Is *THIS* what is making medical care/insurance so expensive?

[SaltyNuts]

So, I need to pay from some medical stuff. Some testing. Get a load of this. The hospital tells me, if I pay for it out of pocket, I owe $400.83. But if I go through insurance, I owe $1,500. I ask how on earth this makes sense - if I went through insurance they should cover some of the $400.83 (at least to the extent my deductible was met), making my out of pocket something less than $400.83. But instead its over 300% more. I asked her how in the heck that could be, and she said it is because if I go through insurance they charge the insurance company the rates the hospital negotiated with the insurance company. Apparently if they don't the rate they charge me is much, much less.

What the hell is going on? Is this why medical costs and medical insurance are going up so fast? Hospitals know insurance will pay high rates, so they raise the prices to insurance companies through the roof, and insurance companies don't care because they know that both they, and their insurance competitors, will just raise the rates to the insured to cover the increased costs, and the insurance company won't be any worse off since all its competitors are doing the same thing?

My gawd, if that is what is going on somebody needs to stop this racket. Trump, I call on you, fix this issue NOW!!!!

 

[dullard]

Opaque pricing certainly adds a lot to the cost. You can't easily shop around either for that reason. You usually get some runaround when you call rather than an exact price. When prices are hidden, prices tend to be higher.

But the real problem, by far, is lack of medical school and residency slots.

 

[thedrewker]

Good luck getting Trump to fix anything, he's more likely to make it worse for "working class people."

But you're right, our healthcare costs are insane, and the reasoning behind it is completely asinine. The more you try to understand it, the less it makes sense. It's not even supposed to make sense, it's meant to be a bunch of convoluted double-speak in a half assed attempt to justify the money they steal. There is absolutely no reason Americans should have such extreme healthcare costs when comparable countries managed to figure out much better solutions. But that's capitalism, nothing can happen unless someone can make a 300% profit.

I'm self employed and I actually base my prices on what the work is worth and what it costs me to perform it - I don't just gouge for the maximum amount I think I can get away with. Luckily I have no aspirations of buying a million dollar yacht or G6.

Sent from my XT1585 using Tapatalk

 

[arubino99]

@SaltyNuts - this isn't recent. It's been going on for 20+ years.
Here's some reasons why (as was explained to me by someone in the industry)
1) They wait for payment from the insurance company. Sometimes as long as 6 months or more! If you're running a business, can you wait 6 months for payment? The medical facility builds that into the price they charge the insurance companies.
2) They might not get paid at all! Insurance companies can deny claims or payments at a much later date. The medical facility can try and go after the patient, but if it's been 6 months, they might not be able to collect since they didn't bill the patient in a timely manner. Lost money...
3) Insurance companies will pay more. Flat out, they have the resources, and medical providers know this. $400 for a scalpel? Yup, insurance will pay it.
4) Pricing is never presented to the customer before services. Customers can't shop around if they don't know the prices they are paying beforehand. This also limits competition.

As a story (because people like stories):
A nurse tried to give my wife a Flu shot (nothing special, just an ordinary Flu vaccination) when she was pregnant. It's not required, but recommended. I asked the nurse how much the hospital would be charging for the vaccination. She couldn't tell me (she was about to stick my wife). I told her to stop and we didn't consent. She got all huffy. I called the billing department, spent nearly an hour to find out. The answer given to me was: "oh, turns out your insurance covers it 100%". Well thanks, wasn't my question. My wife just said get it done since it's 100% covered.
Bill time!
Flu vaccination: $87.23
Syringe: $13.51
Administration of Flu vaccination: $38.92
All of which insurance paid. That's about 4x the market CONSUMER rate for a Flu vaccination. Just an FYI, most places like Walgreens or CVS charge $15-30 for Flu vaccinations. Administered and all. Which is also covered by insurance.

So yeah, there ya go.

PS - next time you're in a hospital, doctor's office, or anywhere related to medical services; take a look around. Look how many staff there are. There's tons of money in the medical field.

Oh, and a few tips I've learned over the years:
1) Ask for price without insurance when you're given a bill.
2) Ask for cash discount (cash can actually be credit card, it just means paid up-front in full).
3) If you don't like the price when filling a prescription at your pharmacy, tell them you'll be going somewhere else. YES, PHARMACY PRICES VARY TOO!
4) It's 100% negotiable. Nobody will tell you this. Ever. But it is. Haggle away like it's a bazaar in Baghdad.
5) ALWAYS ASK FOR A FULLY ITEMIZED BILL. In some states, they MUST provide them when asked by law. Look for anything suspicious/didn't order/double billed.
6) NEVER PAY A DIME UNTIL YOU ARE SATISFIED WITH THE BILL INVOICE. Payment acknowledges the bill, which can hold you accountable for things like double-billing. It sounds silly, but it's true (varies by state, ofc).

 

[fuzzybabybunny]

https://www.youtube.com/watch?v=qSjGouBmo0M

The healthcare cost issues in the US aren't issues in most other developed countries.

 

[ImpulsE69]

That's the way it has always been. Insurance in general is a big scam but we've been convinced as a whole that it is necessary (and illegal not to have), so everyone can make more money. the idea of it is actually good in its intent, but normal greed screws it up as usual. No one is happy making a buck when they can squeeze 10 bucks out of you.

 

[hardhat]

Primary drivers, in my opinion, are:
1. Ridiculous cost of drugs. Medicare can't negotiate, and private insurance just increases premiums. This problem just gets worse because congress refuses to allow international sales, regulate absurd price gouging, or institute reforms to the patent system. And we let drug companies advertise on television, unlike virtually all other first world countries. And most people refuse to use generics.
2. Government would rather pay for a lifelong extremely expensive condition like diabetes than institute preventative screenings and education before problems get worse. With a country full of obese people, this is a serious problem.
3. Costs from people who can't pay are passed on to those who can. If someone comes to the ER, they will be treated, even if they can't pay. But this is only true for the ER, which is already a much more costly visit than normal. So people without money end up going and getting very expensive services because that is the only place they can be seen immediately. These costs have to be passed on to others who can pay.
4. Bureaucracy. Hospitals and clinics are often managed by people without clinical backgrounds. Instead, you get people who come out of business schools and think about maximizing profit instead of providing the services people need.
5. Ageing population. The baby boomers are getting old. This is putting a strain on the system and driving prices up.
6. Not enough doctors, and very expensive medical schools. The AMA hasn't responded adequately to the need for physicians, and medical school has become MUCH more expensive in comparison to other education options over the last few decades. So physicians need to charge more to pay back their loans.

 

[shortylickens]

Have we not discussed this a thousand times in P&N already?

 

[BoomerD]

The OP's scenario seems backwards. Generally, insurers negotiate LOWER pricing than is charged to the uninsured customer.

 

[child of wonder]

Been saying this for years and simply ensuring everyone has health insurance only exacerbates the problem.

Years ago I had a contractor work on my unfinished basement. He told me a story about he and his boys were working on a big house not far from here. They figured the cost would be around $2,500 for the work. While in the house they discovered some financial documents laying around showing how much money the client had. They then decided to find ways to jack up the price for the work because "he can afford it."

Hospitals and clinics do the same when it comes to insurance.

Upfront pricing, educated consumers, and competition is what will drive prices down. Insurance is a necessity, yes, but this blank check mentality only drives prices higher, keeps medical providers greedy and motivated to gouge insurance companies, which then drives insurance companies towards making harsh decisions like denying benefits, cutting benefits, and raising premiums.

 

[TheVrolok]

Been saying this for years and simply ensuring everyone has health insurance only exacerbates the problem.

Years ago I had a contractor work on my unfinished basement. He told me a story about he and his boys were working on a big house not far from here. They figured the cost would be around $2,500 for the work. While in the house they discovered some financial documents laying around showing how much money the client had. They then decided to find ways to jack up the price for the work because "he can afford it."

Hospitals and clinics do the same when it comes to insurance.

Upfront pricing, educated consumers, and competition is what will drive prices down. Insurance is a necessity, yes, but this blank check mentality only drives prices higher, keeps medical providers greedy and motivated to gouge insurance companies, which then drives insurance companies towards making harsh decisions like denying benefits, cutting benefits, and raising premiums.

That's a bit of an over simplification. You are having a heart attack right now. Wanna shop for the cheapest ambulance service? Wanna compare charge masters from all local hospitals? Need to review the itemized bill for your stent, etc.

Obviously this is a bold example, but health care is just different and that's why cost containment and capitalism don't jive.

 

[arubino99]

That's a bit of an over simplification. You are having a heart attack right now. Wanna shop for the cheapest ambulance service? Wanna compare charge masters from all local hospitals? Need to review the itemized bill for your stent, etc.

Obviously this is a bold example, but health care is just different and that's why cost containment and capitalism don't jive.

Actually, it's not an oversimplification. You're led to believe that "medicine is different" because something can be life-threatening when the reality is, most of the money racked up in medical bills isn't the emergency at all.

Sure, the heart attack needs immediate care. But look at your medical bill. MOST of it is the after-care. The hospital stay, the specialists you need to see, therapies, the medication you need to go on. All of that can be shopped/compared and moved to a different venue. But guess what? Medicine is a business, and like all business, they like sticky customers.

Patients feel "forced" to stay in the hospital/network/treatment center that first saw them, they feel "forced" to see the specialists that are on-call, and they feel "forced" to get their medication without shopping around at pharmacies. I'm willing to bet nobody reading this has ever 1) requested a different hospital/facility once the immediate need has been treated, 2) requested a different on-call specialists due to financial reasons, or 3) shopped different pharmacies when picking up medication.

I once had a hospital tell me that I needed an MRI done quickly. They said they had a machine and specialist on site. "Great!" I said. "When I can make an appointment, and how much is it?" Appointment availability was in 5 days... got a blank stare on the "how much is it" question. I told them I'd look around as there are other places to get an MRI. Sure enough, a day later, I was called by a billing specialist. Out of pocket was $3,000, PLUS the MRI specialist billed separately for an unknown amount (and he could have been out of network, they didn't know!) Called around, did some research, found a different place to get an MRI. Out of pocket was $600, no other fees AND they could see me next-day. They even gave me a copy of the images, plus forwarded the results to my doctor.

You as a consumer have all the power (except in an emergency). Once the emergency is dealt with, use your power. Make calls, do research, save yourself money.

 

[agent00f]

https://www.youtube.com/watch?v=qSjGouBmo0M

The healthcare cost issues in the US aren't issues in most other developed countries.

Threads like these mostly demonstration of how people delude themselves with stupid rationalization, given the answer is plain enough with many (or basically all of them) better solutions to contrast with.

 

[TheVrolok]

Actually, it's not an oversimplification. You're led to believe that "medicine is different" because something can be life-threatening when the reality is, most of the money racked up in medical bills isn't the emergency at all.

It certainly is. That fact is actually further demonstrated by what you're saying here. Unfortunately, medicine is incredibly grey and often poorly practiced - further complicating things

Sure, the heart attack needs immediate care. But look at your medical bill. MOST of it is the after-care. The hospital stay, the specialists you need to see, therapies, the medication you need to go on. All of that can be shopped/compared and moved to a different venue. But guess what? Medicine is a business, and like all business, they like sticky customers.

Patients feel "forced" to stay in the hospital/network/treatment center that first saw them, they feel "forced" to see the specialists that are on-call, and they feel "forced" to get their medication without shopping around at pharmacies. I'm willing to bet nobody reading this has ever 1) requested a different hospital/facility once the immediate need has been treated, 2) requested a different on-call specialists due to financial reasons, or 3) shopped different pharmacies when picking up medication.

In theory, I actually like the idea of horizontal transfers out after stabilization in order to promote competition. However, moving to a new hospital adds another "hand off" to care and that is, generally, a bad thing which can be fraught with error. In a perfect world, perhaps it may work, but we're far from that. Additionally, changing facilities while acutely ill is generally not safe, per se. Requesting different specialists? Incredibly complex issue. Perhaps there may be other options in urban areas, but in many many rural or even suburban areas, there is only 1, maybe 2, groups per specialty. Want someone else? There is no one else.

I once had a hospital tell me that I needed an MRI done quickly. They said they had a machine and specialist on site. "Great!" I said. "When I can make an appointment, and how much is it?" Appointment availability was in 5 days... got a blank stare on the "how much is it" question. I told them I'd look around as there are other places to get an MRI. Sure enough, a day later, I was called by a billing specialist. Out of pocket was $3,000, PLUS the MRI specialist billed separately for an unknown amount (and he could have been out of network, they didn't know!) Called around, did some research, found a different place to get an MRI. Out of pocket was $600, no other fees AND they could see me next-day. They even gave me a copy of the images, plus forwarded the results to my doctor.

Here I would argue that you didn't need it "done quickly." If it were truly an emergent MRI, there is no shopping around. Otherwise, it's fairly common to shop around for non-emergent diagnostics/procedures if the locality features other options (again, "most" people don't like in the urban areas where there are many other options - look at the electoral college map from our last election).

One of the biggest problems is that people look at cost from the end user end (what did the patient pay for XXX) and really the bigger problem is the cost of the resources (ie pharmaceuticals, medical devices, etc.). Additionally, as long as insurance companies, medical device manufacturers, big pharma, etc. are for-profit (without any type of caps or stricter regulation) there is no incentive to truly drive supply side costs down.

 

[ImpulsE69]

One of the biggest problems is that people look at cost from the end user end (what did the patient pay for XXX) and really the bigger problem is the cost of the resources (ie pharmaceuticals, medical devices, etc.). Additionally, as long as insurance companies, medical device manufacturers, big pharma, etc. are for-profit (without any type of caps or stricter regulation) there is no incentive to truly drive supply side costs down.

I would counter however that in most cases, they are going to tell you YOU NEED THIS and SOON, which is enough to scare most people into just doing it whenever they tell them to. You typically aren't in the mindset to 'bargain shop' for medical issues you just had taken care of.

 

[TheVrolok]

I would counter however that in most cases, they are going to tell you YOU NEED THIS and SOON, which is enough to scare most people into just doing it whenever they tell them to. You typically aren't in the mindset to 'bargain shop' for medical issues you just had taken care of.

Totally agreed, that's why I added the "often poorly practiced" bit. The system is TOTALLY fucked. And that's an industry term.

 

[Darwin333]

The OP's scenario seems backwards. Generally, insurers negotiate LOWER pricing than is charged to the uninsured customer.

This. Usually the cash price is absurdly higher than what insurance companies pay.

 

[Darwin333]

That's a bit of an over simplification. You are having a heart attack right now. Wanna shop for the cheapest ambulance service? Wanna compare charge masters from all local hospitals? Need to review the itemized bill for your stent, etc.

Obviously this is a bold example, but health care is just different and that's why cost containment and capitalism don't jive.

The vast majority of medical services are not an emergency are planned in advance. There is a hospital in Oklahoma I think that only takes cash (credit cards, etc...) and have ALL their prices listed up front on their website and it includes EVERYTHING. You pay no more or no less. They beat the national average by a metric fuckton and depending on where you live by factors of 2 or 3 times the price you, or your insurance company, would pay.

There is no other industry that is allowed to perform a service and then tell you what that service cost afterwards and there is absolutely zero reason that hospitals, doctors, medical testing services, etc... can't post prices, or at the very least close estimates, on the vast majority of their services up front. Just the absurdly wild variation in costs for something like an MRI scan, which is performed exactly the same, is proof that the way the healthcare industry prices services is severely fucked. In Japan an MRI runs around $400, something that almost all of us could pay cash for. The average price Medicare pays for an MRI is $2,600 and in some places can be as high as $13,000...

 

[TheVrolok]

The vast majority of medical services are not an emergency are planned in advance. There is a hospital in Oklahoma I think that only takes cash (credit cards, etc...) and have ALL their prices listed up front on their website and it includes EVERYTHING. You pay no more or no less. They beat the national average by a metric fuckton and depending on where you live by factors of 2 or 3 times the price you, or your insurance company, would pay.

There is no other industry that is allowed to perform a service and then tell you what that service cost afterwards and there is absolutely zero reason that hospitals, doctors, medical testing services, etc... can't post prices, or at the very least close estimates, on the vast majority of their services up front. Just the absurdly wild variation in costs for something like an MRI scan, which is performed exactly the same, is proof that the way the healthcare industry prices services is severely fucked. In Japan an MRI runs around $400, something that almost all of us could pay cash for. The average price Medicare pays for an MRI is $2,600 and in some places can be as high as $13,000...

Of course what you're saying is true which is why I provided the oversimplification caveat.

Healthcare is, unfortunately, a different service. Many, many, people do not approach medicine with the same rationality they approach other aspects of their lives.

The average person is also not going to spend time/effort shopping around to have testing done. It just won't get done.

The system is so damaged and self destructive, the only real way to fix it is to have a governmental single payer (if we want private insurance on top of that, all the better).

 

[Cozarkian]

Transaction without insurance:

1. Secretary schedules appointment, does intake, takes payment.
2. See the nurse
3. See the doctor.

Transaction with insurance:

1. Insurance company hires actuaries to develop plans and premiums.
2. Insurance company, doctors, and employers hire sales/HR personnel to negotiate plans, prices, and preferred providers.
3. Attorneys are hired to draft contracts for above.
4. Software is purchased to track plans, participants, coverage and pricing.
5. Secretary schedules the appointment, does intake, looks up insurance, takes copay.
6. See the nurse
7. See the doctor
8. Bill is sent to insurance
9. Insurance reviews bill and makes coverage decision
20. Insurance pays bill
21. Doctor's office verifies payment and determined whether there are unpaid probs for billing to patient

Whoops, I forgot the extra steps regarding the creation, completion, and review of the application to get insurance.

 

[Darwin333]

Of course what you're saying is true which is why I provided the oversimplification caveat.

Healthcare is, unfortunately, a different service. Many, many, people do not approach medicine with the same rationality they approach other aspects of their lives.

The average person is also not going to spend time/effort shopping around to have testing done. It just won't get done.

The system is so damaged and self destructive, the only real way to fix it is to have a governmental single payer (if we want private insurance on top of that, all the better).

The only reason people don't shop around is because it is absurdly difficult if not impossible to do. If it was as easy as shopping around for anything else I guarantee that a LOT of people would do it. Hell you have people that fly to other countries to have medical and dental procedures done to save money.

And I think that eventually we will move to single payer but I don't see how that will fix the underlying problem which is NOT health insurance costs but healthcare costs.

 

[TheVrolok]

The only reason people don't shop around is because it is absurdly difficult if not impossible to do. If it was as easy as shopping around for anything else I guarantee that a LOT of people would do it. Hell you have people that fly to other countries to have medical and dental procedures done to save money.

And I think that eventually we will move to single payer but I don't see how that will fix the underlying problem which is NOT health insurance costs but healthcare costs.

I think you're right that some motivated and educated people would, but that is not the majority of this county.

I absolutely agree with you're last sentence, which is what I said earlier. Insurance, medical device, and pharmaceutical companies continue to post record profits (at least world leading profits) while politicians keep the people focused on cost of insurance.

 

[HumblePie]

Medical care costs has been a on going scam in this country for decades. Wish regular people could do something about it, but we can't really.

 

[cbrunny]

for profit healthcare is extremely stupid. unless they are having a sale on CT scans or w/e your ailment is. 50% off one large vaccine! TODAY ONLY!

 

[manly]

Medical care costs has been a on going scam in this country for decades. Wish regular people could do something about it, but we can't really.

In theory we could vote for "socialist" legislators who would deliver us single-payer like the rest of the advanced economies (and many developing countries) have.

But we're collectively too dumb for that, so we get the health care "system" that we deserve.