I needed medical care without insurance (due to a short inadvertent coverage gap), the out of pocket price was significantly lower than my co-pay would have been.
In fairness to the insurance companies, the doctor made it clear she charges people without insurance less money. This bill will prevent hospitals from subsidizing uninsured people with money from the insured; that’s a potential downside. We really need universal single-payer health care in this country.
Uninsured people are cheaper to provide service to, too. Don't underestimate the effort it takes to code things up for insurance consumption and navigate their bureaucracy and any routine denials of payment.
Could you mention / link one of these services?
I'm quite curious.
I'm quite curious.
Not the op and they might know different ones but GoodRx is the one I'm familiar with.
In talking with the pharmacy at Costco, it turned out to be probably cheaper to buy my son's prescription medicine out-of-pocket with an HSA than to do it through insurance.
The reason I say "probably" is there are situations where you hit the insurance maximum per individual or for the family and then the cost for additional refills is zero.
https://www.goodrx.com
In talking with the pharmacy at Costco, it turned out to be probably cheaper to buy my son's prescription medicine out-of-pocket with an HSA than to do it through insurance.
The reason I say "probably" is there are situations where you hit the insurance maximum per individual or for the family and then the cost for additional refills is zero.
https://www.goodrx.com
I suspect that we will find out that insurance isn’t paying much at all for most health care procedures, and the bulk of the cost is payed by the patient.
This is true. My wife paid out of pocket for a procedure that should have been covered, and when she finally made it through the labyrinthine process to seek reimbursement, they only wanted to reimburse her for half of the cost, because that's the negotiated price the provider would have paid the hospital.
In case you were still a bit unsure if the entire American health care system is irreparably broken or not.
In case you were still a bit unsure if the entire American health care system is irreparably broken or not.
My billing statements always include the insurance portion and the patient portion. Could be a Michigan law. The bills also include the billed price and the covered price (so the portion that they 'negotiate' is also on there).
It would be big news if the amounts they said they paid weren't actual payments.
It would be big news if the amounts they said they paid weren't actual payments.
This I believe is standard practice at major insurers. It's called an "explanation of benefits" (EOB), and I have always been able to see them easily on my insurer's website.
That’s after the fact, though. You don’t get to see any of those numbers until it’s too late to matter.
It matters in the sense that the payments made by the insurance company are already transparent; the other poster is speculating that it will be revealed that the patient portion is larger than the insurance portion, which people in (at least) Michigan already know isn't the case.
I didn’t read the grandparent the same way, but that makes sense.
Still, I don’t think it’s accurate to say that the prices are transparent when you can’t find them out without first signing away an unknown amount of your own money.
Still, I don’t think it’s accurate to say that the prices are transparent when you can’t find them out without first signing away an unknown amount of your own money.
Sure, it's not price transparency, it's payment transparency (which I don't think is a redefinition of anything I've said above).
As someone else has already pointed out, ACA imposes an 80% medical loss ratio on insurers. That means 80% of premiums have to go towards medical expenses.
Insurance is a financial product, and there will be winners and losers. I pay my auto insurance bill on time and without a complaint even though I haven’t had an accident in 20+ years.
Insurance is a financial product, and there will be winners and losers. I pay my auto insurance bill on time and without a complaint even though I haven’t had an accident in 20+ years.
Few people incur north of their 10k deductible in medical fees a year, but nearly everyone pays for something every year out of pocket.
I'd like to see the costs/invoice from each doctor you see or service billed for in the Canadian system as well.
> The rule mandating that hospitals disclose their privately negotiated charges with commercial health insurers is scheduled to take effect Jan. 1, 2021.
So, today. Does anyone know how/where the data will be published?
So, today. Does anyone know how/where the data will be published?
likely, each hospital system will be publishing their own data rather than having it centralized.
Good! Let’s hope Biden will have the courage to do even more about price transparency. If we can’t have something like Medicare for All they should at least make sure the “free market” works like an actual market. The minimum requirement for a market should be that the participants know at least how much goods cost. The current situation is just ridiculous where hospitals and insurance can do pretty much whatever they feel like and the patient has no way to know if they are being overcharged or not.
roamerz(3)
IMO the healthcare market should be restructured into 3 sub markets where a payment scheme that make the most sense for the type of care can be applied:
- Routine/Preventative Care [Self or Employer paid in cash]
- Emergency & Acute Care [Self or Employer paid insurance]
- Chronic/Disabled/Elder Care [Socialized Medicine]
However, that is far too logical and efficient for our current system of crony capitalism.
- Routine/Preventative Care [Self or Employer paid in cash]
- Emergency & Acute Care [Self or Employer paid insurance]
- Chronic/Disabled/Elder Care [Socialized Medicine]
However, that is far too logical and efficient for our current system of crony capitalism.
There are a few problems with this setup.
1) Part of the reason why Americans are so sick is that they don't have access to preventative care in the first place. Just getting a check up at the doctor should not be a financial burden.
2) It breaks the basic model of insurance, wherein risk is spread among many parties and the premiums that come in can pay for the losses paid out.
3) Employer sponsored insurance just handcuffs people to their jobs. This is bad for all kinds of reasons.
1) Part of the reason why Americans are so sick is that they don't have access to preventative care in the first place. Just getting a check up at the doctor should not be a financial burden.
2) It breaks the basic model of insurance, wherein risk is spread among many parties and the premiums that come in can pay for the losses paid out.
3) Employer sponsored insurance just handcuffs people to their jobs. This is bad for all kinds of reasons.
Not sure you’ve fully thought this through...
Regarding your first point, in a system as I’ve described pricing for preventative care will be driven down by market forces. Especially with market pressures like price comparisons made available. This kind of care is fairly fixed in cost and has predictable demand so the business risks are much lower. Additionally government could provide tax incentives for things like getting an annual exam for example.
For point #2 you have this backwards. Insurance is meant to guard against risk. When you have situation like the current one where insurance is used to pay for routine or predictable care that whole idea of spreading the risk around with insurance is moot as the risk of costing the plan money is 100% for everyone.
Finally, fully single payer medicine is bad for all kinds of reasons as well. We need balanced solutions not ideologies.
Regarding your first point, in a system as I’ve described pricing for preventative care will be driven down by market forces. Especially with market pressures like price comparisons made available. This kind of care is fairly fixed in cost and has predictable demand so the business risks are much lower. Additionally government could provide tax incentives for things like getting an annual exam for example.
For point #2 you have this backwards. Insurance is meant to guard against risk. When you have situation like the current one where insurance is used to pay for routine or predictable care that whole idea of spreading the risk around with insurance is moot as the risk of costing the plan money is 100% for everyone.
Finally, fully single payer medicine is bad for all kinds of reasons as well. We need balanced solutions not ideologies.
Canadian here! Socialized medicine is, in fact, good. I think the US has gone about as far as it can go with crowbarring healthcare into an insurance model. Moving from Canada to the states as an adult I can sincerely tell you that healthcare here is an utterly terrible experience on every level, from check-ups to clinic visits to overnight emergency room stays. At a certain point it becomes more ideological not to have socialized healthcare. And that point was passed long, long ago. Twisting a few dials & pulling some levers on a machine that is fundamentally profiting off of people being sick will just never cut it. Nothing can overcome that underlying incentive.
I'd encourage you to take a look at some health economics literature, instead of accusing me of being an ideologue.
There’s a lot of detail here https://www.federalregister.gov/documents/2019/11/27/2019-24...
"“This transformative hospital price transparency rule has been fought at every step by the swamp and defenders of the status quote,” White House press secretary Kayleigh McEnany said in a statement."
Is "the status QUOTE" actually a thing now?
Is "the status QUOTE" actually a thing now?
Yeah I was wondering if this was misreporting or if the actual statement has this mistake. It looks like the press release is worded correctly but it's possible it's been edited. But every news org out there seems to have the word "quote", which shouldn't have passed any editor's desk without adding [sic] if it was indeed issued mistakenly, or fixed otherwise. But nobody gives a crap anymore about language or editing.
Second only to quid pro quote
a small piece of good news coming from the Trump administration, but still far too little to be meaningful
They has also put through a rule that drug companies were required to show the cost of a 30-day supply of the drug in their TV commercials. They did it for a few months before that pharmaceutical companies went to court and got a judge to rule in their favor.
Even a stopped clock is right twice a day
Actually according to the headline the White House did it. Trump only does bad things so something else must be responsible. In this case the house he lives in did it.
> Actually according to the headline the White House did it. Trump only does bad things so something else must be responsible. In this case the house he lives in did it.
FFS it's always been common practice to refer to the current administration as the White House.
FFS it's always been common practice to refer to the current administration as the White House.
It would be interesting to compare what percent of the time criticism of President Trump’s official actions used his name, vs what percent of the time praise of his official actions said “White House”. I suspect that there would be a vast discrepancy within publications.
The one that stands out most to me is having to disclose what we need to pay in cash if we choose. Not that any of this is really going to change any pricing, but hopefully it's just another step towards single payer.
Note the new transparency rule only affects hospitals, so the new rule won't cover services performed at local doctor's offices or clinics.
There will be several knock-on effects where the overall impact is unknown:
1. The transparency rule not only reveals prices to consumers, but also to other insurance companies and other hospitals. Since these price arrangements were typically conducted in private, this will impact negotiations between insurers and hospitals in competitive markets, which are typically in major cities. This is likely to force outliers on both the cheap end and expensive end to bring their rates closer to market. To the extent that either the hospital or the insurer cannot bring their rates closer to market, this may accelerate consolidation of hospitals into larger networks to improve negotiating power, and/or cause smaller insurers to drop hospitals from their network.
2. Since the transparency list is not comprehensive, and not all medical services are shoppable (i.e. scheduled in advanced, typically non life-threatening), this may cause hospitals to shift costs to services that consumers have no control over, meaning the emergency and unlisted procedures. It will take a few years for hospitals to understand the impact the rule has on their bottom line.
[0]https://en.wikipedia.org/wiki/Consumer-driven_healthcare