This is not news, I'm surprised it's in the NYT. Medicare and Medicaid reimbursement rates are very low and hospitals lose money on these patients. All hospitals depend upon private insurers paying higher rates in order to stay in business. They call this the payor mix (private/medicare/Medicaid).
Based on how they framed it, I am not too surprised it is in the NYT.
Headline: Many Hospitals Charge Double or Even Triple What Medicare Would Pay
You have to get about 80% of the way through to read a more accurate version of the truth:
"Medicare payment rates, which reimburse below the cost of care, should not be held as a standard benchmark for hospital prices”
If you’re going to quote the article, I think it’s important to include context. So let’s broaden your article quote (that is, the article is quoting someone else) just a smidge:
“Medicare payment rates, which reimburse below the cost of care, should not be held as a standard benchmark for hospital prices,” said Melinda Hatton, general counsel for the American Hospital Association, AN INDUSTRY TRADE GROUP, in an emailed statement. [emphasis mine]
You claim that the quoted statement is more accurate / truthful than the statement that private insurers pay more than the Medicare rate, and seem to imply that the Times’ reporting is biased. Did I get that right?
Would you like to furnish some support for those claims?
The article implies that Medicare is the correct rate.
If anyone has Medicare, or has worked at a clinic that accepts Medicare, or has filled out Medicare paperwork- you know Medicare isn't a gold, silver or bronze standard.
It's dollar store quality.
Things take longer, are often riddled with wrong denials, and him major limitations for patients.
Medicare rate and the reality of using Medicare are separate issues though
For me the issue is that if you had something like a hernia it would essentially cost less to fly to Europe, have the surgery, and stay a couple of weeks than to pay out of pocket in the US. And many European healthcare systems tend to rank better than the US.
So it seems that the procedure can be done for less, maybe even for less than Medicare costs; the "dollar store quality" doesn't seem to come from the inexpensiveness.
I agree that physicians wages may be part of it. The AMA keeps a tight control on how many physicians are produced to keep fees high, but physician incomes haven't really been increasing. Doctors, I believe, generally make less now adjusting for inflation than they did in the 90s, which I've heard described as like some kind of golden age or something.
It’s not just doctors though. It’s doctors, nurses, PAs, hospital admins, etc. Everyone in that chain is going to have to take a pay cut* to get prices down to where the rest of the American public feels it’s fair. We’re also going to have to change the way we design hospitals and remodel current ones: US hospitals are built and staffed for private rooms. That’s going to have to give way to wards, with private rooms being reserved for medical necessity.
*The staff that manages insurance payments etc. will lose their jobs.
I’m not making a value judgment, just stating facts. This is going to be a tough row to hoe once politically attractive groups start mobilizing members to fight the change.
This is part of it , but physician salaries are 10% of the spending. This could be fixed by laxing licensing laws, allowing doctor immigration and reducing the cost of education.
I’m not sure where you got the number 10% from. Perhaps you’re dispatching heavily on the word “salary”, when most doctors and surgeons operate as small businesses, and don’t earn much income directly as salary?
Doctor plus nurse compensation dominate every chart I’ve ever seen of US medical spending.
People like to imagine it’s all the fault of insurance companies, pharmaceuticals, and malpractice; those are collectively a tiny fraction of US spending. It’s mostly labor costs.
The US is rich, health is a good with infinite demand. It’s hard to reduce costs in that context.
This one shows 20%, though when you say clinical services you include nurses, mid levels and medical assistants, though it doesnt explain how much of the hospital spending goes to providers, so higher.
Also, add that the amount of debt physicians graduate with, does not make it a very healthy career, particularly in primary care (where you could do most of cost control).
PCP's have high burnout and suicide rates, work 50+60hour weeks until their 50's , etc.
There is nuance to the analysis of provider spending.
In any case, i can assure you there are plenty of marginally useless rank-file employees that exist thanks to the current regulatory framework.
> Source? This doesn’t jive with how popular Medicare is.
One of the great trickeries of using Medicare's "popularity" is that people that have it pay 150$ a month, while the cost is 1000$. If medicare charged its patients what it cost, "popular sentiment" will rapidly change.
Hospitals are one of those things that just shouldn't be run like a for-profit business. There should be regulated set amounts for how much various services cost, and those amounts should be equal (or at least close) to what the government/insurance programs cover.
It's bonkers to me how much resources and technology we have as a species, and how we decide to not let people access it because money/capitalism.
Obviously the US is notably worse at this than other countries, and it doesn't feel like we're on a path to fixing it.
Tell that to every other country that has socialized medicine that has cheaper services with better outcomes.
The casualness with which you declare its Economics 101 shows how ignorant and brainwashed Americans are.
Seriously, book publishing is your example? You know writing, editing and publishing a book takes a lot of time and skill. Also the majority of book authors are not making out like bandits on books sales, even digital ones. Book Authors and Publishers are not making 1000000000% on digital book sales, otherwise we would probably see Goldman Sachs in the book publishing/writing business.
You're correct, but that is all fixed cost. The marginal cost of an e-book is essentially zero. In the short run, a publisher can keep selling an e-book at almost any price.
Hospitals negotiate for the rate with the insurance companies, including Medicare. They don’t have to accept Medicare payments at all. It is the right price because that is what the group with the most bargaining power says it is. That doesn’t mean Humana should pay less, but should work harder to add people. Maybe there is a way for one entity to have all the people?
Medicare processes and payments have very little basis in reality. The payments are so low that doctors and hospitals often factor in the lost money into non-medicare bills to make up the difference.
So, the real story is that these doctors and hospitals are so committed to providing care, that they're willing to figure out ways to provide it despite medicare.
> The mean salary of a doctor in the United States is $294,000/year [Medscape]
So, so committed to providing care... they're practically working for free. Maybe they're even losing money.
Side note: Google is bizarre. You can tell what words Google thinks are effectively synonyms by typing one word and then seeing which words are bolded in the results; I searched "median earnings of a doctor in the usa" and it bolds "mean" and "average"...
Note: if you want a meaningful discussion about physician salaries, you need to be discussing lifetime income after tax and after debt repayment, and compare this metric to other professions. Comparing the yearly salary of a vascular surgeon with 10-15 years of post-high school education, training, and compounding debt interest to the yearly salary of a junior developer ignores the very different lifetime shape of the careers.
Any substantial change to the pay structure for physicians needs to address the cost of education and training, and not screw over a large cohort of physicians saddled with debt who see a massive pay cut. They will significantly oppose any attempted changes that don't address these two things.
Doctors in Europe are paid a good bit less than here in the US, but their education is paid for (and then some) by the state.
The US health system is full of stories like "Medicare payments are below cost therefore we have to charge other patients more", "International drug prices are too low, therefore we have to charge US prices more", "There are a lot of uninsured patients treated for free therefore we need to charge others more".
I tend to call BS on all of them. None of them explains why especially hospitals tend to charge almost random prices for the same thing, make constant billing mistakes and haunt the patient for years with changes that already have been settled with the insurance. It doesn't explain why the medical device my company sells for 30k gets charged 140k by the hospital (happened to my girlfriend). Or why for the same 1 hour surgery one hospital anesthesiologist charges 12k while somewhere else the charge is 3k.
The whole system is totally corrupt, opaque and highly profitable for doctors, administrators and middlemen. Each of them blames the other while never providing any real accounting with hard numbers.
Not disagreeing on the fact that the system is broken.
However, if cost is important, why are prices not transparent, and the same for all treatments (hint: medicare is a big reason)?
Why do states have laws that prohibit competition? In many states, you can only build a new hospital if existing hospitals OK it.
In our state, why is there a shortage of general practitioners? (hint: after paying malpractice insurance and student loans, its almost impossible to make a living). So, GPs are moving to other states.
Mis-regulation has created an environment where market forces are prohibited from operating, predatory lawyers make a killing, cronies are comfortable - with predictable results.
You are blaming it on regulation, medicare, malpractice insurance and lawyers. How about also saying that hospital owner, managers and doctors make a killing in this system? They are not victims.
What I am saying is that all market forces have been suspended, and replaced with something that is not working. Market forces tend to keep a lid on the kinds of things we are seeing. The mis-regulation has not replaced these market forces with anything that is working.
You can't have transparent pricing if medicare comes in and imposed unrealistic pricing. It only works if the advertised price is the same price for everyone.
You can't have inexpensive malpractice insurance without the English Rule, and if the tort system is basically a lottery.
The health insurance companies are a much bigger problem than the care providers.
Things that might be productive instead of pointing fingers:
* all medical services and medicines provided by a provider must have a single, public price
* prohibit employer provided health insurance, replacing it with insurance purchased by individuals with pre-tax money
* enable interstate purchase of health insurance
* expand the health care exchange that federal employees have access to to create a single, unified market for purchasing insurance
* introduce the English Rule to reign in trial lawyers
Agreed, maybe medicare is too low -- but then single payer MINUS insurers could beef up medicare too something like 2x what it now, but as a nation we'd still pay less total on medical (if hospitals mark up insurance 4x and the insurer marks up 2x the cost or more, that's 6x the cost that we're all paying for... Cut off 4x and tell the hospitals to be happy and downsize their operations, and get costs under control. Medicines should only be charged at cost for delivery, charging $40 for a single ibuprofen tablet is INSANE! It takes a nurse 5 minutes to deliver pills, say she makes $50/hour, that's like $5 labor + 30 cents for an ibuprofen, so 5.30 even doubled to $10 is much fairer than $40 for a single pill, or hell make some sort of automated delivery system that pops out medicine by hydraulics as needed and cut the cost even more.
With single payer the government could also put together some emergency grants/funds for hospitals that can't cope -- as long as they accept auditing from the government of all their processes/administration salaries/etc.. and follow guidelines take pay cuts to recommended averages, etc...
TLDR; Medicare for all will solve this issue, it will need to set the low-end higher obviously to compensate for where hospitals make the bulk of their money, but it'll need to hold hospitals accountable for better money management, and pay structures, and price gouging. Not to mention one of the largest cost savings : single-bulk-payer for drug purchases.
Agreed. If Medicare really pays too little then let’s raise
that. But I believe that the current system is much more profitable so they won’t push for raising Medicare in exchange for eliminating the current
pricing practices.
Single payer or medicare is basically the imposition of price controls, which cause shortages and leads to rationing.
In the US, you can get an MRI pretty much immediately from one of many facilities. The wait time in Canada is pretty ridiculous, and far below the standard of care anyone should expect.
I've known people who moved to the US from Canada because they could not get adequate health care under the single payer system. Hospitals on the border with Canada routinely have to deal with the spill over from Canada because Canada's system does not have the capacity to deal with all of the cases (I have relatives in such hospitals who talk about this). Medical tourism to the US from Canada is one of the few options people have to get timely access to needed healthcare.
We already have an enormous amount of regulation and control of this area by the government and it is not working. Regulation can be like violence - its practitioners always seem to want to use more if it when it is not working. It's time to take a step or two back and reevaluate.
I consider it institutionalized corruption when we allow healthcare providers to charge X to uninsured patients yet a tiny fraction of X to patients with insurance ... this distortion should be highly illegal ... this is how the insurance industry forces people to get insured ... healthcare providers cost of services to the patient should be independent of the patients level of insurance coverage
This usually happens when you pay upfront. If they bill an uninsured person retroactively, they try to capture as much cost as possible expecting that they will not get the entire amount. It's an awful system.
They should be required to charge the same to everyone. If an insurer doesn't want to pay that price, the patient will have to cover the rest and insurance companies will have to compete. If there were to be an exception, it should be the provider giving the patient a break on their portion.
This would be putting people first, and it's exactly opposite of what we have.
>Hospitals don't have to accept Medicare or Medicaid patients.
An emergency room has to treat anyone until they're stable, regardless of their means to pay. You don't exactly have time to shop around for an affordable doctor if you've just had a heart attack.
Why do you think medical debt is a key reason for 2/3rds of US bankruptcies?
A patient is accepted, cared for, and cannot pay. The patient has medicare. Would you, as a hospital, refuse any payment; or would you take what you could get (medicare)? A below-market rate is bad, but nothing is worse.
While I’m philosophically aligned with the medical-expenses-lead-to-bankruptcies narrative, it’s worth noting that the 2/3 number is based on a drastic overcounting of people’s reported expenses.
If I mention a $500 hospital bill, but put $50,000 on credit cards for run of the mill spending beyond my means, I get counted in that 2/3rds.
Completely missing context from the story: If a healthcare provider accepts Medicare patients, legally they cannot charge anyone a lower price than they give Medicare. The Medicare price is the price floor, not the average price. Once you understand that, the charge rates make more sense. However, I suppose adding that context wouldn’t gin up the correct amount of outrage...
I used to see a doctor who had an angry note in his front office stating he would charge less if he could but his group had negotiated a price with Medicare and it was against the law for him to charge less. In lieu, he took donations to pay for the needy and I strongly suspect laundered his own profits into that pot effectively circumventing Medicare’s insane rules. I suspect this because lots of people used the donations but he would never accept any from me.
A lot of comments on here about Medicare not paying enough compared to private insurance- so here is one from a very recent personal experience with private insurance. My wife had surgery followed by 6 days in the hospital for recovery. (This is I think her 9th surgery in the 8 years of our marriage, and every time the billing is similiar.) I just received the explanation fo benefits from my private insurance from the hospital. They billed $245,000! The negotiated amount with the insurance company was $36,000. They billed for 6.8X what they actually got from private insurance. The amount that the hospital bills is completely made-up gibberish.
63 comments
[ 2.9 ms ] story [ 125 ms ] threadHeadline: Many Hospitals Charge Double or Even Triple What Medicare Would Pay
You have to get about 80% of the way through to read a more accurate version of the truth: "Medicare payment rates, which reimburse below the cost of care, should not be held as a standard benchmark for hospital prices”
“Medicare payment rates, which reimburse below the cost of care, should not be held as a standard benchmark for hospital prices,” said Melinda Hatton, general counsel for the American Hospital Association, AN INDUSTRY TRADE GROUP, in an emailed statement. [emphasis mine]
You claim that the quoted statement is more accurate / truthful than the statement that private insurers pay more than the Medicare rate, and seem to imply that the Times’ reporting is biased. Did I get that right?
Would you like to furnish some support for those claims?
If anyone has Medicare, or has worked at a clinic that accepts Medicare, or has filled out Medicare paperwork- you know Medicare isn't a gold, silver or bronze standard.
It's dollar store quality.
Things take longer, are often riddled with wrong denials, and him major limitations for patients.
For me the issue is that if you had something like a hernia it would essentially cost less to fly to Europe, have the surgery, and stay a couple of weeks than to pay out of pocket in the US. And many European healthcare systems tend to rank better than the US.
So it seems that the procedure can be done for less, maybe even for less than Medicare costs; the "dollar store quality" doesn't seem to come from the inexpensiveness.
The American Medical Association is the 3rd biggest lobby in the United States.
Physicians/surgeons in Europe do not make 300k/year.
*The staff that manages insurance payments etc. will lose their jobs.
I’m not making a value judgment, just stating facts. This is going to be a tough row to hoe once politically attractive groups start mobilizing members to fight the change.
But only one of many reforms needed.
Doctor plus nurse compensation dominate every chart I’ve ever seen of US medical spending.
People like to imagine it’s all the fault of insurance companies, pharmaceuticals, and malpractice; those are collectively a tiny fraction of US spending. It’s mostly labor costs.
The US is rich, health is a good with infinite demand. It’s hard to reduce costs in that context.
This one shows 20%, though when you say clinical services you include nurses, mid levels and medical assistants, though it doesnt explain how much of the hospital spending goes to providers, so higher.
Also, add that the amount of debt physicians graduate with, does not make it a very healthy career, particularly in primary care (where you could do most of cost control).
PCP's have high burnout and suicide rates, work 50+60hour weeks until their 50's , etc. There is nuance to the analysis of provider spending.
In any case, i can assure you there are plenty of marginally useless rank-file employees that exist thanks to the current regulatory framework.
As always, singling out some part of a hugely dysfunctional system for criticism is quite unhelpful.
Source? This doesn’t jive with how popular Medicare is.
> Things take longer, are often riddled with wrong denials, and him major limitations for patients
Source?
One of the great trickeries of using Medicare's "popularity" is that people that have it pay 150$ a month, while the cost is 1000$. If medicare charged its patients what it cost, "popular sentiment" will rapidly change.
It's bonkers to me how much resources and technology we have as a species, and how we decide to not let people access it because money/capitalism.
Obviously the US is notably worse at this than other countries, and it doesn't feel like we're on a path to fixing it.
Note that I’m not defending the broken U.S. system, but attempting to fix it with price controls will exacerbate its problems.
[1]: https://www.washingtonpost.com/national/health-science/why-s...
So, the real story is that these doctors and hospitals are so committed to providing care, that they're willing to figure out ways to provide it despite medicare.
So, so committed to providing care... they're practically working for free. Maybe they're even losing money.
Side note: Google is bizarre. You can tell what words Google thinks are effectively synonyms by typing one word and then seeing which words are bolded in the results; I searched "median earnings of a doctor in the usa" and it bolds "mean" and "average"...
Any substantial change to the pay structure for physicians needs to address the cost of education and training, and not screw over a large cohort of physicians saddled with debt who see a massive pay cut. They will significantly oppose any attempted changes that don't address these two things.
Doctors in Europe are paid a good bit less than here in the US, but their education is paid for (and then some) by the state.
I tend to call BS on all of them. None of them explains why especially hospitals tend to charge almost random prices for the same thing, make constant billing mistakes and haunt the patient for years with changes that already have been settled with the insurance. It doesn't explain why the medical device my company sells for 30k gets charged 140k by the hospital (happened to my girlfriend). Or why for the same 1 hour surgery one hospital anesthesiologist charges 12k while somewhere else the charge is 3k.
The whole system is totally corrupt, opaque and highly profitable for doctors, administrators and middlemen. Each of them blames the other while never providing any real accounting with hard numbers.
However, if cost is important, why are prices not transparent, and the same for all treatments (hint: medicare is a big reason)?
Why do states have laws that prohibit competition? In many states, you can only build a new hospital if existing hospitals OK it.
In our state, why is there a shortage of general practitioners? (hint: after paying malpractice insurance and student loans, its almost impossible to make a living). So, GPs are moving to other states.
Mis-regulation has created an environment where market forces are prohibited from operating, predatory lawyers make a killing, cronies are comfortable - with predictable results.
You can't have transparent pricing if medicare comes in and imposed unrealistic pricing. It only works if the advertised price is the same price for everyone.
You can't have inexpensive malpractice insurance without the English Rule, and if the tort system is basically a lottery.
The health insurance companies are a much bigger problem than the care providers.
Things that might be productive instead of pointing fingers:
* all medical services and medicines provided by a provider must have a single, public price
* prohibit employer provided health insurance, replacing it with insurance purchased by individuals with pre-tax money
* enable interstate purchase of health insurance
* expand the health care exchange that federal employees have access to to create a single, unified market for purchasing insurance
* introduce the English Rule to reign in trial lawyers
Why not? You still can publish prices.
With single payer the government could also put together some emergency grants/funds for hospitals that can't cope -- as long as they accept auditing from the government of all their processes/administration salaries/etc.. and follow guidelines take pay cuts to recommended averages, etc...
TLDR; Medicare for all will solve this issue, it will need to set the low-end higher obviously to compensate for where hospitals make the bulk of their money, but it'll need to hold hospitals accountable for better money management, and pay structures, and price gouging. Not to mention one of the largest cost savings : single-bulk-payer for drug purchases.
In the US, you can get an MRI pretty much immediately from one of many facilities. The wait time in Canada is pretty ridiculous, and far below the standard of care anyone should expect.
https://www.fraserinstitute.org/studies/waiting-your-turn-wa...
I've known people who moved to the US from Canada because they could not get adequate health care under the single payer system. Hospitals on the border with Canada routinely have to deal with the spill over from Canada because Canada's system does not have the capacity to deal with all of the cases (I have relatives in such hospitals who talk about this). Medical tourism to the US from Canada is one of the few options people have to get timely access to needed healthcare.
We already have an enormous amount of regulation and control of this area by the government and it is not working. Regulation can be like violence - its practitioners always seem to want to use more if it when it is not working. It's time to take a step or two back and reevaluate.
Total corruption.
This would be putting people first, and it's exactly opposite of what we have.
An emergency room has to treat anyone until they're stable, regardless of their means to pay. You don't exactly have time to shop around for an affordable doctor if you've just had a heart attack.
Why do you think medical debt is a key reason for 2/3rds of US bankruptcies?
If I mention a $500 hospital bill, but put $50,000 on credit cards for run of the mill spending beyond my means, I get counted in that 2/3rds.
Why does everyone freak out when regular business strategy is applied?