Hospitals lift curtain on prices, revealing giant swings in pricing by procedure(healthcaredive.com)
healthcaredive.com
Hospitals lift curtain on prices, revealing giant swings in pricing by procedure
https://www.healthcaredive.com/news/hospitals-price-transparency-spotty-compliance-swings-price/596183/
456 comments
And this can really cause issues for people who are insured because if an insurance company decides not to cover something (very very common, even in-network) then the inflated price is what you end up getting billed for.
That is until you call the hospital and find out there's all sorts of "sliding" prices etc...
I had a procedure billed for one of these drastically larger "insured" codes which got denied based on the nature of the procedure from the insurance company (apparently too new of a procedure at the time, however common now).
It all got worked out in the end but what I realized was that hospitals are largely subsidizing the cost of the uninsured by over-billing the insured folk's insurance companies. We've set the American healthcare system up to be a cat and mouse game where those in need are represented the least.
Best insurance here is "don't get sick"
That is until you call the hospital and find out there's all sorts of "sliding" prices etc...
I had a procedure billed for one of these drastically larger "insured" codes which got denied based on the nature of the procedure from the insurance company (apparently too new of a procedure at the time, however common now).
It all got worked out in the end but what I realized was that hospitals are largely subsidizing the cost of the uninsured by over-billing the insured folk's insurance companies. We've set the American healthcare system up to be a cat and mouse game where those in need are represented the least.
Best insurance here is "don't get sick"
> if an insurance company decides not to cover something (very very common, even in-network) then the inflated price is what you end up getting billed for...
Is there any reason why this kind of windfall shouldn't be illegal? I realize it isn't, but is sure seems like it should be.
I was stuck with a charge from a doctor for 7x the price my insurance would have paid. My pre-ACA insurance refused to cover the procedure and I ended up on the hook for the inflated price. The doctor wouldn't negotiate and demanded the full fee. Neither the doctor, nor I, knew this would happen until the procedure was already done.
It feels like an agreement, to me, when the practice takes on a patient knowing who their insurer is. I feel like the reimbursement rate that insurer has negotiated, regardless of whether the insurer ultimately covers any procedures, should act as a cap for the fees charged to the patient. It feels a lot like negotiating a contract, except that one party gets to unilaterally change the amount of consideration. How does that fly?
Is there any reason why this kind of windfall shouldn't be illegal? I realize it isn't, but is sure seems like it should be.
I was stuck with a charge from a doctor for 7x the price my insurance would have paid. My pre-ACA insurance refused to cover the procedure and I ended up on the hook for the inflated price. The doctor wouldn't negotiate and demanded the full fee. Neither the doctor, nor I, knew this would happen until the procedure was already done.
It feels like an agreement, to me, when the practice takes on a patient knowing who their insurer is. I feel like the reimbursement rate that insurer has negotiated, regardless of whether the insurer ultimately covers any procedures, should act as a cap for the fees charged to the patient. It feels a lot like negotiating a contract, except that one party gets to unilaterally change the amount of consideration. How does that fly?
Insurance has the worst moral hazard: the winning strategy is to sell a product that pretends to cover your customers but actually doesn't. Your customers give you money for nothing and they will only realize it once in a blue moon. You can probably buy off the few who are capable of causing actual blowback, and if that doesn't work just rebrand.
Until everyone becomes a contract lawyer capable of devoting weeks to insurance shopping every 6 months, the only good insurance market is a heavily regulated one, even though heavy regulation comes with its own gigantic bag of worms.
Until everyone becomes a contract lawyer capable of devoting weeks to insurance shopping every 6 months, the only good insurance market is a heavily regulated one, even though heavy regulation comes with its own gigantic bag of worms.
Aren't insurance rates regulated meaning if they payout a smaller amount than expected the rates will go down next year?
So that encourages greater payouts more or less synced with greater premiums in order to increase year over year real profits.
And given that the payouts are very nearly a function of how hard the insurance company can negotiate, they can simply choose to call off the negotiations when they reach their target amount.
And given that the payouts are very nearly a function of how hard the insurance company can negotiate, they can simply choose to call off the negotiations when they reach their target amount.
Only up to a point, they still accept or recheck claims arbitrarily to get closer to their targets. Worse they have incentives to decrease efficiency by increasing paperwork etc.
Private medical insurance in the US is a horridly inefficient system. Separating the claims process from insurance companies hands might help, but their incentives are never going to line up with consumers.
Private medical insurance in the US is a horridly inefficient system. Separating the claims process from insurance companies hands might help, but their incentives are never going to line up with consumers.
> Worse they have incentives to decrease efficiency by increasing paperwork etc.
Money spent on paperwork comes out of the same pile as profit. The MLR cap preserves incentive to reduce paperwork, wherever premiums and payouts sit.
Money spent on paperwork comes out of the same pile as profit. The MLR cap preserves incentive to reduce paperwork, wherever premiums and payouts sit.
Not internal paperwork. Think in terms of industry wide collusion not a single insurance company. If lobbing or an industry group can drive up healthcare costs via say paperwork or regulations then every health insurance company is “forced” to raise premiums and as the maximum profit per premium ratio is fixed that also increases the total possible industry wide profit.
Of course insurance companies are also in competition so they have individual incentives to keep premiums cost competitive.
Of course insurance companies are also in competition so they have individual incentives to keep premiums cost competitive.
I think even in terms of industry-wide collusion, the push of an MLR cap would be to decrease (money spent on) paperwork.
With R = revenue, P = profit, A = administrative expenses, and M = medical expenses, we have:
Does the MLR cap have an impact?
Of course if I believe that my company is better able to handle the new paperwork than my competitors, that could help - but if the whole industry believes that's the case then most of them are wrong, and in any event I believe this incentive is weakened not strengthened by the MLR cap.
If paperwork keeps new entrants out of the market, that is something current participants can probably agree on, but that's true in any case and I don't see how the MLR cap makes it stronger.
I don't think this analysis changes if we pull executive compensation out of "administrative expenses" and treat it as something we're maximizing in addition to (or instead of) profit.
With R = revenue, P = profit, A = administrative expenses, and M = medical expenses, we have:
R = P + A + M
P = R - M - A
P₂ = R - M - (A + δ) = P - δ
P₃ = (R + δ) - M - (A + δ) = P
Does the MLR cap have an impact?
MLR = M / R
MLR₃ = M / (R + δ)
MLR₃ < MLR
P = (R + δ) - M - (A + δ)
Of course if I believe that my company is better able to handle the new paperwork than my competitors, that could help - but if the whole industry believes that's the case then most of them are wrong, and in any event I believe this incentive is weakened not strengthened by the MLR cap.
If paperwork keeps new entrants out of the market, that is something current participants can probably agree on, but that's true in any case and I don't see how the MLR cap makes it stronger.
I don't think this analysis changes if we pull executive compensation out of "administrative expenses" and treat it as something we're maximizing in addition to (or instead of) profit.
Don’t forget a regulation that says Profit <= some percentage of Medical Expenses. In effect you have a normal demand curve but company’s can’t raise prices past some limit. Assuming profit maximization occurs below that limit it has no effect. However, insurance is unusually inelastic in part because much of it is subsidized.
So while thinking in terms of total administrative costs seems reasonable there are two different numbers here, administrative costs for the insurance companies and administrative costs for the healthcare industry and that matters.
So again, assuming it’s the regulation not market forces limiting profits increasing Ma directly increases profits. Up to some limit rather than P < (Mm + Ma) * X% it’s P = (Mm + Ma) * X%. Thus creating incentives to increase Ma.
So while thinking in terms of total administrative costs seems reasonable there are two different numbers here, administrative costs for the insurance companies and administrative costs for the healthcare industry and that matters.
So again, assuming it’s the regulation not market forces limiting profits increasing Ma directly increases profits. Up to some limit rather than P < (Mm + Ma) * X% it’s P = (Mm + Ma) * X%. Thus creating incentives to increase Ma.
Ah, yes, administrative costs within the medical organizations are presumably paid by passing those costs on to (payers including) insurance companies as "medical costs" and that is presumably counted in the M in the MLR (I could imagine a system that avoids it - at, ironically, the cost of some more paperwork - but I don't expect it's what we do).
It is true that the MLR cap does nothing to motivate insurance companies to avoid increasing hospital paperwork. I don't see that it produces incentive to create it - yes, increasing payments to hospitals increases allowable profit, but in order to make that profit you need sufficient revenues and customers aren't paying because they want hospitals to do paperwork. I'm of a mind that (at the margin) increasing legitimate (or nearly legitimate) medical spending is typically pretty easy so there is no need to find alternative ways of paying hospitals more; if I'm mistaken about that then you raise an important point that probably deserves attention (if it hasn't got it in some way I'm unaware of).
It is true that the MLR cap does nothing to motivate insurance companies to avoid increasing hospital paperwork. I don't see that it produces incentive to create it - yes, increasing payments to hospitals increases allowable profit, but in order to make that profit you need sufficient revenues and customers aren't paying because they want hospitals to do paperwork. I'm of a mind that (at the margin) increasing legitimate (or nearly legitimate) medical spending is typically pretty easy so there is no need to find alternative ways of paying hospitals more; if I'm mistaken about that then you raise an important point that probably deserves attention (if it hasn't got it in some way I'm unaware of).
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This is not remotely true.
Only to a degree because policies basically always have an upper limit on coverage.
If the payouts are dropping because there's a massive reduction in claims, then there's a pretty decent chance that paying the policy maximum on each claim still won't be enough.
Plus, profits don't come directly from the premiums anyway. They come from the investments the insurer makes with the premiums. So sure, they can try to convince policy holders to increase coverage which allows them to charge a higher premium, or they can work on their loss modeling and investment strategy to better predict their actual loss ratio (which means they can have less money in reserve and more money in investments) or get better returns on the investments. And those 2 are usually a better use of resources since increasing coverage means an individual conversation with each policy holder. That's a lot of human-hours compared to the modeling and investing.
If the payouts are dropping because there's a massive reduction in claims, then there's a pretty decent chance that paying the policy maximum on each claim still won't be enough.
Plus, profits don't come directly from the premiums anyway. They come from the investments the insurer makes with the premiums. So sure, they can try to convince policy holders to increase coverage which allows them to charge a higher premium, or they can work on their loss modeling and investment strategy to better predict their actual loss ratio (which means they can have less money in reserve and more money in investments) or get better returns on the investments. And those 2 are usually a better use of resources since increasing coverage means an individual conversation with each policy holder. That's a lot of human-hours compared to the modeling and investing.
> So sure, they can try to convince policy holders to increase coverage which allows them to charge a higher premium
Or they just stone wall and increase premiums anywhere they can until they hit targets. Like at a previous job I had at a 250 employee company where premiums went up $150/m one year because the previous year had two families had a kid get (very different kinds of) cancer out of the blue. You'd think that shopping around would've helped in that case, but the word got out somehow to the other insurance companies and they were giving us similar quotes.
The power relationship is very very tilted in the insurance company's favor and they can more or less dictate terms.
Or they just stone wall and increase premiums anywhere they can until they hit targets. Like at a previous job I had at a 250 employee company where premiums went up $150/m one year because the previous year had two families had a kid get (very different kinds of) cancer out of the blue. You'd think that shopping around would've helped in that case, but the word got out somehow to the other insurance companies and they were giving us similar quotes.
The power relationship is very very tilted in the insurance company's favor and they can more or less dictate terms.
> Like at a previous job I had at a 250 employee company where premiums went up $150/m one year because the previous year had two families had a kid get (very different kinds of) cancer out of the blue.
It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer.
When employees go through big health events it's hard to keep it under wraps in a work environment... especially in this "race to the bottom" society we happen to live in. You can bang on about privacy all you want, but people talk.
I guess I'm shocked it happened in an office of ~250 as I've always seen it happen at much smaller places.
It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer.
When employees go through big health events it's hard to keep it under wraps in a work environment... especially in this "race to the bottom" society we happen to live in. You can bang on about privacy all you want, but people talk.
I guess I'm shocked it happened in an office of ~250 as I've always seen it happen at much smaller places.
Sometimes it's worse than the office gossip- https://slate.com/human-interest/2014/02/tim-armstrong-blame...
>It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer.
That is how it would have to work if the employer wants to restrict the risk pool to the company's employees. After all, money has to come from somewhere.
But employers are welcome to participate in healthcare.gov plans where the risk pool is much larger (across the whole state), and where individuals in the company cannot be solely blamed for increases in healthcare costs:
It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer.
That is how it would have to work if the employer wants to restrict the risk pool to the company's employees. After all, money has to come from somewhere.
But employers are welcome to participate in healthcare.gov plans where the risk pool is much larger (across the whole state), and where individuals in the company cannot be solely blamed for increases in healthcare costs:
It's bad enough that I've heard office gossips complain about other employees leveraging their healthcare turning into higher premiums the year after. Like, as evil as complaining their coworker's kid got cancer.
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>You'd think that shopping around would've helped in that case, but the word got out somehow to the other insurance companies and they were giving us similar quotes.
Employers are welcome to purchase healthcare.gov plans that are not allowed to price based on pre existing conditions:
https://www.healthcare.gov/how-plans-set-your-premiums/
If an employer wants to self insure and restrict their risk pool to only their employees, then they have to pay for it.
Employers are welcome to purchase healthcare.gov plans that are not allowed to price based on pre existing conditions:
https://www.healthcare.gov/how-plans-set-your-premiums/
If an employer wants to self insure and restrict their risk pool to only their employees, then they have to pay for it.
> Employers are welcome to purchase healthcare.gov plans that are not allowed to price based on pre existing conditions:
Which are stupid expensive for anyone much above the poverty level.
> If an employer wants to self insure and restrict their risk pool to only their employees, then they have to pay for it
A 250 person company wasn't self insuring or restricting their risk pool to only their employees. They wouldn't be negotiating premiums with an insurance company if they were self insuring.
Which are stupid expensive for anyone much above the poverty level.
> If an employer wants to self insure and restrict their risk pool to only their employees, then they have to pay for it
A 250 person company wasn't self insuring or restricting their risk pool to only their employees. They wouldn't be negotiating premiums with an insurance company if they were self insuring.
If they were not restricting their risk pool, then how would a couple kids with cancer affect the company's premiums? The costs would be distributed across a much larger population.
When I was shopping around for health insurance for my businesses, the premiums were the same as what they would have been individually on healthcare.gov. Kaiser has a good report showing the costs are not that different based on firm size:
https://www.kff.org/report-section/ehbs-2020-section-1-cost-...
The cost of healthcare is pretty predictable, and spread over a sufficient population converges to the same numbers. Only option I can think of is people were thinking that the employer reduced their portion of healthcare they were subsidizing, and so people thought premiums were going up since the size of the portion they were expected to pay went up? Most people do not really know to look at box 12 code DD of their W-2 to know what is happening with their healthcare insurance premiums.
When I was shopping around for health insurance for my businesses, the premiums were the same as what they would have been individually on healthcare.gov. Kaiser has a good report showing the costs are not that different based on firm size:
https://www.kff.org/report-section/ehbs-2020-section-1-cost-...
The cost of healthcare is pretty predictable, and spread over a sufficient population converges to the same numbers. Only option I can think of is people were thinking that the employer reduced their portion of healthcare they were subsidizing, and so people thought premiums were going up since the size of the portion they were expected to pay went up? Most people do not really know to look at box 12 code DD of their W-2 to know what is happening with their healthcare insurance premiums.
Because the premiums even for the larger risk pool can be negotiated with the insurance company. And if you suck at negotiating (like our HR), then you can accept at face value the arguments the insurance company makes about how much you're costing them, and how they'll just drop you if you don't accept higher premiums.
And I'm going to guess that your businesses had very, very few employees? To the point of not being worth negotiating with from the insurance company's perspective?
And Kaiser isn't run like most insurance companies.
And I'm going to guess that your businesses had very, very few employees? To the point of not being worth negotiating with from the insurance company's perspective?
And Kaiser isn't run like most insurance companies.
The Affordable Care Act (Obamacare) eliminated lifetime coverage limits. There are also limits of the minimum medical loss ratio.
Unlike property and life insurers, medical insurers generate very little income from investments. Premium revenue comes in at about the same rate as claims are paid out. They don't have large reserves to invest. And most large employers are self insured anyway, so the ”insurance" company just acts as a claims administrator.
Unlike property and life insurers, medical insurers generate very little income from investments. Premium revenue comes in at about the same rate as claims are paid out. They don't have large reserves to invest. And most large employers are self insured anyway, so the ”insurance" company just acts as a claims administrator.
The parents in the thread don't specify medical insurance. They're talking about a moral hazard in all forms of insurance.
Now; I think the "medical loss ratio" requirements were one of the most important features of the ACA.
One of the worst offenders from the before-times was an insurance plan targeted at college students that had a 10% MLR.
One of the worst offenders from the before-times was an insurance plan targeted at college students that had a 10% MLR.
To save those looking it up: medical loss ratio is the fraction of premiums an insurer spends on actual healthcare expenses. 10% means 90 cents of every dollar paid in premium goes to admin/profit/etc.
I wonder how MLRs interact with subsidies, backroom deals and manufacturer rebates - if an payer can inflate their MLR by double paying for a medication - but then they get a rebate back for half the cost they paid will MLR tracking catch that?
Payers often get incentivized to promote certain drugs via manufacturer kickbacks and I wonder if this system is also used to run around MLR requirements.
Payers often get incentivized to promote certain drugs via manufacturer kickbacks and I wonder if this system is also used to run around MLR requirements.
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for admitted policies, usually yes. But it's not just that the rate for the next year goes down. Premium payments have to be refunded too.
Payouts and premiums aren't where the money is in insurance. It's in the return on investments the insurer makes with the money they hold in trust. From an insurer's point of view, the best market isn't one with no payouts, but one where there is a highly predictable amount of payouts, because the better they can predict how much they need to payout, the more aggressive they can be with their investments.
Yeah, there's a decent amount of regulation around payouts to protect the consumer, but it pales in comparison to the regulations around making sure that the insurer has enough liquid assets on hand, that the total valuation of their assets (ie investments) remains large enough, and that they're charging a minimum amount of premium for the risk that they're taking on.
Yeah, there's a decent amount of regulation around payouts to protect the consumer, but it pales in comparison to the regulations around making sure that the insurer has enough liquid assets on hand, that the total valuation of their assets (ie investments) remains large enough, and that they're charging a minimum amount of premium for the risk that they're taking on.
Yes, in a well-regulated insurance market the winning business model isn't deceit. That's the point of the regulations.
Deceit can take many forms, and I'd argue that undercapitalization is actually one of them. "There's a trap clause on page 23 of the telephone book contract" is only the simplest strategy an insurance company can use to lemon-drop. "We ask our customers to do an impossible information wrangling task and only review the paperwork if they get cancer, so that we have an excuse to drop them" is a slightly more evolved form. Loading up sacrificial business vehicles with risk and using bankruptcy to discharge obligations is the most advanced form of deceit-based insurance business models, because it provides plausible deniability. "We just tried to compete a bit too hard!" they can claim, even if they knew in their hearts exactly what they were doing: the age old practice of selling insurance that you had no intent of making good on.
Fortunately, we have a long record of historical evil tricks to draw on when crafting legislation, because I absolutely stand by my claim that the natural incentives (the ones that happen without careful legislation) in the insurance industry are overwhelmingly bleak, both on an absolute scale and relative to other industries.
Deceit can take many forms, and I'd argue that undercapitalization is actually one of them. "There's a trap clause on page 23 of the telephone book contract" is only the simplest strategy an insurance company can use to lemon-drop. "We ask our customers to do an impossible information wrangling task and only review the paperwork if they get cancer, so that we have an excuse to drop them" is a slightly more evolved form. Loading up sacrificial business vehicles with risk and using bankruptcy to discharge obligations is the most advanced form of deceit-based insurance business models, because it provides plausible deniability. "We just tried to compete a bit too hard!" they can claim, even if they knew in their hearts exactly what they were doing: the age old practice of selling insurance that you had no intent of making good on.
Fortunately, we have a long record of historical evil tricks to draw on when crafting legislation, because I absolutely stand by my claim that the natural incentives (the ones that happen without careful legislation) in the insurance industry are overwhelmingly bleak, both on an absolute scale and relative to other industries.
I'm not saying it's not because of regulations. I'm saying it's not just the regulations on payouts and the regulations on payouts probably aren't even the most important, because all the regulation in the world around ensuring the insurer can't skip out on payouts will do nothing for "Oops we invested badly and have literally no money with which to pay your completely valid claim".
The payouts regulations are still good and necessary because that's way better than requiring people to find out the hard way through shitty claims processes and denials and word-of-mouth reputation, but they're in no way sufficient.
The payouts regulations are still good and necessary because that's way better than requiring people to find out the hard way through shitty claims processes and denials and word-of-mouth reputation, but they're in no way sufficient.
I'm not sure we disagree. We just allocate the benefit of the doubt differently.
> "Oops we invested badly and have literally no money with which to pay your completely valid claim".
It's 100% possible for this to be a genuine mistake. I'm sure that it happened as a genuine mistake more than once! However, it is also possible to do this on purpose: load up a business vehicle with increasing amounts of risk and extract as much of the premiums as one possibly can before it explodes. If this is done intentionally, it is exactly the same hustle as selling policies that one doesn't intend to make good on, it just uses a different mechanism to shirk the obligation.
Every company that does it on purpose will say that it happened by mistake, of course, and just as I am certain that it has happened multiple times as a genuine mistake, I am certain that it has happened multiple times on purpose.
Undercapitalization is the evolved form of the "sell a trash policy" hustle because it provides almost perfect plausible deniability. It makes sense that the greatest legislative effort would be spent heading it off.
> "Oops we invested badly and have literally no money with which to pay your completely valid claim".
It's 100% possible for this to be a genuine mistake. I'm sure that it happened as a genuine mistake more than once! However, it is also possible to do this on purpose: load up a business vehicle with increasing amounts of risk and extract as much of the premiums as one possibly can before it explodes. If this is done intentionally, it is exactly the same hustle as selling policies that one doesn't intend to make good on, it just uses a different mechanism to shirk the obligation.
Every company that does it on purpose will say that it happened by mistake, of course, and just as I am certain that it has happened multiple times as a genuine mistake, I am certain that it has happened multiple times on purpose.
Undercapitalization is the evolved form of the "sell a trash policy" hustle because it provides almost perfect plausible deniability. It makes sense that the greatest legislative effort would be spent heading it off.
> From an insurer's point of view, the best market isn't one with no payouts, but one where there is a highly predictable amount of payouts, because the better they can predict how much they need to payout, the more aggressive they can be with their investments.
Isn't the latter a strict superset of the former? No payouts is an easily predictable number. And for nonzero amount of payouts, the less those payouts sum to, the more money remains for continuous investing.
Isn't the latter a strict superset of the former? No payouts is an easily predictable number. And for nonzero amount of payouts, the less those payouts sum to, the more money remains for continuous investing.
No, they're not a superset. You can have events with a very low probability and very little variance, events with very low probability and very high probability, higher probability with low variance, and high probability with very high variance.
Here's some random numbers,say for a hypothetical 100,000 hypothetical year long policies low probability, low variance: E(total claims) := 20, V(total claims) := 1 low probability, high variance: E(total claims) := 20, V(total claims) := 20 higher probability, low variance: E(total claims) := 20,000, V(total claims) := 10 higer probability, high variance: E(total claims):= 20,000, V(total claims): 10,000
Premiums don't usually make their way into investing for a bit. They're used to cover claims and then business overheads and then even dividends first. First they go to claims, because there's usually regulations to prevent price gouging that require insurers to refund premium if the ratio of aggregate premium : aggregate claims gets too high (the regulation is on a state by state basis in the US). Then any remainder goes to any other outlay first, so that the invested money can be/stay invested into longer term investments. Only if those outlays can be completely covered by the premium (and i'm skipping over a few things like regulations regarding various levels of liquidity for different risk levels and other stuff) then yeah it can make its way over to the actual investment fund. But in general the business model for insurers is that underwriting profit, limited as it is by regulations, is primarily used for actually running day to day operations and isn't a reliable source for being turned over to the investing side. The investing side is primarily using the initial capitalization of the insurer and the returns from earlier investments.
One way of looking at insurance is that the insured is actually buying an option against the insured's capitalization with very limited exercise clauses, but the the insurer pays out exercised options with the money from other purchased options contracts.
Here's some random numbers,say for a hypothetical 100,000 hypothetical year long policies low probability, low variance: E(total claims) := 20, V(total claims) := 1 low probability, high variance: E(total claims) := 20, V(total claims) := 20 higher probability, low variance: E(total claims) := 20,000, V(total claims) := 10 higer probability, high variance: E(total claims):= 20,000, V(total claims): 10,000
Premiums don't usually make their way into investing for a bit. They're used to cover claims and then business overheads and then even dividends first. First they go to claims, because there's usually regulations to prevent price gouging that require insurers to refund premium if the ratio of aggregate premium : aggregate claims gets too high (the regulation is on a state by state basis in the US). Then any remainder goes to any other outlay first, so that the invested money can be/stay invested into longer term investments. Only if those outlays can be completely covered by the premium (and i'm skipping over a few things like regulations regarding various levels of liquidity for different risk levels and other stuff) then yeah it can make its way over to the actual investment fund. But in general the business model for insurers is that underwriting profit, limited as it is by regulations, is primarily used for actually running day to day operations and isn't a reliable source for being turned over to the investing side. The investing side is primarily using the initial capitalization of the insurer and the returns from earlier investments.
One way of looking at insurance is that the insured is actually buying an option against the insured's capitalization with very limited exercise clauses, but the the insurer pays out exercised options with the money from other purchased options contracts.
> It's in the return on investments the insurer makes with the money they hold in trust
...sourced from the premiums. When they pull in more premiums, they have more money to invest.
...sourced from the premiums. When they pull in more premiums, they have more money to invest.
No, it's sourced from the initial capitalization of the firm and then realized returns that are reinvested. You can't offer insurance until you're capitalized enough to handle claims on the same day the policy takes effect.
Ideally the premiums will cover payouts and day-to-day business expenses, so the invested money can just keep being reinvested, hopefully into longer term and more aggressive investments. The premiums and payouts get rolled into underwriting profit/income. And that can eventually get rolled into new investments.
Here, look at state farm for 2019[1].
Their underwriting gain was $777 million on $65.2 billion in total premium. Their investment income was $5 billion with a net worth of over $100 billion, which is more than 6 times larger their underwriting premiums.
Their profit ratio for underwriting is like 1.2% because they're not trying to maximize that profit. A large reason they're not trying to maximize it is that for admitted policies, there's usually an upper limit to how much aggregate premium can go to anything other than paying out claims (eg: [2] and [3]).
So for an insurer, they don't want to set themselves up to depend on premiums to fund the investment arm because 1) there's an upper limit on how much aggregate premium can go towards anything other than claims 2) there's no limit on how much aggregate premium can go towards claims, 3) growing premium haphazardly can result in less money available for investing due to other regulations that limit risk and require a certain amount of liquidity for claims.
[1]: https://newsroom.statefarm.com/2019-state-farm-financial-res... [2]: https://www.law.cornell.edu/regulations/california/10-CCR-Se... [3]: https://consumerfed.org/press_release/auto-insurers-reaped-n...
Ideally the premiums will cover payouts and day-to-day business expenses, so the invested money can just keep being reinvested, hopefully into longer term and more aggressive investments. The premiums and payouts get rolled into underwriting profit/income. And that can eventually get rolled into new investments.
Here, look at state farm for 2019[1].
Their underwriting gain was $777 million on $65.2 billion in total premium. Their investment income was $5 billion with a net worth of over $100 billion, which is more than 6 times larger their underwriting premiums.
Their profit ratio for underwriting is like 1.2% because they're not trying to maximize that profit. A large reason they're not trying to maximize it is that for admitted policies, there's usually an upper limit to how much aggregate premium can go to anything other than paying out claims (eg: [2] and [3]).
So for an insurer, they don't want to set themselves up to depend on premiums to fund the investment arm because 1) there's an upper limit on how much aggregate premium can go towards anything other than claims 2) there's no limit on how much aggregate premium can go towards claims, 3) growing premium haphazardly can result in less money available for investing due to other regulations that limit risk and require a certain amount of liquidity for claims.
[1]: https://newsroom.statefarm.com/2019-state-farm-financial-res... [2]: https://www.law.cornell.edu/regulations/california/10-CCR-Se... [3]: https://consumerfed.org/press_release/auto-insurers-reaped-n...
The seed comes from initial investment, but if premiums weren't a major component of growth they'd just be an investment firm.
They don't have control over investment returns for the most part, so premiums are the only avenue for growth that they can do something about.
They don't have control over investment returns for the most part, so premiums are the only avenue for growth that they can do something about.
[deleted]
Insurance isn't inherently a moral hazard.
Inherently? No, just under capitalism.
I know that any anti-capitalism comments get immediately downvoted here but yeah...
The privatization of healthcare is a conflict of interest which is a product of our hyper-capitalistic society. You can't make a profit center out of human services without dehumanizing it in the process - the very nature of profit/capitalistic societies means someone has to lose and I see no place for these interests in healthcare or education.
Edit: yep - expected that. Maybe someone argue as to why privatization (which is a product of capitalism) isn't a conflict of interest in regards to healthcare?
The privatization of healthcare is a conflict of interest which is a product of our hyper-capitalistic society. You can't make a profit center out of human services without dehumanizing it in the process - the very nature of profit/capitalistic societies means someone has to lose and I see no place for these interests in healthcare or education.
Edit: yep - expected that. Maybe someone argue as to why privatization (which is a product of capitalism) isn't a conflict of interest in regards to healthcare?
Private health care is adversarial (so you have to look out for your own interests) but this does not automatically imply a conflict of interest. It may become a conflict of interest if you get your advice about which tests or treatments to undergo from the same health care provider who profits from you taking that advice, but this is something which you have control over: Get your advice from one place and have the work done somewhere else, just as you would for e.g. home inspections.
It's not as if public health care doesn't have moral hazards of its own, including conflict of interest. The system may officially be non-profit but the interests of its workers and administrators (profit-oriented or otherwise) do not necessarily align with those of the patient.
It's not as if public health care doesn't have moral hazards of its own, including conflict of interest. The system may officially be non-profit but the interests of its workers and administrators (profit-oriented or otherwise) do not necessarily align with those of the patient.
>the very nature of profit/capitalistic societies means someone has to lose
If by 'profit/capitalistic societies' you mean those allowing for voluntary exchanges between its people, I would disagree. As an adherent to the subjective theory of value, I think it is common that both parties in an exchange would consider themselves 'winners.' [0]
[0] https://en.wikipedia.org/wiki/Subjective_theory_of_value
If by 'profit/capitalistic societies' you mean those allowing for voluntary exchanges between its people, I would disagree. As an adherent to the subjective theory of value, I think it is common that both parties in an exchange would consider themselves 'winners.' [0]
[0] https://en.wikipedia.org/wiki/Subjective_theory_of_value
I'm in the Jim Camp school of thought where, in negotiation, there is no "win-win" situation.
https://www.forbes.com/sites/jimcamp/2013/03/11/revisiting-w...
The reason I am firmly in this school of thought is that I've made the absolute mistake of a decision to try for "win-win" situations in a capitalistic society, specifically in regards to contract negotiations and ultimately pricing/billing.
When I'm making sure that the person on the other end of the table "wins" I'm putting myself at a capitalistic disadvantage; and - if both parties "won" then didn't both ultimately lose?
I get your ideal, but when money is involved I find that the "win-win" is very much that: just an ideal. And, anecdotally over the years I've found many business experts write on the topic of why "win-win" is a losing position which validates my position on this.
https://www.forbes.com/sites/jimcamp/2013/03/11/revisiting-w...
The reason I am firmly in this school of thought is that I've made the absolute mistake of a decision to try for "win-win" situations in a capitalistic society, specifically in regards to contract negotiations and ultimately pricing/billing.
When I'm making sure that the person on the other end of the table "wins" I'm putting myself at a capitalistic disadvantage; and - if both parties "won" then didn't both ultimately lose?
I get your ideal, but when money is involved I find that the "win-win" is very much that: just an ideal. And, anecdotally over the years I've found many business experts write on the topic of why "win-win" is a losing position which validates my position on this.
What is the definition of "win-win" that you are against?
I'm not familiar with Jim Camp, but the term is vague. The linked article to me mainly seems to argue that:
- the side with a better BATNA has more negotiating power (yes, of course) and
- a negotiator should avoid agreeing to a bad deal out of desperation (yes, of course - but not always easy to do)
I'm not sure how the concept of "win-win" specifically plays into it, so I think this is where definitions are useful.
To me, win-win doesn't make sense for transactional negotiations where there is only one dimension (usually price), but CAN happen for more complex negotiations with multiple dimensions where each dimension has different value to each party (price, time, volume commitments, etc...)
I'm not familiar with Jim Camp, but the term is vague. The linked article to me mainly seems to argue that:
- the side with a better BATNA has more negotiating power (yes, of course) and
- a negotiator should avoid agreeing to a bad deal out of desperation (yes, of course - but not always easy to do)
I'm not sure how the concept of "win-win" specifically plays into it, so I think this is where definitions are useful.
To me, win-win doesn't make sense for transactional negotiations where there is only one dimension (usually price), but CAN happen for more complex negotiations with multiple dimensions where each dimension has different value to each party (price, time, volume commitments, etc...)
> if both parties "won" then didn't both ultimately lose?
No, because even in a capitalist society "winning" is defined by each party's relative improvement over the state they would be in if they didn't come to an agreement and make the trade—not by some absolute measure of whether they did better than the other party. A "win-win" is simply an agreement where both parties are better off for making the trade. This is the usual state of things when both parties are free to accept or decline and there is no deception (fraud) involved, since both parties need to accept the agreement and they will only do so if they believe that doing so benefits them. In rare cases one or both parties may be mistaken about the benefit, but they know their own business better than anyone else and are best positioned to judge the expected value of making the trade based on the information available at the time.
No, because even in a capitalist society "winning" is defined by each party's relative improvement over the state they would be in if they didn't come to an agreement and make the trade—not by some absolute measure of whether they did better than the other party. A "win-win" is simply an agreement where both parties are better off for making the trade. This is the usual state of things when both parties are free to accept or decline and there is no deception (fraud) involved, since both parties need to accept the agreement and they will only do so if they believe that doing so benefits them. In rare cases one or both parties may be mistaken about the benefit, but they know their own business better than anyone else and are best positioned to judge the expected value of making the trade based on the information available at the time.
I have to agree with you for the most part, as a Canadian, I know our healthcare system is flawed, deep systemic problems, problems I'm not even familiar with. However, we don't have to deal with any of these price lists or copays or pre-approvals or debt (inside the scope of hospitalisation)
I've even heard arguements that many of the pitfalls stem from privatised aspects.
I'm a fairly capitalist person, but there is something awfully and fundamentally wrong about a society that monetizes well-being and health.
> However, we don't have to deal with any of these price lists or copays or pre-approvals or debt (inside the scope of hospitalisation) I've even heard arguements that many of the pitfalls stem from privatised aspects
Many of the current US medical problems (bureaucratization of medicine) actually evolved out of massive government regulation with debatable value. EMRs, ICD/coding, the bureacracu that eats up 25% of your doctor's day? It is mainly for insurance companies and Medicare/Medicaid.
https://healthncare.info/history-healthcare-insurance-united...
> I'm a fairly capitalist person, but there is something awfully and fundamentally wrong about a society that monetizes well-being and health
All the medical providers (doctors/nurses/therapists/techs/PAs/etc) do not work for free, and there is a significant logistics and technology tail in providing medical services at huge scale.
If you really want to go after waste in medicine ask the following questions:
(1) How much are the nonclinical hospital mgmt & insurance executives paid?
(2) What is the ratio of clinical to non-clinical personnel?
(3) Why is the US subsidizing the vast majority of the medical research, and drug profits for the entire world?
These are serious questions because, as my nearby regional hospital group was firing hundreds of nurses during COVID, their CEO was collecting millions.
Many of the current US medical problems (bureaucratization of medicine) actually evolved out of massive government regulation with debatable value. EMRs, ICD/coding, the bureacracu that eats up 25% of your doctor's day? It is mainly for insurance companies and Medicare/Medicaid.
https://healthncare.info/history-healthcare-insurance-united...
> I'm a fairly capitalist person, but there is something awfully and fundamentally wrong about a society that monetizes well-being and health
All the medical providers (doctors/nurses/therapists/techs/PAs/etc) do not work for free, and there is a significant logistics and technology tail in providing medical services at huge scale.
If you really want to go after waste in medicine ask the following questions:
(1) How much are the nonclinical hospital mgmt & insurance executives paid?
(2) What is the ratio of clinical to non-clinical personnel?
(3) Why is the US subsidizing the vast majority of the medical research, and drug profits for the entire world?
These are serious questions because, as my nearby regional hospital group was firing hundreds of nurses during COVID, their CEO was collecting millions.
>...the very nature of profit/capitalistic societies means someone has to lose
The last time you bought milk did you lose or did the grocery store? The last time you paid money for a hair cut, who lost there?
The extreme regulation of all aspects of health care that has developed over the last century has improved some problems and created other problems - the problems specific to healthcare have little to do with the "the very nature of profit/capitalistic societies"
The last time you bought milk did you lose or did the grocery store? The last time you paid money for a hair cut, who lost there?
The extreme regulation of all aspects of health care that has developed over the last century has improved some problems and created other problems - the problems specific to healthcare have little to do with the "the very nature of profit/capitalistic societies"
> The last time you bought milk did you lose or did the grocery store?
There's way more people involved in that supply chain then me and the store. This is an over simplification.
Outside of the obvious answer of "the cows" - factory farming has been destroying my home state causing huge problems in rural America. Also - the environment. Big time the loser there is the environment for literally any bovine farming.
> The last time you paid money for a hair cut
When I was getting my hair cut professionally I tipped a $20 because I knew the gal cutting my hair working at the midwestern mall Regis Salon was making jack-all. I knew this because I worked at Geeksquad with her boyfriend, eventually husband. If I were not to tip well she would be at-risk for making minimum wage for that hour - and since you can't support yourself on minimum wage I see that as her losing.
I've always tipped my butt off because I know without that they lose.
---
So yeah - sorry... I anecdotally do see losers in the situations you described. I don't have to look hard to see them.
There's way more people involved in that supply chain then me and the store. This is an over simplification.
Outside of the obvious answer of "the cows" - factory farming has been destroying my home state causing huge problems in rural America. Also - the environment. Big time the loser there is the environment for literally any bovine farming.
> The last time you paid money for a hair cut
When I was getting my hair cut professionally I tipped a $20 because I knew the gal cutting my hair working at the midwestern mall Regis Salon was making jack-all. I knew this because I worked at Geeksquad with her boyfriend, eventually husband. If I were not to tip well she would be at-risk for making minimum wage for that hour - and since you can't support yourself on minimum wage I see that as her losing.
I've always tipped my butt off because I know without that they lose.
---
So yeah - sorry... I anecdotally do see losers in the situations you described. I don't have to look hard to see them.
>Big time the loser there is the environment for literally any bovine farming.
Factory farming probably does cause externalities that aren't addressed. People could choose to buy from grocers who only source from smaller farms but there isn't as much interest in that due to price sensitivity.
>...and since you can't support yourself on minimum wage I see that as her losing.
Even in the case where you didn't tip, she likely would have preferred having the work than there not being a job available at that location.
Factory farming probably does cause externalities that aren't addressed. People could choose to buy from grocers who only source from smaller farms but there isn't as much interest in that due to price sensitivity.
>...and since you can't support yourself on minimum wage I see that as her losing.
Even in the case where you didn't tip, she likely would have preferred having the work than there not being a job available at that location.
Reminds me when my dentist charged me $50 for a cup of fluoride (nothing too special about this fluoride).
I asked why they said it would be covered. They said when they checked with insurance it says it’s covered, but for my age or whatever it’s not actually covered.
So then I said why is it my fault that you gave me something you said was free but actually wasn’t because your check wasn’t thorough enough?
They said they already spent it so someone has to pay…
In the end I didn’t pay for the fluoride after hours of argument.
Next year at a different dentist, same situation. I learned my lesson and just paid for the damn fluoride. Land of the free, home of the brave!
I asked why they said it would be covered. They said when they checked with insurance it says it’s covered, but for my age or whatever it’s not actually covered.
So then I said why is it my fault that you gave me something you said was free but actually wasn’t because your check wasn’t thorough enough?
They said they already spent it so someone has to pay…
In the end I didn’t pay for the fluoride after hours of argument.
Next year at a different dentist, same situation. I learned my lesson and just paid for the damn fluoride. Land of the free, home of the brave!
The dentists peddle that nonsense because it is almost all profit for them. Insurance will not cover it because there is no strong evidence that it helps, assuming you are brushing your teeth regularly, have access to fluoridated drinking water, and otherwise have healthy eating habits.
Yes, our medical/dental insurance industry has encouraged the attitude of “cost doesn’t matter, because it’s free to you (oh and besides, you can’t put a price on your health, can you, you cheapskate?)” which just serves to constantly let prices grow out of control. This is an instrumental part of how our healthcare costs got so high. It also is why it’s laughable to think of medical care as a free market: you can’t even find out what things cost before you buy most of the time. Not to mention that when you are in need of care, you often don’t have the luxury of shopping around.
What we really need is for people to stop thinking of insurance as a big blanket you buy that reduces the price of things to zero. That’s not what insurance is for. Insurance is supposed to be a system where you still pay for the cost of the good, but that buffers it for you so when you get an outlier cost, it doesn’t break you. It doesn’t make the costs of things go away. On average, you should end up paying a little more than the cost of your healthcare by purchasing it through an insurance plan. A high deductible plan does this: you actually pay the cost of all your healthcare up until a certain point out of pocket, and if you reach a certain amount (which is pretty high, but significantly less than the premiums on a low-deductible plan), the insurance takes over. This makes you actually aware of the prices of things and is healthy. Not to mention the insurance is a hell of a lot cheaper.
What we really need is for people to stop thinking of insurance as a big blanket you buy that reduces the price of things to zero. That’s not what insurance is for. Insurance is supposed to be a system where you still pay for the cost of the good, but that buffers it for you so when you get an outlier cost, it doesn’t break you. It doesn’t make the costs of things go away. On average, you should end up paying a little more than the cost of your healthcare by purchasing it through an insurance plan. A high deductible plan does this: you actually pay the cost of all your healthcare up until a certain point out of pocket, and if you reach a certain amount (which is pretty high, but significantly less than the premiums on a low-deductible plan), the insurance takes over. This makes you actually aware of the prices of things and is healthy. Not to mention the insurance is a hell of a lot cheaper.
How effectively can you actually shop for medical care? Providers lobby against public measures of effectiveness so basically only payers have enough data to actually judge who is effective and people scream when their doctor choice gets restricted for any reason.
I don't think consumers budgeting can realistically be the control on the growth of healthcare costs. For one thing, people's budgets vary too wildly.
Healthcare should simply be "free", ie budgeted into the operation of a modern society, like infrastructure costs and education.
Healthcare should simply be "free", ie budgeted into the operation of a modern society, like infrastructure costs and education.
Oh, I completely agree with this. In the meantime, the HDHP and acknowledging that, yes, you are paying for your healthcare is the best option.
I never pay for this.
"No cavities again! Would you like a flouride rinse?" "Why would I do that? I have flouride in my mouth rinse and my tooth paste." "Well, ours is a higher concentration that I paint onto your teeth." "Didn't you say I had no cavities?" "Well, yeah." ".... so what I'm doing seems to be working without your rinse" "Well, it's only $16" "My flouride rinse has the exact same active ingredient as yours and costs $5 for an entire bottle." And it just goes on and on.
"No cavities again! Would you like a flouride rinse?" "Why would I do that? I have flouride in my mouth rinse and my tooth paste." "Well, ours is a higher concentration that I paint onto your teeth." "Didn't you say I had no cavities?" "Well, yeah." ".... so what I'm doing seems to be working without your rinse" "Well, it's only $16" "My flouride rinse has the exact same active ingredient as yours and costs $5 for an entire bottle." And it just goes on and on.
Just take all of the money you'd otherwise spend on dental care and put it into a savings account or FSA.
I've never seen a dental insurance plan that actually makes financial sense. Most of them place significant limits on expensive and unlikely care, and cover routine care with little or no cost sharing. Insurance is a highly inefficient way to pay for expected expenses.
I've never seen a dental insurance plan that actually makes financial sense. Most of them place significant limits on expensive and unlikely care, and cover routine care with little or no cost sharing. Insurance is a highly inefficient way to pay for expected expenses.
Dental insurance via employer is mostly just a way to pay for dental healthcare via pre tax dollars.
And FSAs do that without the insurance company overhead.
Yes, the only downside I can think of is if you have an HSA (which anyone that can afford max out of pocket limit should), then you generally cannot have FSAs also unless they are Limited Purpose FSAs and then it gets too complicated for my tastes. I generally do not like the concept of FSAs period, being employer owned, and having to use up funds by the end of the year and all.
Agreed. I only put money in an FSA that I know I am going to use. But for my routine cleanings/xrays/etc, this is pretty easy to calculate.
> Is there any reason why this kind of windfall shouldn't be illegal? I realize it isn't, but is sure seems like it should be.
because our senators and congress critters are all on the buy for really cheap... it's not even hidden. something like medicare for all is the thing that makes sense but has a hard time finding traction because the people that it will negatively impact have the means to buy those politicians out.
because our senators and congress critters are all on the buy for really cheap... it's not even hidden. something like medicare for all is the thing that makes sense but has a hard time finding traction because the people that it will negatively impact have the means to buy those politicians out.
> It feels like an agreement, to me, when the practice takes on a patient knowing who their insurer is. I feel like the reimbursement rate that insurer has negotiated, regardless of whether the insurer ultimately covers any procedures, should act as a cap for the fees charged to the patient. It feels a lot like negotiating a contract, except that one party gets to unilaterally change the amount of consideration. How does that fly?
You aren't exactly talking about "balance billing"[1] but you'll be pleased to know the No Surprises Act[2] tries to address this situation with required cost (estimate) disclosures in advance of a procedure and capping the out-of-network amount that can be charged in the event of an emergency where there can't advanced disclosure. The HHS recently promulgated regulations[3] under the Act but the compliance date is January 2022. For some reason I think there is at least one (maybe two?) other proposed rules in the works but I can't recall what they address and I can't seem to find them.
Edit: The other proposed rule is relating to air ambulance services[4]
[1]https://en.wikipedia.org/wiki/Balance_billing
[2]https://www.congress.gov/bill/116th-congress/house-bill/3630...
[3]https://www.hhs.gov/about/news/2021/07/01/hhs-announces-rule...
[4]https://www.healthaffairs.org/do/10.1377/hblog20210913.57633...
You aren't exactly talking about "balance billing"[1] but you'll be pleased to know the No Surprises Act[2] tries to address this situation with required cost (estimate) disclosures in advance of a procedure and capping the out-of-network amount that can be charged in the event of an emergency where there can't advanced disclosure. The HHS recently promulgated regulations[3] under the Act but the compliance date is January 2022. For some reason I think there is at least one (maybe two?) other proposed rules in the works but I can't recall what they address and I can't seem to find them.
Edit: The other proposed rule is relating to air ambulance services[4]
[1]https://en.wikipedia.org/wiki/Balance_billing
[2]https://www.congress.gov/bill/116th-congress/house-bill/3630...
[3]https://www.hhs.gov/about/news/2021/07/01/hhs-announces-rule...
[4]https://www.healthaffairs.org/do/10.1377/hblog20210913.57633...
I've had this thought as well. If insurance is negotiating with the provider then that should be the final say. What's the point in negotiating if the patient gets charged the difference?
I believe this is called 'balanced billing'. Some states prohibit it under certain conditions but it seems either the government or insurance should be prohibiting this practice.
I believe this is called 'balanced billing'. Some states prohibit it under certain conditions but it seems either the government or insurance should be prohibiting this practice.
There are services you can use which will negotiate the rate back down to the neighborhood of what the insurer pays. They won't negotiate with you specifically, you have to retain one of these services to negotiate on your behalf. They have direct access to usual and customary charges insurers pay per region.
Was in a similar situation as you were, but unfortunately, what I'd have had to pay was still too much as it was clearly fraud on the part of an outpatient clinic - one side, the clinic, was approved by my insurer, the other side, the surgery center, was not, and they willfully lied about this distinction. I threatened a law suit and they demurred.
Was in a similar situation as you were, but unfortunately, what I'd have had to pay was still too much as it was clearly fraud on the part of an outpatient clinic - one side, the clinic, was approved by my insurer, the other side, the surgery center, was not, and they willfully lied about this distinction. I threatened a law suit and they demurred.
I think it ought to fall afoul of "informed consent." Did someone actually consent to paying without being informed of the price, or is it non-consent by virtue of being coerced by lack of information?
> Best insurance here is "don't get sick"
Recent New Yorker article looking at the "Costa Rica model"[0] raised this point as well. America, by contrast to Costa Rica, has a very weak public health sector and infrastructure, and this leads to a real weakness when focusing on preventable illnesses and issues.
[0]: https://www.newyorker.com/magazine/2021/08/30/costa-ricans-l...
Recent New Yorker article looking at the "Costa Rica model"[0] raised this point as well. America, by contrast to Costa Rica, has a very weak public health sector and infrastructure, and this leads to a real weakness when focusing on preventable illnesses and issues.
[0]: https://www.newyorker.com/magazine/2021/08/30/costa-ricans-l...
Yeah I read that too - just cherry picking here:
> All adults have tests and follow-up visits to prevent and treat everything from iron deficiency to H.I.V. It’s all free. If people don’t show up for their appointments, she makes sure their team finds out why and figures out what can be done.
It's common sense why they have better results and outcomes than we do here... Our system is optimized for capitalistic profit. I've got insanely good insurance and I still have no idea how screwed I am if I go to the doctor or especially a hospital. Although I've only had one major billing snafu years back I have real anxiety about going to the doctor here.
And hell, even if I go my PCP is going to be stuck in an "all or nothing" mentality where it's either OTC or getting in their own conflict with my insurer... ie: "If I can't justify this test with your insurer..."
---
Costa Rica's model is better than America's. The reason for this is because it's not optimized for profit, it's designed from the ground up to optimize for patient outcome.
> All adults have tests and follow-up visits to prevent and treat everything from iron deficiency to H.I.V. It’s all free. If people don’t show up for their appointments, she makes sure their team finds out why and figures out what can be done.
It's common sense why they have better results and outcomes than we do here... Our system is optimized for capitalistic profit. I've got insanely good insurance and I still have no idea how screwed I am if I go to the doctor or especially a hospital. Although I've only had one major billing snafu years back I have real anxiety about going to the doctor here.
And hell, even if I go my PCP is going to be stuck in an "all or nothing" mentality where it's either OTC or getting in their own conflict with my insurer... ie: "If I can't justify this test with your insurer..."
---
Costa Rica's model is better than America's. The reason for this is because it's not optimized for profit, it's designed from the ground up to optimize for patient outcome.
In a well functioning health care system screenings like that is actually of debatable value as it generates a lot of false positives and un-necessary procedures.
> if an insurance company decides not to cover something (very very common, even in-network)
Which is why hospitals charge higher prices to insurance companies.
Insurance companies often blanket deny every single claim made against them. This forces the hospital revenue cycle department to have an appeals nurse review just about every procedure done in the hospital, and justify its use. This almost always results in a "discount" for something by virtue of a care provider not justifying every action they take.
Revenue cycle management departments used to be small, about 1 per 1000 hospital employees. Today, they are so big - and make so much money* - that hospital systems are spinning off their revenue cycle management companies for billions of dollars. Private equity firms have been acquiring in this space like mad since about 2016.
* Really, they are actually getting the money that is already owed.
Which is why hospitals charge higher prices to insurance companies.
Insurance companies often blanket deny every single claim made against them. This forces the hospital revenue cycle department to have an appeals nurse review just about every procedure done in the hospital, and justify its use. This almost always results in a "discount" for something by virtue of a care provider not justifying every action they take.
Revenue cycle management departments used to be small, about 1 per 1000 hospital employees. Today, they are so big - and make so much money* - that hospital systems are spinning off their revenue cycle management companies for billions of dollars. Private equity firms have been acquiring in this space like mad since about 2016.
* Really, they are actually getting the money that is already owed.
That last sentence would be a great opener to the explanation of what insurance is, it’s not healthcare, insurance is something you don’t want to have to use. Healthcare is just healthcare, you can buy it from all sorts of places in various forms without billing to insurance.
Just like how car insurance is not a mechanic.
Just like how car insurance is not a mechanic.
>> They have a column called "Uninsured cash price." These prices are <25% of the insurance "discount" prices
> And this can really cause issues for people who are insured because if an insurance company decides not to cover something (very very common, even in-network) then the inflated price is what you end up getting billed for.
That doesn't sound like an "inflated" price? 25% of what insurance companies are billed for?
I'm confused. I'm not sure y'all are talking about the same things?
> And this can really cause issues for people who are insured because if an insurance company decides not to cover something (very very common, even in-network) then the inflated price is what you end up getting billed for.
That doesn't sound like an "inflated" price? 25% of what insurance companies are billed for?
I'm confused. I'm not sure y'all are talking about the same things?
He’s saying if you go in as an insured patient and get denied for a procedure by the insurance company after it’s been performed, you’ll get a bill from the hospital for the insurance-negotiated rate, not the uninsured cash pay rate. You can generally talk the billing department down to the cash pay rate, but that requires having a lot of meta-knowledge of how American healthcare works.
omg, I see what you mean. Confusing as heck.
Underpayment is a few percent of hospital revenues. It's a component of costs for sure, but only a small one.
https://www.aha.org/factsheet/2019-01-02-uncompensated-hospi...
My understanding is that you would usually pay the price set by the agreement your insurance has, even if they deny coverage of it.
https://www.aha.org/factsheet/2019-01-02-uncompensated-hospi...
My understanding is that you would usually pay the price set by the agreement your insurance has, even if they deny coverage of it.
[deleted]
"I realized was that hospitals are largely subsidizing the cost of the uninsured by over-billing the insured folk's insurance companies."
1. You have to back up claims like this.
2. I imagine for-profit Insurance companies would love to blame their prices on the uninsured.
3. Many poor people actually have insurance in the USA. Even if they don't apply for it, insurance can be applied for after the fact.
4. The wealthy, and the poor are usually covered by insurance. It's the middle class that needs attention. They have insurance, but it's not great.
I still don't belive our healthcare costs are due to the uninsured. Oh yea, every hospital has a fierce Billing and Collections department.
They are allowed to go after your assets if you can't pay your bill, and they do. Obamacare gave patients some rights, but hospitals blatantly abuse the regulations.
The right to collect in municipal court was never taken away from hospitals.
In my local newspaper, it's not uncommon for a hospital to sue a patient over a bill, and put a Judgment lien on the patients assets.
They claim they only do this as a last resort, but bankruptcy due to medical bills are still the number 1 reason people end up in federal court (Bankruptcy).
Your protections under a bankruptcy are not great either.
There are many hospitals that forced a former patient to sell their home (homestead exemption needs to be higher. In TX, they can't touch your primary residence.). under a bankruptcy.
In CA, for example, the primary home gets a $250,000 protection. (Look up that last figure. I know it's very low in CA, and needs to be raised to at least a million. You have a $600,000 home. You are only protected by $250,000 of it's worth.
So in America, if you do get sick, and can't pay all your medical bills, you have no protections. These for-profit medical companies will come after you with more zest than an unpaid credit card. I think CC companies are less aggressive.
1. You have to back up claims like this.
2. I imagine for-profit Insurance companies would love to blame their prices on the uninsured.
3. Many poor people actually have insurance in the USA. Even if they don't apply for it, insurance can be applied for after the fact.
4. The wealthy, and the poor are usually covered by insurance. It's the middle class that needs attention. They have insurance, but it's not great.
I still don't belive our healthcare costs are due to the uninsured. Oh yea, every hospital has a fierce Billing and Collections department.
They are allowed to go after your assets if you can't pay your bill, and they do. Obamacare gave patients some rights, but hospitals blatantly abuse the regulations.
The right to collect in municipal court was never taken away from hospitals.
In my local newspaper, it's not uncommon for a hospital to sue a patient over a bill, and put a Judgment lien on the patients assets.
They claim they only do this as a last resort, but bankruptcy due to medical bills are still the number 1 reason people end up in federal court (Bankruptcy).
Your protections under a bankruptcy are not great either.
There are many hospitals that forced a former patient to sell their home (homestead exemption needs to be higher. In TX, they can't touch your primary residence.). under a bankruptcy.
In CA, for example, the primary home gets a $250,000 protection. (Look up that last figure. I know it's very low in CA, and needs to be raised to at least a million. You have a $600,000 home. You are only protected by $250,000 of it's worth.
So in America, if you do get sick, and can't pay all your medical bills, you have no protections. These for-profit medical companies will come after you with more zest than an unpaid credit card. I think CC companies are less aggressive.
1. All you have to do is look at the chargemaster flat files that have been coming out. There are literally two different columns for insured and non-insured procedure cost and for every hospital I've obtained a chargemaster flatfile for this is the case. Other comments in this thread have backed this up, and have even claimed their hospital's chargemaster had the non-insured pricing column hidden potentially in bad faith.
2. I mean, I have no idea but for-profit insurance companies aren't out there really blaming anyone as they're just a faceless corporate entity. I've only heard hospital staff and normal people blame the uninsured.
3/4... no - poor people don't have insurance. I've grown up around people who were not economically privileged/who were struggling and this is just 100% untrue that poor people can get insurance as you posit. I've had private insurance and it's just not something someone can afford if poor. And, if you're referring to things like "Christian Healthcare Ministries" they're straight-up scams. Outside of that, there is no way American restaurant owners, retail franchises, etc will cover an unskilled laborer's health insurance - that just does not happen here.
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> I still don't *believe our healthcare costs are due to the uninsured.
When it comes to hospital billing - yeah. It is a huge thing that's baked into their SOP. See item #1 above.
2. I mean, I have no idea but for-profit insurance companies aren't out there really blaming anyone as they're just a faceless corporate entity. I've only heard hospital staff and normal people blame the uninsured.
3/4... no - poor people don't have insurance. I've grown up around people who were not economically privileged/who were struggling and this is just 100% untrue that poor people can get insurance as you posit. I've had private insurance and it's just not something someone can afford if poor. And, if you're referring to things like "Christian Healthcare Ministries" they're straight-up scams. Outside of that, there is no way American restaurant owners, retail franchises, etc will cover an unskilled laborer's health insurance - that just does not happen here.
---
> I still don't *believe our healthcare costs are due to the uninsured.
When it comes to hospital billing - yeah. It is a huge thing that's baked into their SOP. See item #1 above.
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There's police around hospitals constantly and if they get a whiff that you have a fake ID they're going to be talking to law enforcement sooner or later.
Also this isn't going down to your corner liquor store and flashing your drivers license... that thing is going to get scanned etc.
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Actual protip: If you're uninsured and need care they legally can't turn you away at an ER. They have to provide the healthcare to get you stabilized regardless if they're going to be able to bill for it or not... which ironically this is a big part of why the insured end up subsidizing the uninsured at the hospital.
Also, if this ends up being you - don't sign anything until you're in the right mind to sign something. They're going to try to pin you to bill your ass off one way or another and if you're half way through a heart attack or something do not sign anything until you can 100% understand what you're legally agreeing to.
Also this isn't going down to your corner liquor store and flashing your drivers license... that thing is going to get scanned etc.
---
Actual protip: If you're uninsured and need care they legally can't turn you away at an ER. They have to provide the healthcare to get you stabilized regardless if they're going to be able to bill for it or not... which ironically this is a big part of why the insured end up subsidizing the uninsured at the hospital.
Also, if this ends up being you - don't sign anything until you're in the right mind to sign something. They're going to try to pin you to bill your ass off one way or another and if you're half way through a heart attack or something do not sign anything until you can 100% understand what you're legally agreeing to.
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I've often wondered what would happen if you went to the ER, carried no identifying documents, and just refused to identify yourself. Just hope nobody recognizes you there.
Giving a fake name is fraud, and people have been arrested for doing that at the ER. (Fuck America.) But I don't know that there's any legal obligation to give any name at all. If you don't give them a name, you're not lying to them, and oops, looks like they don't have a way to bill you. As you note, hospitals are legally required to provide emergency stabilization without regard to ability to pay.
I suppose the hospital could try to call the police, but AFAIK the police cannot compel you to identify yourself without reasonable suspicion that you have committed a crime.
Giving a fake name is fraud, and people have been arrested for doing that at the ER. (Fuck America.) But I don't know that there's any legal obligation to give any name at all. If you don't give them a name, you're not lying to them, and oops, looks like they don't have a way to bill you. As you note, hospitals are legally required to provide emergency stabilization without regard to ability to pay.
I suppose the hospital could try to call the police, but AFAIK the police cannot compel you to identify yourself without reasonable suspicion that you have committed a crime.
People show up at hospitals physically unable to identify theirselves all of the time.
https://www.npr.org/sections/health-shots/2019/05/07/7207022...
Hospitals that accept medicare do have a legal obligation to stabilize patients. But we're talking 'stabilize' as in 'you're not dying'. If you're alert and capable enough to be arguing with people and you're not a psych danger, you're likely stable enough to legally be thrown out on the street.
https://www.npr.org/sections/health-shots/2019/05/07/7207022...
Hospitals that accept medicare do have a legal obligation to stabilize patients. But we're talking 'stabilize' as in 'you're not dying'. If you're alert and capable enough to be arguing with people and you're not a psych danger, you're likely stable enough to legally be thrown out on the street.
I'm aware of that. That's different from refusing to identify yourself to avoid paying money to the healthcare racket.
The discussion here is whether there is a legal obligation to identify yourself. If there is such a requirement, it would apply to someone who is fully capacitated but refusing to identify themselves. It would not apply to someone who is unable to identify themselves due to incapacity, because such a person obviously lacks any criminal intent.
The discussion here is whether there is a legal obligation to identify yourself. If there is such a requirement, it would apply to someone who is fully capacitated but refusing to identify themselves. It would not apply to someone who is unable to identify themselves due to incapacity, because such a person obviously lacks any criminal intent.
There is no legal obligation for you to identify yourself to any businesses that I'm aware of. Most businesses will refuse you services if you refuse to cooperate in paying, to the extent that they are legally able to do so. I think you can expect that a hospital met with this scenario will complete their obligations under the EMTALA and nothing more.
Even with identification, healthcare systems usually will not do more than they're required to under EMTALA. The hospital will provide intensive care to the uninsured DKA patient, since they're obligated to do so under EMTALA, but they will not provide that patient the insulin and other care necessary to prevent them from needing ICU in the first place, since it's not yet an emergent condition.
If there's no risk of criminal exposure, even insured people should start doing this. Hitting hospitals with uncompensated care under EMTALA is one of the few points of leverage we have to fight back against these murderers. Hospitals are, by and large, not innocent parties in this -- several hospital groups are even members of the Partnership for America's Health Care Future terrorist group, which bribes politicians to fight Medicare for All.
It would bring me great pleasure to get to tell a hospital to go fuck themselves and to quit bribing politicians to fight M4A if they want to get paid next time.
If there's no risk of criminal exposure, even insured people should start doing this. Hitting hospitals with uncompensated care under EMTALA is one of the few points of leverage we have to fight back against these murderers. Hospitals are, by and large, not innocent parties in this -- several hospital groups are even members of the Partnership for America's Health Care Future terrorist group, which bribes politicians to fight Medicare for All.
It would bring me great pleasure to get to tell a hospital to go fuck themselves and to quit bribing politicians to fight M4A if they want to get paid next time.
If I'm dying, I want the best care I can get. I'm not about to argue with someone trying to save my life to make a political point to an ER doctor who didn't have anything to do with it in the first place. And I'm certainly not about to risk my own health outcomes by withholding the insurance that I paid for to help me in that exact scenario.
Oh, I wouldn't be arguing with the ER doctor. I'd be arguing with the billing murderers, like the one that comes in to shake you down for money while in the ER bed.
I believe legally they have a duty to provide care.
Yes, that's my understanding. So wouldn't refusing to identify yourself be an effective way to avoid a bill, without the criminal exposure of giving a fake name or ID?
This is why we need reference based pricing. You can't charge more than 1.2 * Medicare and if you pay cash, you get the Medicare price. This change alone would remove 25+% of unnecessary bloat from the US system.
This is what other countries with large well functioning private systems (Netherlands, Germany, Switzerland) do - they set reference prices that generously cap the costs that can be charged.
What people don’t understand is the appetite for healthcare spending is practically limitless - there is always something more you can do even if the benefit is marginal. As such you have to control spending somehow and the options are (not exhaustive):
- ration care by capping total healthcare spending - “we will do 1,000 hip replacements this year, everyone else waits”
- make the cost visible to patients so they ration their own care - Singapore does this even in their public system. There is no free care, you are expected to pay something according to your ability. This is what the US is trying to do with the move to HDHPs
- closely regulate coverage and prices. Many systems do this.
What people don’t understand is the appetite for healthcare spending is practically limitless - there is always something more you can do even if the benefit is marginal. As such you have to control spending somehow and the options are (not exhaustive):
- ration care by capping total healthcare spending - “we will do 1,000 hip replacements this year, everyone else waits”
- make the cost visible to patients so they ration their own care - Singapore does this even in their public system. There is no free care, you are expected to pay something according to your ability. This is what the US is trying to do with the move to HDHPs
- closely regulate coverage and prices. Many systems do this.
>"This change alone would remove 25+% of unnecessary bloat from the US system."
Where do you think the money is going? Insurance companies are not as profitable as you might think, drugs are not a massive burden on healthcare expenditures, and many hospitals are non-profits. The truth is that most of the money is going to staff wages; if you want to reduce healthcare spending, the only way to do it sustainably is to increase the numbers of doctors and nurses, so as to drive down their salaries (but this is not a popular option).
Where do you think the money is going? Insurance companies are not as profitable as you might think, drugs are not a massive burden on healthcare expenditures, and many hospitals are non-profits. The truth is that most of the money is going to staff wages; if you want to reduce healthcare spending, the only way to do it sustainably is to increase the numbers of doctors and nurses, so as to drive down their salaries (but this is not a popular option).
A substantial portion of the money spent on wages at primary care physicians offices is on staff to negotiate with insurance companies. At a previous employer, where I worked closely with many primary care physicians offices, it was not uncommon for there to be three or more staff members working entirely on billing. That is ludicrous.
Even if you drive down staff salaries physician, nurse, and everyone else working in the hospital, the profits that are made from those changes would simply be pocketed by the CEOs and MBAs in the system.
Many business which successfully reduce costs don't pass on those savings to consumers.
I will also point out medical students graduate (after 4 years college and 4 years medical school) on average with $210,000 of debt and make $60,000 dollars a year while working 60-80 hours a week for 3-8 years of residency. While yes doctors after residency are well compensated they have gone through 11-16 years of post secondary education by the time they achieve these salaries. Cutting salaries without reforming medical school tuition and residency salaries would be a mistake.
Many business which successfully reduce costs don't pass on those savings to consumers.
I will also point out medical students graduate (after 4 years college and 4 years medical school) on average with $210,000 of debt and make $60,000 dollars a year while working 60-80 hours a week for 3-8 years of residency. While yes doctors after residency are well compensated they have gone through 11-16 years of post secondary education by the time they achieve these salaries. Cutting salaries without reforming medical school tuition and residency salaries would be a mistake.
> many hospitals are non-profits.
That can't possibly be true of a hospital that charged $3000 for something on Tuesday, and $53000 for the same thing on Friday.
(Under reasonable assumptions like that Tuesday wasn't done at a $25K loss relative to breaking even; why would such be the case? And that they are busy with procedures, not simply doing a way overpriced procedure once every few weeks, and then just burning through cash in between that time.)
That can't possibly be true of a hospital that charged $3000 for something on Tuesday, and $53000 for the same thing on Friday.
(Under reasonable assumptions like that Tuesday wasn't done at a $25K loss relative to breaking even; why would such be the case? And that they are busy with procedures, not simply doing a way overpriced procedure once every few weeks, and then just burning through cash in between that time.)
PSA:
Non profits can be as greedy as any other organization.
Typically the money goes to wages for the leadership rather than profits to the owners.
Non profits can be as greedy as any other organization.
Typically the money goes to wages for the leadership rather than profits to the owners.
> Non profits can be as greedy as any other organization.
The term ‘non-profit’ is one I find hilarious. With the smoke and mirrors of accounting and standard insurance company behaviour it can mean anything.
The directors can get bonuses, the cars can be upgraded and the conferences/holidays can get more impressive. It’s surprising that ‘non-profit’ doesn’t generate an eye-roll in more people.
The term ‘non-profit’ is one I find hilarious. With the smoke and mirrors of accounting and standard insurance company behaviour it can mean anything.
The directors can get bonuses, the cars can be upgraded and the conferences/holidays can get more impressive. It’s surprising that ‘non-profit’ doesn’t generate an eye-roll in more people.
Very few hospitals do cost-accounting, so they don't even know how much things cost; this results in the inconsistencies you see in prices.
From Wikipedia:
>"In 2003, of the roughly 3,900 nonfederal, short-term, acute care general hospitals in the United States, the majority—about 62 percent—were nonprofit. The rest included government hospitals (20 percent) and for-profit hospitals (18 percent)"
https://en.wikipedia.org/wiki/Non-profit_hospital
From Wikipedia:
>"In 2003, of the roughly 3,900 nonfederal, short-term, acute care general hospitals in the United States, the majority—about 62 percent—were nonprofit. The rest included government hospitals (20 percent) and for-profit hospitals (18 percent)"
https://en.wikipedia.org/wiki/Non-profit_hospital
If you don't know how much things cost, how can you say you're doing accounting?
If you're doing accounting you have a ledger which balances down to the penny, and the expenses are spelled out in there with concrete amounts.
This is why that judge, as noted in the article, rejected the argument that the cost of an X-ray can be unknowable.
If you're doing accounting you have a ledger which balances down to the penny, and the expenses are spelled out in there with concrete amounts.
This is why that judge, as noted in the article, rejected the argument that the cost of an X-ray can be unknowable.
Cost accounting consists of more than just balancing a chequebook to the penny; you need to attribute expenses to specific procedures, which can get a bit tricky. It requires discipline and cooperation throughout the organization, which would likely be a huge change for hospitals (as I'm certain doctors would be loathe to log their time like lawyers do).
OK, so if my company knows how much it's spending on toilet paper for the washroom, but doesn't know exactly which departments are wiping how much ass, then we are not doing cost accounting though we are tracking the bulk expense properly in the ledger. We are not able to answer the question of how much toilet paper is required to operate our marketing department, for instance.
Widely used supplies like that are usually just put into a general overhead account, sometimes specific to a department.
Healthcare companies would need to attribute things like depreciation of equipment (MRIs & CAT scanners for example), as well as doctor and nurse time (outside of operating rooms). These things are generally not tracked accurately, and many professionals are indignant at the idea that they could be.
Healthcare companies would need to attribute things like depreciation of equipment (MRIs & CAT scanners for example), as well as doctor and nurse time (outside of operating rooms). These things are generally not tracked accurately, and many professionals are indignant at the idea that they could be.
> increase the numbers of doctors and nurses
and tort reform to manage the lawsuits to enable lower malpractice insurance costs.
and a scheme to drive down med school pricing. Maybe more competition? Enabling more MD and DO schools? There are <200 medical schools (both MD and DO schools) in the US.
and tort reform to manage the lawsuits to enable lower malpractice insurance costs.
and a scheme to drive down med school pricing. Maybe more competition? Enabling more MD and DO schools? There are <200 medical schools (both MD and DO schools) in the US.
Tort reform only helps a little. In fact several US states have already implemented major tort reform and their healthcare costs aren't significantly lower. Doctors still tend to practice defensive medicine and err on the side of doing too much rather than too little.
The current bottleneck in producing more physicians isn't medical schools but rather funded residency program slots. Every year some students graduate from medical school but are unable to actually practice medicine because they don't get matched to a residency program. We need Congress to increase funding.
https://www.ama-assn.org/press-center/press-releases/ama-fun...
The current bottleneck in producing more physicians isn't medical schools but rather funded residency program slots. Every year some students graduate from medical school but are unable to actually practice medicine because they don't get matched to a residency program. We need Congress to increase funding.
https://www.ama-assn.org/press-center/press-releases/ama-fun...
>and tort reform to manage the lawsuits to enable lower malpractice insurance costs.
A great insurance company talking point! The purpose of 'tort reform' is to increase insurer profits.
We need more medical malpractice lawsuits, not less!
A great insurance company talking point! The purpose of 'tort reform' is to increase insurer profits.
We need more medical malpractice lawsuits, not less!
Medical errors cause an estimated 250,000 deaths in the United States annually.
You are forgetting about all the brokers and all the staff at the insurance companies whose jobs is to negotiate different prices for procedures with different doctors. Most brokers charge 5%. Additionally, this change would cause a loss of some clinical jobs. A lot of the urgent cares would no longer be profitable and would have to get shutdown. Additionally, all these changes would ripple in other ways. Some providers may start offering sub Medicare cash prices to attract business. There is no reason healthcare costs needed to go up 6% per year and the main reason it does is that it can.
If you accept Medicare, you cannot legally charge anyone less than the Medicare price.
I won’t say always, but Medicare price is usually marginal but not profitable. I.e. if you’ve got an empty bed, Medicare is better than nothing, but you wouldn’t actively try to fill beds at sub-Medicare rates even without the hassle of dealing with insurance companies
I won’t say always, but Medicare price is usually marginal but not profitable. I.e. if you’ve got an empty bed, Medicare is better than nothing, but you wouldn’t actively try to fill beds at sub-Medicare rates even without the hassle of dealing with insurance companies
I didn't downvote you and in fact, I agreed with the fact that a significant portion of the exorbitant healthcare prices in the US can be traced back to administrative bloat, MBAs who are in the management and to a degree, the significantly-higher-than-OECD-average salaries of the doctors in the US.
Having said that, your belief that many hospitals are non-profit might not be as simple as it looks from the outside. I recently read an insider writing something about it on Reddit: https://old.reddit.com/r/SelfAwarewolves/comments/pruk4x/the...
Hope that gives you an additional viewpoint regarding the "non-profit" label of the hospitals.
Having said that, your belief that many hospitals are non-profit might not be as simple as it looks from the outside. I recently read an insider writing something about it on Reddit: https://old.reddit.com/r/SelfAwarewolves/comments/pruk4x/the...
Hope that gives you an additional viewpoint regarding the "non-profit" label of the hospitals.
I completely agree with that user's statement:
>"The end result is a privately-owned hospital that operates as a non-profit on the books when it is anything but that... American doctors and hospital executives are printing money using the backs of their patients as the die. They take in millions per year in compensation that was given to them by people who worked hard and fell on bad times. It is one of the most shameful forms of exploitation in modern history."
I'm just unsurprised, as that is consistent with my view of many (most?) non-profits. I also think that the executive pay component is a smaller share than that Redditor seems to.
>"The end result is a privately-owned hospital that operates as a non-profit on the books when it is anything but that... American doctors and hospital executives are printing money using the backs of their patients as the die. They take in millions per year in compensation that was given to them by people who worked hard and fell on bad times. It is one of the most shameful forms of exploitation in modern history."
I'm just unsurprised, as that is consistent with my view of many (most?) non-profits. I also think that the executive pay component is a smaller share than that Redditor seems to.
>administrative bloat
I'd love to know how much money is spent by hospital admin staff dealing with the insurance industry.
I'd love to know how much money is spent by hospital admin staff dealing with the insurance industry.
>the only way to do it sustainably is to increase the numbers of doctors and nurses, so as to drive down their salaries
Getting the hospitals to accept a price ceiling which forces the issue is another way to do it.
Getting the hospitals to accept a price ceiling which forces the issue is another way to do it.
Yes, but supposedly the author was referring to a way to lower prices while maintaining an equilibrium of supply versus demand.
You can always lower prices by fiat proclamation, but then you have shortages and wait lines as hospitals go bankrupt and shut down, which will hit rural areas particularly hard.
If you want to lower prices and make sure that everyone gets served, you need to be a bit more sophisticated than just cutting hospital revenue in half and washing your hands of the consequences.
You can always lower prices by fiat proclamation, but then you have shortages and wait lines as hospitals go bankrupt and shut down, which will hit rural areas particularly hard.
If you want to lower prices and make sure that everyone gets served, you need to be a bit more sophisticated than just cutting hospital revenue in half and washing your hands of the consequences.
>supposedly the author was referring to a way to lower prices while maintaining an equilibrium of supply versus demand
They were trying to solve the problem by increasing the supply of doctors into the system. The other proposed solution was taking the approach of reducing the supply of money into the system. Neither are contradictory to "maintaining an equilibrium of supply versus demand" but both are trying to move where that equilibrium is by adjusting the supply of two different things. So however you define "while maintaining an equilibrium of supply versus demand" either they were both doing it, or both weren't.
>then you have shortages and wait lines as hospitals go bankrupt and shut down, which will hit rural areas particularly hard
Sure, that is what happens if you only fix the prices in certain states and not others, which incentivizes the doctors to move from states that have such price ceilings into states that don't. That is why the only possible way to implement that solution is nation-wide.
>If you want to lower prices and make sure that everyone gets served
I don't see why lowering the price nation-wide would reduce the supply of doctors. What are the doctors going to do? Migrate? But no other large economy has doctor compensation as high as the US. So as a country, you are only competing against yourselves.
They were trying to solve the problem by increasing the supply of doctors into the system. The other proposed solution was taking the approach of reducing the supply of money into the system. Neither are contradictory to "maintaining an equilibrium of supply versus demand" but both are trying to move where that equilibrium is by adjusting the supply of two different things. So however you define "while maintaining an equilibrium of supply versus demand" either they were both doing it, or both weren't.
>then you have shortages and wait lines as hospitals go bankrupt and shut down, which will hit rural areas particularly hard
Sure, that is what happens if you only fix the prices in certain states and not others, which incentivizes the doctors to move from states that have such price ceilings into states that don't. That is why the only possible way to implement that solution is nation-wide.
>If you want to lower prices and make sure that everyone gets served
I don't see why lowering the price nation-wide would reduce the supply of doctors. What are the doctors going to do? Migrate? But no other large economy has doctor compensation as high as the US. So as a country, you are only competing against yourselves.
> Where do you think the money is going?
To the millions of people making a living in the health care system that have no actual role (direct or indirect) in improving the health of patients.
To the millions of people making a living in the health care system that have no actual role (direct or indirect) in improving the health of patients.
I think this is far too facile. It's like saying half your taxes go to government waste. I mean sure, OK, but how do you get rid of government waste? So far no one has been able to do it. So this is really an unwillingness to engage in the problem, which is absolutely endemic in the current discourse.
The key problem is that 20% of our GDP goes to healthcare, and similarly 20% of our population is employed in healthcare provision. This isn't just people sitting around doing nothing. It's nurses, doctors, administrators, etc. If you want to reduce healthcare costs in half, so that it is only 10% of GDP, then expect to throw 10% of the population out of work. That will include nurses, doctors, EMT personnel as well as administrators. Sure, you can try to shift that and fire a bit more administrators than nurses, but you will soon discover that's about as easy as eliminating government waste.
This inability to address the core issue arisies from people approaching these difficult problems in administration and systems science from a facile moral point of view. "it's wrong!" they say, to be given a big bill for a snake bite. Well, OK, it's wrong. But that same attitude will tell you "it's wrong" to fire a hard working nurse, or to reduce the pay of a doctor, etc. So now you are left with boogeymen like greedy insurance companies and fat cat CEOs. This is like the person who insists on a tax cut funded by reducing government waste. It's not a serious proposal. And what we have in the US healthcare debate is two sides, the first side is just lying and obfuscating (that is the side opposed to reform) and the second side is so bound in the chain of moralizing that they are unable to make any serious proposals. They can only go after the fat cats, and not the nurses. Thus their proposals will never work.
Same thing for education -- you need to fire most of the university staff and reduce the pay or fire many of the teachers. Same thing for all the difficult problems in life where we complain that things cost too much. It is not shadowy fat cats that are causing these problems, it is too many people employed in the provision of services who are earning too much. Ordinary professionals. The biggest problems of modern life are that professionals have too much power and are extracting too much from the society as a whole. Whether it is hospital workers or government workers or teachers, the issues of skyrocketing costs and bureaucratic bloat are very similar across these areas, and they cannot be solved by getting rid of shadowy fat cats or employees that "do nothing".
The key problem is that 20% of our GDP goes to healthcare, and similarly 20% of our population is employed in healthcare provision. This isn't just people sitting around doing nothing. It's nurses, doctors, administrators, etc. If you want to reduce healthcare costs in half, so that it is only 10% of GDP, then expect to throw 10% of the population out of work. That will include nurses, doctors, EMT personnel as well as administrators. Sure, you can try to shift that and fire a bit more administrators than nurses, but you will soon discover that's about as easy as eliminating government waste.
This inability to address the core issue arisies from people approaching these difficult problems in administration and systems science from a facile moral point of view. "it's wrong!" they say, to be given a big bill for a snake bite. Well, OK, it's wrong. But that same attitude will tell you "it's wrong" to fire a hard working nurse, or to reduce the pay of a doctor, etc. So now you are left with boogeymen like greedy insurance companies and fat cat CEOs. This is like the person who insists on a tax cut funded by reducing government waste. It's not a serious proposal. And what we have in the US healthcare debate is two sides, the first side is just lying and obfuscating (that is the side opposed to reform) and the second side is so bound in the chain of moralizing that they are unable to make any serious proposals. They can only go after the fat cats, and not the nurses. Thus their proposals will never work.
Same thing for education -- you need to fire most of the university staff and reduce the pay or fire many of the teachers. Same thing for all the difficult problems in life where we complain that things cost too much. It is not shadowy fat cats that are causing these problems, it is too many people employed in the provision of services who are earning too much. Ordinary professionals. The biggest problems of modern life are that professionals have too much power and are extracting too much from the society as a whole. Whether it is hospital workers or government workers or teachers, the issues of skyrocketing costs and bureaucratic bloat are very similar across these areas, and they cannot be solved by getting rid of shadowy fat cats or employees that "do nothing".
> So far no one has been able to do it.
But that's the problem with your argument. Of course people have done it, nearly every developed country has.
> If you want to reduce healthcare costs in half, so that it is only 10% of GDP, then expect to throw 10% of the population out of work. That will include nurses, doctors, EMT personnel as well as administrators.
No, it won't. I'm talking about eliminating the positions that would only exist because of the private insurance system. Which is a massive amount of dead weight loss.
It's not remotely hard to understand conceptually, I mean EVERY dollar that's devoted to arguing over insurance bills is completely wasted. As are all the dollars spent on insurance advertising and marketing, and so on. Every dollar paid back to health care companies as dividends, or used for stock buybacks.
That's a lot of dollars.
Every time this argument comes up people in the US start talking about it like "Oh yeah? Sure but what's YOUR solution then smart guy? Stumped you didn't I?"
Um, no. My solution is the NHS. Like you can go there and look at it I swear it's a real thing, they have buildings and everything, just book a flight to London and see for yourself. Or, in US terms, Medicare for all, which is also a real understandable thing that exists, except for the "for all" part.
But that's the problem with your argument. Of course people have done it, nearly every developed country has.
> If you want to reduce healthcare costs in half, so that it is only 10% of GDP, then expect to throw 10% of the population out of work. That will include nurses, doctors, EMT personnel as well as administrators.
No, it won't. I'm talking about eliminating the positions that would only exist because of the private insurance system. Which is a massive amount of dead weight loss.
It's not remotely hard to understand conceptually, I mean EVERY dollar that's devoted to arguing over insurance bills is completely wasted. As are all the dollars spent on insurance advertising and marketing, and so on. Every dollar paid back to health care companies as dividends, or used for stock buybacks.
That's a lot of dollars.
Every time this argument comes up people in the US start talking about it like "Oh yeah? Sure but what's YOUR solution then smart guy? Stumped you didn't I?"
Um, no. My solution is the NHS. Like you can go there and look at it I swear it's a real thing, they have buildings and everything, just book a flight to London and see for yourself. Or, in US terms, Medicare for all, which is also a real understandable thing that exists, except for the "for all" part.
The NHS/UK isn't cheaper (just) because of insurance related dead weight though- they also just pay everyone less.
The US Government estiamtes the total adminstration and health insurance expenditure cost $288B in 2019. Total health consumption was $3.69T. Thats about 7.5% of total health spending. Even if you assume a 2 or 3x multiplier to the effect of eliminating insurance companies you STILL don't get US healthcare spending on a GDP basis in line with international norms.
Insurance companies are awful, but they alone are not the cause of American's health care spening problems.
The US Government estiamtes the total adminstration and health insurance expenditure cost $288B in 2019. Total health consumption was $3.69T. Thats about 7.5% of total health spending. Even if you assume a 2 or 3x multiplier to the effect of eliminating insurance companies you STILL don't get US healthcare spending on a GDP basis in line with international norms.
Insurance companies are awful, but they alone are not the cause of American's health care spening problems.
To believe that administrative overhead would significantly reduce healthcare costs is just obviously false. We spend 20% of GDP on healthcare and UK spends 10%.
Total spend is employees * average salary per employee.
Let's take a look:
* For doctors, there are roughly the same number, ~2.8 per 1000, but US doctors earn three times as much as UK doctors[1]. 294K/year US versus 66K/year (UK).
* The US has twice as many nurses[2] per 1000 people (17.4 per 1000) as the UK does (9.8 per 1000), and the US pays its nurses much more. The US pays 77K/year for an RN and 112K/year for an PN and 181K/year average salary for a nurse anasthesologist[3]. Nurses in the UK earn about 1/3 less, a total average of 33K/year[4]
* The US has 315K pharmacists (not assistants) or roughly 1 per 1000, whereas the UK has 43K or .65 per 1000. US pharmacists make average of 140K/year[7]. UK pharmacists make an average salary of 58K per year[8].
* The US has 23,200 microbiologists (earning 69K/year). The UK has 490 (earning 52K/yr)
* The US has 40 MRI machines per million. The UK has 6.
* Now let's generally talk about staffing. The US employs 20 million healthcare workers with a payroll of 1 Trillion (2018)[5] an average wage of 70K (and median wage of 42K/year). This is occupational data from BLS (https://www.bls.gov/ooh/healthcare/home.htm), so you can't complain about insurance employees at hospitals being included.
The UK has 1.3 Million[5] in both hospitals and clinics counting both NHS and Independents, with an average salary of 24.7K/year.
That means, relative to population, that the US employs 60 per 100,000 healthcare employees while the UK employs 20 per 1000. We have triple the number of healthcare workers and our health care workers earn double what the do in the UK.
Now let's talk about this enormous waste in insurance that will make healthcare affordable if only we got rid of it. Total insurance overhead in the US is 7% of healthcare expenditures[8]. So if we reduced it to zero, we would pay 7% less. Whoppee.
Thinking that you can keep paying doctors and nurses triple and have so many more staff and keep their high wages but merely with insurance reforms reduce healthcare spending by half is so wrong I am amazed I even need to say it. It's a terrible, misleading, evasive non-answer.
What we need to cut are salaries and employment. If you don't acknowledge that, then you are not a serious participant in this discussion because you are refusing to acknowledge that this problem has tough trade offs. You are not going to solve it by "cutting waste".
And this is important, because our problem, as a nation, is the general problem of professional guilds extracting too much from the rest of society. We have this problem with higher education, with finance, with healthcare. A large chunk of our professional middle class is employed by these sectors, and their well-being would be threatened if we significantly cut their wages and employment. It is not evil insurance companies, it is not shadowy billionaires, but our neighbors down the street -- the nurses, the college professors, and the X-ray technicians -- who are the ones blocking meaningful reform. And until we are willing to face that and recognize what must be done, then we will not get affordable healthcare. The incurable diseases of the modern west are all due to the professional classes extracting too much. It is not due to excessive "waste".
---
[1] https://revisingrubies.com/us-vs-uk-doctors-salary/
[2] https://www.healthsystemtracker.org/chart-collection/u-s-hea...
[3] https://nursinglicensemap.com/resources/nurse-salary/
[4] https://www.bls.gov/opub/ted/2020/number-of-hospitals-and-ho...
[5] https://digital.nhs.uk/data-and-information/publications/sta...
[6] https://www.census.gov/library/stories/2020/10/health-care-s...
[7] https://www.salary.com/research/salary/benchmark/pharmacist-...
[8] https://uk.indeed.com/career/pharmacist/salaries
[9] https://time.com/5759972/health-care-administrative-costs/#:....
Total spend is employees * average salary per employee.
Let's take a look:
* For doctors, there are roughly the same number, ~2.8 per 1000, but US doctors earn three times as much as UK doctors[1]. 294K/year US versus 66K/year (UK).
* The US has twice as many nurses[2] per 1000 people (17.4 per 1000) as the UK does (9.8 per 1000), and the US pays its nurses much more. The US pays 77K/year for an RN and 112K/year for an PN and 181K/year average salary for a nurse anasthesologist[3]. Nurses in the UK earn about 1/3 less, a total average of 33K/year[4]
* The US has 315K pharmacists (not assistants) or roughly 1 per 1000, whereas the UK has 43K or .65 per 1000. US pharmacists make average of 140K/year[7]. UK pharmacists make an average salary of 58K per year[8].
* The US has 23,200 microbiologists (earning 69K/year). The UK has 490 (earning 52K/yr)
* The US has 40 MRI machines per million. The UK has 6.
* Now let's generally talk about staffing. The US employs 20 million healthcare workers with a payroll of 1 Trillion (2018)[5] an average wage of 70K (and median wage of 42K/year). This is occupational data from BLS (https://www.bls.gov/ooh/healthcare/home.htm), so you can't complain about insurance employees at hospitals being included.
The UK has 1.3 Million[5] in both hospitals and clinics counting both NHS and Independents, with an average salary of 24.7K/year.
That means, relative to population, that the US employs 60 per 100,000 healthcare employees while the UK employs 20 per 1000. We have triple the number of healthcare workers and our health care workers earn double what the do in the UK.
Now let's talk about this enormous waste in insurance that will make healthcare affordable if only we got rid of it. Total insurance overhead in the US is 7% of healthcare expenditures[8]. So if we reduced it to zero, we would pay 7% less. Whoppee.
Thinking that you can keep paying doctors and nurses triple and have so many more staff and keep their high wages but merely with insurance reforms reduce healthcare spending by half is so wrong I am amazed I even need to say it. It's a terrible, misleading, evasive non-answer.
What we need to cut are salaries and employment. If you don't acknowledge that, then you are not a serious participant in this discussion because you are refusing to acknowledge that this problem has tough trade offs. You are not going to solve it by "cutting waste".
And this is important, because our problem, as a nation, is the general problem of professional guilds extracting too much from the rest of society. We have this problem with higher education, with finance, with healthcare. A large chunk of our professional middle class is employed by these sectors, and their well-being would be threatened if we significantly cut their wages and employment. It is not evil insurance companies, it is not shadowy billionaires, but our neighbors down the street -- the nurses, the college professors, and the X-ray technicians -- who are the ones blocking meaningful reform. And until we are willing to face that and recognize what must be done, then we will not get affordable healthcare. The incurable diseases of the modern west are all due to the professional classes extracting too much. It is not due to excessive "waste".
---
[1] https://revisingrubies.com/us-vs-uk-doctors-salary/
[2] https://www.healthsystemtracker.org/chart-collection/u-s-hea...
[3] https://nursinglicensemap.com/resources/nurse-salary/
[4] https://www.bls.gov/opub/ted/2020/number-of-hospitals-and-ho...
[5] https://digital.nhs.uk/data-and-information/publications/sta...
[6] https://www.census.gov/library/stories/2020/10/health-care-s...
[7] https://www.salary.com/research/salary/benchmark/pharmacist-...
[8] https://uk.indeed.com/career/pharmacist/salaries
[9] https://time.com/5759972/health-care-administrative-costs/#:....
> What we need to cut are salaries and employment. If you don't acknowledge that, then you are not a serious participant in this discussion because you are refusing to acknowledge that this problem has tough trade offs. You are not going to solve it by "cutting waste".
Yes I agree. Take the windfall profit motive out of the system and you’ll see quite a bit of change. Paying doctors less sounds like a great plan.
But we can start with the truly staggering amount of deadweight loss. Do you actually interact with the US health care system? Is it really that hard to understand just how much energy is wasted fucking around with just the billing component alone?
Yes I agree. Take the windfall profit motive out of the system and you’ll see quite a bit of change. Paying doctors less sounds like a great plan.
But we can start with the truly staggering amount of deadweight loss. Do you actually interact with the US health care system? Is it really that hard to understand just how much energy is wasted fucking around with just the billing component alone?
The problem with eliminating "waste" is the bang for the buck. It would take massive restructuring to cut the 7% administration in half. But then you've only saved 3.5%!
So when addressing a problem, you start with the first order stuff, and then go to the second order stuff, and you do this in terms of impact, not in terms of conceptual clarity.
Cut nurses and doctors, medical staff wages in half, and you save 40%.
The real point here is that you can't have affordable healthcare if nurses are earning 6 figures.
That's why nurses in the UK earn 40K/year. It's the price of affordable healthcare.
That's the core trade off between affordable healthcare and US style healthcare.
But all of a sudden now we do not have the same moral clarity as we did when we were only talking about "waste".
So let's have that debate right now - the real healthcare debate, not the fake healthcare debate -- and stop pretending this is a problem that can be solved with waste while allowing nurses to keep their 6 figure salaries.
It is what we call cheap moralism to decry how unfair high healthcare costs are in the US and then avoid raising any of the tough issues of what would happen to people whose livelihoods depend on those costs being so high.
So when addressing a problem, you start with the first order stuff, and then go to the second order stuff, and you do this in terms of impact, not in terms of conceptual clarity.
Cut nurses and doctors, medical staff wages in half, and you save 40%.
The real point here is that you can't have affordable healthcare if nurses are earning 6 figures.
That's why nurses in the UK earn 40K/year. It's the price of affordable healthcare.
That's the core trade off between affordable healthcare and US style healthcare.
But all of a sudden now we do not have the same moral clarity as we did when we were only talking about "waste".
So let's have that debate right now - the real healthcare debate, not the fake healthcare debate -- and stop pretending this is a problem that can be solved with waste while allowing nurses to keep their 6 figure salaries.
It is what we call cheap moralism to decry how unfair high healthcare costs are in the US and then avoid raising any of the tough issues of what would happen to people whose livelihoods depend on those costs being so high.
But is it substantially lower percent wise in single payer systems like the NHS? Assuming the 7% figure is correct that does not seem like an excessive amount and event cutting it by half would only result in a marginal decrease in prices.
> The US has 40 MRI machines per million. The UK has 6.
Funny story - these days most DI (diagnostic imaging) machines (CT, fMRI, PET) are owned by doctors or consortiums of doctors.
They are money printing machines.
Doctors, and manufacturers know this. Manufacturers will find you doctors you can partner up with to buy DI assets, and get set up. You can pay off a CT machine in a couple of months, even high end fMRI in under a year. The manufacturer will finance. They'll even help you write CON applications (Certificate of Need, a nice little thing that hospitals lobbied for to reduce competition - if a new hospital wants to open up in an area it has to demonstrate that the existing community healthcare needs are being underserved. And the existing hospital gets input into the process). A nice little imaging production line.
Interestingly, though perhaps unsurprisingly, doctors who own an interest in imaging equipment tend to refer their patients to it at a rate approaching 2 standard deviations higher (comparing specialties like-for-like).
Funny story - these days most DI (diagnostic imaging) machines (CT, fMRI, PET) are owned by doctors or consortiums of doctors.
They are money printing machines.
Doctors, and manufacturers know this. Manufacturers will find you doctors you can partner up with to buy DI assets, and get set up. You can pay off a CT machine in a couple of months, even high end fMRI in under a year. The manufacturer will finance. They'll even help you write CON applications (Certificate of Need, a nice little thing that hospitals lobbied for to reduce competition - if a new hospital wants to open up in an area it has to demonstrate that the existing community healthcare needs are being underserved. And the existing hospital gets input into the process). A nice little imaging production line.
Interestingly, though perhaps unsurprisingly, doctors who own an interest in imaging equipment tend to refer their patients to it at a rate approaching 2 standard deviations higher (comparing specialties like-for-like).
> These prices are <25% of the insurance "discount" prices
There are some clever insurance companies whose entire model is "tell the hospital you don't have insurance, get the cash price, pay it with this debit card we give you."
There are some clever insurance companies whose entire model is "tell the hospital you don't have insurance, get the cash price, pay it with this debit card we give you."
Is it illegal to state you don’t have insurance when you do? Or is this product not considered Insurance in the legal sense?
I don't think it is. Sidecar Health is doing just fine on this model[1]
It's pretty perverse that you, an insured person, would have to lie about having insurance because the provider would charge you more for being insured.
[1] https://cost.sidecarhealth.com
It's pretty perverse that you, an insured person, would have to lie about having insurance because the provider would charge you more for being insured.
[1] https://cost.sidecarhealth.com
The same goes for pharmacies. Walmart advertises $4 generics. If your insurance has a $25 drug co-pay, then they will charge you the full $25.
I do this. Once my insurance company got upset that my procedure was so expensive and rang the hospital. The hospital immediately tripled the price. The insurance became even more upset and asked me to fix it. Still much cheaper than the equivalent procedure in the USA.
It's not illegal here, but in any case nobody asks, I just tell them I'm paying cash.
It's not illegal here, but in any case nobody asks, I just tell them I'm paying cash.
It's not insurance. They're "fixed indemnity plans." Sidecar Health is the one I'm familiar with.
https://www.brookings.edu/blog/usc-brookings-schaeffer-on-he... (Fixed indemnity health coverage is a problematic form of “junk insurance”)
https://www.brookings.edu/blog/usc-brookings-schaeffer-on-he... (Fixed indemnity health coverage is a problematic form of “junk insurance”)
Health care consumers are absolutely free to pay providers directly even if they carry insurance coverage.
They could be running as a "health spending account" where you can spend the money on whatever you want provided it's health-related. You don't technically have "insurance" but you're insured.
Not technically "insurance", these are cost-sharing companies. Often religious due to Obama's brilliance.
Is there evidence that Obama wanted those religious exemptions and bullshit cost sharing plans? I would be willing to bet that was a concession to other politicians in Congress in order to get ACA passed.
You misread. Parent thought those are a decent option and it's unfortunate that their availability is restricted.
I'm thankful the concession was made. The lower price of cost-sharing made it possible for my parents to keep eating while providing for the family.
That's great until the church decides your parents are sinners and refuse to cover anything, and have no consequences for stealing their money.
People voluntarily join health sharing groups. They are run by non-profits, some of which have no religious affiliation.
They're not church-run organizations. This is reductionist, inaccurate, and I would go so far as to say bigoted.
You're welcome to think that about me, but health sharing is almost entirely scams using "religion" as a cover. See my other link in this thread.
I'm happy for your family that they got a good one.
[deleted]
The parent comment never said anything about President Obama's desires regarding the Affordable Care Act, just that his 'brilliance' resulted in this outcome.
They are required to have some shared religious belief to be exempt from the ACA.
loeg(5)
Please provide an example or two.
You inspired me to look at the local hospital we just delivered our first child at.
They release 'standard charges' which as far as I can tell means 'the range of charges for this particular diagnosis based on past data' as an excel file.
But the price list is a text file delimited by pipes (vertical bars... |) which just seems unnecessary. They also do nothing to define the variables or column names they use...so that's nice.
They release 'standard charges' which as far as I can tell means 'the range of charges for this particular diagnosis based on past data' as an excel file.
But the price list is a text file delimited by pipes (vertical bars... |) which just seems unnecessary. They also do nothing to define the variables or column names they use...so that's nice.
Sometimes medical procedure names have commas in them. Instead of text qualifying them, it can be faster to write code that uses a different semi-standard delimiter.
It sucks, but, like, I don't really blame people for being in a hurry to fix a problem.
It sucks, but, like, I don't really blame people for being in a hurry to fix a problem.
Or they could be using a legacy system that exports data in that format from times before CSV was invented/standardized.
For example, SCO Unix's Informix SQL's `UNLOAD TO <file> SELECT ...` queries output in a format that's very much like what avs733 describes, only that the values aren't separated by pipes, they're terminated by them, so every record ends with a pipe character.
If that's the case, there's unfortunately no built-in option to get it to include column identifiers in the report. :(
For example, SCO Unix's Informix SQL's `UNLOAD TO <file> SELECT ...` queries output in a format that's very much like what avs733 describes, only that the values aren't separated by pipes, they're terminated by them, so every record ends with a pipe character.
If that's the case, there's unfortunately no built-in option to get it to include column identifiers in the report. :(
If it’s HL7 (likely) the format is more complex than just a CSV anyway. There are multiple separators for different purposes.
This is the GDPR cookie popup annoyance equivalent of requiring hospitals to disclose their chargemasters, but not spelling out that the published data should be reasonably human-readabale. Malicious compliance.
Oh but, if you read slightly between the article’s lines, you’ll notice that the law does require both human- and machine-readable publication.
The machine-readable part is mandated here: https://www.federalregister.gov/documents/2019/11/27/2019-24...
As a taste of how specific this is:
They aren’t always quite as stupid as people make them out to be, these lawyers.
The machine-readable part is mandated here: https://www.federalregister.gov/documents/2019/11/27/2019-24...
As a taste of how specific this is:
(5) The file must use the following naming convention specified by CMS, specifically: <ein>_<hospital-name>_standardcharges.[json|xml|csv].
They aren’t always quite as stupid as people make them out to be, these lawyers.
From your second link:
> c) Format. A hospital has discretion to choose a format for making public the information described in paragraph (b) of this section online.
This is how you get Excel files with certain column widths set to zero. All it has to be is searchable, free, public, and updated regularly.
> c) Format. A hospital has discretion to choose a format for making public the information described in paragraph (b) of this section online.
This is how you get Excel files with certain column widths set to zero. All it has to be is searchable, free, public, and updated regularly.
Pipes are commonly used as delimiters in healthcare settings [1]. A quick quack suggests Python, Javascript and Perl ecosystems have HL7 parsing libraries available. I assume most languages do.
[1]: https://en.m.wikipedia.org/wiki/Health_Level_7
[1]: https://en.m.wikipedia.org/wiki/Health_Level_7
Yep, probably an HL7 message. In the case of vertical bars, pretty sure it's HL7v2
Except they usually call them “tubes”.
(Can’t find the original source, but it goes “Cant breathe? Put in a tube. Can't pee? Tube. Can't poop? Tube. Bleeding? Tube. Infection? Tube. Heart attack? Tube.”)
(Can’t find the original source, but it goes “Cant breathe? Put in a tube. Can't pee? Tube. Can't poop? Tube. Bleeding? Tube. Infection? Tube. Heart attack? Tube.”)
God, I used to work in medical billing, and people would think these file format issues were some kind of scheme. NO they are not. They deal with the obvious problem that clinicians are NOT always programmer friendly, and will put things like tabs in case notes, will use commas etc. At some point you use a delimiter that is much less likely to be used - | - is one of those, not a lot of clinicians use it and you can say, please don't use this.
A surprising amount of stuff (at least medical billing side) can be flat file moves, especially if you are billing into lots of different systems.
And yes, the idiot new person with a phD says, just quote every field with a ". Great - you program all this up, along with the required escape sequence handling, and then escapes for escapes. \ and / get used a fair bit sometimes already and we are dealing with tons of systems.
A surprising amount of stuff (at least medical billing side) can be flat file moves, especially if you are billing into lots of different systems.
And yes, the idiot new person with a phD says, just quote every field with a ". Great - you program all this up, along with the required escape sequence handling, and then escapes for escapes. \ and / get used a fair bit sometimes already and we are dealing with tons of systems.
> God, I used to work in medical billing, and people would think these file format issues were some kind of scheme.
I think it must be at this point. The hot garbage that is medical data formats (HL7, in particular) and the ways you can break it as a user, unknowingly and silently. It’s incredible that a format this bad has hung around this long.
It’s not ok that users can type certain characters into a field and break the system.
I think it must be at this point. The hot garbage that is medical data formats (HL7, in particular) and the ways you can break it as a user, unknowingly and silently. It’s incredible that a format this bad has hung around this long.
It’s not ok that users can type certain characters into a field and break the system.
[deleted]
> But the price list is a text file delimited by pipes (vertical bars... |) which just seems unnecessary. They also do nothing to define the variables or column names they use...so that's nice.
They likely just exported the prices as HL7 from their EHR system and used Excel's built-in delimiter support, then called it a day
They likely just exported the prices as HL7 from their EHR system and used Excel's built-in delimiter support, then called it a day
> HL7
And there is the problem.
And there is the problem.
File a complaint with Health and Human Services [1]. It is clear they are not acting in good faith. Take snapshots of the URL with the Internet Archive for notarization [2].
[1] https://www.cms.gov/hospital-price-transparency/contact-us
[2] https://web.archive.org/save
[1] https://www.cms.gov/hospital-price-transparency/contact-us
[2] https://web.archive.org/save
I actually might, the wording on this page:
https://www.cms.gov/hospital-price-transparency
Does say "provide clear, accessible pricing information" which I would argue this is not.
edit: Filed a complaint.
https://www.cms.gov/hospital-price-transparency
Does say "provide clear, accessible pricing information" which I would argue this is not.
edit: Filed a complaint.
I genuinely appreciate that you took the time to do so.
EDIT: Thank you all for your efforts.
EDIT: Thank you all for your efforts.
Fantastic. In return I will review my locals and see what they report.
Thanks for posting this. I just looked to see if my local hospital had prices available. They have a webpage set up, but they give you a dummy link! Outrageous! I will absolutely be making a complaint.
I'm also going to post a review online, since poor reviews seem to get attention from them.
I'm also going to post a review online, since poor reviews seem to get attention from them.
I'd love to look up uninsured prices and compare them 1-1 to what I was charged for my little girl's 2 week ICU stay https://kingsley.sh/posts/2021/two-weeks-in-the-icu-as-a-bab...
What's hilarious about that - is this:
Instead of giving a hospital your insurance info, say "you don't know if you have it, the last one expired" - even if you have insurance they couldn't prove you did "know you had it".
Then get the bill in the mail.
Submit the bill to your insurance company.
Bill gets paid.
Hospital doesn't get to inflate.
Instead of giving a hospital your insurance info, say "you don't know if you have it, the last one expired" - even if you have insurance they couldn't prove you did "know you had it".
Then get the bill in the mail.
Submit the bill to your insurance company.
Bill gets paid.
Hospital doesn't get to inflate.
Reminds me of that time I exported a bunch of strings to Excel for translation. Was very confused when I got surprisingly short translations back.
Turns out the translator didn’t know you could resize the rows, so they had only translated the first few words that happened to be visible in each cell.
Turns out the translator didn’t know you could resize the rows, so they had only translated the first few words that happened to be visible in each cell.
It's like that "display:none;" thing in CSS.
Excuse me.
But fucking cunt asshole motherfuckers, we should be lining the people who are intentionally deceiving the public up against the wall, they are causing people to DIE.
The most sane comment here, sadly.
Anytime I have a procedure,
imaging, anything I ask for the out of pocket price. You can save a lot of money doing this especially imaging.
My local hospital offers a cash discount of nearly 50% if you pay at time of service.
That sounds pretty unreasonable. Most people can barely stay on top of payments with a payment plan, let alone paying everything upfront
I would think hospitals like people paying the cash price?
They make less that way. If they know you're insured they won't allow you to pay the cash price, only the much higher negotiated price.
> They make less that way. If they know you're insured they won't allow you to pay the cash price, only the much higher negotiated price.
This is not correct for all practices
My wife's practice (of plastic surgeons medical providers only in a reconstructive practice 75%, cosmetic 25%, attempting to be in-network with every insurer, with administrative front-office doubling as billing, and dedicated personnel for resubmits) vastly prefer cash paying because they get the money right then, and they don't have to haggle with insurers around things like pre-authorization, billing, etc. Insurers regularly make physicians go through the ringer to get an pre-authorization for a vital surgery. Even worse, insurers will ask for a "peer to peer" and then have some underqualified medical provider understand what a board certified surgeon is doing, based on a complex diagnosis, and not understanding the actual surgeries or procedures involved. Insurers will forget pre-auths, and then reject billing, and they have a whole bunch of shady practices around, even with in-network practices for cancer cases.
So much of this price transparency stuff is a giant racket because it helps insurers, and not the actual medical doctors, PAs, NPs and other medical providers. However, it is medical insurers & Payors which are driving all the paperwork (Horrible EMRs, ICD codes, pre-auth, auths, etc) along with growing the tsunami of administrative personnel)
Insurers try to use being out-of-network to reject medical bills, so they use it as a weapon vs practices/hospitals, very effectively unless it is an emergent case (medical emergency).
What is completely missing from this conversation is who this benefits, who this harms, and how insurers exploit the status quo.
Cash paying customers should always be the cheapest option, since there is little overhead for them.
This is not correct for all practices
My wife's practice (of plastic surgeons medical providers only in a reconstructive practice 75%, cosmetic 25%, attempting to be in-network with every insurer, with administrative front-office doubling as billing, and dedicated personnel for resubmits) vastly prefer cash paying because they get the money right then, and they don't have to haggle with insurers around things like pre-authorization, billing, etc. Insurers regularly make physicians go through the ringer to get an pre-authorization for a vital surgery. Even worse, insurers will ask for a "peer to peer" and then have some underqualified medical provider understand what a board certified surgeon is doing, based on a complex diagnosis, and not understanding the actual surgeries or procedures involved. Insurers will forget pre-auths, and then reject billing, and they have a whole bunch of shady practices around, even with in-network practices for cancer cases.
So much of this price transparency stuff is a giant racket because it helps insurers, and not the actual medical doctors, PAs, NPs and other medical providers. However, it is medical insurers & Payors which are driving all the paperwork (Horrible EMRs, ICD codes, pre-auth, auths, etc) along with growing the tsunami of administrative personnel)
Insurers try to use being out-of-network to reject medical bills, so they use it as a weapon vs practices/hospitals, very effectively unless it is an emergent case (medical emergency).
What is completely missing from this conversation is who this benefits, who this harms, and how insurers exploit the status quo.
Cash paying customers should always be the cheapest option, since there is little overhead for them.
But someone told me insurance companies are bad and are stiffing those poor, struggling doctors and hospitals.
Every head of the insurance/drug/provider dog points at the other two heads when somebody accuses it of being the problem.
Voters not wanting to pay for comprehensive care for everyone is a 4th head. The current system of healthcare is great for allocating different amounts of healthcare to different classes of people, so that it is great for 20 to 30% of people, okay for 20%, and not good for 50%, and that is why it persists.
There is no reason Medicare should be restricted to those over 65, or why Medicaid is implemented differently (and reimburses providers more poorly than Medicare). Or even Tricare. We have at least 3 different taxpayer funded healthcare programs specifically so not everyone can get access to equal care, but so that various classes of people can get healthcare proportional to their political power (which usually scale with money, but also votes in the case of old people).
There is no reason Medicare should be restricted to those over 65, or why Medicaid is implemented differently (and reimburses providers more poorly than Medicare). Or even Tricare. We have at least 3 different taxpayer funded healthcare programs specifically so not everyone can get access to equal care, but so that various classes of people can get healthcare proportional to their political power (which usually scale with money, but also votes in the case of old people).
> There is no reason Medicare should be restricted to those over 65, or why Medicaid is implemented differently (and reimburses providers more poorly than Medicare). Or even Tricare. We have at least 3 different taxpayer funded healthcare programs specifically so not everyone can get access to equal care, but so that various classes of people can get healthcare proportional to their political power (which usually scale with money, but also votes in the case of old people).
Medicare/Medicaid reimbursements are insufficient to support most medical practices. Tricare is for military & their families. Most active duty military are young & extremely healthy compared to the general population.
Medicare/Medicaid combined are the largest single item on the federal budget. More importantly, they are still growing in costs because of an aging population, and are heading towards 30% overall of the federal budget [1]
Tricare operates as an employment perk. Medicare has a cap on benefits, but is effectively mandatory for 65+, and medicaid operates as a payor of last resort, after folks have run out their lifetime benefits on medicare.
However, an argument in favor of your suggestion is that the vast majority of medical resources are spent on the last 2 years of life, often for terminally ill patients with a ton of co-morbidities that are at death's door anyways. Most medical spending happens in the latter part of life [2]
> 25% of Medicare’s annual spending is used by the 5% of patients during the last 12 months of their lives [3]
[1] https://www.americanprogress.org/issues/economy/reports/2010...
[2] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/
[3] https://www.acsh.org/news/2018/09/28/true-cost-end-life-medi...
Medicare/Medicaid reimbursements are insufficient to support most medical practices. Tricare is for military & their families. Most active duty military are young & extremely healthy compared to the general population.
Medicare/Medicaid combined are the largest single item on the federal budget. More importantly, they are still growing in costs because of an aging population, and are heading towards 30% overall of the federal budget [1]
Tricare operates as an employment perk. Medicare has a cap on benefits, but is effectively mandatory for 65+, and medicaid operates as a payor of last resort, after folks have run out their lifetime benefits on medicare.
However, an argument in favor of your suggestion is that the vast majority of medical resources are spent on the last 2 years of life, often for terminally ill patients with a ton of co-morbidities that are at death's door anyways. Most medical spending happens in the latter part of life [2]
> 25% of Medicare’s annual spending is used by the 5% of patients during the last 12 months of their lives [3]
[1] https://www.americanprogress.org/issues/economy/reports/2010...
[2] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361028/
[3] https://www.acsh.org/news/2018/09/28/true-cost-end-life-medi...
Medicare reimbursement levels are sufficient to support most medical practices. They charge more because they can, not because they have to. If reimbursement levels are cut then they'll find ways to improve efficiency, and then cut salaries.
Is there a reason that US doctors should get paid significantly more than their peers in other developed countries?
https://www.medscape.com/slideshow/2019-international-compen...
Is there a reason that US doctors should get paid significantly more than their peers in other developed countries?
https://www.medscape.com/slideshow/2019-international-compen...
> Medicare reimbursement levels are sufficient to support most medical practices.
Big Nope.
Most practices have fairly fixed costs:
Medical malpractice
Facilities rent, or mortgage
Front office
IT & EMR
Privileging/Credentialing
Practice
CME/required education
The only highly variable cost is physician compensation, and considering the limited availability, this will merely cause the retirements and limited access to specialists.
Perhaps you have some evidence to support your extraordinary claim?
I'll provide evidence to the contrary, based on Hospitals and practices refusing to accepting Medicaid [1] patients, or, not accepting/limiting medicare patients[2], [3], [4]
The simple fact is, there is a limited supply of physicians, and many of them don't want to practice the higher volume, 5 minutes per patient, 5 minutes for notes x 12 hours a day type of practice. Not only is the higher volume more dangerous for the patient, it is also more risky for the medical provider, both in terms of quality of life, and also, the risk of an error, or inadequate information exchange.
[1] https://www.reliasmedia.com/articles/147019-when-hospitals-r...
[2] https://www.investopedia.com/articles/personal-finance/10021...
[3] https://www.verywellhealth.com/doctors-accept-medicare-insur...
[4] https://www.hlc.org/news/more-physicians-no-longer-seeing-me...
Big Nope.
Most practices have fairly fixed costs:
Medical malpractice
Facilities rent, or mortgage
Front office
IT & EMR
Privileging/Credentialing
Practice
CME/required education
The only highly variable cost is physician compensation, and considering the limited availability, this will merely cause the retirements and limited access to specialists.
Perhaps you have some evidence to support your extraordinary claim?
I'll provide evidence to the contrary, based on Hospitals and practices refusing to accepting Medicaid [1] patients, or, not accepting/limiting medicare patients[2], [3], [4]
The simple fact is, there is a limited supply of physicians, and many of them don't want to practice the higher volume, 5 minutes per patient, 5 minutes for notes x 12 hours a day type of practice. Not only is the higher volume more dangerous for the patient, it is also more risky for the medical provider, both in terms of quality of life, and also, the risk of an error, or inadequate information exchange.
[1] https://www.reliasmedia.com/articles/147019-when-hospitals-r...
[2] https://www.investopedia.com/articles/personal-finance/10021...
[3] https://www.verywellhealth.com/doctors-accept-medicare-insur...
[4] https://www.hlc.org/news/more-physicians-no-longer-seeing-me...
> there is a limited supply of physicians
If the AMA isn't going to fix the physician and residency pipeline, could we not offer visas to physician immigrants who meet first world medical credentialing standards to deepen the supply and therefore support demand? If supply is the issue, we should fix the supple, not destroy necessary demand.
If the AMA isn't going to fix the physician and residency pipeline, could we not offer visas to physician immigrants who meet first world medical credentialing standards to deepen the supply and therefore support demand? If supply is the issue, we should fix the supple, not destroy necessary demand.
The AMA isn't responsible for the bottleneck in residency slots. We should be asking Congress to increase funding.
https://www.ama-assn.org/press-center/press-releases/ama-fun...
https://www.ama-assn.org/press-center/press-releases/ama-fun...
I stand corrected. Thank you for pointing out my mistake.
> could we not offer visas to physician immigrants who meet first world medical credentialing standards
Basically, you are saying American trained doctors only then, as American doctors are much better trained.
Because my experience is that a physician immigrant has to do the following:
Receive ECFMG verification
Complete missing medical education requirements
Study a boatload!
Pass US medical licensing exams 1 & 2
Find a residency (matching)
Go through Residency again
Obtain certification from ECFMG
start practicing, or
Complete Fellowship, then start practicing
Basically, you are saying American trained doctors only then, as American doctors are much better trained.
Because my experience is that a physician immigrant has to do the following:
Receive ECFMG verification
Complete missing medical education requirements
Study a boatload!
Pass US medical licensing exams 1 & 2
Find a residency (matching)
Go through Residency again
Obtain certification from ECFMG
start practicing, or
Complete Fellowship, then start practicing
> Basically, you are saying American trained doctors only then, as American doctors are much better trained.
Considering how much healthcare costs in the US and the quality of care received [1], I assert American doctors are not better trained, simply that they are more expensive and there are less of them per capita than other OECD countries [2] [3] [4]. I'm suggesting bypassing the undersized US doctor development pipeline until it is fully funded to produce enough doctors to meet demand and drive down costs.
https://www.ajmc.com/view/the-quality-of-us-healthcare-compa... ("A 2014 report from the Commonwealth Fund revealed continued trends that were along the same lines—despite the implementation of the Affordable Care Act (ACA) in the interim. In the report, the US “ranked last overall among 11 industrialized countries on measures of health system quality, efficiency, access to care, equity and healthy lives.” Significantly, the US was noted to have the highest costs while also displaying the lowest performance.")
[2] https://data.worldbank.org/indicator/SH.MED.PHYS.ZS?most_rec...
[3] https://www.fiercehealthcare.com/practices/how-u-s-stacks-up... ("When it comes to practicing physicians, there are only two physicians for every 1,000 Americans, nearly half the ratio of countries with nationalized public healthcare. Countries with nationalized systems saw the greatest increase in the number of physicians relative to their population.")
[4] https://www.medicaresupplement.com/content/global-healthcare...
Considering how much healthcare costs in the US and the quality of care received [1], I assert American doctors are not better trained, simply that they are more expensive and there are less of them per capita than other OECD countries [2] [3] [4]. I'm suggesting bypassing the undersized US doctor development pipeline until it is fully funded to produce enough doctors to meet demand and drive down costs.
https://www.ajmc.com/view/the-quality-of-us-healthcare-compa... ("A 2014 report from the Commonwealth Fund revealed continued trends that were along the same lines—despite the implementation of the Affordable Care Act (ACA) in the interim. In the report, the US “ranked last overall among 11 industrialized countries on measures of health system quality, efficiency, access to care, equity and healthy lives.” Significantly, the US was noted to have the highest costs while also displaying the lowest performance.")
[2] https://data.worldbank.org/indicator/SH.MED.PHYS.ZS?most_rec...
[3] https://www.fiercehealthcare.com/practices/how-u-s-stacks-up... ("When it comes to practicing physicians, there are only two physicians for every 1,000 Americans, nearly half the ratio of countries with nationalized public healthcare. Countries with nationalized systems saw the greatest increase in the number of physicians relative to their population.")
[4] https://www.medicaresupplement.com/content/global-healthcare...
> Voters not wanting to pay for comprehensive care for everyone is a 4th head.
M4A is overwhelmingly popular, at points taking majorities of Republicans. Also, the US government already spends as much on healthcare as Britain and the NHS; US healthcare is just allowed to cost twice as much.
M4A is overwhelmingly popular, at points taking majorities of Republicans. Also, the US government already spends as much on healthcare as Britain and the NHS; US healthcare is just allowed to cost twice as much.
Maybe now, but it was not true in 2009/2010 when ACA was being hashed out. As I saw it, lots of people said they wanted everyone to get healthcare, but when the chips were down, there was lots of balking at costs.
==We have at least 3 different taxpayer funded healthcare programs specifically so not everyone can get access to equal care==
Add in CHIP and the VA (Tricare). We've taken every vulnerable part of society (older, poor people, poor children, injured veterans) and given them government-paid, universal healthcare. This is around 100 million people.
Everyone left over is thrown into the private insurance pool. These people are typically working age population (18-60), making them both the richest and the healthiest. This is around 200 million people.
Add in CHIP and the VA (Tricare). We've taken every vulnerable part of society (older, poor people, poor children, injured veterans) and given them government-paid, universal healthcare. This is around 100 million people.
Everyone left over is thrown into the private insurance pool. These people are typically working age population (18-60), making them both the richest and the healthiest. This is around 200 million people.
>given them government-paid, universal healthcare
This is meaningless if the quality of healthcare is not the same. There are numerous hurdles placed for various different people to get the healthcare, effectively restricting access to healthcare itself.
This is meaningless if the quality of healthcare is not the same. There are numerous hurdles placed for various different people to get the healthcare, effectively restricting access to healthcare itself.
No doubt. I wasn't trying to comment on the quality or access, just a point on how we have "solved" the healthcare problem over time.
Taxpayers cover the neediest, leaving the healthiest to for-profit insurers. The healthiest have no incentive to make sure the programs for the neediest actually work or are accessible.
Taxpayers cover the neediest, leaving the healthiest to for-profit insurers. The healthiest have no incentive to make sure the programs for the neediest actually work or are accessible.
Oh yes, I agree with you. I remember how pissed people were when ACA caused their premiums to go up, because they were now subsidizing everyone who used to simply not get healthcare.
Just because hospitals are also evil doesn't mean insurance companies are not.
Everyone says that. But it's pretty clear that healthcare services themselves just cost an obscene amount of money no matter who's paying.
There is a loophole in ACA specifically for this. A loophole that you can drive 20% of all Americans through (That's roughly the percent I've heard).
https://www.nytimes.com/2020/01/02/health/christian-health-c...
https://www.nytimes.com/2016/12/10/opinion/sunday/should-i-l...
https://www.nytimes.com/2020/01/02/health/christian-health-c...
https://www.nytimes.com/2016/12/10/opinion/sunday/should-i-l...
Things they would love more:
Accepting the cash price after billing the person for the full price and writing off the difference.
Accepting the cash price after billing the person for the full price and writing off the difference.
It can go the other way too. Some hospitals will charge uninsured people much more than they would charge the insurance company for the same procedure.
Would a local news outlet publicise this?
> At a Sutter hospital in San Francisco, a procedure can range from $22,865 to $101,571.
What if ... that's actually a very egalitarian approach? Procedure cost is what you can afford.
What if ... that's actually a very egalitarian approach? Procedure cost is what you can afford.
Full openness is a good first step to make this insane system a little better. Next step would be for hospitals to quote the same price for the same procedure no matter if or where you are insured. I can’t think of another business where prices are different by hundreds of percent for different customer groups.
Also get rid of the whole in and out network system.
Also get rid of the whole in and out network system.
> Next step would be for hospitals to quote the same price for the same procedure no matter if or where you are insured.
After that, decouple health care from employment.
Finally, fully excise the connection between health care and ability to pay.
After that, decouple health care from employment.
Finally, fully excise the connection between health care and ability to pay.
[deleted]
Ever heard of coupons, rebates, bundles? All ways of adjusting pricing based on consumer price sensitivity.
It's not as pervasive, but a good deal of consulting work is priced, at least partially, by the size of the problem you're solving rather than the labor required to solve it.
That can lead to price discrepancies similar to (although perhaps not quite as severe) as what you see in healthcare.
That can lead to price discrepancies similar to (although perhaps not quite as severe) as what you see in healthcare.
I like the idea of getting rid of in/out of network. Both recent administrations have taken steps in this direction.
Psychologists want to charge $200-$250/hr, but insurance only reimburses $120-$160/hr. You might think these are high prices, but chargeable hours isn't hours worked for psychologists, since they have to do notes for every meeting, manage the business, appointments, etc, which reduces their total take home to something below $200k/yr, which is below a typical bigtech Eng II with only a couple years of experience, potentially not even going to college if they are clever and self motivated enough. While a psychologist has gone to school for 10 years and paid for it.
It's gaps like that that lead to the entire in/out network split.
It's gaps like that that lead to the entire in/out network split.
> You might think these are high prices, but chargeable hours isn't hours worked for psychologists, since they have to do notes for every meeting, manage the business, appointments, etc, which reduces their total take home to something below $200k/yr, which is below a typical bigtech Eng II with only a couple years of experience, potentially not even going to college if they are clever and self motivated enough.
Silicon Valley/big tech is not the center of the universe. How is what "typical" engineers at big tech companies make relevant to a discussion of what psychologists and other medical professionals make? Are you suggesting that the medical profession is doing battle with big tech for (future) workers?
Silicon Valley/big tech is not the center of the universe. How is what "typical" engineers at big tech companies make relevant to a discussion of what psychologists and other medical professionals make? Are you suggesting that the medical profession is doing battle with big tech for (future) workers?
Any ambitious and smart enough American who wants to make a high income in exchange for working hard at prep has a choice of jobs they can go into. Many people who go into medicine are not necessarily the most passionate about medicine, but want a high paying, prestigious job.
So yes, it does effect the supply of future and even current psychologists and doctors. Supply is dictated partly by cost of that supply vs the demand in dollars for it, and the cost and barriers to med school and licensing is a big factor of supply costs.
So yes, it does effect the supply of future and even current psychologists and doctors. Supply is dictated partly by cost of that supply vs the demand in dollars for it, and the cost and barriers to med school and licensing is a big factor of supply costs.
> Any ambitious and smart enough American who wants to make a high income in exchange for working hard at prep has a choice of jobs they can go into.
I suspect that the number of people who are driven solely by money and prestige is smaller than you believe, but even so, careers in different fields aren't fungible for the simple fact that even ambitious and smart people aren't universally capable of excelling in any field they choose. A top heart surgeon, for instance, wouldn't necessarily have the ability to be a top software engineer, even if he or she tried, just as a top software engineer wouldn't necessarily have the ability to be a top heart surgeon.
> So yes, it does effect the supply of future and even current psychologists and doctors.
Do you have any hard evidence indicating that the lure of big tech jobs is reducing the number of individuals who are pursuing careers in psychology, medicine, law, etc.? A study perhaps?
I suspect that the number of people who are driven solely by money and prestige is smaller than you believe, but even so, careers in different fields aren't fungible for the simple fact that even ambitious and smart people aren't universally capable of excelling in any field they choose. A top heart surgeon, for instance, wouldn't necessarily have the ability to be a top software engineer, even if he or she tried, just as a top software engineer wouldn't necessarily have the ability to be a top heart surgeon.
> So yes, it does effect the supply of future and even current psychologists and doctors.
Do you have any hard evidence indicating that the lure of big tech jobs is reducing the number of individuals who are pursuing careers in psychology, medicine, law, etc.? A study perhaps?
Yes, all high paying careers are competing with each other for ambitious workers.
FWIW I pay mine in cash from my HSA because he doesn’t accept any insurance due to the headaches involved getting reimbursed.
That's fair but for people without HSA they should still file a claim against maximum out of pocket.
Networks are a double edged sword. They're a pain to use (especially for things where network facilities have non-network providers or network providers steer you towards non-network accessory care like labs and what not), but network agreements are also a way that insurers control costs. Forcing insurers to cover every provider means insurers can't exclude overpriced providers.
Yep. These agreements cut out some ridiculous fees some might try to charge.
E.g. when my wife had surgery, the hospital tried to charge $20k for the surgery room and $20k for the recovery room. Our insurance pointed out that by their agreement they aren't allowed to charge for use like that.
Instantly cut the hospital portion of the bill from $49k to $9k.
E.g. when my wife had surgery, the hospital tried to charge $20k for the surgery room and $20k for the recovery room. Our insurance pointed out that by their agreement they aren't allowed to charge for use like that.
Instantly cut the hospital portion of the bill from $49k to $9k.
That’s the insanity. You are the same person, same procedure, everything same but somehow the hospital can reduce its bill from 49000 to 9000. That is just not normal for a business like a hospital where they have a ton of fixed costs (unlike a software company where delivery of their product often costs close to zero so they can easily give rebates). This seems to indicate that the 49k is an insanely high price with very high profit margin.
[deleted]
Completely agree with your point, but I want to point out that a lot of businesses (most?) adjust pricing based on the consumer group.
There is obviously a ways to go to create a system where price transparency is feasible, but I’m very interested in how the community might think it would affect the value based healthcare industry with respect to total cost of care management and bundled services? You cannot always look at a service in isolation because of complications on episodes like joint replacements or the impact of chronic conditions over the longitudinal total cost.
You’re right, my estimate for a short surgery in a private Thai hospital last Monday was “10k/11k THB excluding fees.” I walked out of the hospital 2 hours later having paid 9.1k THB (270 USD) painkillers included.
Estimates are fine, it’s just that they don’t benefit US hospitals. Stop justifying them, they’re scamming you.
Estimates are fine, it’s just that they don’t benefit US hospitals. Stop justifying them, they’re scamming you.
sure. any given procedure has a happy path and many different ways it could go wrong and become much more expensive. you can't really predict what it will cost for an individual. but after performing the same procedure hundreds or thousands of times, the hospital ought to be able to figure out a standard rate that (statistically) covers its costs. I don't see a good reason why a large organization with tons of cashflow shouldn't be able to quote a price up front after taking any pre-existing conditions into account.
of course, we might not like the prices they quote if forced to do this, but it would at least be better than rolling the dice every time.
of course, we might not like the prices they quote if forced to do this, but it would at least be better than rolling the dice every time.
This is what bundled payments are attempting to accomplish. These bundles take into account the procedure (cot codes) in addition to transmissions and rehab costs generally. Disclaimer: not an expert on this specifically.
> You cannot always look at a service in isolation
But in the American system it's setup that you must. This is the whole "coding" thing that you hear people refer to which is taking a procedure and breaking it into individual codes that can be used in billing you/your insurance.
This was addressed in the "Methodology" section of the article:
> Data was collected for three services, determined by specific codes.
---
> I’m very interested in how the community might think it would affect the value based healthcare industry with respect to total cost of care management and bundled services?
You mean... releasing pricing for individual codes.....? Finally showing that hospitals will bill different prices for the same code based on the patient's insurer...?
I read the article and all I got was that hospitals are releasing pricing information under the Trump mandate. I'm not sure what you're positing for an "effect" here as the effect is literally just transparency in hospital billing?
But in the American system it's setup that you must. This is the whole "coding" thing that you hear people refer to which is taking a procedure and breaking it into individual codes that can be used in billing you/your insurance.
This was addressed in the "Methodology" section of the article:
> Data was collected for three services, determined by specific codes.
---
> I’m very interested in how the community might think it would affect the value based healthcare industry with respect to total cost of care management and bundled services?
You mean... releasing pricing for individual codes.....? Finally showing that hospitals will bill different prices for the same code based on the patient's insurer...?
I read the article and all I got was that hospitals are releasing pricing information under the Trump mandate. I'm not sure what you're positing for an "effect" here as the effect is literally just transparency in hospital billing?
The US healthcare system is slowly moving away from the fee-for-service model and towards a value-based care model. Under that model, providers bear much of the financial risk. They might receive a single bundled payment for a joint replacement including all follow-up care, with penalties for failing to meet clinical quality measures. Or they might receive a flat per-patient per-month fee to completely care for people.
>Under that model, providers bear much of the financial risk.
Actually, practices currently bear the risk already, because they are subject to reimbursements unless they are cash-paying. Remember, the patients are regularly not the bill payors - the Payors are actually insurance companies/medicare/or, rare HMOs out of the area.
> They might receive a single bundled payment for a joint replacement including all follow-up care, with penalties for failing to meet clinical quality measures
Certain medical interventions like cancer treatment or joint replacement may require a long tail of treatment, counseling, physical therapy, aftercare, global periods, etc.
The applicability of that is fairly limited since many things do not trigger a global, and don't fit into this definition.
Actually, practices currently bear the risk already, because they are subject to reimbursements unless they are cash-paying. Remember, the patients are regularly not the bill payors - the Payors are actually insurance companies/medicare/or, rare HMOs out of the area.
> They might receive a single bundled payment for a joint replacement including all follow-up care, with penalties for failing to meet clinical quality measures
Certain medical interventions like cancer treatment or joint replacement may require a long tail of treatment, counseling, physical therapy, aftercare, global periods, etc.
The applicability of that is fairly limited since many things do not trigger a global, and don't fit into this definition.
Good faith - not trying to be a bastard...
I've heard rumblings of this too but every time I've interacted with healthcare it's still the same coded system that you see in regards to the chargemasters etc... even as recent as-of a few weeks ago this was the system in a modern hospital in a large west coast city.
So, two things:
1. I think we're on the coded system indefinitely, or at least that's only what I can expect given recent experience
2. Even if we were to implement this, providers and insurers will still fight like cats and dogs because there's just too much money to be made here that I can't imagine the same problems won't manifest itself in a "bundled payment" system. I would actually expect this to make matters worse. Often when you bundle something it obfuscates and confuses the value of the individual "things" in the bundle - the middlemen will do everything they can to extract margin from this. I'd personally like to stay with codes to maintain transparency through having an auditable receipt of known services directly tied to a fair price.
I've heard rumblings of this too but every time I've interacted with healthcare it's still the same coded system that you see in regards to the chargemasters etc... even as recent as-of a few weeks ago this was the system in a modern hospital in a large west coast city.
So, two things:
1. I think we're on the coded system indefinitely, or at least that's only what I can expect given recent experience
2. Even if we were to implement this, providers and insurers will still fight like cats and dogs because there's just too much money to be made here that I can't imagine the same problems won't manifest itself in a "bundled payment" system. I would actually expect this to make matters worse. Often when you bundle something it obfuscates and confuses the value of the individual "things" in the bundle - the middlemen will do everything they can to extract margin from this. I'd personally like to stay with codes to maintain transparency through having an auditable receipt of known services directly tied to a fair price.
Procedures will always be coded using a terminology system like CPT4 / HCPCS / SNOMED CT regardless of the payment model. The issue isn't coding but rather who bears the risk.
Bundled payments give providers the freedom and financial incentive to find innovative ways to efficiently deliver high quality care. No one benefits when hospitals have a separate line item charge every time a nurse administers a pain killer over the course of a hospital stay.
Bundled payments give providers the freedom and financial incentive to find innovative ways to efficiently deliver high quality care. No one benefits when hospitals have a separate line item charge every time a nurse administers a pain killer over the course of a hospital stay.
> Bundled payments give providers the freedom and financial incentive to find innovative ways to efficiently deliver high quality care
Until someone financially incentivizes a higher quality of care I don't expect to receive it, especially by a bundled pricing model.
> No one benefits when hospitals have a separate line item charge every time a nurse administers a pain killer over the course of a hospital stay.
And as someone who's been billed insane amounts for things like OTC painkillers I disagree with this so hard. I have zero, and I mean zero, confidence that they will not continue to overcharge me. When everything is individually coded then at least a patient can go back and "look at the receipt"...
In my adult life I realize that almost everything is weaponized against me (the patient) in healthcare. I cannot expect in good faith that removing the line items from the receipt will help me in any way. In America, I can only expect this to hurt me or I'd be an idiot.
Sorry to disagree, but there is no way that bundled pricing is going to serve the patient better as it makes auditing services rendered much much harder. As someone who's had to get into the weeds on this stuff between insurer, hospital billing, etc. I can only imagine that bundled pricing would have made my life more difficult as it really did come down to the codes.....
Until someone financially incentivizes a higher quality of care I don't expect to receive it, especially by a bundled pricing model.
> No one benefits when hospitals have a separate line item charge every time a nurse administers a pain killer over the course of a hospital stay.
And as someone who's been billed insane amounts for things like OTC painkillers I disagree with this so hard. I have zero, and I mean zero, confidence that they will not continue to overcharge me. When everything is individually coded then at least a patient can go back and "look at the receipt"...
In my adult life I realize that almost everything is weaponized against me (the patient) in healthcare. I cannot expect in good faith that removing the line items from the receipt will help me in any way. In America, I can only expect this to hurt me or I'd be an idiot.
Sorry to disagree, but there is no way that bundled pricing is going to serve the patient better as it makes auditing services rendered much much harder. As someone who's had to get into the weeds on this stuff between insurer, hospital billing, etc. I can only imagine that bundled pricing would have made my life more difficult as it really did come down to the codes.....
Bundled payments still help stablize the cost for an outcome. The bundled payment should make it easier to purchase a “knee replacement” as a consumer because you won’t need the clinical knowledge to understand the professional details of how. It has downsides as you mentioned above, but it can make consumer choice easier. Complexity is one of the fundamental challenges of paying for healthcare today.
"You cannot always look at a service in isolation because..."
The medical industry is adept at excuse making and impeding change. If we wrap ourselves around every conceivable axle then nothing will be achieved. As it is providers and payers already employ elaborate coding systems to represent work and ascribe costs. Step one is to kick open that door and make this transparent. Should the result prove inadequate to sufficiently represent every imaginable nuance then the medical industry can engage in the necessary rework under that pressure.
The medical industry is adept at excuse making and impeding change. If we wrap ourselves around every conceivable axle then nothing will be achieved. As it is providers and payers already employ elaborate coding systems to represent work and ascribe costs. Step one is to kick open that door and make this transparent. Should the result prove inadequate to sufficiently represent every imaginable nuance then the medical industry can engage in the necessary rework under that pressure.
When I was working in healthcare, I found out that hospital groups negotiate their own Code prices with each carrier individually.
So one group will have one rate with Blue Shield vs what another hospital will have.
Its absolute bullshit.
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If youre mandated to have insurance - then procedures should be regulated to a set cost regardless of who performs the procedure.
So one group will have one rate with Blue Shield vs what another hospital will have.
Its absolute bullshit.
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If youre mandated to have insurance - then procedures should be regulated to a set cost regardless of who performs the procedure.
Another thing is Medicaid pays below the cost of care so that is balanced by the private insurers payments. This is why you see many county and rural hospitals struggling because the private hospitals have taken the cream of the crop private insurers. First step is the make sure hospitals are not drowning in covering for costs of Medicaid and uninsured patient care.
This Frontline documentary talks about this issue.
https://www.youtube.com/watch?v=UVvEkeH4O8o
This Frontline documentary talks about this issue.
https://www.youtube.com/watch?v=UVvEkeH4O8o
Alternative spin: Medicare/Medicaid are the only insurance that is any good at keeping prices under control. Everyone else in the medical industry is in the city, bilking people who have money. Expanding medicare/medicaid will help us slowly bring costs down, more in line (PPP-adjusted) with the rest of the developed world.
This will probably help a bit but in an emergency people don't have the time to compare prices. And with US health care, it just takes one accident that sends you to the ER and where someone that's out of network performed a procedure to end up with a bill that's tens or hundreds of thousands of dollars.
Its just the first step
To shock and awe into future laws
To shock and awe into future laws
The whole out of network aspect in hospitals is ridiculous
Yes, in a single-payer environment everyone is in-network.
Every doctor in Canada providing covered medical services is in-network.
Every doctor in Canada providing covered medical services is in-network.
I was told by a cancer patient in the US, who is a Canadian citizen, that specialized equipment and certain tests are not available in the entire system, or months-long wait times.
Medical bankruptcy is the most common form of bankruptcy in the US. I would say that for the massive portion of the US that is un-insured, under-insured or faces bankruptcy in the event of a medical procedure that substantially any tests and equipment for them are not available.
Canada has some of the best cancer survival rates in the world, and is substantially identical to the US. [1]
Further the US tends to skew towards early detection without a commensurate increase in survival rates, which means 5-year numbers in the US are higher than elsewhere in the world but it does not necessarily translate to lower mortality.
[1] https://www.ctvnews.ca/canada-gets-high-ranking-for-cancer-s...
Canada has some of the best cancer survival rates in the world, and is substantially identical to the US. [1]
Further the US tends to skew towards early detection without a commensurate increase in survival rates, which means 5-year numbers in the US are higher than elsewhere in the world but it does not necessarily translate to lower mortality.
[1] https://www.ctvnews.ca/canada-gets-high-ranking-for-cancer-s...
Not all treatments are statistically useful. In the US you can get anything you can pay for, even if it costs a million dollars and hasn't been shown to have any beneficial effect. In a national system you make statistical decisions based on cost and effectiveness.
Yes but emergencies are the exception, not the norm for most hospitals. Most hospitals make 40-60% of their revenue on elective surgeries, ie things that can wait 2-6 months. So patients have time to shop around.
Source: currently work at a big hospital in IT.
Source: currently work at a big hospital in IT.
Emergencies are the norm, not the exception, for most people. Elective surgeries are mostly the well-insured and the wealthy. Poor working people go to the hospital when it hurts so bad that they're missing work, and when they miss work they don't get paid.
That is old information. In the US, your deductible and copay have to be the in-network price in emergencies, and balance bills from the provider will not be allowed in emergencies starting next year (and you can already usually get the balance waived with sliding scale charity etc.)
You don't pay up front in an emergency, so people can consult the information and ask questions before they do pay. They can call their insurance company and ask why they pay more than average. And so on.
[deleted]
A recent federal regulation which implements the No Surprises Act of 2021 should reduce some of those abuses by hospitals.
https://www.cms.gov/newsroom/press-releases/hhs-announces-ru...
https://www.cms.gov/newsroom/press-releases/hhs-announces-ru...
The other big conflict here is that I'm not an expert and I'm not about to turn down services if recommended to me by an expert in a field which I have no experience.
I get the whole "do your research", but often it's in areas in-which I have no real capability - especially with healthcare.
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> And with US health care, it just takes one accident that sends you to the ER and where someone that's out of network performed a procedure to end up with a bill that's tens or hundreds of thousands of dollars.
Agree. And to add, all it takes is one procedure that your insurance company doesn't want to cover to put you into literal billing hell for months on end. My point being, even with price transparency they can just chose not to pay even if they're obligated (and they do this). If there's any way they can weasel out of paying they will.
I'm still 100% in support of price transparency in healthcare however... there's just so much broken with it and I've lived through the hell.
I get the whole "do your research", but often it's in areas in-which I have no real capability - especially with healthcare.
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> And with US health care, it just takes one accident that sends you to the ER and where someone that's out of network performed a procedure to end up with a bill that's tens or hundreds of thousands of dollars.
Agree. And to add, all it takes is one procedure that your insurance company doesn't want to cover to put you into literal billing hell for months on end. My point being, even with price transparency they can just chose not to pay even if they're obligated (and they do this). If there's any way they can weasel out of paying they will.
I'm still 100% in support of price transparency in healthcare however... there's just so much broken with it and I've lived through the hell.
> I get the whole "do your research", but often it's in areas in-which I have no real capability - especially with healthcare.
Oh the system has answers – just happen to be high enough at your company, or the spouse of someone who is.
> While a benefits expert at a mid-sized company may create a narrow network, an executive's spouse, for example, may want to go somewhere not in the network. "And there's a pillow talk that happens. And the next thing you know that hospital is in the network," Ladd said.
This whole "employer provides your healthcare" thing we have going on in the US is just nuts.
Oh the system has answers – just happen to be high enough at your company, or the spouse of someone who is.
> While a benefits expert at a mid-sized company may create a narrow network, an executive's spouse, for example, may want to go somewhere not in the network. "And there's a pillow talk that happens. And the next thing you know that hospital is in the network," Ladd said.
This whole "employer provides your healthcare" thing we have going on in the US is just nuts.
There is a little bit of good news here from the omnibuss budget passed at the end of 2020. Search for “NO SURPRISES ACT” on this page:
https://congressionaldish.com/cd227-coronabus-health-care/
“Starting on January 1, 2022, any health insurance company that provides “any benefits” in an emergency department can not require pre-authorization of those services or deny coverage because the emergency department is out of their network. If emergency services are provided out-of-network, there can not be any limits on coverage any more restrictive than what would be covered by an in-network emergency department and the out-of-pocket costs can’t be more than they would be in-network. Out-of-pocket payments at an out-of-network emergency room must count towards in-network deductibles and out-of-pocket maximums.”
https://congressionaldish.com/cd227-coronabus-health-care/
“Starting on January 1, 2022, any health insurance company that provides “any benefits” in an emergency department can not require pre-authorization of those services or deny coverage because the emergency department is out of their network. If emergency services are provided out-of-network, there can not be any limits on coverage any more restrictive than what would be covered by an in-network emergency department and the out-of-pocket costs can’t be more than they would be in-network. Out-of-pocket payments at an out-of-network emergency room must count towards in-network deductibles and out-of-pocket maximums.”
Emergency care accounts for just 2% of healthcare spending.
https://www.politifact.com/factchecks/2013/oct/28/nick-gille...
https://www.politifact.com/factchecks/2013/oct/28/nick-gille...
That is not a useful statistic here. We are talking about an individual’s financial obligations in a medical emergency. A $10,000 bill is not 2% of an individual’s yearly spending.
You’re missing the bigger picture. It’s worthwhile improving transparency around the vast majority of healthcare needs/spending. ER costs are also a problem, but it’s an orthogonal issue. Don’t let the perfect be the enemy of the good.
No, I don't oppose hospital price transparency. My comment was basically a procedural one. Saying that ER visits are 2% of nationwide costs does not meaningfully address the toplevel poster's concerns.
> ER costs are also a problem, but it’s an orthogonal issue.
It's natural to want to discuss this orthogonal issue, and the solutions to the two issues are not mutually exclusive.
> ER costs are also a problem, but it’s an orthogonal issue.
It's natural to want to discuss this orthogonal issue, and the solutions to the two issues are not mutually exclusive.
And yet: Using a conservative definition, 62.1% of all bankruptcies in 2007 were medical; 92% of these
medical debtors had medical debts over $5000, or 10% of pretax family income.
https://www.amjmed.com/article/S0002-9343%2809%2900404-5/pdf
https://www.amjmed.com/article/S0002-9343%2809%2900404-5/pdf
I'd imagine that prices will now plummet simply due to the fact that prices are now transparent and real competition can actually exist.
It will be fun to watch people be positive on this until they are reminded who we have to thank for it.
Edit: CNN hasn't forgotten, notice the obvious negative spin, with literally zero argument of how this may be beneficial: https://www.cnn.com/2021/01/04/politics/hospital-price-trans...
Edit: CNN hasn't forgotten, notice the obvious negative spin, with literally zero argument of how this may be beneficial: https://www.cnn.com/2021/01/04/politics/hospital-price-trans...
I'm not a fan of the guy, but this is probably the most important/good thing he did with his presidency. Price transparency is the most fundamental first step to driving down health care costs. Once people get a taste of it, it will drive even more, better and accurate data. Start real conversations about costs and open the door to measureable improvement through innovation.
Price transparency is a pointless shell game designed to keep everyone strung along on the entrenched, failed system. When you're having a heart attack, the last thing you're doing is shopping around for the best prices on heart attack emergency treatment.
The free market has no place in health care, because in the hands of the free market the first thing that will happen in a life-threatening emergency is for you to transfer 100% of your wealth to the party that has 100% of the leverage.
The free market has no place in health care, because in the hands of the free market the first thing that will happen in a life-threatening emergency is for you to transfer 100% of your wealth to the party that has 100% of the leverage.
Price gouging especially in a system with transparent pricing is not difficult to prevent with laws.
This is really is the ideal place for government in healthcare. Make the laws, set the standards, level the playing field and let the free market work just like in every other facet of society.
It’s funny people who see how incompetent and irresponsible our government is on a daily basis think that handing healthcare over to them is a good idea.
This is really is the ideal place for government in healthcare. Make the laws, set the standards, level the playing field and let the free market work just like in every other facet of society.
It’s funny people who see how incompetent and irresponsible our government is on a daily basis think that handing healthcare over to them is a good idea.
>When you're having a heart attack, the last thing you're doing is shopping around for the best prices on heart attack emergency treatment.
This is a tired, nonsensical argument. The vast, vast majority of medical procedures are not last minute emergencies. Furthermore, with price transparency you will clearly be able to evaluate which hospitals may or may not be generally in your price range and choose a default to visit for an emergency (assuming you're not carted off in an ambulance).
More importantly, this will absolutely force competition and some degree of price correction.
This is a tired, nonsensical argument. The vast, vast majority of medical procedures are not last minute emergencies. Furthermore, with price transparency you will clearly be able to evaluate which hospitals may or may not be generally in your price range and choose a default to visit for an emergency (assuming you're not carted off in an ambulance).
More importantly, this will absolutely force competition and some degree of price correction.
I agree that it's pointless for emergency surgery, but there are plenty of other cases where a consumer could shop around (colonoscopy, ACL repair, etc), and I'd argue these are actually the majority rather than the minority of cases.
To me it comes down to - if we are going to pretend we have a market based system for health care (that's what we say we have now), we need pricing transparency to have any hope of it working.
To me it comes down to - if we are going to pretend we have a market based system for health care (that's what we say we have now), we need pricing transparency to have any hope of it working.
> I'd argue these are actually the majority rather than the minority of cases.
For well-insured middle-class people. Poor working people only get emergency care
For well-insured middle-class people. Poor working people only get emergency care
I think forcing hospitals to at least list something is a good start. It won't be perfect but it will make people more aware of how hospitals and insurance companies are working usually to screw people when it comes to billing. Any transparency is a good thing whether it is perfect or not.
Not all health care is heart attacks. "Health care" is a huge bucket containing everything from buying a bottle of cough syrup to the heart attacks you mention.
For life threatening emergencies, I'm with you. Let's fund that care through the state.
But excluding the market from everything is not the answer. The problem with using insurance for all these non-urgent things is that insurance distorts the market and price discipline goes out the window.
For life threatening emergencies, I'm with you. Let's fund that care through the state.
But excluding the market from everything is not the answer. The problem with using insurance for all these non-urgent things is that insurance distorts the market and price discipline goes out the window.
We don't have to reinvent the wheel. Other countries have solved these problems. They have better health care than we do. It's measurable, it's been measured, and no surprise, they have flat-out superior outcomes. They are dramatically more efficient. Our market focus is a cargo cult.
What market focus? Prices were completely opaque until just a few months ago. Any economist on the planet will tell you that would lead to awful outcomes for everyone except the powerful healthcare lobby.
Yes, we have a thoroughly regulated, negotiated, contractually obligated system. You can't have a true "free market" in health care without some truly egregious outcomes because when people are in health crisis they will pay anything to stay alive, and we already know we won't countenance the (let's call it what it is) extortion that the free market would produce in those scenarios. Because we want to feel like it's a free market, because free market economics is a cargo cult when it comes to health care, we get the worst of both worlds.
Not sure how you get reinventing the wheel from my comment.
What I described would move us in the direction of the countries you're talking about.
I have lived in the UK, and seen doctors through the NHS. I have bought cough medicine at the chemist, and no it was not state-funded. I have visited patients at NHS hospitals where you are one patient sharing a room with 20 others in the same ward. I have talked to people on the waitlist for months to get surgery.
I still think the UK system is better than ours in the US for urgent care. I don't want anyone to be financially ruined because of some unforeseeable accident or emergency.
But I maintain that "health care" is way too big a category to be absolutist about using or not using free market principles in it. There are parts of health care where markets do not make sense. There are other parts where they do.
What I described would move us in the direction of the countries you're talking about.
I have lived in the UK, and seen doctors through the NHS. I have bought cough medicine at the chemist, and no it was not state-funded. I have visited patients at NHS hospitals where you are one patient sharing a room with 20 others in the same ward. I have talked to people on the waitlist for months to get surgery.
I still think the UK system is better than ours in the US for urgent care. I don't want anyone to be financially ruined because of some unforeseeable accident or emergency.
But I maintain that "health care" is way too big a category to be absolutist about using or not using free market principles in it. There are parts of health care where markets do not make sense. There are other parts where they do.
There is no silver bullet. Your absolutist perspective undermines your argument.
On the contrary, there is, the problem (for some) is that it is indeed a bullet and the people getting (figuratively) shot are the ones who, under this system, are getting very fat on the inefficiencies. They're able to use their illicit wealth to exploit our very broken system of government to maintain their rent-seeking successes.
No system is perfect. If the US had a universal healthcare system, it would suck in many ways. People do, after all, travel to the US for medical care. My point is that there is likely a better local optimum out there than the one you suggest, and coming off as if the problem of healthcare is “solved” is news to people under any system who are suffering due to its inefficiencies or inequities. For example, I live in the US - I have CF and have been taking a drug for more than a year that is extremely effective. It has yet to be approved in some universal healthcare systems, likely due to its high cost (given the small patient population and its extremely high R&D costs.) This is literally killing people who would be alive had they been able to access the drug.
There may be edge cases, but on the whole if people in the US had the health care systems of the UK, France, Germany, Japan, or pretty much any other developed country, they would riot in the streets if the US system were suddenly forced on them.
lol dead people as “edge cases” - frame this one up - own it.
Nothing funny about it. It's grim, but it beats dead people as the default case. We have a lower life expectancy in the US than Cuba, a nation with a GDP per capita of 8,821 USD. A country where the average person's annual wages wouldn't buy them half of a ten year old used Toyota Corolla has better health outcomes. We have people begging bystanders not to call them an ambulance when they're grievously injured, because they can't afford it.
So yeah, there are a handful of people out of thousands where this system works great. We shouldn't optimize the entire system for hundreds of millions of people for these edge cases.
So yeah, there are a handful of people out of thousands where this system works great. We shouldn't optimize the entire system for hundreds of millions of people for these edge cases.
You've set up a nice little fallacy for yourself in the form of declaring people you don't care about as "edge cases." I'm glad you're acknowledging that your original claim of the problem of allocating heathcare for people is not "solved" though.
Let me cut to the chase: a better system is probably one where competitive market forces are leveraged to drive down (actual) costs and drive up innovation where it is an optimal strategy, and social program-oriented solutions are deployed when that is the bad, unethical, impractical or suboptimal approach, with an overarching mechanism to regulate over time the transition from the former to the latter. If you remove the incentives that come with a free market for healthcare, it comes with benefits and costs. Stop acting as though it is cost free. It isn't.
I never took issue with your claim that healthcare in the US has problems which are solved through universal systems. I took issue with your claim that universal systems are a panacea that solve all relevant problems, and the implication that trying to hill climb to a better optimum is not worthwhile to improve outcomes.
Let me cut to the chase: a better system is probably one where competitive market forces are leveraged to drive down (actual) costs and drive up innovation where it is an optimal strategy, and social program-oriented solutions are deployed when that is the bad, unethical, impractical or suboptimal approach, with an overarching mechanism to regulate over time the transition from the former to the latter. If you remove the incentives that come with a free market for healthcare, it comes with benefits and costs. Stop acting as though it is cost free. It isn't.
I never took issue with your claim that healthcare in the US has problems which are solved through universal systems. I took issue with your claim that universal systems are a panacea that solve all relevant problems, and the implication that trying to hill climb to a better optimum is not worthwhile to improve outcomes.
How many people died last year in the NHS because they couldn't get health care?
You mean Bill Clinton in the early 90's? It was part of the Clinton health care reform. But maybe you're not that old. ;-)
Every president has pushed for this except Bush Jr.
Glad it finally happened even if it was under who I consider to be the worst president* in the last 100 years of US history. Doesn't mean I need to thank him. If you were being tortured in a Mexican cartel prison, would you thank the torturer for giving you glass of water?
Every president has pushed for this except Bush Jr.
Glad it finally happened even if it was under who I consider to be the worst president* in the last 100 years of US history. Doesn't mean I need to thank him. If you were being tortured in a Mexican cartel prison, would you thank the torturer for giving you glass of water?
Thinking that trump is the worst president in the past 100 years just betrays either an insane privilege[1] or just ignorance. You realize the hundreds of thousands of lives lost directly or indirectly in the war on terror, a war almost completely engineered by the Bush administration, are actually real right? They were people with hopes, plans, dreams that were all wiped out, and for a lot of those who are still alive they are condemned to live in a cycle of violence caused again by the war on terror and it's ripple effects. If you compare that to what trump did in his 4 years and come up with the conclusion that hey, it wasn't as bad & Donald truly is the worst president... Then I don't even know what to tell you.
I'm Muslim and I've grown up my entire life with that war and its consequences in the background, especially since we mostly consumed arabic media. I've thankfully not been affected directly, but man do these takes completely discredit the side that keeps pushing them instantly for me.
We are at a point where even the notoriously neocon hawkish republican party and their voters are a lot more willing to acknowledge just how horrible those people were, yet democrats have no problem completely rehabilitating the old neocon crew because hey yeah they killed people but at least they were... Polite about it? I get that it's unhinged crusading politics and we just have to paint the adversary as the worst person ever to feel the rush of being morally superior but when you are at the point where you defend George W Bush to own the magahats, maybe take a step back and reflect on what you are doing.
The worst part is that now that bed has been made and apologism for those neocons became a mainstream talking point, everyone is just doubling down because admitting that trump isn't actually even close to being worst would be to admit that maybe the hysteria to score political points didn't warrant sweeping under the rug 2 enormously destructive wars.
[1] as in the privilege of not having ever been affected by the war on terror. Which in turn leads to pretty insignificant events like being concerned about the presidents tweets or feeling that you are part of some sort of feel good #resist movement for 4 years just registering as being more impactful than a region getting destabilized far away
I'm Muslim and I've grown up my entire life with that war and its consequences in the background, especially since we mostly consumed arabic media. I've thankfully not been affected directly, but man do these takes completely discredit the side that keeps pushing them instantly for me.
We are at a point where even the notoriously neocon hawkish republican party and their voters are a lot more willing to acknowledge just how horrible those people were, yet democrats have no problem completely rehabilitating the old neocon crew because hey yeah they killed people but at least they were... Polite about it? I get that it's unhinged crusading politics and we just have to paint the adversary as the worst person ever to feel the rush of being morally superior but when you are at the point where you defend George W Bush to own the magahats, maybe take a step back and reflect on what you are doing.
The worst part is that now that bed has been made and apologism for those neocons became a mainstream talking point, everyone is just doubling down because admitting that trump isn't actually even close to being worst would be to admit that maybe the hysteria to score political points didn't warrant sweeping under the rug 2 enormously destructive wars.
[1] as in the privilege of not having ever been affected by the war on terror. Which in turn leads to pretty insignificant events like being concerned about the presidents tweets or feeling that you are part of some sort of feel good #resist movement for 4 years just registering as being more impactful than a region getting destabilized far away
That's a fair criticism, although you really pulled out the big hyperbolic guns. Insane? Not really. And you continue to make personal attacks even in your footnote. But hey, it's an internet discussion board, I'm guilty of the same.
The guy broke democracy and started a trend that IMHO will inevitably break the US. There's no stopping the nihilistic-right's rise fueled by an uneducated white minority bent on revenge via politics for their oppression at the hands of those they vote for. This nihilism, meaning its not that side A is correct or side B is correct: there is no "correct". That's worse than two pointless wars, IMHO, and it springs directly from Trump. A fountainhead of corruption the likes of which modern democracy has never seen. And I stand by that.
The guy broke democracy and started a trend that IMHO will inevitably break the US. There's no stopping the nihilistic-right's rise fueled by an uneducated white minority bent on revenge via politics for their oppression at the hands of those they vote for. This nihilism, meaning its not that side A is correct or side B is correct: there is no "correct". That's worse than two pointless wars, IMHO, and it springs directly from Trump. A fountainhead of corruption the likes of which modern democracy has never seen. And I stand by that.
Yet that white minority is more willing to stop bombing non white across the world. It's a bit unreal but it's the truth. You ought to realize that you are also coming from an imo pretty... White-democrat point of view right? And my argument is exactly that a segment of the country, mostly white, went to such a extent to get revenge on the 2016 election that they sided with literally everyone they used to hate not even a decade ago. I'm sorry but how is that for nihilism? Your arguments are again very philosophical, but in a way just dismiss the destruction of an entire generation of Iraqi (and Syrian, by ripple effects) because a nihilistic trend of your political opposition rising? I'm sorry but come on! Like you are exactly doing what I was critizing in the first place. "those people may have died, and that region may have been hopelessly destabilized but at least Bush (who literally was elected by the supreme Court which makes this even more ironic) wasn't nihilistic?". The guy that came up with you are either with us or you are with the terrorists?
Of course it's worse than 2 wars you have never been affected by. The entire USA had a complete meltdown over allegations of Russians rigging the elections, without any American casualty. In fact I'd bet that one of the reason you are saying trump broke democracy is probably related to those allegations. But when the US is destroying entire countries it's no big deal? I hope you can see the cognitive dissonance there or at least why your point of view is very very white centered. And that's without even getting into how the democrats attacked the integrity of the elections for years, rightly or wrongly yet I don't see how that didn't directly undermine trust in democracy. It was a dance-à-deux, and if trump ends up breaking democracy down the line it's not because one side pushed against it. My point here is that no matter how you look at it, the entire thing is related to partisan politics not a righteous crusade that couldve somehow justified arguing that 2 desastrous, decades long wars were in fact less important/bad.
But that's all unrelated. Look, I'm not American, not white and not Christian.to me it boils down to this. I don't think anything is more cynical and cold than to publicly downplay and rehabilitate a figure that caused so much more pain and suffering because that would score points. That's it.
I really didn't want to come off as insulting you, honestly. And I get that some things can't really be expressed in a non offensive way (even if that's not the intention) when it comes to heated subjects like this. That's why I'm not going to touch on some of your other points. Again, it's not because I'd have insulted you otherwise, but because I don't know how to express what the war on terror felt like from the "inside" without inevitably sounding hyperbolic.
Of course it's worse than 2 wars you have never been affected by. The entire USA had a complete meltdown over allegations of Russians rigging the elections, without any American casualty. In fact I'd bet that one of the reason you are saying trump broke democracy is probably related to those allegations. But when the US is destroying entire countries it's no big deal? I hope you can see the cognitive dissonance there or at least why your point of view is very very white centered. And that's without even getting into how the democrats attacked the integrity of the elections for years, rightly or wrongly yet I don't see how that didn't directly undermine trust in democracy. It was a dance-à-deux, and if trump ends up breaking democracy down the line it's not because one side pushed against it. My point here is that no matter how you look at it, the entire thing is related to partisan politics not a righteous crusade that couldve somehow justified arguing that 2 desastrous, decades long wars were in fact less important/bad.
But that's all unrelated. Look, I'm not American, not white and not Christian.to me it boils down to this. I don't think anything is more cynical and cold than to publicly downplay and rehabilitate a figure that caused so much more pain and suffering because that would score points. That's it.
I really didn't want to come off as insulting you, honestly. And I get that some things can't really be expressed in a non offensive way (even if that's not the intention) when it comes to heated subjects like this. That's why I'm not going to touch on some of your other points. Again, it's not because I'd have insulted you otherwise, but because I don't know how to express what the war on terror felt like from the "inside" without inevitably sounding hyperbolic.
> I'm sorry but come on! Like you are exactly doing what I was critizing in the first place.
Shit. That's an excellent point. Thanks for making me realize it. I'm being absolutely glib about 1M+ deaths. Yeah, that's totally privilege. My bad. I'll go think on that for a while. Yes, I'm a white liberal and I haven't been called out this succinctly and correctly in a long time. I responded like shit because I got angry, my apologies. Thanks again.
Shit. That's an excellent point. Thanks for making me realize it. I'm being absolutely glib about 1M+ deaths. Yeah, that's totally privilege. My bad. I'll go think on that for a while. Yes, I'm a white liberal and I haven't been called out this succinctly and correctly in a long time. I responded like shit because I got angry, my apologies. Thanks again.
Hey this is actually really nice to read, and no matter what you end up concluding I think it's good to just put things in perspective.
I totally realize it's harder to get the whole picture for a lot of people who weren't really affected or involved, just like it is harder for me to relate to let's say the current Ethiopian civil war and it's very harsh effects on the local population since it's so detached from my every day life. Even as a Muslim , I'd probably have been oblivious to the war on terror if it wasn't for my parents being very into Arab politics and the family tv always tuned to Arabic news. Growing up with daily reports of bombings, suicide bombings, mothers crying on TV, and just footage of destruction everywhere is what made me realize and process how much misery was brought upon so many people. it got to the point where the opposite of the normal media sentionalism happened and a few dozen people dying in a suicide bombing/drone strike barely made it in the news. the weird part was that it somehow was never ending.from the invasion of Iraq, to the insurgency to the Iraqi surge to the afghan surge to libya to Syria to Isis to... A bit of very relative peace now? I think everyone would've felt the same if they were in the same situation I think. Even many Arabs and Muslims in the US don't fully realize that either. Cheers!
I totally realize it's harder to get the whole picture for a lot of people who weren't really affected or involved, just like it is harder for me to relate to let's say the current Ethiopian civil war and it's very harsh effects on the local population since it's so detached from my every day life. Even as a Muslim , I'd probably have been oblivious to the war on terror if it wasn't for my parents being very into Arab politics and the family tv always tuned to Arabic news. Growing up with daily reports of bombings, suicide bombings, mothers crying on TV, and just footage of destruction everywhere is what made me realize and process how much misery was brought upon so many people. it got to the point where the opposite of the normal media sentionalism happened and a few dozen people dying in a suicide bombing/drone strike barely made it in the news. the weird part was that it somehow was never ending.from the invasion of Iraq, to the insurgency to the Iraqi surge to the afghan surge to libya to Syria to Isis to... A bit of very relative peace now? I think everyone would've felt the same if they were in the same situation I think. Even many Arabs and Muslims in the US don't fully realize that either. Cheers!
I also really hate how much people ignore the actions of other presidents and hyper focus on one mainly because of the massive amount of consent manufacturing by mainstream media. Hundreds of thousands of people are dead as a result of other presidents, and a lot of those were women and children.
I think it's sad that you can end a sentence with Bush Jr and then not call him the worst president in the next sentence. My vote for worst president in living memory is the guy who started two pointless trillion dollar wars, the latter of which took 20 years to close up in a humiliating retreat, but that's just me. This is not a defense of he who isn't being named here btw.
Even a blind squirrel finds a nut once in a while.
I mean, that's nice, but I'm not going to fall all over myself thanking the people who have fought viciously for decades to maintain the current profit-driven health care system and block single payer health care. It's like an abusive spouse who, out of the blue, brings you flowers and chocolate.
Wasn't really my point. My point is that you should expect to see all kinds of mental gymnastics around answering the question of if this is a positive change or not.
Biden doesn't run his mouth when he shouldn't, but foreign policy with China and along the southern border are essentially the same as under Trump, and the Afghanistan withdrawal alienated some NATO allies. Biden is carrying over more of Trump's policies than you'd expect.
Presidents come and go, but the Blob is eternal.
It is funny/depressing to think how different our country would be today if Bernie had been the 2016 dem nominee.
The most depressing thing is that it likely wouldn't have changed much. Congress (of which Bernie is still part of and has been for decades) is the one with the power to make these changes, the President is just the scapegoat/hero.
Great, now mandate that it is viewable via API
Can even use the healthcare industry standard for EHR which is JSON and RESTful
Can even use the healthcare industry standard for EHR which is JSON and RESTful
Even better: Mandate them to upload the data to some government system and let them provide a central API, transparency reports, ...
Germany did this for gas stations:
> Since 31 August 2013 companies which operate public petrol stations or have the power to set their prices are obliged to report price changes for the most commonly used types of fuel, Super E5, Super E10 and Diesel "in real time" to the Market Transparency Unit for Fuels.
https://www.bundeskartellamt.de/EN/Economicsectors/MineralOi...
Germany did this for gas stations:
> Since 31 August 2013 companies which operate public petrol stations or have the power to set their prices are obliged to report price changes for the most commonly used types of fuel, Super E5, Super E10 and Diesel "in real time" to the Market Transparency Unit for Fuels.
https://www.bundeskartellamt.de/EN/Economicsectors/MineralOi...
In the meantime, since we have the data, this could be a good project for volunteers to glue together all the different documents from the different hospitals into a single system.
These files are provided as excel documents in what I assume to be a (hopefully) mostly unchanging location on each site. A script could download all the files, match up the procedures and then push it to a pretty tool for everybody to use when comparing prices.
Most enterprises have terrible dev/IT talent but when it is a cause as important as this, talented people tend to show up to provide a great solution.
These files are provided as excel documents in what I assume to be a (hopefully) mostly unchanging location on each site. A script could download all the files, match up the procedures and then push it to a pretty tool for everybody to use when comparing prices.
Most enterprises have terrible dev/IT talent but when it is a cause as important as this, talented people tend to show up to provide a great solution.
I was thinking of doing this. I even started a bit, but I didn't end up getting very far. I'm torn between trying to run it as a service and running ads or whatever, or trying to run it as a wiki with contributors writing ETLs for individual hospitals and trying to tame the data set.
Seems like we need a public project to attract a groups of developers to help make this a reality.
Seeing the price range you pay is interesting, but I'm not sure what we are supposed to do with it.
My wife had her prenatal anatomy scan a few months ago at Stanford medical, $11000 for a 1 hour ultrasound. I personally was on the hook for around $500 and insurance paid $10500.
End of the day, what say do we have as consumers? How did the insurance company negotiate a rate of $11,000? Does the insurance company really care when every year they can just increase premiums and shrug and go "costs are going up! sorry!"
It feels a lot like a pyramid scheme, at some point the gravy train has to stop
My wife had her prenatal anatomy scan a few months ago at Stanford medical, $11000 for a 1 hour ultrasound. I personally was on the hook for around $500 and insurance paid $10500.
End of the day, what say do we have as consumers? How did the insurance company negotiate a rate of $11,000? Does the insurance company really care when every year they can just increase premiums and shrug and go "costs are going up! sorry!"
It feels a lot like a pyramid scheme, at some point the gravy train has to stop
healthcare insurance is the best example of a state-sponsored scam I've ever seen.. and it just continues unabated. I can guarantee that almost no one involved in that transaction actually knows what the per-unit cost for a 1 hour ultrasound actually is.. and when I say 'cost', I mean how it costs the hospital. Health insurers, hospitals, doctors are so awash in money they probably can't believe they're still getting away with it after all this time. Just look at all of the new hospitals and care facilities that are getting built. You don't do that if you're 'squeaking by'.. Hospital lobby is full of shit. You can probably trace all of this back to the HMO model where insurers began to add a lot of distance between the caregivers (i.e. doctors, hospitals, etc) and the patients. Like wall street did (with basically every financial instrument), they add layer upon layer to the cost chain, which adds an equivalent number of money-takers, to the value proposition. Insurance companies amortize the total cost across their subscriber base and 'poof', you've got our ever increasing health premiums. Just ridiculous and so obvious.. but since they're 'doctors' and 'care givers', we automatically just assume they're not motivated by profit and therefore beyond reproach...um, wrong.
The insurance most definitely did not pay $11,000 USD. They paid a percentage of an adjusted figure, and the balance was passed on to you. Billing and payment amounts usually differ by an order of magnitude.
Oh yea they paid it. Negotiation for rates happens before you pay coinsurance. I’ve called them and discussed it all. They send a $10000 check.
Odd part was in this case, we had a follow up ultrasound for another $2500 for a second hour after they “saw something odd” and it turned out to be nothing. Second hour had billing codes that were 75% less for some reason.
https://imgur.com/a/Ffmt8YT
Odd part was in this case, we had a follow up ultrasound for another $2500 for a second hour after they “saw something odd” and it turned out to be nothing. Second hour had billing codes that were 75% less for some reason.
https://imgur.com/a/Ffmt8YT
Wow, that's an absurd disbursement, even if the procedure might have been done out-of-network. Glad everything turned out okay. The administrator should have taken you out to celebrate. :)
So deducibiles are a sham?
Holy shit, that's just insane!
Here in the UK we paid for a prenatal scan and NIPT a few years ago (this was in addition to free NHS scans at our local hospital), and IIRC it was £200!
Here in the UK we paid for a prenatal scan and NIPT a few years ago (this was in addition to free NHS scans at our local hospital), and IIRC it was £200!
I am one of the people responsible for making these lists. The fact that the general public as well as journalists think this data is accurate in anyway is really funny. This an exercise of futility that only increases the overall cost and provides job security for me :)
No one working in a hospital knows how much do we acquire things for, or how much we get paid for doing things in advance. And only like 8 people can tell you that information 3 months after the fact.
Take the simple exercise of figuring out cost/revenue of an aspirin administration.
Cost depends on: 1. Are you an outpatient/Obsveration v. inpatient v. ED? 2. Are you on Medicaid? 3. Is the hospital a part of GPO organization or not? 4. Is contractual obligations of GPO includes/excludes Aspirin?
Reimbursement depends on: 1. Insurance 2. Group which you are under the insurance from 3. Contract language whether its a fee/service or bundled 4. Is the visit covered or not 5. how the visit/procedure was coded (most important and opaque factor)
Everybody in the know, knows that these lists are a joke, but no one can prove it.
No one working in a hospital knows how much do we acquire things for, or how much we get paid for doing things in advance. And only like 8 people can tell you that information 3 months after the fact.
Take the simple exercise of figuring out cost/revenue of an aspirin administration.
Cost depends on: 1. Are you an outpatient/Obsveration v. inpatient v. ED? 2. Are you on Medicaid? 3. Is the hospital a part of GPO organization or not? 4. Is contractual obligations of GPO includes/excludes Aspirin?
Reimbursement depends on: 1. Insurance 2. Group which you are under the insurance from 3. Contract language whether its a fee/service or bundled 4. Is the visit covered or not 5. how the visit/procedure was coded (most important and opaque factor)
Everybody in the know, knows that these lists are a joke, but no one can prove it.
You're in charge of literally saving lives but you can't handle something as standard as cost estimation? How can you joke about that? Figuring out the cost to the hospital in terms of materials and labor should be standard.
Example, an x-ray. You know you need to pay an x-ray tech X$/Hour and after doing 1,000's of x-rays, a hospital should have it down that somebody with a broken leg will require N hours (maybe .5, maybe 1.5) to setup and take the x-ray. x-ray film costs HAVE to be known. the x-ray machine life time and number of shots should be known. Then do something like a 30% surcharge for admin fees and boom, x-ray cost.
Every other industry estimates this way, what makes a hospital different?
Example, an x-ray. You know you need to pay an x-ray tech X$/Hour and after doing 1,000's of x-rays, a hospital should have it down that somebody with a broken leg will require N hours (maybe .5, maybe 1.5) to setup and take the x-ray. x-ray film costs HAVE to be known. the x-ray machine life time and number of shots should be known. Then do something like a 30% surcharge for admin fees and boom, x-ray cost.
Every other industry estimates this way, what makes a hospital different?
> You're in charge of saving lives but you can't handle something as standard as cost estimation.
The irony, coming from a profession which is notoriously bad at cost estimation.
But in any case, the difficultly is not so much the materials/services as much as figuring out what the patient's insurance company (which is completely different then the practice) will cover and by how much. But of course that's actually what matters to the patient.
They know medicine, not the intricacies of your particular insurance policy.
Source: Am founder of rivethealth.com which does cost estimation.
The irony, coming from a profession which is notoriously bad at cost estimation.
But in any case, the difficultly is not so much the materials/services as much as figuring out what the patient's insurance company (which is completely different then the practice) will cover and by how much. But of course that's actually what matters to the patient.
They know medicine, not the intricacies of your particular insurance policy.
Source: Am founder of rivethealth.com which does cost estimation.
To be fair Boeing doesn’t know how much an airplane cost.
There's R&D, and then there's the actual manufacturing. Sure, prices go down after a while, but you can track costs accordingly.
If you know (because you have blue prints) that the materials will cost 1,000,000 to build the plane (because your suppliers gave your price quotes), you can have a very good idea of what that plane will cost before putting it on the assembly line.
If you know (because you have blue prints) that the materials will cost 1,000,000 to build the plane (because your suppliers gave your price quotes), you can have a very good idea of what that plane will cost before putting it on the assembly line.
You forget that the x-ray is propping up about 50 admin job positions that don't directly generate revenue. The army of compliance, insurance, billing, etc etc etc employees have to get paid somehow.
But hopefully this price transparency helps us ask the question of why does an x-ray have to pay for a ton of positions which have nothing to do with x-rays, and how do we correct this situation.
But hopefully this price transparency helps us ask the question of why does an x-ray have to pay for a ton of positions which have nothing to do with x-rays, and how do we correct this situation.
You could say the same about any other service work. If I have the internet guy come out there's probably 50 admin job positions that bill for that time too. Internally they bill the installation department. Hospitals are just complaining to make it seem more complicated than it actually is.
Because the broken leg could be a gun shot wound, or an alcoholic who fell down and now is withdrawing, or a geriatric patients who is abused at home or a person who fell due to side effects of drugs with alternatives, or a cancer patient with bone metastases.
No one gets an x-ray for a broken leg then leaves with their foot broken. Even assuming that you are just trying to figure out the cost of an x-ray - there is a radiologist involved (unless you want to read it the x-ray on your own) and how they bill is a whole total beast!
No one gets an x-ray for a broken leg then leaves with their foot broken. Even assuming that you are just trying to figure out the cost of an x-ray - there is a radiologist involved (unless you want to read it the x-ray on your own) and how they bill is a whole total beast!
I'm not following why any of that matters to the cost of an x-ray. If there's a gunshot wound and there needs to be a nurse attending to the patient while the x-ray is being taken, the nurse is an extra cost, separate from the x-ray and the x-ray tech. The cost of the x-ray itself shouldn't change.
But we are just talking about an x ray here. Estimating the price of a radiologist per hour is not hard.
It shouldn’t be this difficult to price x rays at a per hour or per shot basis.
Pretty much every industry has variability in their jobs. Sometimes they eat some money and sometimes they make more based on what actually happens during the job fulfillment.
No one expects (or should expect) hospitals to literally know the amount of parts and labor for every single x ray they could perform. However, like literally every other business, they should know rates and tiers such that on average they make money. Then, disclose that.
It shouldn’t be this difficult to price x rays at a per hour or per shot basis.
Pretty much every industry has variability in their jobs. Sometimes they eat some money and sometimes they make more based on what actually happens during the job fulfillment.
No one expects (or should expect) hospitals to literally know the amount of parts and labor for every single x ray they could perform. However, like literally every other business, they should know rates and tiers such that on average they make money. Then, disclose that.
I'm talking about the x-ray, nothing more and nothing less. If they have a broken foot and need a cast, the cast should be an estimatable line item based on where it's broken, age/gender/size of the patient, and materials used. If a doctor has put a cast on 1,000 broken feet on men aged 12-16, they should have a very good idea of the material and time it will take and the number of nurses or whatever else they need to put it on.
> Reimbursement depends on: 1. Insurance 2. Group which you are under the insurance from 3. Contract language whether its a fee/service or bundled 4. Is the visit covered or not 5. how the visit/procedure was coded (most important and opaque factor)
But this list doesn't care why the price was charged. It only needs to know, bottom line, what amount of money changed hands for the procedure?
But this list doesn't care why the price was charged. It only needs to know, bottom line, what amount of money changed hands for the procedure?
>Take the simple exercise of figuring out cost/revenue of an aspirin administration.
>Cost depends on: 1. Are you an outpatient/Obsveration v. inpatient v. ED? 2. Are you on Medicaid? 3. Is the hospital a part of GPO organization or not? 4. Is contractual obligations of GPO includes/excludes Aspirin?
Wrong.
Cost depends on "how much does the raw aspirin cost in bulk + some standard overhead cost"
>Cost depends on: 1. Are you an outpatient/Obsveration v. inpatient v. ED? 2. Are you on Medicaid? 3. Is the hospital a part of GPO organization or not? 4. Is contractual obligations of GPO includes/excludes Aspirin?
Wrong.
Cost depends on "how much does the raw aspirin cost in bulk + some standard overhead cost"
if most patients were paying cash with no insurance such that hospitals had to compete on price all of these items would somehow become clear
At this point, I think your colleagues' nihilistic humor is totally lost on the American Public. Your flippancy is a strong argument for legislative reforms of the healthcare industry.
The convoluted cost formula is a process that shouldn't exist in the first place, so your comment only reinforced my internal rationale for why these types of lists are important.
Pricing in general for any non commodity is the same kind of statistical joke.
That said, these price lists are an attempt to turn healthcare service delivery into commodities. Transparency, yes, but the lie is that healthcare is a market.
The alternative is nationalized care where all sorts of financial flows that now are optimized for profits, are so optimized no longer.
Most people living under and working for a nationalized system tend to like it. Most who live under or work for a commodity system tend not to, except for those positioned to receive profit flows.
That said, these price lists are an attempt to turn healthcare service delivery into commodities. Transparency, yes, but the lie is that healthcare is a market.
The alternative is nationalized care where all sorts of financial flows that now are optimized for profits, are so optimized no longer.
Most people living under and working for a nationalized system tend to like it. Most who live under or work for a commodity system tend not to, except for those positioned to receive profit flows.
I think the point of making the lists public is to provide information that can lead to iterative improvements. I'm not sure it will do that but I'm a bit more confident that it is a necessary first step.
I thought the lists were a red herring for the problems with privatized healthcare - i.e. look at how complicated pricing is, not how it is being complicated by for-profit middlemen.
One interesting aspect of the No Surprises Act regulations that would seem to support your claim is the three hour required waiting period for non-emergency same-day procedures. The waiting period is ostensibly to prevent patients from feeling rushed or pressured into agreeing the price but the "long wait" boogeyman is another common red herring in the healthcare discussion and the three-hour wait seems unnecessary. The wait applies only in non-emergency situations so logic would follow that if the quoted price were too high the patient could leave.
That neither the people prescribing/providing the product, nor the customers/insurers can ever know the price before they are billed, shows that this is not a market, or certainly not anything like a free market.
The real scam is that the health insurers have convinced people they "fight for lower prices", when in fact they collectively profit from price hikes and the annual marginal increases fuel their growth as well.
The real scam is that the health insurers have convinced people they "fight for lower prices", when in fact they collectively profit from price hikes and the annual marginal increases fuel their growth as well.
>> Cost depends on: 1. Are you an outpatient/Obsveration v. inpatient v. ED? 2. Are you on Medicaid? 3. Is the hospital a part of GPO organization or not? 4. Is contractual obligations of GPO includes/excludes Aspirin?
Those considerations aren't part of what anyone calls cost. How much does the hospital pay for aspirin? How much do they pay someone to administer it to a patient? That's cost. If it's very complicated to determine what the patient or their insurance pays, well that's part of the problem.
Those considerations aren't part of what anyone calls cost. How much does the hospital pay for aspirin? How much do they pay someone to administer it to a patient? That's cost. If it's very complicated to determine what the patient or their insurance pays, well that's part of the problem.
This. It's telling that people working inside this system operate on a totally different set of rules for how to determine basic things like the cost of some input.
You're making the reasonable-sounding (but incorrect) assumption that the cost to the hospital of a drugs is the same for every patient. It's telling how people on the outside have no idea how complex the system is, as if there's one simple way to cost an item (hell, there's not even one simple way to cost an item with GAAP accounting for a widget). These lists are kind of worthless in the current iteration, but they'll hopefully get better with more targeted intervention.
How does the cost of a drug change based on who is consuming it? That's like saying the cost of a loaf of bread changes based on who is buying it.
The price you charge for the bread might change, but the cost is the same regardless of who is purchasing it. There's a difference between varying costs of an item based on accounting methods, versus varying costs of an item due to who is buying it. There seems to be huge disconnect here between people working in healthcare, and pretty much everyone else.
The price you charge for the bread might change, but the cost is the same regardless of who is purchasing it. There's a difference between varying costs of an item based on accounting methods, versus varying costs of an item due to who is buying it. There seems to be huge disconnect here between people working in healthcare, and pretty much everyone else.
The hospital's drug cost is the price the distributor charges it. That price varies for each individual patient. It's turtles all the way down.
This reads like straight up corruption and extortion. There could be no other reason to do this than to milk as much money as possible out of people who have no alternative.
You should absolutely be testifying before Congress, not before HN.
You should absolutely be testifying before Congress, not before HN.
This is exactly what happens when a monopoly produces extremely price inelastic goods. If it's not illegal, the monopoly will attempt to charge each customer as much as they can afford.
Why does the distributor know the identity of the patient?
That needs to be made illegal tomorrow.
Heck, sounds like there could be a Civil Rights Act case, if prices impact people differently based on race or sex or other protected class.
Heck, sounds like there could be a Civil Rights Act case, if prices impact people differently based on race or sex or other protected class.
That doesn't change the question though. It just changes who it's posed to.
>You're making the reasonable-sounding (but incorrect) assumption that the cost to the hospital of a drugs is the same for every patient.
Why shouldn't it be? How hard is it for a hospital to project their annual aspirin/paracetamol/? usage and budget for it?
Why shouldn't it be? How hard is it for a hospital to project their annual aspirin/paracetamol/? usage and budget for it?
Easy.
Now try it at a rural critical access hospital for rattlesnake antivenom with a short shelf life, so it usually expires unused. They are required by law to stock it or they cannot have their emergency room open. Estimate the revenue generated from treating the one patient who needs it every other year, and by the way, you have 9 contracted payers with different rates and you don't know which one, if any, the patient will have. Rinse and repeat for every other drug required to provide "critical care". Maybe layer on infusion of exotic chemotherapy drugs or monoclonal antibodies to treat a new pandemic virus.
It's not easy.
Now try it at a rural critical access hospital for rattlesnake antivenom with a short shelf life, so it usually expires unused. They are required by law to stock it or they cannot have their emergency room open. Estimate the revenue generated from treating the one patient who needs it every other year, and by the way, you have 9 contracted payers with different rates and you don't know which one, if any, the patient will have. Rinse and repeat for every other drug required to provide "critical care". Maybe layer on infusion of exotic chemotherapy drugs or monoclonal antibodies to treat a new pandemic virus.
It's not easy.
So one patient every two years needs one dose of an antivenom. Charge them for the dose of antivenom. Then add up the unused stock as administrative cost and spread that over all emergency care. Simple and effective.
Do the same sort of thing for all other short-half-life things that you must keep on hand.
It doesn’t have to be hard. I get that it is complicated right now, but let’s focus on the idea that simplifying it would help everyone.
Do the same sort of thing for all other short-half-life things that you must keep on hand.
It doesn’t have to be hard. I get that it is complicated right now, but let’s focus on the idea that simplifying it would help everyone.
Not my area of expertise but I would bet that would get you a substantial fine from Medicare for misrepresenting your cost of care, or at least be prevented by Medicare cost reporting
https://www.cms.gov/Research-Statistics-Data-and-Systems/Dow...
https://www.cms.gov/Research-Statistics-Data-and-Systems/Dow...
Radioactive pharmacy is another example of insane pricing complexity (and logistics) because of the short half life problem.
I wouldn’t call it worthless at all, because of the rest of your last sentence. It provides a starting point.
We need to start setting the expectation of transparency for some small subset of info to get further transparency. Change takes time, as much as we’d like it to drastically improve overnight for real life and death situations like medical prices.
We need to start setting the expectation of transparency for some small subset of info to get further transparency. Change takes time, as much as we’d like it to drastically improve overnight for real life and death situations like medical prices.
The cost of the aspirin depends on these things lol. Look up 340B.
There is a drug called Oncaspar. It's >$16,000 for one patient, and 5 cents for another (acquisition cost). Same drug, widely different acquisition cost.
There is a drug called Oncaspar. It's >$16,000 for one patient, and 5 cents for another (acquisition cost). Same drug, widely different acquisition cost.
When two pills coming from the same company are being made at the same time on the same machines, then they both cost the same. It's pretty obvious that the patient status changes nothing about that. However, the hospital's acquisition cost is variable because you're further down the supply chain and you're seeing the exact same kinds of arbitrary behind-the-scenes price swings that this article is talking about.
It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.
It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.
Drugs typically have a pretty in elastic demand. Whether it costs $16000 or $0.05 for a pill, the end user - whether a doctor or a patient - will simply figure out a way to pay for it to alleviate the pain, symptoms, and perhaps to avoid dying.
Seems like 340B (I hadn’t heard of this before, thanks!) may have been created with recognition of this inelasticity.
If we can limit prices this way, all it would take are a few more laws to put more price limits in place.
Seems like 340B (I hadn’t heard of this before, thanks!) may have been created with recognition of this inelasticity.
If we can limit prices this way, all it would take are a few more laws to put more price limits in place.
Sort of? As we're seeing with the pandemic, a not insignificant portion of the population is so used to healthcare being utterly inaccessible that animal medication seems like a reasonable alternative. That $16,000 pill isn't getting to patients, people are simply dying without it instead, going to faith/crystal "healers" instead.
There is much more elasticity than you think. Most medicine is not about “not dying”. Here is an example: I get heartburns pretty often. I take a heartburn medicine omeprazole daily. It’s an over the counter drug, costing something like $0.3/dose. If they bumped the price to $16,000 I would just stop taking it, and started getting regular heartburns again. These suck, but I lived with them before finding this drug, and wouldn’t pay tens of thousands of dollar annually to get rid of them.
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Under capitalism, a thing's cost to manufacture has nothing to do with the price of that something.
Read that again and work through your objections. Ideally something's price is higher than its cost so the company can make a profit, but there are so many obvious exceptions that its nice, but not necessary. Thus, who cares how much the pill coming down line costs to manufacture, unless you start hacking into the free market and set price controls, and say that pharmaceutical companies are only allowed to make 20% profit (or however much), Martin Shrekili's play, of buying pharmacutical companies and simply raising prices of drugs, is a legal move under capitalism, no matter how reprehensible that move may be.
Read that again and work through your objections. Ideally something's price is higher than its cost so the company can make a profit, but there are so many obvious exceptions that its nice, but not necessary. Thus, who cares how much the pill coming down line costs to manufacture, unless you start hacking into the free market and set price controls, and say that pharmaceutical companies are only allowed to make 20% profit (or however much), Martin Shrekili's play, of buying pharmacutical companies and simply raising prices of drugs, is a legal move under capitalism, no matter how reprehensible that move may be.
Under capitalism, with that kind of price difference, someone else would move in and start manufacturing the same drug and selling it for less to gain market share. That's competition for you. Or if no one else wants to do the job you could just make it yourself. Cost and price are indeed two different things, but competition keeps the prices of goods down to a relatively low multiple of their manufacturing cost.
Unfortunately what we actually have, between patents and other monopolies the government has instituted on drug manufacturing and distribution, is nothing like capitalism.
Unfortunately what we actually have, between patents and other monopolies the government has instituted on drug manufacturing and distribution, is nothing like capitalism.
>Unfortunately what we actually have, between patents and other monopolies the government has instituted on drug manufacturing and distribution, is nothing like capitalism.
You could replace patents with trade secrets and have many of the same problems (along with some others).
You could replace patents with trade secrets and have many of the same problems (along with some others).
Trade secrets don't prevent someone else from independently developing the same thing, or reverse-engineering the solution. Very few things can be successfully kept as trade secrets for an extended time. Moreover, patents do not preclude trade secrets and in most cases can only make things worse: If one expects to be able to maintain a trade secret for at least the duration of a patent, without independent rediscovery, then one would choose secrecy over the patent since there is no built-in time limit. Patents are thus only viable for those things which would not be expected to remain secret. Having the discovery or invention documented in a patent (which you will be advised not to read due to the risk of a willful infringement penalty) but being prohibited from using it by law is strictly worse than having the knowledge hidden at first but potentially (re)discoverable and free to use once known.
Of course patents are preferable to trade secrets in the vast majority of cases. That's why I said trade secrets have many of the same the same problems, not that they are equivalent.
The problem is that when patents are no longer an option trade secrets (or public funding) become essentially the only viable option to pay for the majority of drug research.
If a drug is unique and desirable, forcing doctors, suppliers and patients into contracts that don't allow reverse engineering is the most likely outcome. In extreme cases drug companies could require patients to only be treated in a doctor's office.
In the case of drugs that can't be kept secret, given the time and effort necessary to develop, much of the economic incentive for that research evaporates.
>Patents are thus only viable for those things which would not be expected to remain secret.
That's not how the math works outs. You can easily construct a counter example where a drug has a greater than 50% chance of remaining secret during the length of the patent, yet taking the patent has a greater expected value.
The problem is that when patents are no longer an option trade secrets (or public funding) become essentially the only viable option to pay for the majority of drug research.
If a drug is unique and desirable, forcing doctors, suppliers and patients into contracts that don't allow reverse engineering is the most likely outcome. In extreme cases drug companies could require patients to only be treated in a doctor's office.
In the case of drugs that can't be kept secret, given the time and effort necessary to develop, much of the economic incentive for that research evaporates.
>Patents are thus only viable for those things which would not be expected to remain secret.
That's not how the math works outs. You can easily construct a counter example where a drug has a greater than 50% chance of remaining secret during the length of the patent, yet taking the patent has a greater expected value.
> Of course patents are preferable to trade secrets in the vast majority of cases.
At least we agree on that much. My point is that when the patent is preferable (in the vast majority of cases, as you say) it implies that a trade secret would not have been expected to last as long as the patent—which makes the patent strictly worse from the public's point of view. We've granted a 20-year monopoly in exchange for revealing information which would have otherwise become public, without restrictions, in less than 20 years.
Maintaining tight control over the distribution of the drug only gets you so far, especially when the underlying research is already public knowledge. Trade secrets, unlike patents, don't block independent discovery, and only the rarest and most expensive drugs would warrant complete control over the supply chain.
As for the incentive to perform the research, that ultimately comes from the patients desiring treatment, not the pharmaceutical companies. Eliminating the monopolies would not reduce the demand for treatments, though it would reduce the profitability of individual pharmaceutical companies.
> You can easily construct a counter example where a drug has a greater than 50% chance of remaining secret during the length of the patent, yet taking the patent has a greater expected value.
Yes, if you are not confident that you can keep a trade secret then the patent becomes the better option. (Isn't that what I said before?) "Greater than 50% chance" is not what I would call "confident". It doesn't change the fact that patents only have a positive net expected value to the recipient in the situations where the public is expected to lose by granting a patent rather than having the knowledge kept as a trade secret for a time. The interests of the applicant and the public are diametrically opposed; if the patent applicant wins, the public loses.
At least we agree on that much. My point is that when the patent is preferable (in the vast majority of cases, as you say) it implies that a trade secret would not have been expected to last as long as the patent—which makes the patent strictly worse from the public's point of view. We've granted a 20-year monopoly in exchange for revealing information which would have otherwise become public, without restrictions, in less than 20 years.
Maintaining tight control over the distribution of the drug only gets you so far, especially when the underlying research is already public knowledge. Trade secrets, unlike patents, don't block independent discovery, and only the rarest and most expensive drugs would warrant complete control over the supply chain.
As for the incentive to perform the research, that ultimately comes from the patients desiring treatment, not the pharmaceutical companies. Eliminating the monopolies would not reduce the demand for treatments, though it would reduce the profitability of individual pharmaceutical companies.
> You can easily construct a counter example where a drug has a greater than 50% chance of remaining secret during the length of the patent, yet taking the patent has a greater expected value.
Yes, if you are not confident that you can keep a trade secret then the patent becomes the better option. (Isn't that what I said before?) "Greater than 50% chance" is not what I would call "confident". It doesn't change the fact that patents only have a positive net expected value to the recipient in the situations where the public is expected to lose by granting a patent rather than having the knowledge kept as a trade secret for a time. The interests of the applicant and the public are diametrically opposed; if the patent applicant wins, the public loses.
>Yes, if you are not confident that you can keep a trade secret then the patent becomes the better option. (Isn't that what I said before?) "Greater than 50% chance" is not what I would call "confident".
Change it to any arbitrary likelihood below 1. The expected value of a drug during the length of the patent maybe arbitrarily greater than the expected value of a drug after that time period due to reasons other than duplication (alternative unrelated treatments etc..). If it is expected that drug will make nearly all of its total value during the length of the patent, then even a 1% chance of duplication means that the expected value of taking a patent is higher.
Such an extreme disparity between expected value during the patent length and after isn't even necessary when you factor in the additional costs of attempting to maintain a trade secret.
>It doesn't change the fact that patents only have a positive net expected value to the recipient in the situations where the public is expected to lose by granting a patent rather than having the knowledge kept as a trade secret for a time. The interests of the applicant and the public are diametrically opposed; if the patent applicant wins, the public loses.
This is wrong because it ignores the additional costs (both direct and indirect) of maintaining the trade secret.
>We've granted a 20-year monopoly
Minor point--most drug patents have an effective date of about 10 years because of the time it takes to bring a drug to market.
>Maintaining tight control over the distribution of the drug only gets you so far, especially when the underlying research is already public knowledge.
Without the potential benefit of patent protection, we'd almost certainly see research become less open to begin with.
>Trade secrets, unlike patents, don't block independent discovery, and only the rarest and most expensive drugs would warrant complete control over the supply chain.
Probably, but those drugs would become immensely more expensive, or the reward available to an individual company for developing them would go down. Every novel drug would likely warrant some extra level of control (and expense).
>though it would reduce the profitability of individual pharmaceutical companies.
The direct cost of maintaining trade secrets would effectively act as a tax on all pharmaceutical companies doing novel drug development. As would the direct cost caused by duplication of drugs during what would have been the patent protection period. Add in the indirect cost of decreased openness, and the only way to maintain the exact same level of drug research we have today without patents would be to increase public funding for drug development.
I think that's probably a better system to be honest.
Change it to any arbitrary likelihood below 1. The expected value of a drug during the length of the patent maybe arbitrarily greater than the expected value of a drug after that time period due to reasons other than duplication (alternative unrelated treatments etc..). If it is expected that drug will make nearly all of its total value during the length of the patent, then even a 1% chance of duplication means that the expected value of taking a patent is higher.
Such an extreme disparity between expected value during the patent length and after isn't even necessary when you factor in the additional costs of attempting to maintain a trade secret.
>It doesn't change the fact that patents only have a positive net expected value to the recipient in the situations where the public is expected to lose by granting a patent rather than having the knowledge kept as a trade secret for a time. The interests of the applicant and the public are diametrically opposed; if the patent applicant wins, the public loses.
This is wrong because it ignores the additional costs (both direct and indirect) of maintaining the trade secret.
>We've granted a 20-year monopoly
Minor point--most drug patents have an effective date of about 10 years because of the time it takes to bring a drug to market.
>Maintaining tight control over the distribution of the drug only gets you so far, especially when the underlying research is already public knowledge.
Without the potential benefit of patent protection, we'd almost certainly see research become less open to begin with.
>Trade secrets, unlike patents, don't block independent discovery, and only the rarest and most expensive drugs would warrant complete control over the supply chain.
Probably, but those drugs would become immensely more expensive, or the reward available to an individual company for developing them would go down. Every novel drug would likely warrant some extra level of control (and expense).
>though it would reduce the profitability of individual pharmaceutical companies.
The direct cost of maintaining trade secrets would effectively act as a tax on all pharmaceutical companies doing novel drug development. As would the direct cost caused by duplication of drugs during what would have been the patent protection period. Add in the indirect cost of decreased openness, and the only way to maintain the exact same level of drug research we have today without patents would be to increase public funding for drug development.
I think that's probably a better system to be honest.
Eh, technically yes, but that's not really what I'm talking about. The way we use the word "cost" varies depending on the context, and I'm responding to a specific usage of that word. I'm not making a broad claim that drugs need to be sold at cost, I'm making a claim that drug costs are not so highly variable that coming up with a consumer price needs to take days of research after a procedure.
jonathan-adly is making the argument that the inherent "cost" of drugs is itself highly variable for hospitals, and that means it's normal and expected that hospitals should not be able to tell patients the price of procedure before it happens. I'm arguing that the "cost" of the drugs is not actually that variable, that hospitals are just downstream of another part of the industry that is engaged in the same price-hiding behavior that hospitals are engaged in.
Of course, under Capitalism "cost" doesn't determine price, the market determines price. But I would also point out that under Capitalism, signing a contract usually involves the terms of that contract being made upfront. Pretty much every other industry in America has figured out how to put a price tag on the products they sell, and I'm not sympathetic towards the medical industry just because up until now it's never needed to learn how. Apple sources its components from manufactures, those manufacturers could change their prices someday. But Apple still puts a price tag on iPhones, and because it needs to put a price tag on iPhones it's incentivized to form long-term contracts with suppliers and to demand a level of consistency in the prices its suppliers offer.
Hospitals haven't needed to do that in a long time.
Price transparency is an important part of most industries under Capitalism, and the medical industry hiding behind variable "cost" as an excuse to avoid pricing their products shouldn't be something we tolerate.
Martin Shrekili's practices (as abhorrent as they might be) are a different conversation. I think that price limits and price transparency are two very different issues.
jonathan-adly is making the argument that the inherent "cost" of drugs is itself highly variable for hospitals, and that means it's normal and expected that hospitals should not be able to tell patients the price of procedure before it happens. I'm arguing that the "cost" of the drugs is not actually that variable, that hospitals are just downstream of another part of the industry that is engaged in the same price-hiding behavior that hospitals are engaged in.
Of course, under Capitalism "cost" doesn't determine price, the market determines price. But I would also point out that under Capitalism, signing a contract usually involves the terms of that contract being made upfront. Pretty much every other industry in America has figured out how to put a price tag on the products they sell, and I'm not sympathetic towards the medical industry just because up until now it's never needed to learn how. Apple sources its components from manufactures, those manufacturers could change their prices someday. But Apple still puts a price tag on iPhones, and because it needs to put a price tag on iPhones it's incentivized to form long-term contracts with suppliers and to demand a level of consistency in the prices its suppliers offer.
Hospitals haven't needed to do that in a long time.
Price transparency is an important part of most industries under Capitalism, and the medical industry hiding behind variable "cost" as an excuse to avoid pricing their products shouldn't be something we tolerate.
Martin Shrekili's practices (as abhorrent as they might be) are a different conversation. I think that price limits and price transparency are two very different issues.
>But I would also point out that under Capitalism, signing a contract usually involves the terms of that contract being made upfront.
There's nothing inherent to Capitalism that prevents variable priced contracts.
>Pretty much every other industry in America has figured out how to put a price tag on the products they sell,
Maybe for mass produced products they have, but certainly not for custom work. You aren't paying for a product but for a custom service. Paying a doctor to fix your body in many cases is more complex than paying someone to build a house, a bridge, or a piece of software. You won't even get an upfront price for something as simple remodeling your kitchen. A contractor estimates that it will cost $20k and then finds that a leak in your attic completely rotted some of the framing, now it's $50k. A builder starts digging the foundation to your house only to discover a huge boulder that has to be moved.
There are parts of medicine that could be made more transparent, but there is an inherent complexity that makes complete or even mostly complete price transparency impossible.
There's nothing inherent to Capitalism that prevents variable priced contracts.
>Pretty much every other industry in America has figured out how to put a price tag on the products they sell,
Maybe for mass produced products they have, but certainly not for custom work. You aren't paying for a product but for a custom service. Paying a doctor to fix your body in many cases is more complex than paying someone to build a house, a bridge, or a piece of software. You won't even get an upfront price for something as simple remodeling your kitchen. A contractor estimates that it will cost $20k and then finds that a leak in your attic completely rotted some of the framing, now it's $50k. A builder starts digging the foundation to your house only to discover a huge boulder that has to be moved.
There are parts of medicine that could be made more transparent, but there is an inherent complexity that makes complete or even mostly complete price transparency impossible.
> There's nothing inherent to Capitalism that prevents variable priced contracts.
Definitely not the norm though, and it is inherent to Capitalism that price transparency is an important part of creating an efficient market.
But sure, it's not a rule. A lot of common things in Capitalism aren't rules, but they're still often signals of a healthy market.
> You won't even get an upfront price for something as simple remodeling your kitchen. A contractor estimates that it will cost $20k and then finds that a leak in your attic completely rotted some of the framing.
A contractor will not however replace the framing and then charge me after the fact. They'll discover the rotten framing, inform me of the new conditions and the new price, and then let me decide. A good contractor will walk me through that process.
> but there is an inherent complexity
Not in the places that we're talking about. The kind of complexity and guesswork and change in procedure you're talking about is not present in the situations that jonathan-adly discusses above. The inherent complexity of fixing someone's body and the inherent variability of what drugs/procedures will be necessary to do so is a good explanation of why pricing a surgery or an entire hospital visit is very difficult. But it is not a good explanation for why hospitals have claimed that the price of a single x-ray is "unknowable".
Definitely not the norm though, and it is inherent to Capitalism that price transparency is an important part of creating an efficient market.
But sure, it's not a rule. A lot of common things in Capitalism aren't rules, but they're still often signals of a healthy market.
> You won't even get an upfront price for something as simple remodeling your kitchen. A contractor estimates that it will cost $20k and then finds that a leak in your attic completely rotted some of the framing.
A contractor will not however replace the framing and then charge me after the fact. They'll discover the rotten framing, inform me of the new conditions and the new price, and then let me decide. A good contractor will walk me through that process.
> but there is an inherent complexity
Not in the places that we're talking about. The kind of complexity and guesswork and change in procedure you're talking about is not present in the situations that jonathan-adly discusses above. The inherent complexity of fixing someone's body and the inherent variability of what drugs/procedures will be necessary to do so is a good explanation of why pricing a surgery or an entire hospital visit is very difficult. But it is not a good explanation for why hospitals have claimed that the price of a single x-ray is "unknowable".
>Definitely not the norm though
It most certainly is the norm when purchasing complex custom services.
>A contractor will not however replace the framing and then charge me after the fact. They'll discover the rotten framing, inform me of the new conditions and the new price, and then let me decide. A good contractor will walk me through that process.
If a surgeon could keep your chest open on an operating table while they walked you through the process this analogy would work.
>a good explanation of why pricing a surgery or an entire hospital visit may be difficult. But it is not a good explanation for why hospitals have claimed that the price of a single x-ray is "unknowable".
jonathan-adly has done a great job explaining why drug prices are difficult to calculate upfront.
As for the price os a single x-ray. I'm sure the average cost of a single x-ray could be calculated. But how much is that worth when the entirety of the hospital visit is going to be a variable cost? If you're only interested in a single x-ray, there are already outpatient imaging clinics that will give you the upfront cost.
It most certainly is the norm when purchasing complex custom services.
>A contractor will not however replace the framing and then charge me after the fact. They'll discover the rotten framing, inform me of the new conditions and the new price, and then let me decide. A good contractor will walk me through that process.
If a surgeon could keep your chest open on an operating table while they walked you through the process this analogy would work.
>a good explanation of why pricing a surgery or an entire hospital visit may be difficult. But it is not a good explanation for why hospitals have claimed that the price of a single x-ray is "unknowable".
jonathan-adly has done a great job explaining why drug prices are difficult to calculate upfront.
As for the price os a single x-ray. I'm sure the average cost of a single x-ray could be calculated. But how much is that worth when the entirety of the hospital visit is going to be a variable cost? If you're only interested in a single x-ray, there are already outpatient imaging clinics that will give you the upfront cost.
> It most certainly is the norm when purchasing complex custom services.
An x-ray is not is not a complex custom service.
> But how much is that worth when the entirety of the hospital visit is going to be a variable cost?
This is the exact same argument that hospitals used to use against itemized pricing, and yet it turns out that requiring hospitals to give itemized bills on request has pretty solidly been a good thing for consumers.
There are a huge number of reasons for this, not the least being fostering competition and putting natural pressure on the market to justify its prices helps it become more efficient, and these kinds of opaque systems will almost always naturally lead to inflated prices. There's little reason to believe that up-front price transparency for individual itemized procedures and drugs wouldn't also be good for the same reasons.
At the very least, this would help with the many health decisions that consumers make that aren't happening during life-threatening situations. Most of the time that I get an x-ray, most of the time when I'm being offered pain medication, most of the time when I'm making decisions about whether or not to opt for anesthesia before a procedure, I'm awake and not in danger of immediately dying.
It really doesn't make sense to keep leaning on the most extreme life-or-death situations as a defense for why a hospital can't walk me through the price differences in several different brands of pain medication. But sure, we'll make an exception for surgeons operating while a patient is literally unconscious during a time-sensitive procedure. Most health visits (and the vast majority of all preventative care procedures) do not fall into that category.
> jonathan-adly has done a great job explaining why drug prices are difficult to calculate upfront.
Let's make this simpler. johnathan-adly says:
> The cost of the aspirin depends on these things
Here's Rite-Aide's page that comes up when I search for an aspirin: https://www.riteaid.com/shop/medicine-health/pain-fever-reli...
Why is it that Rite-Aid can give me an upfront cost for an aspirin, and a hospital can't? 340B is a rebate system, it doesn't force doctors to avoid talking to patients about the baseline price differences between comparable off-the-shelf name-brand and generic drugs.
An x-ray is not is not a complex custom service.
> But how much is that worth when the entirety of the hospital visit is going to be a variable cost?
This is the exact same argument that hospitals used to use against itemized pricing, and yet it turns out that requiring hospitals to give itemized bills on request has pretty solidly been a good thing for consumers.
There are a huge number of reasons for this, not the least being fostering competition and putting natural pressure on the market to justify its prices helps it become more efficient, and these kinds of opaque systems will almost always naturally lead to inflated prices. There's little reason to believe that up-front price transparency for individual itemized procedures and drugs wouldn't also be good for the same reasons.
At the very least, this would help with the many health decisions that consumers make that aren't happening during life-threatening situations. Most of the time that I get an x-ray, most of the time when I'm being offered pain medication, most of the time when I'm making decisions about whether or not to opt for anesthesia before a procedure, I'm awake and not in danger of immediately dying.
It really doesn't make sense to keep leaning on the most extreme life-or-death situations as a defense for why a hospital can't walk me through the price differences in several different brands of pain medication. But sure, we'll make an exception for surgeons operating while a patient is literally unconscious during a time-sensitive procedure. Most health visits (and the vast majority of all preventative care procedures) do not fall into that category.
> jonathan-adly has done a great job explaining why drug prices are difficult to calculate upfront.
Let's make this simpler. johnathan-adly says:
> The cost of the aspirin depends on these things
Here's Rite-Aide's page that comes up when I search for an aspirin: https://www.riteaid.com/shop/medicine-health/pain-fever-reli...
Why is it that Rite-Aid can give me an upfront cost for an aspirin, and a hospital can't? 340B is a rebate system, it doesn't force doctors to avoid talking to patients about the baseline price differences between comparable off-the-shelf name-brand and generic drugs.
>Most health visits, and the vast majority of all preventative care, does not fall into that category.
The kinds of easy issues you're talking about don't need to happen in a hospital. You can already go to an outpatient imaging clinic for an x-ray, a dermatologist's office to have a mole removed, or an urgent care to suture a laceration.
If you need emergent care or you want an elective procedure that requires a hospital stay, you're into the realm of custom services with variable pricing.
>This is the exact same argument that hospitals used to use against itemized pricing, and yet it turns out that requiring hospitals to give itemized bills on request has pretty solidly been a good thing for consumers.
Has it? Has it driven down prices? Has the demonstrated value been worth the cost? Or has it just pushed hospitals into creating longer bills with more creative items and charges. Creative line items like $500 for aspirin perhaps?
The kinds of easy issues you're talking about don't need to happen in a hospital. You can already go to an outpatient imaging clinic for an x-ray, a dermatologist's office to have a mole removed, or an urgent care to suture a laceration.
If you need emergent care or you want an elective procedure that requires a hospital stay, you're into the realm of custom services with variable pricing.
>This is the exact same argument that hospitals used to use against itemized pricing, and yet it turns out that requiring hospitals to give itemized bills on request has pretty solidly been a good thing for consumers.
Has it? Has it driven down prices? Has the demonstrated value been worth the cost? Or has it just pushed hospitals into creating longer bills with more creative items and charges. Creative line items like $500 for aspirin perhaps?
> The kinds of easy issues you're talking about don't need to happen in a hospital. You can already go to an outpatient imaging clinic for an x-ray, a dermatologist's office to have a mole removed, or an urgent care to suture a laceration.
Even better: clearly the market has proven that it's possible to offer these services with transparent pricing. Why can't hospitals keep pace?
This also raises the question why preventative care often falls into the same category. Lawyers have a predictable billable rate, personal physicians and doctors often don't. Most scheduled hospital procedures require multiple consultations and planning before the procedures take place. Most of that stuff is not transparently priced.
There's no reason why a hospital shouldn't be able to figure out the cost of minor anesthesia before a scheduled minor surgery. That's not a surprising part of the procedure, that should be something that's fully negotiated with insurance and disclosed to the patient beforehand so they can decide.
> Has the demonstrated value been worth the cost?
Yes, absolutely, you can find tons of stories online about people negotiating smaller bills because itemized bills turn out to include services that they never requested (and in some cases services that were never even actually performed). If you talk to experts about managing personal health costs, pretty much all of them will tell you to always request an itemized bill after you visit a hospital or doctors office.
It's also absolutely worthwhile because you're seeing creative line items like $500 for aspirin that prove that the costs of the services aren't being based on market rates. That's really important information because it opens the door to other questions like "why are these prices what they are", and "can you tell me in advance before you give me a $500 aspirin?"
I mean... you're saying this is the norm in complex industries, it absolutely is not. Complex industries are complex because they don't know up front what they'll be billing you for. That's not even remotely the same thing as "we think your stay should cost $5000 for reasons we can't disclose, so I guess we'll jack up the aspirin cost after the fact to try and prevent anyone from questioning us."
It is extremely worthwhile to put hospitals in a position where they have to answer consumers why an in-patient aspirin is priced so much higher than the market rate for the drug. I don't know if this is your intention, but what you're implying when you say that the itemized bills aren't accurate is that hospital pricing isn't based on any kind of competitive or visible market rate, or even anything objective at all. Which is a pretty bold claim.
Other industries with high-variability pricing exist, but they're not just making up numbers completely out of thin air after the fact and then lying about line items to try and justify that cost. Hopefully hospitals aren't doing that either. But if they're not, if they are actually basing their prices off of the combined prices of the services they provided... then we gotta ask about that $500 aspirin, because that's a weird price.
Even better: clearly the market has proven that it's possible to offer these services with transparent pricing. Why can't hospitals keep pace?
This also raises the question why preventative care often falls into the same category. Lawyers have a predictable billable rate, personal physicians and doctors often don't. Most scheduled hospital procedures require multiple consultations and planning before the procedures take place. Most of that stuff is not transparently priced.
There's no reason why a hospital shouldn't be able to figure out the cost of minor anesthesia before a scheduled minor surgery. That's not a surprising part of the procedure, that should be something that's fully negotiated with insurance and disclosed to the patient beforehand so they can decide.
> Has the demonstrated value been worth the cost?
Yes, absolutely, you can find tons of stories online about people negotiating smaller bills because itemized bills turn out to include services that they never requested (and in some cases services that were never even actually performed). If you talk to experts about managing personal health costs, pretty much all of them will tell you to always request an itemized bill after you visit a hospital or doctors office.
It's also absolutely worthwhile because you're seeing creative line items like $500 for aspirin that prove that the costs of the services aren't being based on market rates. That's really important information because it opens the door to other questions like "why are these prices what they are", and "can you tell me in advance before you give me a $500 aspirin?"
I mean... you're saying this is the norm in complex industries, it absolutely is not. Complex industries are complex because they don't know up front what they'll be billing you for. That's not even remotely the same thing as "we think your stay should cost $5000 for reasons we can't disclose, so I guess we'll jack up the aspirin cost after the fact to try and prevent anyone from questioning us."
It is extremely worthwhile to put hospitals in a position where they have to answer consumers why an in-patient aspirin is priced so much higher than the market rate for the drug. I don't know if this is your intention, but what you're implying when you say that the itemized bills aren't accurate is that hospital pricing isn't based on any kind of competitive or visible market rate, or even anything objective at all. Which is a pretty bold claim.
Other industries with high-variability pricing exist, but they're not just making up numbers completely out of thin air after the fact and then lying about line items to try and justify that cost. Hopefully hospitals aren't doing that either. But if they're not, if they are actually basing their prices off of the combined prices of the services they provided... then we gotta ask about that $500 aspirin, because that's a weird price.
Not trying to be rude but he already told you the answer. You really should look up 340b. It's a federal program to rebate drug costs for certain types of patients and is a legal form of price discrimination. When you provide a drug in a healthcare setting, it can be a very different price depending on who receives it, because the federal government has the 340b program.
Your argument about cost to manufacture isn't relevant in the same way that the marginal cost of a flying one more passenger on an airline isn't relevant. We all pay different prices for airline seats. Hospitals pay different prices for the same pharmaceuticals.
There are a lot of smart people working in healthcare. A lot of people go into the industry thinking they know better and wash out. See the latest Berkshire Hathaway + JPM + Amazon failure.
Your argument about cost to manufacture isn't relevant in the same way that the marginal cost of a flying one more passenger on an airline isn't relevant. We all pay different prices for airline seats. Hospitals pay different prices for the same pharmaceuticals.
There are a lot of smart people working in healthcare. A lot of people go into the industry thinking they know better and wash out. See the latest Berkshire Hathaway + JPM + Amazon failure.
What's preventing the hospital from at least telling me the baseline price without 340b rebates and then listing those rebates separately? Does the hospital even know the baseline price without 340b rebates? If not, doesn't that strike you as a problem?
> Hospitals pay different prices for the same pharmaceuticals.
Right, that's exactly what I said:
> It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.
> Hospitals pay different prices for the same pharmaceuticals.
Right, that's exactly what I said:
> It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.
They have the transparency to supplier costs but it's so variable and granular that it's not meaningful to discuss.
Drugs in a clinical setting are priced on a per unit basis (which might be per mL), usually with a flat markup over cost. In practice, that can mean a patient getting IV drug treatment could receive two different charges for the same drug in the same day. If it's a hard to find drug and they deplete batch 1 from supplier A, then administer batch 2 from supplier B, the cost per unit could change by multiplies.
Using the earlier airline example, it's like trying to say what the cost of a generic flight is. The answer is always going to be it depends.
Combining that kind of cost structure with a transparency requirement means you get unusable, and as parent commenter mentioned, laughable results. It's not malicious compliance driving this garbage price transparency, it's a fundamental misunderstanding of how the healthcare system works.
Drugs in a clinical setting are priced on a per unit basis (which might be per mL), usually with a flat markup over cost. In practice, that can mean a patient getting IV drug treatment could receive two different charges for the same drug in the same day. If it's a hard to find drug and they deplete batch 1 from supplier A, then administer batch 2 from supplier B, the cost per unit could change by multiplies.
Using the earlier airline example, it's like trying to say what the cost of a generic flight is. The answer is always going to be it depends.
Combining that kind of cost structure with a transparency requirement means you get unusable, and as parent commenter mentioned, laughable results. It's not malicious compliance driving this garbage price transparency, it's a fundamental misunderstanding of how the healthcare system works.
> They have the transparency to supplier costs but it's so variable and granular that it's not meaningful to discuss.
Right, so again, exactly what I said:
> It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.
jonathan-adly suggests that it's laughable to assume that a hospital could get a predictably priced supply of aspirin from it's suppliers. And I'm sorry, but no it's not. Everybody else has figured out how to do this. The market has already proven that it is possible to predictably price an aspirin tablet for consumers before you hand it to them.
If hospitals can't do that, then it signals that either something is very wrong with how they operate, or (from the sound of things) something is very wrong with their supply chains.
The value here is in asking why hospitals can only provide laughable answers to a question that other segments of the health industry have been competently answering for decades now. I'm not saying it's necessarily the hospital's fault. I'm saying that something is pretty clearly wrong with their model for sourcing even generic drugs, given that they are one the only parts of the health industry that has this problem.
Right, so again, exactly what I said:
> It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.
jonathan-adly suggests that it's laughable to assume that a hospital could get a predictably priced supply of aspirin from it's suppliers. And I'm sorry, but no it's not. Everybody else has figured out how to do this. The market has already proven that it is possible to predictably price an aspirin tablet for consumers before you hand it to them.
If hospitals can't do that, then it signals that either something is very wrong with how they operate, or (from the sound of things) something is very wrong with their supply chains.
The value here is in asking why hospitals can only provide laughable answers to a question that other segments of the health industry have been competently answering for decades now. I'm not saying it's necessarily the hospital's fault. I'm saying that something is pretty clearly wrong with their model for sourcing even generic drugs, given that they are one the only parts of the health industry that has this problem.
Can't speak to aspirin specifically, but I think generically you're pushing a false assumption. It is not easy for the rest of the health industry to provide stable pricing of drugs, especially for the types of rarer drugs that are administered in inpatient care settings. Go click around GoodRx drug prices and tell me how stable even generic drug prices are. There's a post here on HackerNews every 6 months about the outrageous cost of insulin, one of the most commonly prescribed and readily available pharmaceuticals (within a lot of variation depending on patient needs).
It's complicated. You're oversimplifying it.
It's complicated. You're oversimplifying it.
Then how are Rite Aid and my local 7-11 able to do it?
Look, people are pointing me at rare drugs, drugs that don't have generics and that are only available on prescription, people are pointing me at the costs of surgeries and emergency care.
I'm really only asking about the absolute simplest part of this equation. Why can't hospitals predictably price the generic over-the-counter non-prescription drugs that I can buy at predictable prices communicated per-purchase in basically every single grocery store in America? Even GoodRx, for all of the variability on different drugs from different sources, is still able to show the price from each source up front. It's able to pull off transparent pricing.
If hospitals could do even just that, then we could move on and have a conversation about complexity. But they apparently can't even clear the lowest possible bar. Every single over-the-counter drug in a shopping mart will have a price tag on it when I pick it up. It is clearly possible to reach at least that level of competency. We don't even need to talk about the rare drugs or the complicated procedures.
Edit: it occurs to me that you may be focusing on stable, predictable prices over time. To be clear, I'm not even asking for that. I'm asking that at the moment a nurse walks up to me to put an aspirin in my hand, they should be able to tell me what the price is. I'm not asking for standardization across hospitals or static pricing across time, or even consistent pricing across a single visit. I'm asking for the price to be known before the drug is placed in my hand. That is something that pretty much everybody else has figured out how to do, it's the lowest possible bar to clear.
Look, people are pointing me at rare drugs, drugs that don't have generics and that are only available on prescription, people are pointing me at the costs of surgeries and emergency care.
I'm really only asking about the absolute simplest part of this equation. Why can't hospitals predictably price the generic over-the-counter non-prescription drugs that I can buy at predictable prices communicated per-purchase in basically every single grocery store in America? Even GoodRx, for all of the variability on different drugs from different sources, is still able to show the price from each source up front. It's able to pull off transparent pricing.
If hospitals could do even just that, then we could move on and have a conversation about complexity. But they apparently can't even clear the lowest possible bar. Every single over-the-counter drug in a shopping mart will have a price tag on it when I pick it up. It is clearly possible to reach at least that level of competency. We don't even need to talk about the rare drugs or the complicated procedures.
Edit: it occurs to me that you may be focusing on stable, predictable prices over time. To be clear, I'm not even asking for that. I'm asking that at the moment a nurse walks up to me to put an aspirin in my hand, they should be able to tell me what the price is. I'm not asking for standardization across hospitals or static pricing across time, or even consistent pricing across a single visit. I'm asking for the price to be known before the drug is placed in my hand. That is something that pretty much everybody else has figured out how to do, it's the lowest possible bar to clear.
Oh well in that case, you would have to have a totally different conversation about bundled payments.
The price (chargemaster) that the hospital might list for all of the a-la-carte care you're provided is totally separate from how they will get paid on it. If you present at the ER and are triaged with stabilizing care, the nurse can't tell you that price because it will depend on your status at discharge, which is not yet known or in her scope of license to determine. If the doctor sees you and sends you home, that's one price (tied to Medicare outpatient prospective payment system or OPPS). Depending on how severe your issue is, the triaging care, such as pain relievers, may or may not be included in the "evaluation and management" procedure coding level you're assigned. There's one of those codes and typically separate bills for both the facility and the attending physician on your visit. If you're admitted to the hospital, what happened in the ER is not really relevant anymore, because now the facility portion of your care will be paid for based on your diagnosis related group (MS-DRG) at discharge, which has no bearing on how many a-la-carte services/drugs you received. Your insurer negotiates payment per DRG (usually as a spread to Medicare) but the hospital, recognizing that they can get screwed and lose a fortune if they have a really complicated case, will probably negotiate a stoploss provision for "outlier claims", saying something like after $750,000 of billed charges, we don't want MS-DRG reimbursement anymore, we want 35% of billed charges.
The regulation, primarily driven by Medicare, prevents any of this from being simple enough to communicate at point of care.
That doesn't even touch the administrative burden of documenting and collecting on all of that care. If your care wasn't meticulously documented by providers making hundreds an hour to type longform notes, it's essentially free, because no provider will risk billing for care they can't support with documentation. Once insurance pays (or not, they might deny the claim), they will often say "yeah we agreed to pay you x but the patient has 20% coinsurance so here's 80%, you need to talk to him about the rest". The hospital and especially caregivers are not aware of how much of your annual out of pocket max you've spent (thereotically they could check with the insurer, but not realistically in an ER), so maybe you have 20% coinsurance or maybe you don't, only you and the insurance company can realistically know that before the hospital sends the bill.
So now that you've glimpsed one hellscape of a reimbursement scenario, which price did you want the nurse to tell you?
It's totally insane and it all starts with CMS and the insurers. The hospitals would love to simplify and have menu pricing for your care, run your card, and send you on your way. No insurer would contract to pay that way because it would "incentivize the providers to administer unnecessary care".
The price (chargemaster) that the hospital might list for all of the a-la-carte care you're provided is totally separate from how they will get paid on it. If you present at the ER and are triaged with stabilizing care, the nurse can't tell you that price because it will depend on your status at discharge, which is not yet known or in her scope of license to determine. If the doctor sees you and sends you home, that's one price (tied to Medicare outpatient prospective payment system or OPPS). Depending on how severe your issue is, the triaging care, such as pain relievers, may or may not be included in the "evaluation and management" procedure coding level you're assigned. There's one of those codes and typically separate bills for both the facility and the attending physician on your visit. If you're admitted to the hospital, what happened in the ER is not really relevant anymore, because now the facility portion of your care will be paid for based on your diagnosis related group (MS-DRG) at discharge, which has no bearing on how many a-la-carte services/drugs you received. Your insurer negotiates payment per DRG (usually as a spread to Medicare) but the hospital, recognizing that they can get screwed and lose a fortune if they have a really complicated case, will probably negotiate a stoploss provision for "outlier claims", saying something like after $750,000 of billed charges, we don't want MS-DRG reimbursement anymore, we want 35% of billed charges.
The regulation, primarily driven by Medicare, prevents any of this from being simple enough to communicate at point of care.
That doesn't even touch the administrative burden of documenting and collecting on all of that care. If your care wasn't meticulously documented by providers making hundreds an hour to type longform notes, it's essentially free, because no provider will risk billing for care they can't support with documentation. Once insurance pays (or not, they might deny the claim), they will often say "yeah we agreed to pay you x but the patient has 20% coinsurance so here's 80%, you need to talk to him about the rest". The hospital and especially caregivers are not aware of how much of your annual out of pocket max you've spent (thereotically they could check with the insurer, but not realistically in an ER), so maybe you have 20% coinsurance or maybe you don't, only you and the insurance company can realistically know that before the hospital sends the bill.
So now that you've glimpsed one hellscape of a reimbursement scenario, which price did you want the nurse to tell you?
It's totally insane and it all starts with CMS and the insurers. The hospitals would love to simplify and have menu pricing for your care, run your card, and send you on your way. No insurer would contract to pay that way because it would "incentivize the providers to administer unnecessary care".
> If the doctor sees you and sends you home, that's one price (tied to Medicare outpatient prospective payment system or OPPS). Depending on how severe your issue is, the triaging care, such as pain relievers, may or may not be included in the "evaluation and management" procedure coding level you're assigned.
Wait, hold on sec though. I've dealt with navigating inpatient vs outpatient coverage with my insurance compacts. It impacts what they will pay and it impacts what their coverage is, but that's a very different thing than telling the hospital what its prices need to be.
A hospital knows what it wants to charge for an aspirin tablet. Separately, some of that cost is going to be covered by insurance (maybe 100%, maybe 80%, whatever). Maybe there's going to be have to be separate negotiation afterwards to figure out what the insurance is willing to pay. Maybe the hospital won't get to charge what it wants, because the insurance company will whittle them down or move the entire procedure into a separate coding level.
But being able to predict the outcomes of that is more than I was asking. I am fine with a situation where a nurse goes to hand me an aspirin and says, "just so you know, this will be $5, though of course your insurance may end up covering it or negotiating you into a different code where you pay something lower." Because, again, other industries have figured out how to do this. A psychiatrist will not be able to tell you before the visit how much your insurance is going to pay, or even what the final price that they negotiate with your insurance will be. But you'll still know the general price of a session beforehand, the base amount that they want to charge.
Is there a reason why a hospital can't even tell me even just what the maximum amount is that the aspirin they're about to place into my hand would cost inside of their walls?
> That doesn't even touch the administrative burden of documenting and collecting on all of that care. If your care wasn't meticulously documented by providers making hundreds an hour to type longform notes, it's essentially free, because no provider will risk billing for care they can't support with documentation. Once insurance pays (or not, they might deny the claim), they will often say "yeah we agreed to pay you x but the patient has 20% coinsurance so here's 80%, you need to talk to him about the rest". The hospital and especially caregivers are not aware of how much of your annual out of pocket max you've spent (thereotically they could check with the insurer, but not realistically in an ER), so maybe you have 20% coinsurance or maybe you don't, only you and the insurance company can realistically know that before the hospital sends the bill.
This still feels like a lot of words to essentially agree with what I was originally saying -- that the entire process is not used to price transparency, and that this is not the result of an inherent complication in healthcare itself, it's the result of a system that at every level has gotten used to the idea that consumers shouldn't get to know what they pay, and that prices should be determined behind closed doors, not through an open market process.
If from the beginning, nobody tolerated getting mystery bills days or weeks after a hospital visit, would insurance companies have felt this comfortable demanding that hospitals follow a specific payment structure? Would hospitals have been as willing to accept supply contracts where the prices fluctuated so much?
After all of this conversation, we're still kind of back to the original point, which is that it's really good to put pressure on this system, that transparent pricing showcases the various issues with the system in a very public way, and that shining light on those issues and making them obvious to consumers may lead to improvements across the board. If the problem starts with insurance companies, then great. Attempts at transparent pricing open the door for public conversations where the public and regulatory boards ask "why is the insurance company refusing to pay the transparent prices that the hospital is offering?"
I mean, you bring up the (very common) scenario of insurance companies and hospitals disagreeing about what a procedure should cost and only agreeing to pay part of it. That's something that happens because there isn't a market rate for any of these procedures, and there's honestly no way to determine whether the insurer or the hospital is being reasonable. Price transparency helps with that, it gives us a more accurate picture of what the normal variation in prices are for a procedure across the entire industry.
I think that it might be coming across that I blame hospitals entirely for this, and I really don't, I'm focusing in on hospitals to make the point that the pricing outcomes are worse in hospitals than in most other industries. I understand that insurance makes this more complicated, I understand that suppliers make this more complicated, I understand that hospitals are trying to figure out how to bill as much as possible within the scope of regulations that dictate some price limits depending on context. What I'm saying is that price transparency regulation puts pressure on those systems to get better, and that it's good to put pressure on those systems to get better, and (most importantly) that there's nothing about medical care that inherently means those systems need to be this way. We have other examples of parts of the industry that have proven that this kind of complexity for the end consumer could be lower. We could have a medical system with transparent billing, the complications you're bringing up are regulatory, administrative, and contractual; they're not laws of nature. They're complications that were invented by human beings (not necessarily by hospitals specifically) and spread across the entire industry, because there was no incentive not to invent them.
Yes, insurance companies also need transparent pricing for hospitals. That doesn't mean that hospitals don't need transparent pricing for consumers.
Wait, hold on sec though. I've dealt with navigating inpatient vs outpatient coverage with my insurance compacts. It impacts what they will pay and it impacts what their coverage is, but that's a very different thing than telling the hospital what its prices need to be.
A hospital knows what it wants to charge for an aspirin tablet. Separately, some of that cost is going to be covered by insurance (maybe 100%, maybe 80%, whatever). Maybe there's going to be have to be separate negotiation afterwards to figure out what the insurance is willing to pay. Maybe the hospital won't get to charge what it wants, because the insurance company will whittle them down or move the entire procedure into a separate coding level.
But being able to predict the outcomes of that is more than I was asking. I am fine with a situation where a nurse goes to hand me an aspirin and says, "just so you know, this will be $5, though of course your insurance may end up covering it or negotiating you into a different code where you pay something lower." Because, again, other industries have figured out how to do this. A psychiatrist will not be able to tell you before the visit how much your insurance is going to pay, or even what the final price that they negotiate with your insurance will be. But you'll still know the general price of a session beforehand, the base amount that they want to charge.
Is there a reason why a hospital can't even tell me even just what the maximum amount is that the aspirin they're about to place into my hand would cost inside of their walls?
> That doesn't even touch the administrative burden of documenting and collecting on all of that care. If your care wasn't meticulously documented by providers making hundreds an hour to type longform notes, it's essentially free, because no provider will risk billing for care they can't support with documentation. Once insurance pays (or not, they might deny the claim), they will often say "yeah we agreed to pay you x but the patient has 20% coinsurance so here's 80%, you need to talk to him about the rest". The hospital and especially caregivers are not aware of how much of your annual out of pocket max you've spent (thereotically they could check with the insurer, but not realistically in an ER), so maybe you have 20% coinsurance or maybe you don't, only you and the insurance company can realistically know that before the hospital sends the bill.
This still feels like a lot of words to essentially agree with what I was originally saying -- that the entire process is not used to price transparency, and that this is not the result of an inherent complication in healthcare itself, it's the result of a system that at every level has gotten used to the idea that consumers shouldn't get to know what they pay, and that prices should be determined behind closed doors, not through an open market process.
If from the beginning, nobody tolerated getting mystery bills days or weeks after a hospital visit, would insurance companies have felt this comfortable demanding that hospitals follow a specific payment structure? Would hospitals have been as willing to accept supply contracts where the prices fluctuated so much?
After all of this conversation, we're still kind of back to the original point, which is that it's really good to put pressure on this system, that transparent pricing showcases the various issues with the system in a very public way, and that shining light on those issues and making them obvious to consumers may lead to improvements across the board. If the problem starts with insurance companies, then great. Attempts at transparent pricing open the door for public conversations where the public and regulatory boards ask "why is the insurance company refusing to pay the transparent prices that the hospital is offering?"
I mean, you bring up the (very common) scenario of insurance companies and hospitals disagreeing about what a procedure should cost and only agreeing to pay part of it. That's something that happens because there isn't a market rate for any of these procedures, and there's honestly no way to determine whether the insurer or the hospital is being reasonable. Price transparency helps with that, it gives us a more accurate picture of what the normal variation in prices are for a procedure across the entire industry.
I think that it might be coming across that I blame hospitals entirely for this, and I really don't, I'm focusing in on hospitals to make the point that the pricing outcomes are worse in hospitals than in most other industries. I understand that insurance makes this more complicated, I understand that suppliers make this more complicated, I understand that hospitals are trying to figure out how to bill as much as possible within the scope of regulations that dictate some price limits depending on context. What I'm saying is that price transparency regulation puts pressure on those systems to get better, and that it's good to put pressure on those systems to get better, and (most importantly) that there's nothing about medical care that inherently means those systems need to be this way. We have other examples of parts of the industry that have proven that this kind of complexity for the end consumer could be lower. We could have a medical system with transparent billing, the complications you're bringing up are regulatory, administrative, and contractual; they're not laws of nature. They're complications that were invented by human beings (not necessarily by hospitals specifically) and spread across the entire industry, because there was no incentive not to invent them.
Yes, insurance companies also need transparent pricing for hospitals. That doesn't mean that hospitals don't need transparent pricing for consumers.
The more I read about US healthcare, the more confused I am about how it's grown this perverse for this long. Prices are hidden (until the government forces them into the open), but they're badly distorted anyway by perverse incentives, which all seem to ladder up to the root cause of providing healthcare for profit.
Thank the private free market.. /s it goes this way because the government involvement. If anyone else in another industry attempted the same thing they would be sued for fraud.
I think this is the best argument for these lists that I've heard.
Forcing this stuff out into the light helps the system get fixed. This is a pattern I've seen in internal tools development for businesses over and over. When my solution increases visibility into a problem, suddenly people start solving the problem without my help.
Forcing this stuff out into the light helps the system get fixed. This is a pattern I've seen in internal tools development for businesses over and over. When my solution increases visibility into a problem, suddenly people start solving the problem without my help.
>And only like 8 people can tell you that information 3 months after the fact.
It's like that in every large organization. But it turns out businesses are pretty good at tracking costs, no matter how complex.
Besides, the specifics of any single case don't matter all that much. The variation can be smoothed out given enough data and a few common points of comparison.
But all of this is asking the wrong question...not 'how much does this cost now?' which is hopelessly mired in historical cruft but 'how much would this cost if done efficiently?'.
I wonder if the VA has open books...if not, they should.
It's like that in every large organization. But it turns out businesses are pretty good at tracking costs, no matter how complex.
Besides, the specifics of any single case don't matter all that much. The variation can be smoothed out given enough data and a few common points of comparison.
But all of this is asking the wrong question...not 'how much does this cost now?' which is hopelessly mired in historical cruft but 'how much would this cost if done efficiently?'.
I wonder if the VA has open books...if not, they should.
I think the issue here is that the system that has been setup is so dysfunctional that there is some validity to the phrase "the cost is unknowable".
But prior to this regulation, it was extremely difficult to even ascertain just how dysfunctional it all was. Putting it out in the open means more accountability for providers and insurers. Which in due time means more regulation :)
Which is how it goes when an industry misbehaves for so long. Eventually the public will get fed up, and demand that changes be made. This is just one step on that journey.
But prior to this regulation, it was extremely difficult to even ascertain just how dysfunctional it all was. Putting it out in the open means more accountability for providers and insurers. Which in due time means more regulation :)
Which is how it goes when an industry misbehaves for so long. Eventually the public will get fed up, and demand that changes be made. This is just one step on that journey.
Exactly this, though I’d like to point out that word “misbehaves.”
Many people may not see the medical cost world as misbehaving at all. It sounds like healthcare companies, from drug manufacturers to hospitals, are charging what the market will bare.
The inelasticity of the products and services for sale are what allows this market to become so out of whack. I don’t need an iPad that badly, but I do need to have these drugs to have a good quality of life.
I’m glad we’re taking these steps on the journey of making costs more transparent and understandable. And perhaps putting into law what we the people think is a reasonable approach to charging for life-saving treatments, rather than “whatever the company can get away with.”
Many people may not see the medical cost world as misbehaving at all. It sounds like healthcare companies, from drug manufacturers to hospitals, are charging what the market will bare.
The inelasticity of the products and services for sale are what allows this market to become so out of whack. I don’t need an iPad that badly, but I do need to have these drugs to have a good quality of life.
I’m glad we’re taking these steps on the journey of making costs more transparent and understandable. And perhaps putting into law what we the people think is a reasonable approach to charging for life-saving treatments, rather than “whatever the company can get away with.”
I see what you're saying, but much of the factors driving the "misbehavior" is due to companies being in-cahoots with each other on creating convoluted pricing schemes, kickbacks with various parties, and muscling through legislation that favors healthcare providers and insurers, to the detriment of patients.
It's true that this can all be explained in economic terms, but it's true in the same sense that the behavior of warlords can be described by economics.
It's true that this can all be explained in economic terms, but it's true in the same sense that the behavior of warlords can be described by economics.
I think you made the biggest argument for requiring these lists in the first place.
For your simple exercise, it seems like we need to have that breakdown for those four different factors (and have that explicitly listed). Then we can figure out why the cost for a $0.22 jumps to $20 for those with insurance but $12 when paying cash. I agree it probably is a huge plus for you and your job security. :)
For your simple exercise, it seems like we need to have that breakdown for those four different factors (and have that explicitly listed). Then we can figure out why the cost for a $0.22 jumps to $20 for those with insurance but $12 when paying cash. I agree it probably is a huge plus for you and your job security. :)
Requiring hospitals to make these lists may help the situation improve.
> No one working in a hospital knows how much do we acquire things for, or how much we get paid for doing things in advance. And only like 8 people can tell you that information 3 months after the fact.
This is the problem. There has to be prolonged pressure put on multiple parts of the system until it will start to optimize in different directions.
A nontrivial part of why no one knows these things in the hospital is because nobody has to know these things, the entire system (not just the hospital but the surrounding insurance system, the billing systems, the vendors, etc) is used to not needing to care about these things.
So these lists, as imperfect as they are, increase that pressure a little bit. Ideally, seeing the price fluctuation and seeing the reactions of doctors to these lists will prompt more in-depth questioning[0] from regulators, judges, and consumers. The fact that the lists are a joke is why they're not a joke. People need to be publicly reminded, again and again, over and over, that the way health procedures in the US are priced are generally broken, often arbitrary, sometimes opportunistically exploited, and almost always unnecessarily complicated.
The more obvious that becomes, the more attention that other parts of the system will get.
[0]: https://www.healthcaredive.com/news/baffled-judges-price-tra...
> No one working in a hospital knows how much do we acquire things for, or how much we get paid for doing things in advance. And only like 8 people can tell you that information 3 months after the fact.
This is the problem. There has to be prolonged pressure put on multiple parts of the system until it will start to optimize in different directions.
A nontrivial part of why no one knows these things in the hospital is because nobody has to know these things, the entire system (not just the hospital but the surrounding insurance system, the billing systems, the vendors, etc) is used to not needing to care about these things.
So these lists, as imperfect as they are, increase that pressure a little bit. Ideally, seeing the price fluctuation and seeing the reactions of doctors to these lists will prompt more in-depth questioning[0] from regulators, judges, and consumers. The fact that the lists are a joke is why they're not a joke. People need to be publicly reminded, again and again, over and over, that the way health procedures in the US are priced are generally broken, often arbitrary, sometimes opportunistically exploited, and almost always unnecessarily complicated.
The more obvious that becomes, the more attention that other parts of the system will get.
[0]: https://www.healthcaredive.com/news/baffled-judges-price-tra...
The spirit is here is that you should fully open all those factors and fully open how they influence the cost paid by the patient. Make an excel sheet, a web app, an API, whatever. But let people know and simulate the cost - include all required factors.
If the prices you charge differ from the prices provided by your open data platform, or if some factors are omitted from the open platform, you should get a lawsuit on your hand - and lose it.
If your excuse is that building the open data platform is too complex and expensive because too many variable are involved, explain how you were able to build a reliable system internally - and open that one.
If you cannot do that as well, you know it's time to rethink your pricing model, in order to simplify it.
The end goal of the regulation is to push as many health institution as possible to reach the conclusion that they really need to rethink their pricing model.
If the prices you charge differ from the prices provided by your open data platform, or if some factors are omitted from the open platform, you should get a lawsuit on your hand - and lose it.
If your excuse is that building the open data platform is too complex and expensive because too many variable are involved, explain how you were able to build a reliable system internally - and open that one.
If you cannot do that as well, you know it's time to rethink your pricing model, in order to simplify it.
The end goal of the regulation is to push as many health institution as possible to reach the conclusion that they really need to rethink their pricing model.
There is no internal reliable system. Healthcare in the US uses faxes.
People here thinks that their local hospital is Google, while in reality it's a badly managed/badly funded 100 year old non-profit organization full of middle managers who just learned how to use their email.
People here thinks that their local hospital is Google, while in reality it's a badly managed/badly funded 100 year old non-profit organization full of middle managers who just learned how to use their email.
I think if your point is "the system is broken today", basically everyone agrees with you.
If your point is "it is not possible to have transparent pricing", that seems also insane.
IMO we should pass a law that says if you can't give people transparent upfront pricing, you can't bill them at all. The idea that you can "figure out a price later" seems absurd.
If your point is "it is not possible to have transparent pricing", that seems also insane.
IMO we should pass a law that says if you can't give people transparent upfront pricing, you can't bill them at all. The idea that you can "figure out a price later" seems absurd.
It is not possible to have transparent pricing in the current broken system.
It's like trying to put a bandaid on an arm that met a chainsaw. Not really a good first step and a waste of time. The solution is to go to the OR, and give him a new arm. The more bandaids and time you waste, the worse it is.
It's like trying to put a bandaid on an arm that met a chainsaw. Not really a good first step and a waste of time. The solution is to go to the OR, and give him a new arm. The more bandaids and time you waste, the worse it is.
By demanding transparent pricing (and other aggressive policy, like say not being able to bill patients without them seeing a price and agreeing) might we force the system to replace itself? Because these companies are very good at complying with regulations, but the regulations allow them to use faces to communicate because most of the regulations are designed to keep most of the system compliant.
> 100 year old non-profit organization full of middle managers who just learned how to use their email.
As someone who works in the industry, you gave me a hearty chuckle - well done, too true
As someone who works in the industry, you gave me a hearty chuckle - well done, too true
It seems like in 2021, doing better than faxes is pretty reasonable. If things like that are legitimately the significant barriers today, then doesn't that suggest it should be very easy to get them fixed?
Can you say more about why the information process isn’t automated, allowing for easier and faster determination of these things?
Doing it manually seems rife for error and to be awful toil
Doing it manually seems rife for error and to be awful toil
> The fact that the general public as well as journalists think this data is accurate in anyway is really funny. This an exercise of futility that only increases the overall cost and provides job security for me :)
People are literally dying out here from administrative bloat and you're joking about job security. Your comment comes across as cavalier and even a bit callous.
With that said, I respect the systemic and historical complexity of the problem and don't mean to suggest that you personally are the problem. I understand that you're pointing out the Kafkaesque futility from within the trenches; I think I get where you're coming from.
May I suggest that you rephrase your critique next time in a way that would communicate empathy so that we might in turn empathize with your situation? If these spreadsheets are feel-good window dressing (not that I agree), then state your case and let's stop wasting time on them. What do you think should be done instead?
Let us improve things together.
People are literally dying out here from administrative bloat and you're joking about job security. Your comment comes across as cavalier and even a bit callous.
With that said, I respect the systemic and historical complexity of the problem and don't mean to suggest that you personally are the problem. I understand that you're pointing out the Kafkaesque futility from within the trenches; I think I get where you're coming from.
May I suggest that you rephrase your critique next time in a way that would communicate empathy so that we might in turn empathize with your situation? If these spreadsheets are feel-good window dressing (not that I agree), then state your case and let's stop wasting time on them. What do you think should be done instead?
Let us improve things together.
> Take the simple exercise of figuring out cost/revenue of an aspirin administration. [...]
In your opinion, is this something that could be exhaustively modeled in software? What would the bottlenecks be? I'm guessing probably the biggest is the fact that the necessary data isn't digitized, or if it is, it's not easily accessible.
In your opinion, is this something that could be exhaustively modeled in software? What would the bottlenecks be? I'm guessing probably the biggest is the fact that the necessary data isn't digitized, or if it is, it's not easily accessible.
Yes. It could be. The bottleneck is selling it. Healthcare has lots of problems that can be solved with software. The bottleneck is always making a business case and selling to hospitals which is a nightmare.
So long as a shitty excel sheet with inaccurate data fulfills the regulatory requirement, you will find a lot of trouble getting people to pay money for it.
So long as a shitty excel sheet with inaccurate data fulfills the regulatory requirement, you will find a lot of trouble getting people to pay money for it.
Alas, this makes sense.
I’d’ve assumed that it’s all done by software that takes into account all the factors, but I wouldn’t be surprised if it’s a step-by-step guide in a physical book. (Hospitals are horribly outdated with technology)
> The fact that the general public as well as journalists think this data is accurate in anyway is really funny.
If they are inaccurate, these hospitals should be sued into oblivion and replaced by trustworthy, competent organizations.
> Cost depends on: 1. Are you an outpatient/Obsveration v. inpatient v. ED? 2. Are you on Medicaid? 3. Is the hospital a part of GPO organization or not? 4. Is contractual obligations of GPO includes/excludes Aspirin?
> Reimbursement depends on: 1. Insurance 2. Group which you are under the insurance from 3. Contract language whether its a fee/service or bundled 4. Is the visit covered or not 5. how the visit/procedure was coded (most important and opaque factor)
Your convoluted process should not be the patient's problem.
Write an app that allows the user to input their provider and group, and search for the procedure to get a price.
If they are inaccurate, these hospitals should be sued into oblivion and replaced by trustworthy, competent organizations.
> Cost depends on: 1. Are you an outpatient/Obsveration v. inpatient v. ED? 2. Are you on Medicaid? 3. Is the hospital a part of GPO organization or not? 4. Is contractual obligations of GPO includes/excludes Aspirin?
> Reimbursement depends on: 1. Insurance 2. Group which you are under the insurance from 3. Contract language whether its a fee/service or bundled 4. Is the visit covered or not 5. how the visit/procedure was coded (most important and opaque factor)
Your convoluted process should not be the patient's problem.
Write an app that allows the user to input their provider and group, and search for the procedure to get a price.
Around 2012 before my wife and I were married, we both got pneumonia. I was insured through my employer, she was uninsured.
We went to urgent care at the same time on the same day, saw the same doctor and got prescribed the same drugs.
About a month later when the bills came, her bill with no insurance was somewhere in the $160 range. My bill after insurance was nearly $300.
I'm still peaved about this.
We went to urgent care at the same time on the same day, saw the same doctor and got prescribed the same drugs.
About a month later when the bills came, her bill with no insurance was somewhere in the $160 range. My bill after insurance was nearly $300.
I'm still peaved about this.
Did you have a HDHP (high deductible plan)? In that case, you have no co-pay or anything until your deductible is used up. Employers typically contribute a good amount towards this deductible (or even more than) using an HSA.
It's still crazy that the bills were so completely divergent.
It's still crazy that the bills were so completely divergent.
That's not the point. Your explanation is exactly what the issue is. Why is cash price cheaper than insurance price ? And in that case, why do we even need insurance for most of these visits.
In my view, the amount you pay for stuff before you hit your deductible is just another type of premium. If the cash prices you can pay for what you reasonably think your care will be in a year are less than your deductible, then it can save you a little money to do that. If you happen to be wrong, you'll have still have to pay for your deductible.
I pay for a specific medication OOP with goodrx because it's not covered by my insurance, and paying for it through them would be nutty ($1600/year versus $90/year). But other things I just lump in b/c I use a fair bit of insurance every year.
I pay for a specific medication OOP with goodrx because it's not covered by my insurance, and paying for it through them would be nutty ($1600/year versus $90/year). But other things I just lump in b/c I use a fair bit of insurance every year.
I think the problem is, it's insurance. I pay $1200/month for my ACA insurance as I am a freelancer. Those with full time jobs pay a similar amount, just indirectly. In a given year, if I am healthy and need minimal medical care, then my insurance puts me way behind financially. If I have a sudden medical emergency, it can really save me. That is of course, assuming the insurance company will honor their end of the bargain which is another matter altogether.
I don't want health insurance. I want health care.
I don't want health insurance. I want health care.
Make no mistake, I think the entire health insurance industry is a meat grinder for profits and we should move to single-payer like most other affluent countries.
Was there any difference in ability to sue the provider in case things went wrong?
I heard that sometimes they ask the uninsured to sign away the ability to sue the doctor and get lower prices in return. I am not too sure about details, this is just hearsay.
I heard that sometimes they ask the uninsured to sign away the ability to sue the doctor and get lower prices in return. I am not too sure about details, this is just hearsay.
I remember she did have to sign a lot of paperwork. I have no idea what it contained however.
And that’s because the product you were buying had a completely inelastic demand. You might have died if you didn’t get treatment.
Perhaps allowing healthcare providers to incentivize things like this is… not great? Because we’ll sign pretty much anything if we’re sick enough.
Perhaps allowing healthcare providers to incentivize things like this is… not great? Because we’ll sign pretty much anything if we’re sick enough.
If you are interested in this topic, I found this podcast to be enlightening: https://www.econtalk.org/keith-smith-on-free-market-health-c...
Basically, there's a surgery center in OK which posts every price online and doesn't take insurance. A surgeon who works there talks with the host about how it works and the nuttiness of health care pricing in America.
Basically, there's a surgery center in OK which posts every price online and doesn't take insurance. A surgeon who works there talks with the host about how it works and the nuttiness of health care pricing in America.
<critic>Imagine the most advanced country in the world can not get their healthcare in order... Imagine one of the most Christian countries in the world (>75% are believers) yet they are not "good Samaritans" to their own people...</critic>
>yet they are not "good Samaritans" to their own people
The state of the secular healthcare system is unrelated to the religiosity of the population. Further, in some states (like TN), there are in fact christian organizations that do take on a substantial portion of the social safety net, especially for the homeless. Critics will say that the time limit on food and housing is unethical but I think its important not to create a permanent dependence.
I'm not a religious person but the disdain which people commonly speak of [white] Christianity online is really offputting and, frankly, ignorant.
The state of the secular healthcare system is unrelated to the religiosity of the population. Further, in some states (like TN), there are in fact christian organizations that do take on a substantial portion of the social safety net, especially for the homeless. Critics will say that the time limit on food and housing is unethical but I think its important not to create a permanent dependence.
I'm not a religious person but the disdain which people commonly speak of [white] Christianity online is really offputting and, frankly, ignorant.
Our system is so byzantine. I prefer to go to Kaiser, if possible, for no other reason than everything is in-network by definition. The only reason I don't have Kaiser right this moment is my current company only has one Kaiser plan, and it's a Cadillac plan -- zero deductible, zero out of pocket maximum, and so it has a fairly high premium (whereas the PPO plan I'm using has a premium essentially zero, the company pays almost 100% of it). Which brings me to something else I loathe -- that my health coverage is related to my job. Dammit, I don't want to change doctors when I change jobs.
I'm not sure how useful these lists are when hospitals are not in competition. In many areas that aren't a major metro, you may only have one hospital you can even choose, and the law prevents new hospitals from opening without permission. This 'market' is the very definition of inelastic.
[deleted]
Just spent last night in an Urgent Care watching my youngest child get stitches (closest thing around for miles). Can't wait to see how that bill plays out, hopefully one day I can see how their prices compare to larger hospitals and such.
Got three plates and a few screws put into my smashed hip last year, cost me 120 Euros for the stay.
I'm in Austria, obviously... The only thing wrong here in Austria is there's still more than one health care insurance (one of regular employees, quite a few on federal and state level and one of self-employed) and there's a separate one for accidents (AUVA) and almost all of them are just playthings to the power hungry and greedy government.
I'm in Austria, obviously... The only thing wrong here in Austria is there's still more than one health care insurance (one of regular employees, quite a few on federal and state level and one of self-employed) and there's a separate one for accidents (AUVA) and almost all of them are just playthings to the power hungry and greedy government.
The csv from my local hospital is 247MB. Still going on 3 mins trying to open it.
There are 6000 hospitals, 20% for profit businesses, 17 of which are publicly traded. They write off procedure costs to some degree. The amount written off is so widely variable and lopsided, the IRS or the SEC would have a nearly impossible task of determining what is true. I'm curious, do hospital CFOs sweat the risk of IRS discovery that write offs are artificially inflated if/when the data becomes easily known and calculable? How many years and how many procedures were written off to which extent? To what end did asymmetric data play in avoiding taxes or violating SEC regs?
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US Insurance Aetna President Karen Lynch Compensation 2020: 7.33M
https://www.comparably.com/companies/aetna/executive-salarie...
Ferengi Rules of Acquistion #87 : A friend in need means three times the profit
I am willing to take some time and build a publicly available API of this. I care so much about this issue that I would build this db at my own cost and hope it truly helps people. if anyone wants to join forces, feel free to send any suggestions.
Hospitals rig the economy. They intentionally break price comparisons, patients able to decide-before-buy, pricing pressure, and a million ways to rig prices.
I don't understand why US healthcare providers are allowed to charge different customers a different price for the same service or good.
As this is clearly being systematically abused to extract the most wealth from patients and insurance companies, is anyone seeking to require healthcare providers to not provide such variable pricing?
As this is clearly being systematically abused to extract the most wealth from patients and insurance companies, is anyone seeking to require healthcare providers to not provide such variable pricing?
My third world country has better regulation than this
There is debate about healthcare nationalization.
As always, that which lends itself to regulation via market should be private and that which does not should be nationalized. So which one is medicine?
Medical care that is needed suddenly and urgently must be nationalized because the consumer of this care doesn’t shop the market and therefore the market is not capable of regulating its participants in that case.
Medical care that planned ahead of time, not urgently needed or otherwise allows people to shop the market should be private.
But this is not the issue. Whether or not medicine of one kind or another is private or public doesn’t matter as long as the medical establishment is corrupt and inefficient. Corruption and inefficiency are possible in both scenarios. Too few people in the public appreciate that it is the massive corruption and inefficiency of the medical establishment that is the cause of America’s healthcare problem. Doctors are in hundreds of thousands of dollars in debt by the time they wear a stethoscope. Hospitals are charging ten dollars for an aspirin. Patients can sue and cause material damage to medical practitioners even if the medical practitioner did nothing wrong. The system is broken. It doesn’t cost 300k to train a fucking doctor. It never did in the past and it doesn’t now either.
As always, that which lends itself to regulation via market should be private and that which does not should be nationalized. So which one is medicine?
Medical care that is needed suddenly and urgently must be nationalized because the consumer of this care doesn’t shop the market and therefore the market is not capable of regulating its participants in that case.
Medical care that planned ahead of time, not urgently needed or otherwise allows people to shop the market should be private.
But this is not the issue. Whether or not medicine of one kind or another is private or public doesn’t matter as long as the medical establishment is corrupt and inefficient. Corruption and inefficiency are possible in both scenarios. Too few people in the public appreciate that it is the massive corruption and inefficiency of the medical establishment that is the cause of America’s healthcare problem. Doctors are in hundreds of thousands of dollars in debt by the time they wear a stethoscope. Hospitals are charging ten dollars for an aspirin. Patients can sue and cause material damage to medical practitioners even if the medical practitioner did nothing wrong. The system is broken. It doesn’t cost 300k to train a fucking doctor. It never did in the past and it doesn’t now either.
Why is it that insurers in the US are seemingly the only industry where the person paying the bill can a) negotiate it after services are received; and, b) just decide not to pay it if they don't want to?
Hospitals should set a price for a procedure. There will be some variability of course as people need more or less anesthesia, identical surgeries can take longer to perform (=== more OR/surgeon time === more money), etc. But a $22-102k like in the article is absurd. Insurance companies should be required to pay whatever the hospital price is provided it can be justified. There should be specific courts to handle these disputes until the industry realizes it isn't special. Regardless, the onus shouldn't fall on the patient. Outcomes should be limited to: 1) Insurance company pays without complaint; 2) Insurance company doesn't pay, is sued by hospital, and is ordered to pay by the court; 3) Insurance company doesn't pay, is sued by the hospital, prevails in court, and hospital adjusts accordingly, eating 100% of that loss.
But, we'll likely just stay where we are now where people pay $100 for Tylenol PM and insurance companies get out of paying claims because one person out of 12 in the OR were out of network and they're all contractors.
Hospitals should set a price for a procedure. There will be some variability of course as people need more or less anesthesia, identical surgeries can take longer to perform (=== more OR/surgeon time === more money), etc. But a $22-102k like in the article is absurd. Insurance companies should be required to pay whatever the hospital price is provided it can be justified. There should be specific courts to handle these disputes until the industry realizes it isn't special. Regardless, the onus shouldn't fall on the patient. Outcomes should be limited to: 1) Insurance company pays without complaint; 2) Insurance company doesn't pay, is sued by hospital, and is ordered to pay by the court; 3) Insurance company doesn't pay, is sued by the hospital, prevails in court, and hospital adjusts accordingly, eating 100% of that loss.
But, we'll likely just stay where we are now where people pay $100 for Tylenol PM and insurance companies get out of paying claims because one person out of 12 in the OR were out of network and they're all contractors.
I studied this years ago for years. My summary:
- a mandated MLR of 85% means the insurance companies have zero incentive to reduce the cost of items. In fact, their toplines and real (non%) profits increase as healthcare gets more expensive.
- industry profitability for insurance companies is around 3%. So, their overhead is around 15%-3% = 12%. They have an incentive to do their job cheaper. This pales in comparison to the 85% cogs.
- the small company cfo (me) has negative incentive to get involved in my employees' healthcare decisions. In fact, even being aware of cancer, pregnancy, etc. can be used against management in an employee lawsuit. No thanks. We just accept the situation and pay the bill.
- huge companies that can afford to self-insure can do it as they can firewall healthcare information from employment decision makers.
So, who in this system is going for cheaper healthcare:
- employees ... no
- insurance companies .. no
- healthcare providers ... no
- business paying the bills ... no
This bullshit billing structure is the tip of the iceberg. We have no freemarket incentives to keep down the cost of healthcare (i.e., carveout for high deductible insurance plans). Why would we expect otherwise?
- a mandated MLR of 85% means the insurance companies have zero incentive to reduce the cost of items. In fact, their toplines and real (non%) profits increase as healthcare gets more expensive.
- industry profitability for insurance companies is around 3%. So, their overhead is around 15%-3% = 12%. They have an incentive to do their job cheaper. This pales in comparison to the 85% cogs.
- the small company cfo (me) has negative incentive to get involved in my employees' healthcare decisions. In fact, even being aware of cancer, pregnancy, etc. can be used against management in an employee lawsuit. No thanks. We just accept the situation and pay the bill.
- huge companies that can afford to self-insure can do it as they can firewall healthcare information from employment decision makers.
So, who in this system is going for cheaper healthcare:
- employees ... no
- insurance companies .. no
- healthcare providers ... no
- business paying the bills ... no
This bullshit billing structure is the tip of the iceberg. We have no freemarket incentives to keep down the cost of healthcare (i.e., carveout for high deductible insurance plans). Why would we expect otherwise?
The solution is to make the consumer participate in driving costs down. One employer I know of has an excellent solution to the problem: Make employees pay 100% of the bill up to a certain amount, such as $6000. That's a large amount, but the employer then contributes a large amount to your Health Savings Account (HSA), such as $4000. This amount is for you to keep regardless of whether you have any health bills or not. (This money can be used for medical expenses only, but can be used any time, including after retirement). So the maximum you will spend out of pocket per year is $2000. How does this encourage the consumer to scrutinize and control medical expenditure? Because the first $6000 of medical spending in a year is "your money". This is money you'd be able to keep in your HSA if you didn't have any medical expenses. This gives the consumer a strong incentive to reduce costs, question charges, avoid unnecessary services, and so on.
100% agree. It's a good start.
Also, I think emergency healthcare should be contemplated differently than ... I'll call it "premeditated healthcare". In one instance, the individual can make a deliberate shopping decision and weigh cost/benefit. That's fundamentally different than an ambulance taking you to the ER when you're bleeding out ... no price shopping then.
Also, I think emergency healthcare should be contemplated differently than ... I'll call it "premeditated healthcare". In one instance, the individual can make a deliberate shopping decision and weigh cost/benefit. That's fundamentally different than an ambulance taking you to the ER when you're bleeding out ... no price shopping then.
I've worked in healthcare my whole career and you hit the nail on the head. Costs keep going up because nobody involved in healthcare has an incentive to make it cheaper, including the patients. We've designed a system that is doomed to fail and nothing short of tearing it down will fix it.
Contact your state legislators and ask them to put large fines which go to the patient if they are discriminated against for their insured status.
Hospitals didn't "lift curtain on prices." They were forced to do so. Accept no framing that allows them to appear heroic or selfless.
https://www.cms.gov/hospital-price-transparency
https://www.cms.gov/hospital-price-transparency
I bet that this ends up resulting in higher prices. Once hospitals know what the others are charging, it is more likely to cause the cheaper ones to raise their prices than it is the more expensive ones to lower them. Medical care is a scarce good and (mostly) the end consumer is not footing the bill directly, either for the care or the insurance.
They have a column called "Uninsured cash price." These prices are <25% of the insurance "discount" prices, but the really amusing thing is that this column was set to 0 size so that when you download the Excel sheet you have to know to auto re-size all the columns, or you cannot see it.
And, no, I don't think this was by accident as they have updated this Excel spreadsheet several times and only that one column is always set to 0 size.