Here in Germany, we have something called "Gebührenordnung für (Tier)Ärzte" (fee catalogue for (veterinary) doctors).
Everything you can think of has a standardized pricing set, with the option to go up to 3.5x the standard rate for difficult procedures.
Kind of prevents that bullshit mentioned in the article; also, national health insurance covers nearly everything that's medically neccessary and deductibles are highly limited.
In BC (and I assume other Canadian provinces) the dental association publishes an annual fee guide. They recommend that dentists charge the suggested fees, but they do not require it. Many insurance companies use the suggested fees as limits on how much they will pay for certain procedures. But patients who are paying cash don't know how much the "suggested" rate is for the services they received -- unless they borrow a copy from their local library, since the dental association explicitly refuses to put the guide online. (Their argument is that the fee schedule is too complicated for patients to understand.)
So despite having nominally standardized pricing, in practice there's nothing keeping pricing standardized beyond what insurance companies are willing to pay for their clients.
It's comforting to see a doctor venting his frustration over Insurance companies. I've gotten to the point where I've kinda just given up. I'm sick of the entire mess.
I've gotten to the point where I just wish patients had more of a say over what medications they could have refilled.
Say, for instance, a person has been taking Blood Presssure medication for over five years; they should be able to renew their original script? Or, a person has been on anti-anxiety/depression medication for over five years; let that person authorize their own refills? Require blood tests--that's fine.
The patient couldn't increase the dose, but wouldn't have to deal with doctors over refills. The patients who abuse the privilege would have to go back to our lovely system of being held hostage.
I guess refill are on my mind because I'm going into detox over the lack of a medication I've been on twenty years. The pharmacy is waiting for her approval. I think my doctor is on an extended vacation?
Of course this will never take place because Americans are all drug seeking zombies according to our government, and I don't think AMA lobbyists would ever even consider such a crazy notion.
As to this, "Nepotism occurs in many fields; friends and family of New York City police officers often carry Patrolmen’s Benevolent Association cards, which may confer special treatment in a traffic stop."
Yea, this is very common. In San Francisco, my father best friend (now a retired cop) gave him a special business card. A "Get out of jail free" card. My father used it a few times. It saved him from a DUI. My father was a very conservative man. He hated what that card stood for, but always carried it around.
If someone is on some medication, it is probably a good idea to have them regularly check in with a doctor to make sure their condition isn't getting worse (or better!). Forcing them to see a doctor when their medication runs out seems like a reliable way to get them to go to such checkups.
I realize that sounds pretty reasonable and all, but I can assure you that no such checkup is being performed the vast majority of times a patient comes in to renew a script. It's just an excuse to get the patient in so that they can cover their ass and increase billables.
"These workarounds are necessary because the health care system doesn’t follow any rational rules of economics, where the customer should be king."
The health care system how it's currently organised in the US _does_ follow rational rules of economics. It is very good at extracting value from the medical process. It's horribly bad at solving health issues, let alone efficiently.
Indeed. The free market is only efficient if property rights exist and are enforced, transaction costs are low, and there are low barriers to entry. In the US we had the property rights done fairly well, the transaction costs were manageable (outside of emergencies where every second counts)... it was the barriers to entry that were a major pain, and no reform in recent memory has done anything but make those worse.
Unless and until it becomes easier to start new businesses, hospitals, practices and careers in the medical-care profession, no one should expect the market to be functional.
> The health care system how it's currently organised in the US _does_ follow rational rules of economics.
Really‽ If prices of service were disclosed in some sane way the market could reward the efficient providers. Instead it's shrouded in mystery and the providers hide behind the complexity of the agreements among the many insurance agencies. They're certainly able to figure it out once it's time to generate a bill.
If there were healthcare providers that worked like my auto mechanic or plumber, it would be so much easier to work with. "sign here, not to exceed $150 for diagnosis, etc..." and then you discuss with the physician later, "Ok treatment option 1) these pills, $50 for your insurance, 2) amputation, $3000 for your insurance and BTW you satisfy your annual deductible, ..." It's not that they couldn't do that, it's just that there's little incentive for them to do it and none of the competition does it. And much of the time the diagnosis would reveal "Sir it's probably just a virus which means that we could spend tons more time and money diagnosing this and then just rule out tons of other things and end up with no treatment options anyways. If your symptoms don't go away in three weeks then come back."
You misunderstand the grandparent post. He is saying that you don't get to change rules of economics. But you (in this case the government) does get to setup the rules of the marketplace. And it is this combination of basic economics and rules of the marketplace (in this case government hiding cross subsidies for Medicare) that results in the mess we are in. But the basic rules of supply, demand and self-interest are the same here as they are in the auto mechanic business and as they were in Soviet Union.
There's also professional courtesy between doctors and police. They'll very often let you off for minor traffic violations even if you're not on the way to an emergency (source: relative who's a doctor).
It was described to me as "if they get shot and you end up being their surgeon they want your goodwill", although it's not limited to surgeons so I suspect that's not quite the whole story.
We used to just call that kind of thing "courtesy" and people in the community who were known for being good were given it, while jerks and scumbags had it denied.
I imagine it played a large part in community good will until our communities got too big for us.
Doubtful the police officer is thinking that far ahead. There's no need for an explanation. When your profession is both prestigious[1] and seen as being for the greater good, you tend to get treated well by the police. Especially if it's on your driver's license (military id works too).
Try telling someone you're a doctor at a bar to see this in action.
In the US, if people take the mystique out of health care and treated it more like food service, then it'd be a lot easier to understand why the industry is so hit-and-miss with a wide range of issues. In other terms, the demand is so strong in the industry that I have no doubt the competency is something to genuinely be concerned about as a patient. I've seen it first hand - Docs and Nurses are humans, and humans get tired, or forgetful, or distracted and those aren't personal faults. However, when they screw up, instead of being apologetic, getting defensive is a very typical response.
What this article points out is something a little deeper, in that knowing the language and culture will allow an individual to social engineer through challenges. I've done it with the medical community, also in Wall St. finance, but it's most useful in my day-to-day life when going out to eat in a restaurant. There are cues and phrases to drop which can alert a competent server as to the experience level - and possible expectations - I will have of the meal. Being deeply involved in such things can have that affect on people, at least it really has for me. Criticism from another industry participant tends to sting more, because it cuts to the point.
Thus, certain groups engage in trying to build up minor tests or cues to test a person's depth or familiarity with a professional subject. So if I'm talking to a person at a bar, and I find out they work at a major bank, say, Comerica, I can probe enough, politely, to probably understand what they do. This level of professional knowledge is not easily faked - it's like a web of synaptic references tagged to various terms and concepts (mostly "made up" for an industry).
Read up on Shibboleth [1]. Using language or phrasing, it's a way to suss out members of a certain group. One can argue that the internet memes are a type of shibboleth for internet groups. One example is The Narwhal Bacons at Midnight [2]. I'm sure YC alumni have some type of shibboleth to identify themselves in situations.
Shibboleth entered mainstream culture (and when I learned it) via a West Wing episode called "Shibboleth" [3]. The clip is worth a watch.
> There are cues and phrases to drop which can alert a competent server as to the experience level - and possible expectations - I will have of the meal.
I typically do the opposite. I underplay my experience level, and gloss over their mistakes. It's more important to me to make sure that they can relax and be comfortable, than to manipulate out of them the best possible meal. Intentional "raise expectations" dialogue seems rude, and I'm generally uncomfortable around people who try that.
But maybe I'm also just covering up for my own imposter-syndrome in case I inadvertently set the overall expectations too high. Interesting to think about.
There are cues and phrases to drop which can alert a competent server as to the experience level - and possible expectations - I will have of the meal.
Maybe I've just been bing-watching too much Silicon Valley lately, but I pictured Erlich Bachman saying that right before the waitstaff rolls their eyes on the way to the kitchen before they spit on the food. A competent server might very well be tuned in to manipulation as well as being able to sling a mean plate of food.
The doctor privilege angle is overblown. That's a shortcut, but you just need to be squeaky to get similar results. I think that instead of trying to create the fantasy that medicine is some sort of open market, we need to do something else.
My wife went through a series of medical procedures that are time sensitive, expensive and require a bunch of expensive speciality medication.
The pharmacy is impossible -- mail order only and dedicated to being obnoxious. Their aim is very obvious -- push prescription fulfillment into the next month, quarter or year. I'm sure bonuses are tied to this, because their stupid behavior wastes money... On three seperate occasions drugs were couriered to my wife (as in, a dude carrying a box got on a plane and took a cab to my home from the airport)
It's dumb behavior that results from applying market incentives to one stakeholder. For want of a $1000 drug, a $15000 procedure could be rendered a waste.
Some party should be given a "project manager" type role, and be responsible for overall patient outcome.
It seems like every time I have to deal with a pharmacy, I am continually blown away. It's a uniquely terrible experience, more akin to the DMV than a retail store.
Out of interest (I'm not from the US) - how can a pharmacy be bad - every time I go to one it's a case of handing across a prescription, waiting a few minutes and then getting the drugs/whatever.
They won't have a medication in stock, they can only partially fill it (requiring you to forfeit the rest), you have to bring in a physical prescription (it cannot be called or faxed in), they say the wait time is 1 hour and it ends up being days, they have to call the doctor, pickup requires a pharmacist consult but no pharmacist is presently available, their computers (and thus insurance billing) are down therefore only cash is accepted. I could go on.
Only time I can remember having to wait more than about 15 minutes (and that was in an eye hospital for apparently drugs that were rare and expensive) was for rabies vaccine and even then the pharmacy delivered it to the GP for them to store it before we had paid (NB we don't normally pay for prescriptions here, things like rabies vaccine are done "private").
Insurance craziness. CVS is becoming a classic horizontally integrated monopoly for drug distribution (benefit management, wholesale distribution and retail) so it's getting much worse in recent years.
For normal drugs they have "step up" process for new drugs so they won't pay for a 90 day script without you first getting two 30 day scripts. They make more money via co-payments on 30 days so shockingly, they fuck this up all of the time to make more money.
In my case, I am on a blood pressure med that went generic. So the script changed to the generic... Which triggered the 30 day "step up" for the same drug. I lost alot of weight and had the generic script changed to a different dosage... Again, back to the 30 day "step up". My insurance penalizes you for short term scripts for maintenance medication, so I get to pay $50 each for two 30-day scripts vs. $25 for a 90 day.
My wife was different, "speciality" drugs, which include stuff like type-1 diabetes and fertility meds require that you use the insurance company's pharmacy and jump through more hoops. My co-worker has a daughter with type-1 diabetes. He's a "type A" PM and actually has developed a project plan with about 100 documented steps to ensure that her medications are delivered on time. He did that after he daughter had to be admitted to the hospital when they ran out of drugs -- which cost the other insurance coverage $25k or more, so it's not saving money.
It's all about delaying expenses over some reporting period and maximizing revenue. Nickel and diming co-pays is how they make a profit with a huge employer like mine with lots of bargaining power. Delaying issuance of speciality drugs is also a profit center, as they are paid a commission/incentive for "controlling" costs in a given quarter/year.
There are. It is mostly illegal to import drugs from overseas. There used to be 90 day exemptions that did in fact lead to many older Americans creating tour groups with the express purpose of crossing into either Canada or Mexico to purchase 90 days worth of drugs.
Big pharma lobbied to end this practice and it appears to be in a bit of a gray zone. When it comes to visa workers, we know that the rallying cry is 'severe shortage of skilled workers'. The analog talking point for drug imports is 'safety - think of poor grandma ordering some blood pressure meds and instead getting fakes or worse'. We can't allow imports and it's for your own good, citizen.
It is absolutely illegal for a wholesaler to import drugs for resale, though. This would essentially destroy big pharma's monopoly overnight, and it is absurd that this is rarely discussed. American consumers essentially subsidize the cost of medicine for the rest of the world (similar to military protection), and it is a large reason we spend more per capita with worse health than every other peer.
Interestingly, Trump is one of the few candidates that has ever pledged allow imports and cut off the pharma industry embargo. See point #7 on his page's plan for health care reform. Hillary's plan says vague things like 'more affordable health care for all working families' with no description of how this will be accomplished.
When my disabled mother was covered by Indiana Medicaid (which provided abysmal coverage), before the ACA took effect, I would import most of her drugs from Canada (except those that the DEA would not look fondly upon, those had to come from the local CVS).
It didn't, but the copays are now so much lower due to subsidies the ACA provides (compared to Indiana Medicaid), it makes no sense to import said drugs.
If you live in a state which refused ACA subsidies, this plan of action would still make sense. Or moving to another country with cheaper/universal healthcare depending on your income arrangement (disability/social security).
Would you be willing to connect me with your coworker or ask them if they're willing to share their project plan?
I have T1 as well and am fascinated by how difficult it is to reliably obtain the physical objects I need to stay healthy. Would be interested in learning more about your coworker's solution. (kamens@gmail.com if they're willing to chat over email)
This is (thankfully) the direction medical care is going in the US - a shift from "fee for service" to "value based care".
It's wrapped up as part of the Affordable Care Act, and basically hospital reimbursements are being moved from "Did you do the treatment? Here's $XX", to being based on metrics like re-admittance, customer complaints, etc. A focus on the population statistics, as opposed to just providing treatment.
So large hospitals today are already starting to have these "project managers", though they call it "population health" - and it is gradually becoming more directly tied to the hospital's bottom line.
The real issue here is not perks for physicians but the corrupt, inefficient, self-serving system that insurance companies and hospital bureaucrats have devised for the American public.
Ever wonder why the cost of healthcare is so ridiculously expensive in this country? The American Medical Association (the AMA is the most powerful union in history) has pushed through laws to protect its members from competition, making it extraordinarily difficult to provide low cost healthcare. Basically, all entrepreneurs who don’t join the union are shut off the health care industry. This is why you pay so much money in insurance & for simple doctors visits. Do you think if a fresh entrepreneur opened a hospital you would pay $8,000 per day for a room? I very much doubt it.
> The American Medical Association (the AMA is the most powerful union in history) has pushed through laws to protect its members from competition, making it extraordinarily difficult to provide low cost healthcare
This is a common misconception. I've posted about this many times before, but in short, it's the AAMC, not the AMA, that used to medical school spots. They are no longer the bottleneck anymore, however; the issue is that we don't have enough residency slots, and the funding for those comes through Medicare[0].
That said, this isn't really a driver of costs anyway, because providers themselves are responsible for only 10-15% of spending.
> Basically, all entrepreneurs who don’t join the union are shut off the health care industry. This is why you pay so much money in insurance & for simple doctors visits. Do you think if a fresh entrepreneur opened a hospital you would pay $8,000 per day for a room?
No, the reason that you pay so much is because of the convoluted way that Medicare reimbursements work (even if you're not on Medicare). In short, Medicare doesn't cover its own costs, so private insurers and uninsured patients are overcharged in order to cover the difference[1]
Oh, so there is free movement of foreign medical staff to the US, so that medical professionals have to compete on the same basis as a working class manufacturing employees?
They have to get re-licensed according to US regulatory standards, which are burdensome for everyone (whether from the US or not), but sure, they can (and do) come practice here regularly.
And, regardless, if physician pay went to 0, US healthcare costs would drop by only 10%.
This is true. I'm biased, of course, but to me the administrative costs are what's breaking the back of medicine. The roles of physicians and nurses are essential (I'm not saying that they can't eventually be automated, just that they have to be done). Those of administrators generally are not. But the growth in administration has been astounding:
So, sure, we can cut physician salaries and nursing salaries (nursing pay collectively is about the same as physician pay). But I don't see a downside to trying to reduce the administrative burden as a means of cost reduction.
FWIW, when I think about cutting physician pay, I think about incentivizing new supply, as it is likely the most effective way to do it and also probably the fairest.
I definitely have lots of concerns about the mega institutions that are swallowing hospitals. It's hard to believe that they really do much to improve outcomes for patients (and it's pretty observable that they haven't done any good for prices).
Doctors. Grants, loan forgiveness programs, stuff like that should incentivize people to go into medicine. Have to fix the limits on residencies and such too.
You don't even need those things. Without them, medical schools still accept less than half of those who apply. Let's say they increase capacity so that everyone who applies gets in somewhere. The bottleneck would still be, as you point out, the number of residency slots that Medicare is willing to fund.
> They are no longer the bottleneck anymore, however; the issue is that we don't have enough residency slots, and the funding for those comes through Medicare[0].
Can you elaborate? I don't understand what dynamic is being alleged with this often-cited reference to limited residency funding. If there really are (quasi) monopoly profits to be made, why would government funding limit that? That is, if it's really lucrative to become a doctor, but you have to do a residency, but no one will pay for it, then potential doctors should be happy to eat the costs, knowing that they can lay it back from later high salaries.
Let me put the argument in another context to say why it doesn't make sense: "demand for passenger air travel is through the roof, with revenues at hundred of times the cost of a flight. But we can't increase the number of flights because the government won't purchase more airplanes to give to the airlines."
In that case, it would be a poor argument: buy the new airplanes with the passenger revenue; you don't need a government subsidy there.
> Can you elaborate? I don't understand what dynamic is being alleged with this often-cited reference to limited residency funding. If there really are (quasi) monopoly profits to be made,
Well, there aren't. There's a bottleneck in the supply, but there aren't monopoly profits to be made, because Medicare acts more like a monopsony. Medicare sets reimbursement rates unilaterally, and medical providers are forced to accept them, even though they don't (in the aggregate) even cover the direct COGS, let alone allow for the overhead of running a practice.
I'm only bringing up residency funding to explain that the AMA has nothing to do with restricting the supply of doctors, as is commonly (mistakenly) believed. But the real topic that OP brought up was the costs of care, and the supply of doctors isn't really relevant to that topic either, because providers' earnings only account for 10-15% of total costs of care.
That doesn't addressing my point, and my point doesn't depend on there being a monopoly, just much-higher-then-typical returns. That was why I said "quasi" and gave a clear example of (what I believe is) an analogous situation, in airlines, to show why lacking government funding couldn't be blamed.
Nor did I ever endorse the claim the doctor compensation was a significant factor, although I should have perhaps made that clearer to avoid the rabbit hole.
My comment was intended to challenge the claim that the small number of Medicare-funded residency slots could affect doctor supply, which you seemed to genuinely believe and be able to defend. (If you can't defend this claim, I would recommend not repeating it.)
> That doesn't addressing my point, and my point doesn't depend on there being a monopoly, just much-higher-then-typical returns.
It does address your point. As I stated, there aren't higher-than-typical returns, because Medicare acts like a monopsony. Monopsonies result in lower-than-typical returns.
Medicare is involved in a number of different ways, but the two main ones here are to set the number of available residency slots, and separately to control providers' revenues through a monopsony power.
Aviation is highly regulated, but neither airlines nor passengers are monopsonies, so the analogy doesn't work.
I meant the returns to becoming a doctor, not general medical practice returns. (Was that not clear? The very next sentence, after I mentioned the monopoly, referred to the returns to becoming a doctor.)
Are you saying that the financial return to becoming a doctor is lower than for other occupations? If not, then you probably misunderstood the argument. Medicare doesn't somehow lower the return to becoming a doctor.
>Aviation is highly regulated, but neither airlines nor passengers are monopsonies, so the analogy doesn't work.
The relevant buyer would be the passengers or the employers of doctors, neither of which is a monopsony, and the use of airlines was arbitrary. Again, the point is that (lack of) governmmet subsidies can't be a bottleneck when existing revenues suffice to pay for whatever expansion is necessary.
In three comments, plus two citations, you have not provided substantiation to address the point (that lucrative businesses can't be bottlenecked by subsidy caps), and at this point I don't think you understand the criticism, but prefer instead to dismiss any clarification of the relevant dynamics with "oh that's regulated".
I request that you stop propagating your argument (and dismissing critics as having a "misconception") until you understand these criticisms better.
> I meant the returns to becoming a doctor, not general medical practice returns. (Was that not clear? The very next sentence, after I mentioned the monopoly, referred to the returns to becoming a doctor.)
I did my best to make it clear that these two things are intricately linked.
> If not, then you probably misunderstood the argument. Medicare doesn't somehow lower the return to becoming a doctor.
Medicare absolutely does lower the returns to becoming a doctor, just as any monopsony lowers the returns for suppliers in that market.
> The relevant buyer would be the passengers or the employers of doctors, neither of which is a monopsony
Until very recently (the last 2-5 years), the majority of doctors were self-employed, meaning that insurers were the direct purchasers of their services. And because of both its size and also various laws, Medicare has monopsony power in the insurance market. The recent employment of physicians by hospital groups doesn't really change those economic forces; it simply adds an extra layer of indirection when resolving them.
> you have not provided substantiation to address the point (that lucrative businesses can't be bottlenecked by subsidy caps), and at this point I don't think you understand the criticism, but prefer instead to dismiss any clarification of the relevant dynamics with "oh that's regulated"
I've stated pretty clearly that medical practice is not a particularly lucrative business (hence why private practices have been going bankrupt and being bought out by hospitals and insurers, and why so many hospitals have negative gross profit margins). That's not a 'dismissal' of your criticism; it's a refutation of the underlying premise.
> I request that you stop propagating your argument (and dismissing critics as having a "misconception") until you understand these criticisms better.
I could request that you stop dismissing me as 'misunderstand[ing] the argument' until you understand what I'm saying better.
Admittedly, this is a complex topic requiring both a detailed understanding of the ontology of the health insurance industry and a firm grasp of some economics concepts that are usually only covered at the graduate level. Most HN readers, understandably, have neither of these. I happen to have domain knowledge about both of these, and sometimes I share pieces of it in HN comments where relevant, and when I think it might be appreciated.
Neither one of these is particularly easy to convey in only a few hundred words, which is the amount of text I have written today on the topic. Sometimes I succeed, and sometimes I don't. Perhaps I have not succeeded in this particular instance. Perhaps I could if I spent more time, or elaborated more, I could convey these points better, and maybe then we could come to an agreement. But that's the amount of time and energy I have to spend today writing HN comments on the matter.
>I did my best to make it clear that these two things are intricately linked.
Where? You haven't once mentioned the return to becoming a doctor, nor compared the two, nor given a reply that suggests you recognized the distinction between the two.
>>you have not provided substantiation to address the point (that lucrative businesses can't be bottlenecked by subsidy caps), and at this point I don't think you understand the criticism, but prefer instead to dismiss any clarification of the relevant dynamics with "oh that's regulated"
>I've stated pretty clearly that medical practico is not a particularly lucrative business (hence why private practices have been going bankrupt and being bought out by hospitals and insurers, and why so many hospitals have negative gross profit margins). That's not a 'dismissal' of your criticism; it's a refutation of the underlying premise.
Then I was correct that you misunderstood the argument. The "lucrative businesses" referred to here, two which I was drawing an analogy, would be 1) the hypothetical airline business, and 2) the "business" of training to be a doctor; it was explicitly NOT referring to that of a medical practice!
Just as superprofitable airlines don't depend on government subsidies, superlucrative becoming-a-doctor shouldn't depend on government funding of residencies. See the dynamic there?
Now, after reading your last post, it sound like you're saying that Medicare has monopsony power over all doctor services and therefore is the major determinant of all doctor compensation, even those that eg work for rich people as their personal doctor.
If that's what you meant, I don't see why you couldn't have just said that the first time around, given your deep domain knowledge. Then, the appropriate reply would be "the return to becoming a doctor is no higher than other training, so it would be pointless to become a doctor if you had to also bear the cost of the residency". Note the length is less than 500 words.
But then, seen so clearly, it would depend on very questionable claims.
If that's not what you meant, then I stand by my claim that you're not responding to my point, because that's the only way that government-paid residency slot caps could hold up the correction of doctor undersupply.
The AMA only represents at BEST 15% of American physicians [1]. If you want ANYONE to blame, it's Medicare/Medicaid, Insurers, and Hospitals. CMS and Insurance regulations mean you cannot charge different prices to different people.
Eg. I can't charge a poor person less and still bill the full Medicare allowable for other patients. I either charge the low rate for all or none. Insurers have similar language in their individual contracts. They even go so far as barring us from discussing our reimbursement rates / charge list to allow patients to comparison shop.
The only real innovations in "price transparency" come when you reject Medicare patients. Surgery Center of Oklahoma [2] is a frequently cited example of a successful model of price transparency; however, they MUST explicitly opt out of Medicare billing else they are in violation of the law.
I have considered opening a Radiology practice with an imaging center that offers flat rate charges for people to price shop, but a LOT of patients who require imaging are Medicare patients and I'm pretty sure they aren't going to fork over $1-2000 for their every 3 month head-to-toe restaging scans, especially when it's a PETCT. Perhaps if I marketed to young people and focused on MSK MRI I could pull it off, but the market of people who are looking to comparison shop for imaging prices is smaller than all the people who rant about healthcare think it is.
Can you help me understand, if charging differing rates to the insurers is verboten, why a "cash only" patient can often (and easily) receive a substantial discount off their medical bills just by asking for it? I'm not being adversarial, I honestly don't understand it, and would like to.
It seems to me that the "cash" rate is what the "market will bear", which makes the hospital administration complicit in defrauding taxpayers and the general insured by overcharging for procedures and consumables when an insurer is the one receiving the bill. I suspect there's more to it, though, and I've never been able to figure out what it is.
I believe such self-pay discount is given "under the table." I.e. the provider is breaking Medicare rules, but expects not to get caught. Which is why you cannot get large providers to do this.
I am not an expert, but as someone who has occasionally paid cash for medical procedures, I know one way it happens: deliberately mis-classifying procedures. You've probably seen doctors check off a few things in a tiny print grid that you then hand to the receptionist to pay for your appointment. Many of the things on that are judgement calls or close enough to each other that anyone not in the room could never tell which it really was.
For example, if you go to your eye doctor, they can bill you for a standard visit, a refraction (getting your prescription), an eye health check, a super-duper health check because they found something and needed to look at it more, an eye health check with dilation, etc.
I have gone to eye doctors who will do everything and then ask at the end of the appointment what my insurance situation was. If I'm on insurance, bang, they charge me for all of it. If not, they just charge me for the refraction and forget about the rest.
What happens is that hospitals and other health care organizations negotiate a rate per procedure, not per patient. They look at how much it "should" cost, based on materials and doctor's time.
You can't go to an insurance company and say, "I know we negotiated a rate of X for this procedure, but the patient is poor, so I'd like to charge less for it." Well, you can, but the insurance company would come back with "Sorry, that's not in our agreement. X for procedure Y." Or worse: "So, you can actually charge less for procedure Y? In that case, we'd like you to charge that lesser rate anytime you perform that procedure, regardless of the wealth of the client."
There's multiple factors to this and multiple ways despite laws against this that it happens.
1. They incorrectly code the encounter leading to a lesser charge. This is Medicare fraud if the doctor ever get audited, but if it's a tiny practice and no one whistleblows on the Doctor, the odds of a small practice getting audited are very low.
2. They charge the cash paying patient the full amount. Then enter a period of "negotiation" and then accept the lesser payment and write off the balance as charity care. This is more legal, but leads to people coming on online forums and bitching about a $3000 bill only to reveal it got lowered to $700. The issue here is that the doctor is super busy and unless it's a micropractice where the doctor is the one billing, some biller/coder somewhere else will send you nasty grams until the doctor intervenes and tells them to write off the balance.
You have to remember, it is law in this country that you must bull accurately. Either coding too high or too low is considered equally fraudulent which Medicare will send its auditors after viciously.
The only way to go outside the system 100% legally is to completely opt out of Medicare/Medicaid. Anything less is fundamentally a gray area that relies on the practice not having someone mad and whistleblowing on them to a RAC. Whistleblowers are entitled to a portion of the fine, so the incentive is there for a disgruntled employee just to whistleblow even on the doctors who undercharge as a kindness to their patients.
When you hear doctors say the government has royally screwed up healthcare, this is fundamentally what they are talking about. I can either offer reasonable/negotiable prices on a cash basis or I can participate in the insurance game, but not both.
My biggest fear is that they eventually make participation in Medicare / Medicaid a requirement of licensure, effectively making the cash pay system illegal.
If physicians were the primary driver behind high healthcare costs, I would expect physician income to be a larger fraction of healthcare expenditure. Currently, physician pay represents about ~10% of US healthcare spending. This is dwarfed by administrative costs, which represent 25% of US healthcare spending.
If the AMA/AAMC are to blame, then it seems likely to be implicitly: by keeping entrepreneurs out of the hospital administration game so they can't reduce inefficiency. But you don't have to be a physician to be a hospital administrator, so this doesn't make sense to me.
Reducing physician salaries to 0 only reduces healthcare costs by <10%, and entrepreneurs can become hospital administrators without becoming physicians. So, I think that the ire directed at the AMA is misplaced, but I'd be interested to hear more (and I'm an obviously interested party, though I'm not an AMA member). The regulatory bodies are most likely what you have concerns about.
The high pay in these professions is simple economics: supply is tightly constricted through the number of residencies allowed. Those in the profession have a strong interest in continuing to restrict the number of people in their field and so they have trade organizations that do this.
The line of defense they use is that consumers are too stupid to select a good healthcare provider without their intervention. I believe consumers would be very good at selecting the best provider, and would love to see all of the regulations dropped to open free competition into the marketplace.
> Ever wonder why the cost of healthcare is so ridiculously expensive in this country?
The major point that I make is that physician salary is under 10% of US healthcare expenditure, so that's not why healthcare is so ridiculously expensive here, and driving it to 0 would likely make little overall impact. You haven't made the case that a constrained supply of physicians is the reason why there is a large amount of healthcare regulation in the US. Much of that regulation is to the consternation of physicians as much as it is to those who want to innovate in healthcare.
Finally, part of the reason that 16 of the top 30 jobs are different subspecialties of physician is that those jobs have existed for quite some time and are cleanly delineated into subspecialty. If you were to break out different roles in investment banks and hedge funds similarly, you'd probably not see physicians in the top 30 list.
I agree completely with you that the large amount of healthcare regulation is the ultimate culprit for the extreme high prices Americans pay.
My argument is that the root cause of all of the regulation is not the best interest of the patients, but what is the best interest of the doctors.
Doctor backed trade organizations push for more and more obfuscation of the actual price a consumer pays in order to be able to charge more. They don't allow pricing or quality to be openly shared in the marketplace, and they don't allow new entrants to compete.
Healthcare is ripe for disruption, but entrepreneurs are prevented from doing so by archaic laws that harm patient care and increase prices. These regulations are vigorously defended by doctor backed trade organizations.. it's in their best interests to keep their cash cow.
The regulations only look like they're in favor of the doctors to those completely unfamiliar with the field. But who keeps the money from that $8000/night hospital stay? It certainly isn't the internal medicine doc making $200k/year (admittedly a great salary, but not at all out of line with the requirements of the job). I'm an advocate for less regulation in the healthcare industry, but it's not as simple as just throwing away all barriers and allowing the free market to solve everything.
Nurse practitioners and physician assistants are new entrants in the healthcare marketplace, and they are absolutely a "disruptive force" in the healthcare market, in the original Clayton Christensen-sense of the term. In fact, these professions were even called out as such in The Innovator's Dilemma. So your argument that new entrants to the market will somehow magically make prices lower doesn't hold much water (and for those who think that these entities should be freed from the regulations which require them to be supervised by a physician...that's like advocating for a large bridge to be designed and signed off by a civil engineer 2 years out of undergrad).
As for Certificate of Need laws, which limit the amount of hospitals and sophisticated equipment that can exist in any given area...certainly most doctors I know don't love these laws. It's the hospital associations (made up of many, many people other than doctors) which continually fight to keep them on the books.
> The real issue here is not perks for physicians but the corrupt, inefficient, self-serving system that insurance companies and hospital bureaucrats have devised for the American public.
I agree with what you're saying, but if anyone's responsible for it, it's actually Congress, not the insurance companies and hospital bureaucrats. Private insurers and hospitals actually hate the status quo even more than you do, trust me.
I've written about this in more detail on HN previously[0][1][2], and I'm on my phone, so forgive me if I just link to those instead of typing it out again.
Do you know of a study that shows real cost breakdown of medical care by payer type, including these cross subsidies to Medicare? Somebody must have put this together.
I highly recommend Zeke Emanuel's "Reinventing American Healthcare" which covers the current status of the US healthcare system and the many reasons about why it turned out the way that it did. It's fairly comprehensive for a primer but is very accessible.
If I remember correctly, the book covers the question you're asking directly. I don't have the book handy otherwise I would summarize it for you.
Real issue is the public's willingness to provide care for itself.
To glaring examples of this are obesity and fatally rates related to medical error; 250000 deaths a year are related to medical error.
On the last point, you'd think this is an institutional issue, but if you account for how little attention the public gives the issue compared to other issues, it's clear the real issue is the public.
> In most realms, those with the least ability to pay should receive the biggest discounts. In health care, it is often the uninsured and indigent who receive bills with the full “chargemaster” fee — the wildly inflated prices that nobody really pays — while large insurance companies get the biggest breaks.
This bothers me more than almost any other piece of our system. It's corrupt from the start, with prices being presented that do not have any relation to the price that the parties in the transaction actually expect to pay/receive. So even if we had "price transparency" for medical procedures, it wouldn't really reflect reality.
A few examples of the system at work:
* I have a HSA so I don't put small medical expenses through my insurance. I went to a doctor for a strep throat check and was told that my 30m appointment would be $350 if put through my insurance (and I hadn't hit my deductible yet) or $150 if I paid in cash at the office. So I paid cash with my HSA. Why should there by these two wildly divergent prices? Even if I had no deductible and took the $350 option that just means my insurance company is paying $200 over what the doctor actually wants for the service, which means some other person in the insurance pool will receive $200 less in services down the road.
* One time I got food poisoning in college and because it happened in a classroom and I was unable to really walk/balance the school said I could only leave in an ambulance. So an ambulance was called to drive me the 0.25mi to the university hospital. I waited a few hours in the ER, then a doctor saw me for 15 minutes and no medicine or care was actually administered since I was fine by then. I get a bill in the mail for $1000 a few weeks later, that's $700 for the drive and $300 for the doctor's time. My dad (a dentist) advised me to not pay the bill and let it go to collection. Then a few weeks later the bill collector called me and since I had my income listed as $0 (college student) they said I could pay the bill in installments or just make it all go away for a $300 lump sum (which I took). So just by waiting around suddenly the cost of treatment went down by 70%.
Medicine should not be a negotation. There should be one price for everyone and you shouldn't have to know anyone or pull strange tricks to get the real price. If we don't even know what something costs, how can we begin to drive the cost down?
I do not believe for a single second that your insurance company "pays" their full share as demonstrated when they tell you you have to pay 20% of the cost. I have no evidence but I am strongly convinced that there is some sort of account reconciliation between an insurance company and an in network provider where they settle accounts in a ... more palatable manner.
There is just no way Humana would pay over $7k for two hours of waiting for triage in the emergency room and eventually a rabies vaccine shot.
You've hit the problem right in the head here.
> Medicine should not be a negotation. There should be one price for everyone and you shouldn't have to know anyone or pull strange tricks to get the real price. If we don't even know what something costs, how can we begin to drive the cost down?
From what I've read: Part of the problem is hospitals themselves don't know the exact cost.
I think another part should be the introduction of death panels. There should be a point being which we will "put down" a suffering patient. We do this with dogs and cats all the time. If someone is suffering and very unlikely to make a good recovery, we should put them out of their misery. Or at least we shouldn't pour so much effort into keeping them alive.
I don't think that's fair. I'm also pretty glad that we have doctors among the active commenters here, as they bring a lot of perspective to both medical and medical policy discussions.
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[ 13.8 ms ] story [ 2889 ms ] threadEverything you can think of has a standardized pricing set, with the option to go up to 3.5x the standard rate for difficult procedures.
Kind of prevents that bullshit mentioned in the article; also, national health insurance covers nearly everything that's medically neccessary and deductibles are highly limited.
So despite having nominally standardized pricing, in practice there's nothing keeping pricing standardized beyond what insurance companies are willing to pay for their clients.
BC's page has an FAQ saying public library and that its over 1400 pages.
I've gotten to the point where I just wish patients had more of a say over what medications they could have refilled.
Say, for instance, a person has been taking Blood Presssure medication for over five years; they should be able to renew their original script? Or, a person has been on anti-anxiety/depression medication for over five years; let that person authorize their own refills? Require blood tests--that's fine.
The patient couldn't increase the dose, but wouldn't have to deal with doctors over refills. The patients who abuse the privilege would have to go back to our lovely system of being held hostage.
I guess refill are on my mind because I'm going into detox over the lack of a medication I've been on twenty years. The pharmacy is waiting for her approval. I think my doctor is on an extended vacation?
Of course this will never take place because Americans are all drug seeking zombies according to our government, and I don't think AMA lobbyists would ever even consider such a crazy notion.
As to this, "Nepotism occurs in many fields; friends and family of New York City police officers often carry Patrolmen’s Benevolent Association cards, which may confer special treatment in a traffic stop."
Yea, this is very common. In San Francisco, my father best friend (now a retired cop) gave him a special business card. A "Get out of jail free" card. My father used it a few times. It saved him from a DUI. My father was a very conservative man. He hated what that card stood for, but always carried it around.
Unless and until it becomes easier to start new businesses, hospitals, practices and careers in the medical-care profession, no one should expect the market to be functional.
If the party paying is not the party demanding, it does not resemble a free market.
Really‽ If prices of service were disclosed in some sane way the market could reward the efficient providers. Instead it's shrouded in mystery and the providers hide behind the complexity of the agreements among the many insurance agencies. They're certainly able to figure it out once it's time to generate a bill.
If there were healthcare providers that worked like my auto mechanic or plumber, it would be so much easier to work with. "sign here, not to exceed $150 for diagnosis, etc..." and then you discuss with the physician later, "Ok treatment option 1) these pills, $50 for your insurance, 2) amputation, $3000 for your insurance and BTW you satisfy your annual deductible, ..." It's not that they couldn't do that, it's just that there's little incentive for them to do it and none of the competition does it. And much of the time the diagnosis would reveal "Sir it's probably just a virus which means that we could spend tons more time and money diagnosing this and then just rule out tons of other things and end up with no treatment options anyways. If your symptoms don't go away in three weeks then come back."
It was described to me as "if they get shot and you end up being their surgeon they want your goodwill", although it's not limited to surgeons so I suspect that's not quite the whole story.
I imagine it played a large part in community good will until our communities got too big for us.
Try telling someone you're a doctor at a bar to see this in action.
1 - http://media.theharrispoll.com/documents/Prestigious+Occupat...
What this article points out is something a little deeper, in that knowing the language and culture will allow an individual to social engineer through challenges. I've done it with the medical community, also in Wall St. finance, but it's most useful in my day-to-day life when going out to eat in a restaurant. There are cues and phrases to drop which can alert a competent server as to the experience level - and possible expectations - I will have of the meal. Being deeply involved in such things can have that affect on people, at least it really has for me. Criticism from another industry participant tends to sting more, because it cuts to the point.
https://en.wikipedia.org/wiki/Jargon
Thus, certain groups engage in trying to build up minor tests or cues to test a person's depth or familiarity with a professional subject. So if I'm talking to a person at a bar, and I find out they work at a major bank, say, Comerica, I can probe enough, politely, to probably understand what they do. This level of professional knowledge is not easily faked - it's like a web of synaptic references tagged to various terms and concepts (mostly "made up" for an industry).
Shibboleth entered mainstream culture (and when I learned it) via a West Wing episode called "Shibboleth" [3]. The clip is worth a watch.
[1] https://en.wikipedia.org/wiki/Shibboleth
[2] http://knowyourmeme.com/memes/the-narwhal-bacons-at-midnight
[3] https://www.youtube.com/watch?v=fqkaBEWPH18
The concept of a shibboleth entered mainstream culture many centuries ago; it is a story from the Bible.
I typically do the opposite. I underplay my experience level, and gloss over their mistakes. It's more important to me to make sure that they can relax and be comfortable, than to manipulate out of them the best possible meal. Intentional "raise expectations" dialogue seems rude, and I'm generally uncomfortable around people who try that.
But maybe I'm also just covering up for my own imposter-syndrome in case I inadvertently set the overall expectations too high. Interesting to think about.
Maybe I've just been bing-watching too much Silicon Valley lately, but I pictured Erlich Bachman saying that right before the waitstaff rolls their eyes on the way to the kitchen before they spit on the food. A competent server might very well be tuned in to manipulation as well as being able to sling a mean plate of food.
My wife went through a series of medical procedures that are time sensitive, expensive and require a bunch of expensive speciality medication.
The pharmacy is impossible -- mail order only and dedicated to being obnoxious. Their aim is very obvious -- push prescription fulfillment into the next month, quarter or year. I'm sure bonuses are tied to this, because their stupid behavior wastes money... On three seperate occasions drugs were couriered to my wife (as in, a dude carrying a box got on a plane and took a cab to my home from the airport)
It's dumb behavior that results from applying market incentives to one stakeholder. For want of a $1000 drug, a $15000 procedure could be rendered a waste.
Some party should be given a "project manager" type role, and be responsible for overall patient outcome.
For normal drugs they have "step up" process for new drugs so they won't pay for a 90 day script without you first getting two 30 day scripts. They make more money via co-payments on 30 days so shockingly, they fuck this up all of the time to make more money.
In my case, I am on a blood pressure med that went generic. So the script changed to the generic... Which triggered the 30 day "step up" for the same drug. I lost alot of weight and had the generic script changed to a different dosage... Again, back to the 30 day "step up". My insurance penalizes you for short term scripts for maintenance medication, so I get to pay $50 each for two 30-day scripts vs. $25 for a 90 day.
My wife was different, "speciality" drugs, which include stuff like type-1 diabetes and fertility meds require that you use the insurance company's pharmacy and jump through more hoops. My co-worker has a daughter with type-1 diabetes. He's a "type A" PM and actually has developed a project plan with about 100 documented steps to ensure that her medications are delivered on time. He did that after he daughter had to be admitted to the hospital when they ran out of drugs -- which cost the other insurance coverage $25k or more, so it's not saving money.
It's all about delaying expenses over some reporting period and maximizing revenue. Nickel and diming co-pays is how they make a profit with a huge employer like mine with lots of bargaining power. Delaying issuance of speciality drugs is also a profit center, as they are paid a commission/incentive for "controlling" costs in a given quarter/year.
It seems there's a demand for reliable, no-bs medication delivery from outside of the system.
Big pharma lobbied to end this practice and it appears to be in a bit of a gray zone. When it comes to visa workers, we know that the rallying cry is 'severe shortage of skilled workers'. The analog talking point for drug imports is 'safety - think of poor grandma ordering some blood pressure meds and instead getting fakes or worse'. We can't allow imports and it's for your own good, citizen.
It is absolutely illegal for a wholesaler to import drugs for resale, though. This would essentially destroy big pharma's monopoly overnight, and it is absurd that this is rarely discussed. American consumers essentially subsidize the cost of medicine for the rest of the world (similar to military protection), and it is a large reason we spend more per capita with worse health than every other peer.
Interestingly, Trump is one of the few candidates that has ever pledged allow imports and cut off the pharma industry embargo. See point #7 on his page's plan for health care reform. Hillary's plan says vague things like 'more affordable health care for all working families' with no description of how this will be accomplished.
Many self-employed folks import drugs from Canada. For awhile, local governments in my area were doing it as well.
It saved me thousands of dollars per month.
If you live in a state which refused ACA subsidies, this plan of action would still make sense. Or moving to another country with cheaper/universal healthcare depending on your income arrangement (disability/social security).
I have T1 as well and am fascinated by how difficult it is to reliably obtain the physical objects I need to stay healthy. Would be interested in learning more about your coworker's solution. (kamens@gmail.com if they're willing to chat over email)
It's wrapped up as part of the Affordable Care Act, and basically hospital reimbursements are being moved from "Did you do the treatment? Here's $XX", to being based on metrics like re-admittance, customer complaints, etc. A focus on the population statistics, as opposed to just providing treatment.
So large hospitals today are already starting to have these "project managers", though they call it "population health" - and it is gradually becoming more directly tied to the hospital's bottom line.
This is a common misconception. I've posted about this many times before, but in short, it's the AAMC, not the AMA, that used to medical school spots. They are no longer the bottleneck anymore, however; the issue is that we don't have enough residency slots, and the funding for those comes through Medicare[0].
That said, this isn't really a driver of costs anyway, because providers themselves are responsible for only 10-15% of spending.
> Basically, all entrepreneurs who don’t join the union are shut off the health care industry. This is why you pay so much money in insurance & for simple doctors visits. Do you think if a fresh entrepreneur opened a hospital you would pay $8,000 per day for a room?
No, the reason that you pay so much is because of the convoluted way that Medicare reimbursements work (even if you're not on Medicare). In short, Medicare doesn't cover its own costs, so private insurers and uninsured patients are overcharged in order to cover the difference[1]
[0] https://news.ycombinator.com/item?id=8122377
[1] https://news.ycombinator.com/item?id=10479398
And, regardless, if physician pay went to 0, US healthcare costs would drop by only 10%.
If we consider them in isolation, shrug and say the cut won't fix the problem, we won't fix the problem.
http://image.slidesharecdn.com/pnhplongsetweisbartversion-12...
So, sure, we can cut physician salaries and nursing salaries (nursing pay collectively is about the same as physician pay). But I don't see a downside to trying to reduce the administrative burden as a means of cost reduction.
I definitely have lots of concerns about the mega institutions that are swallowing hospitals. It's hard to believe that they really do much to improve outcomes for patients (and it's pretty observable that they haven't done any good for prices).
Sorry for potentially being probably completely obtuse here due to being deep within the structure of medicine, but new supply of what?
Can you elaborate? I don't understand what dynamic is being alleged with this often-cited reference to limited residency funding. If there really are (quasi) monopoly profits to be made, why would government funding limit that? That is, if it's really lucrative to become a doctor, but you have to do a residency, but no one will pay for it, then potential doctors should be happy to eat the costs, knowing that they can lay it back from later high salaries.
Let me put the argument in another context to say why it doesn't make sense: "demand for passenger air travel is through the roof, with revenues at hundred of times the cost of a flight. But we can't increase the number of flights because the government won't purchase more airplanes to give to the airlines."
In that case, it would be a poor argument: buy the new airplanes with the passenger revenue; you don't need a government subsidy there.
Well, there aren't. There's a bottleneck in the supply, but there aren't monopoly profits to be made, because Medicare acts more like a monopsony. Medicare sets reimbursement rates unilaterally, and medical providers are forced to accept them, even though they don't (in the aggregate) even cover the direct COGS, let alone allow for the overhead of running a practice.
I'm only bringing up residency funding to explain that the AMA has nothing to do with restricting the supply of doctors, as is commonly (mistakenly) believed. But the real topic that OP brought up was the costs of care, and the supply of doctors isn't really relevant to that topic either, because providers' earnings only account for 10-15% of total costs of care.
Nor did I ever endorse the claim the doctor compensation was a significant factor, although I should have perhaps made that clearer to avoid the rabbit hole.
My comment was intended to challenge the claim that the small number of Medicare-funded residency slots could affect doctor supply, which you seemed to genuinely believe and be able to defend. (If you can't defend this claim, I would recommend not repeating it.)
It does address your point. As I stated, there aren't higher-than-typical returns, because Medicare acts like a monopsony. Monopsonies result in lower-than-typical returns.
Medicare is involved in a number of different ways, but the two main ones here are to set the number of available residency slots, and separately to control providers' revenues through a monopsony power.
Aviation is highly regulated, but neither airlines nor passengers are monopsonies, so the analogy doesn't work.
Are you saying that the financial return to becoming a doctor is lower than for other occupations? If not, then you probably misunderstood the argument. Medicare doesn't somehow lower the return to becoming a doctor.
>Aviation is highly regulated, but neither airlines nor passengers are monopsonies, so the analogy doesn't work.
The relevant buyer would be the passengers or the employers of doctors, neither of which is a monopsony, and the use of airlines was arbitrary. Again, the point is that (lack of) governmmet subsidies can't be a bottleneck when existing revenues suffice to pay for whatever expansion is necessary.
In three comments, plus two citations, you have not provided substantiation to address the point (that lucrative businesses can't be bottlenecked by subsidy caps), and at this point I don't think you understand the criticism, but prefer instead to dismiss any clarification of the relevant dynamics with "oh that's regulated".
I request that you stop propagating your argument (and dismissing critics as having a "misconception") until you understand these criticisms better.
I did my best to make it clear that these two things are intricately linked.
> If not, then you probably misunderstood the argument. Medicare doesn't somehow lower the return to becoming a doctor.
Medicare absolutely does lower the returns to becoming a doctor, just as any monopsony lowers the returns for suppliers in that market.
> The relevant buyer would be the passengers or the employers of doctors, neither of which is a monopsony
Until very recently (the last 2-5 years), the majority of doctors were self-employed, meaning that insurers were the direct purchasers of their services. And because of both its size and also various laws, Medicare has monopsony power in the insurance market. The recent employment of physicians by hospital groups doesn't really change those economic forces; it simply adds an extra layer of indirection when resolving them.
> you have not provided substantiation to address the point (that lucrative businesses can't be bottlenecked by subsidy caps), and at this point I don't think you understand the criticism, but prefer instead to dismiss any clarification of the relevant dynamics with "oh that's regulated"
I've stated pretty clearly that medical practice is not a particularly lucrative business (hence why private practices have been going bankrupt and being bought out by hospitals and insurers, and why so many hospitals have negative gross profit margins). That's not a 'dismissal' of your criticism; it's a refutation of the underlying premise.
> I request that you stop propagating your argument (and dismissing critics as having a "misconception") until you understand these criticisms better.
I could request that you stop dismissing me as 'misunderstand[ing] the argument' until you understand what I'm saying better.
Admittedly, this is a complex topic requiring both a detailed understanding of the ontology of the health insurance industry and a firm grasp of some economics concepts that are usually only covered at the graduate level. Most HN readers, understandably, have neither of these. I happen to have domain knowledge about both of these, and sometimes I share pieces of it in HN comments where relevant, and when I think it might be appreciated.
Neither one of these is particularly easy to convey in only a few hundred words, which is the amount of text I have written today on the topic. Sometimes I succeed, and sometimes I don't. Perhaps I have not succeeded in this particular instance. Perhaps I could if I spent more time, or elaborated more, I could convey these points better, and maybe then we could come to an agreement. But that's the amount of time and energy I have to spend today writing HN comments on the matter.
Where? You haven't once mentioned the return to becoming a doctor, nor compared the two, nor given a reply that suggests you recognized the distinction between the two.
>>you have not provided substantiation to address the point (that lucrative businesses can't be bottlenecked by subsidy caps), and at this point I don't think you understand the criticism, but prefer instead to dismiss any clarification of the relevant dynamics with "oh that's regulated"
>I've stated pretty clearly that medical practico is not a particularly lucrative business (hence why private practices have been going bankrupt and being bought out by hospitals and insurers, and why so many hospitals have negative gross profit margins). That's not a 'dismissal' of your criticism; it's a refutation of the underlying premise.
Then I was correct that you misunderstood the argument. The "lucrative businesses" referred to here, two which I was drawing an analogy, would be 1) the hypothetical airline business, and 2) the "business" of training to be a doctor; it was explicitly NOT referring to that of a medical practice!
Just as superprofitable airlines don't depend on government subsidies, superlucrative becoming-a-doctor shouldn't depend on government funding of residencies. See the dynamic there?
Now, after reading your last post, it sound like you're saying that Medicare has monopsony power over all doctor services and therefore is the major determinant of all doctor compensation, even those that eg work for rich people as their personal doctor.
If that's what you meant, I don't see why you couldn't have just said that the first time around, given your deep domain knowledge. Then, the appropriate reply would be "the return to becoming a doctor is no higher than other training, so it would be pointless to become a doctor if you had to also bear the cost of the residency". Note the length is less than 500 words.
But then, seen so clearly, it would depend on very questionable claims.
If that's not what you meant, then I stand by my claim that you're not responding to my point, because that's the only way that government-paid residency slot caps could hold up the correction of doctor undersupply.
The AMA only represents at BEST 15% of American physicians [1]. If you want ANYONE to blame, it's Medicare/Medicaid, Insurers, and Hospitals. CMS and Insurance regulations mean you cannot charge different prices to different people.
Eg. I can't charge a poor person less and still bill the full Medicare allowable for other patients. I either charge the low rate for all or none. Insurers have similar language in their individual contracts. They even go so far as barring us from discussing our reimbursement rates / charge list to allow patients to comparison shop.
The only real innovations in "price transparency" come when you reject Medicare patients. Surgery Center of Oklahoma [2] is a frequently cited example of a successful model of price transparency; however, they MUST explicitly opt out of Medicare billing else they are in violation of the law.
I have considered opening a Radiology practice with an imaging center that offers flat rate charges for people to price shop, but a LOT of patients who require imaging are Medicare patients and I'm pretty sure they aren't going to fork over $1-2000 for their every 3 month head-to-toe restaging scans, especially when it's a PETCT. Perhaps if I marketed to young people and focused on MSK MRI I could pull it off, but the market of people who are looking to comparison shop for imaging prices is smaller than all the people who rant about healthcare think it is.
1. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3153537/ 2. http://surgerycenterok.com
It seems to me that the "cash" rate is what the "market will bear", which makes the hospital administration complicit in defrauding taxpayers and the general insured by overcharging for procedures and consumables when an insurer is the one receiving the bill. I suspect there's more to it, though, and I've never been able to figure out what it is.
For example, if you go to your eye doctor, they can bill you for a standard visit, a refraction (getting your prescription), an eye health check, a super-duper health check because they found something and needed to look at it more, an eye health check with dilation, etc.
I have gone to eye doctors who will do everything and then ask at the end of the appointment what my insurance situation was. If I'm on insurance, bang, they charge me for all of it. If not, they just charge me for the refraction and forget about the rest.
You can't go to an insurance company and say, "I know we negotiated a rate of X for this procedure, but the patient is poor, so I'd like to charge less for it." Well, you can, but the insurance company would come back with "Sorry, that's not in our agreement. X for procedure Y." Or worse: "So, you can actually charge less for procedure Y? In that case, we'd like you to charge that lesser rate anytime you perform that procedure, regardless of the wealth of the client."
1. They incorrectly code the encounter leading to a lesser charge. This is Medicare fraud if the doctor ever get audited, but if it's a tiny practice and no one whistleblows on the Doctor, the odds of a small practice getting audited are very low.
2. They charge the cash paying patient the full amount. Then enter a period of "negotiation" and then accept the lesser payment and write off the balance as charity care. This is more legal, but leads to people coming on online forums and bitching about a $3000 bill only to reveal it got lowered to $700. The issue here is that the doctor is super busy and unless it's a micropractice where the doctor is the one billing, some biller/coder somewhere else will send you nasty grams until the doctor intervenes and tells them to write off the balance.
You have to remember, it is law in this country that you must bull accurately. Either coding too high or too low is considered equally fraudulent which Medicare will send its auditors after viciously.
The only way to go outside the system 100% legally is to completely opt out of Medicare/Medicaid. Anything less is fundamentally a gray area that relies on the practice not having someone mad and whistleblowing on them to a RAC. Whistleblowers are entitled to a portion of the fine, so the incentive is there for a disgruntled employee just to whistleblow even on the doctors who undercharge as a kindness to their patients.
When you hear doctors say the government has royally screwed up healthcare, this is fundamentally what they are talking about. I can either offer reasonable/negotiable prices on a cash basis or I can participate in the insurance game, but not both.
My biggest fear is that they eventually make participation in Medicare / Medicaid a requirement of licensure, effectively making the cash pay system illegal.
If the AMA/AAMC are to blame, then it seems likely to be implicitly: by keeping entrepreneurs out of the hospital administration game so they can't reduce inefficiency. But you don't have to be a physician to be a hospital administrator, so this doesn't make sense to me.
Reducing physician salaries to 0 only reduces healthcare costs by <10%, and entrepreneurs can become hospital administrators without becoming physicians. So, I think that the ire directed at the AMA is misplaced, but I'd be interested to hear more (and I'm an obviously interested party, though I'm not an AMA member). The regulatory bodies are most likely what you have concerns about.
The high pay in these professions is simple economics: supply is tightly constricted through the number of residencies allowed. Those in the profession have a strong interest in continuing to restrict the number of people in their field and so they have trade organizations that do this.
The line of defense they use is that consumers are too stupid to select a good healthcare provider without their intervention. I believe consumers would be very good at selecting the best provider, and would love to see all of the regulations dropped to open free competition into the marketplace.
> Ever wonder why the cost of healthcare is so ridiculously expensive in this country?
The major point that I make is that physician salary is under 10% of US healthcare expenditure, so that's not why healthcare is so ridiculously expensive here, and driving it to 0 would likely make little overall impact. You haven't made the case that a constrained supply of physicians is the reason why there is a large amount of healthcare regulation in the US. Much of that regulation is to the consternation of physicians as much as it is to those who want to innovate in healthcare.
Finally, part of the reason that 16 of the top 30 jobs are different subspecialties of physician is that those jobs have existed for quite some time and are cleanly delineated into subspecialty. If you were to break out different roles in investment banks and hedge funds similarly, you'd probably not see physicians in the top 30 list.
My argument is that the root cause of all of the regulation is not the best interest of the patients, but what is the best interest of the doctors.
Doctor backed trade organizations push for more and more obfuscation of the actual price a consumer pays in order to be able to charge more. They don't allow pricing or quality to be openly shared in the marketplace, and they don't allow new entrants to compete.
Healthcare is ripe for disruption, but entrepreneurs are prevented from doing so by archaic laws that harm patient care and increase prices. These regulations are vigorously defended by doctor backed trade organizations.. it's in their best interests to keep their cash cow.
Nurse practitioners and physician assistants are new entrants in the healthcare marketplace, and they are absolutely a "disruptive force" in the healthcare market, in the original Clayton Christensen-sense of the term. In fact, these professions were even called out as such in The Innovator's Dilemma. So your argument that new entrants to the market will somehow magically make prices lower doesn't hold much water (and for those who think that these entities should be freed from the regulations which require them to be supervised by a physician...that's like advocating for a large bridge to be designed and signed off by a civil engineer 2 years out of undergrad).
As for Certificate of Need laws, which limit the amount of hospitals and sophisticated equipment that can exist in any given area...certainly most doctors I know don't love these laws. It's the hospital associations (made up of many, many people other than doctors) which continually fight to keep them on the books.
I agree with what you're saying, but if anyone's responsible for it, it's actually Congress, not the insurance companies and hospital bureaucrats. Private insurers and hospitals actually hate the status quo even more than you do, trust me.
I've written about this in more detail on HN previously[0][1][2], and I'm on my phone, so forgive me if I just link to those instead of typing it out again.
[0] https://news.ycombinator.com/item?id=8122377
[1] https://news.ycombinator.com/item?id=10479398
[2] https://news.ycombinator.com/item?id=12026273
And by Congress, it really means YOU, the (American citizen) reader, who keeps voting for the same crooks.
If I remember correctly, the book covers the question you're asking directly. I don't have the book handy otherwise I would summarize it for you.
To glaring examples of this are obesity and fatally rates related to medical error; 250000 deaths a year are related to medical error.
On the last point, you'd think this is an institutional issue, but if you account for how little attention the public gives the issue compared to other issues, it's clear the real issue is the public.
This bothers me more than almost any other piece of our system. It's corrupt from the start, with prices being presented that do not have any relation to the price that the parties in the transaction actually expect to pay/receive. So even if we had "price transparency" for medical procedures, it wouldn't really reflect reality.
A few examples of the system at work:
* I have a HSA so I don't put small medical expenses through my insurance. I went to a doctor for a strep throat check and was told that my 30m appointment would be $350 if put through my insurance (and I hadn't hit my deductible yet) or $150 if I paid in cash at the office. So I paid cash with my HSA. Why should there by these two wildly divergent prices? Even if I had no deductible and took the $350 option that just means my insurance company is paying $200 over what the doctor actually wants for the service, which means some other person in the insurance pool will receive $200 less in services down the road.
* One time I got food poisoning in college and because it happened in a classroom and I was unable to really walk/balance the school said I could only leave in an ambulance. So an ambulance was called to drive me the 0.25mi to the university hospital. I waited a few hours in the ER, then a doctor saw me for 15 minutes and no medicine or care was actually administered since I was fine by then. I get a bill in the mail for $1000 a few weeks later, that's $700 for the drive and $300 for the doctor's time. My dad (a dentist) advised me to not pay the bill and let it go to collection. Then a few weeks later the bill collector called me and since I had my income listed as $0 (college student) they said I could pay the bill in installments or just make it all go away for a $300 lump sum (which I took). So just by waiting around suddenly the cost of treatment went down by 70%.
Medicine should not be a negotation. There should be one price for everyone and you shouldn't have to know anyone or pull strange tricks to get the real price. If we don't even know what something costs, how can we begin to drive the cost down?
There is just no way Humana would pay over $7k for two hours of waiting for triage in the emergency room and eventually a rabies vaccine shot.
You've hit the problem right in the head here.
> Medicine should not be a negotation. There should be one price for everyone and you shouldn't have to know anyone or pull strange tricks to get the real price. If we don't even know what something costs, how can we begin to drive the cost down?
From what I've read: Part of the problem is hospitals themselves don't know the exact cost.
I think another part should be the introduction of death panels. There should be a point being which we will "put down" a suffering patient. We do this with dogs and cats all the time. If someone is suffering and very unlikely to make a good recovery, we should put them out of their misery. Or at least we shouldn't pour so much effort into keeping them alive.
We detached this subthread from https://news.ycombinator.com/item?id=12027155 and marked it off-topic.