I am pretty sure that not disclosing these figures makes the hospitals far more than $300/day (the proposed fine for noncompliance with the disclosure rule).
Indeed. Raise the cap to $300,000/day per facility, and this might actually have an effect. For most hospitals, a fine of $300 a day isn’t a fine at all, and I assume that’s by design.
Whose design? My guess is that the agency can't go higher due to an outdated law from when the agency was founded. Lots of laws have fixed dollar amounts which eventually get absurd due to inflation.
From CNBC: "The public comment period will be open until the end of September. If finalized, the rule would take effect in January."
So, leave a comment. Ask for something large, tied to inflation or to hospital revenue.
This is wonderful, and so the medical industry would fight it with all their might, except for one problem: the fine is only $300 a day. That is about the cost of a nurse.
It'll matter for little urgent care shops staffed by a handful of people. City hospitals will laugh at $109,572 per year.
I don’t know if this is a step in the right direction. It sounds more like they want the PR value of “doing something” without actually doing anything useful. This seems to be the case with almost all initiatives in the health care area for the last few years.
While $300/day is indeed ridiculously little, these fines would be published on a website, as per the factsheet [1]
"If the hospital fails to respond to CMS’ request to submit a corrective action plan or comply with the requirements of a corrective action plan, CMS may impose a civil monetary penalty on the hospital not in excess of $300 per day, and publicize these penalties on a CMS website."
I guess a "name and shame" strategy could lead to increased public awareness, and later to political pressure, which in time would translate into political action. At least that's how democracy is supposed to work.
Separately, the public is asked for feedback on the proposed rule until 27-Sept-2019. Not sure how this works, but I guess a grassroots movement could result in an increase in this diminutive fine.
While it may be economical to pay the fines, I don’t think many hospitals would choose to tank the fine and keep hiding the information. That’s some pretty bad PR when it adds up. A larger fine would be better, but I think this will be sufficient.
Their billing practices are already getting a lot of PR and nothing has changed. They can easily handle this too. Especially since probably close to nobody will know about this list.
Of course this depends on the location and the type of nurse. I'm not in California, the most expensive place to get a nurse, where the average salary of a Registered Nurse is actually $102,700. Other states have salaries that are half of that. Even for the national average, a Licensed Practical Nurse is only getting $48,251.
Allowing a factor of 2 for benefits and overhead, nurses generally cost about $100,000.
I don't how much that will accomplish. Lots of people without insurance have no means to even pay the discounted rates. I had a drug that until it was available in generic form was $90 (so at 10% copay, I presume it cost the pharmacy $900) But lets say that was a lie and it actually cost $200. Without insurance it would still be too expensive to many people.
I agree that this would not enable people to suddenly be able to afford medical services that they otherwise would not, but I do see some advantages to the system in general:
1. For people without insurance it would possibly give them a little more bargaining power in the negotiations around bills. Right now the hospital holds all the cards, especially when it comes to "costs".
2. It would shine a little light into an area that is generically murky. A lot of people are champions of capitalism/markets being the solution for all/most problems, but market systems do not work well at all when there is a heavy information imbalance. Pretty much every theory of capitalism talks about that. Right now an enormous information imbalance pretty much sums up the U.S. healthcare system.
Are hospitals really that profitable? Take SF general hospital for example. Its obligated to take care of the homeless, drug addicts, under insured that they seem to overcharge the few insured that get admitted to balance their budgets. I'd be curious for an actual fair accounting of things. Are they really flush with money and just overcharging?
What actually often happens is that drugs priced at $90 get marked up to $200 with the knowledge that insurers will get a $90 price. The rebate system paradoxically creates an incentive system where it is insurers best interests for list prices to increase dramatically and then receive a discount than for the products to be sold at the discounted price in the first place. It’s a broken system and replacing it should help medicines be priced closer to what real people can pay for.
Yes, the $90 was my copay and I got a copay reimbursal from the drug company so my net was $5. The drug company is trying to mask the cost of the drug from the consumer so they can charge the insurer a higher price. The insurer is charging a copay so the patient feels some of the cost.
However disclosing these practices is not enough. The end consumer has no negotiating leverage particularly if they have no insurance. The government or some big organization needs to negotiate the best price for them.
It's not a measure though, lower prices are the target.
That law only applies when the ultimate desired goal is different from the target. When the target is the goal then using it as a measure works perfectly.
This would improve the negotiating position of some parties and harm that of others, but only slightly if at all.
Most likely it will make hospitals less likely to allow any single price to be negotiated too low.
Consider that when negotiating a basket of goods, the buyer and seller may agree on a low price for item A and a high price for item B based on their own preferences, but this does not mean that they cared specifically about item A or B since the negotiation was over the basket.
We see this all the time whenever products and services are bundled. The negotiation may result in some prices being lowered, but overall the seller has a lot of knobs to adjust to make the buyer happy.
So all this will do is modify the negotiation slightly and possibly provoke some sensational headlines in the near term.
It would create transparency. Over the long-term that means that prices will become more equal. The people who are paying the most (un-/underinsured) will be the ones who benefit the most.
I think you’re right. I recall hearing about an exemplary case s few years back before ACA, Some guy was shopping around for, I think it was, hip surgery. It was opaque and took some effort but finally settled on some place in the south, possibly AL. It ended up being like a fifth of what his state’s hospitals would do if for.
> this does not mean that they cared specifically about item A or B since the negotiation was over the basket.
This explains why prices are some services surprisingly high, while others are more normal. We've all heard about the $100+ cup of Advil line item in a bill. I never had thought about health care pricing before in this context.
I'm sure both the hospital and the insurance come into the negotiation with existing datasets about the frequency of goods/services are billed for. The hospital knows what it will receive in aggregate from the hospital given a set of line item prices for all of its offered goods/services; conversely, the insurance company would have a rough sense of what they'd be paying.
You get the short end of the stick if you end up consuming a proportionally higher amount of goods/services that were negotiated arbitrarily high price end.
> all this will do is modify the negotiation slightly
There are lots of procedures where consumers have time to shop around. Presently, nobody is incentivized to compete on (or advise to) price. With transparency, that changes.
Yeah, if discounted rates were illegal, then some of the more simplified Republican arguments against requiring and/or subsidizing health insurance might actually make sense.
This whole system of discounted rates is why you're pretty much forced to have insurance as a "payment intermediary," even for stuff that you'd otherwise think paying out of pocket would be reasonable for.
Cost shifting in healthcare is zero sum at significant economic cost. Aka, the net result of these negotiations is higher healthcare costs even if they can benefit the participants.
On the other hand healthcare providers competing on an open market with transparent pricing would presumably actually reduce costs.
It'd effectively make insurers (and everyone else who pays for healthcare) one big negotiating block. The weakest payer gets the benefits of scale of the largest. One might hope that would push prices down.
(for the record I personally just want the simplest thing that's very likely to work—single payer—rather than any complicated poke-the-market-and-pray solutions, but I think that's the idea of such a measure)
I’ve posted this in another thread before, on the high costs of insulin, but if you replace ”pharma company” with healthcare provider and “medication” healthcare services, the same will largely hold true:
Insurance companies in the US have enormous leverage over just about every other party involved in healthcare: the patients, the providers, and the pharmaceutical manufacturers. This is even more true for medications like insulin, where there isn’t much difference in efficacy between brands. In a normal market, these companies would try to compete on price. But for insulin, price continues to rise. This is because insurance companies, and their negotiators, Pharmacy Benefit Managers (aka PBMs) have a vested interest in prices rising.
PBMs make their money by negotiating prices with pharma companies to secure discounted prices for insurers, and in doing so, create the insurers’ “formularies”, which are basically the list of all the medications an insurer will cover, the prices they will pay, and the conditions that must be met. PBMs get a cut of the discount they negotiate with the pharma company. If drug A has a list price of $200, and they negotiate it down to $150 for their insurance clients, they take home x% of all the savings that are made at $50 a pop.
This creates a perverse incentive however: a PBM stands to make more from a drug that costs $300 and is negotiated down to $150 than a drug that is $200 that is negotiated down to $150, even if everything else is the same. That means you are more likely to get better insurance coverage for your drug by starting high and giving deep discounts. And for drugs like insulin, where similarities between products are so small that the only place you can compete is price, how well you are covered by insurers compared to your competitors will make or break your business.
Insurance companies themselves also love drugs with high costs that are then discounted deeply, because when they charge a patient coinsurance, it’s based on the list price, and not the price the insurer is paying. So even though they’ve negotiated the price of insulin down by over 50% with the pharma company, they are still going to charge you y% based on the full price. So if they continue to get insulin from manufacturers for $Y per unit every year, they continue to charge you 20% of a cost that continues to rise further and further away from $Y, meaning they are actually paying less and less as prices rise. They will claim to be using the reduced costs to lower premiums, but if reduced costs are only the result of increased costs for the sick, then all we’ve done is create an insurance system where the sick are subsidizing the healthy, which is entirely backwards.
So now we have a system where manufacturers raise prices year after year, only to also give ever increasing discounts to insurance companies and PBMs, in hopes that it actually increases the number of patients who can afford their products (i.e. those with decent insurance). But those left holding the bag are the individuals without insurance or those with high deductible plans (which are becoming increasingly common).
It’s also important to note exactly how much power these middlemen have. It’s a common narrative that Big Pharma is able to get away with bad practices because of their power. But in reality, only a single pharmaceutical company is in the Fortune 50, and none of the insulin makers are. In contrast, 80% of the PBM market is controlled by 3 companies, 2 of which are Fortune 50, and the third is a subsidiary of United Health, which is an insurer and is also Fortune 50. In fact, 10 of the Fortune 50 companies are middlemen (insurers, PBMs, or drug distributors) in the healthcare industry.
Basically, discounting and rebates have ironically been a big driver behind increasing healthcare costs. They serve primarily to reduce insurers costs but they don’t pass those benefits to consumers, and have actually created a system that rewards high-cost healthcare.
The wider the gap between costs for insurers to pay for operation A vs for you to pay for operation A, the more value you get as a consumer get from having insurance which means the insurance company can earn more profit.
Dumb example. If it costs you a billion dollars and the insurance company a million dollars. The insurance company can comfortably charge you a premium that protects you from the billion dollar risk instead of the million dollar risk.
I would assume that, if rates were equal for both parties, insurance premiums would go up and insurance profitability would go down. If insurance profitability goes down, suddenly the insurance company is incentivized to decrease the costs of healthcare for everyone.
Right now the insurance company has the incentive to INCREASE the generic cost of healthcare and decrease for them only.
I'm not sure that'd be workable. Define a discounted rate. What if the suppliers simply don't chase the insurers for remaining balance above the level of the "discount"? What about common practices (not sure about the US medical industry specifically) such as discounts for early payment? It seems to be that there would be too many workarounds.
I do like the idea though.
How about taxing suppliers on the published rate, rather than what they actually get paid? That might stop them being quite as egregious. If they charge an uninsured person more for an equivalent procedure, their tax bill will suddenly go up.
Just being as simple as "suppliers must offer the same terms to all parties" might be sufficient, though I suppose the loophole is just making the terms insanely complicated in that case.
What they charge isn't what they eventually agree to settle though. Insurers still get _charged_ the full amount, AIUI, but have a negotiated settlement rate. Eg. "we will only pay 20% of your bill and you will consider the matter settled".
I think insurance should be turned around and should reimburse the patient, not the provider. Specifically, if I go to a hospital, I should get a bill from the hospital that does not depend on my insurance status. My insurance can pay some or all of it pursuant to the terms of the insurance. Whatever they don’t pay is my liability. If the insurer and hospital cooperate, the insurer can pay their share before my bill is due, and that’s all.
On top of this, medical providers must disclose the full cost structure of any non-emergency service up front and get my initials, just like auto mechanics. Emergency services should be strongly regulated.
The goal here is to have price transparency where it matters: with the patient, and to prevent insurance from corrupting the market.
Abusive medical consolidation like we have in the Bay Area won’t happen, since there would be no benefit for providers to merge to improve their insurance contracts.
As evidence that this could work, look at dentistry. Every dental provider I have ever encountered can tell you, in advance, exactly what they will charge. The prices are not insane the way non-dental medical prices are. And there are no surprise bills in dentistry.
You can actually do this. Get your treatment, receive your bill (which you must pay), and then ask your insurance company to pay you. Eventually you get a check in the mail from your insurance provider.
I've done it for a few childbirths with midwives and I've done it many times for dentists.
I think this used to be standard, and may relate to that whole annoyance about you being responsible for whatever charges aren't covered. When you give your insurance info to the medical provider, you're not changing who ultimately pays. The medical provider is simply offering two things: they will handle the paperwork and they will loan you the cost of the treatment until the insurance claim is processed.
It’s certainly not the case that telling your doctor about your insurance only changes who pays. It radically changes the price, and not always downward.
> I've done it for a few childbirths with midwives and I've done it many times for dentists.
Neither of which is the kind of medicine that is so badly corrupted by insurance. Try doing it for a routine non-elective procedure at almost any major hospital as you’ll have a rather different experience.
I'm in favor of single payer, but single payer is not required for this. Requiring all prices to be published, and simply passing legislation to make discounted rates illegal, should do it. (Sure, there are probably ways to game that system, but ideally there are also ways to catch worst offenders and punish them with fines to the tune of several multiples of the discount.)
It's also probably doable as a law (which is to say a law that states that healthcare org must sell services using a fixed price list, which the org determines beforehand).
At worst it will have no impact. But even if consumers can't negotiate the discounted price themselves they know the premium they are paying for their current plan. Right? This might encourage a single payer system (for good or bad).
We need to stop focusing on single payor system as it’s too political. Something everyone can get behind is a single price system. The government has the ability to do that without becoming our insurance administrators.
At the least, healthcare companies could reduce a huge amount of labor tied up in billing and insurance could do the same for labor tied up in fighting claims
So, this is a simple idea not fully thought out. But you’re point is hollow. Democracy has failed many places, do we give up our way of government?
In the context of healthcare, using the current Medicare system as a proxy. Yes, it mostly works. CMS sets prices, generally based on what things should cost with a reasonable margin, and in general Medicare patients are receiving quality care.
Beyond that I don’t have much knowledge. I’m sure you’re referencing some examples of fixed corn prices and how it resulted in shortages or something like that. Which may be valid.
However, I think you could get creative and build some pricing models that were much more effective than a fixed price. Or, the minimum government involved way, would be to simply mandate that payors of all types are billed and pay the same amount for same services. Then the market is responsible for compliance.
Either way, the way to get ahold of healthcare is on price. The only reason Medicare for all has any legs is because Medicare is known for controlling price. But the downside is government becoming the administrator. I’m just saying there’s other ways to focus on price and the government could help through legislation.
The second step being setting caps on what health care providers can charge to those who are uninsured, or for which a particular insurer won't cover.
Instead of some ridiculous number that no one actually pays, they should only be able to charge the uninsured a maximum which is the average of what they actually receive.
If they receive, on average, $850 for an MRI then that should be the most they are legally allowed to charge someone who is uninsured. Clearly it's still profitable for them to do so at this price point, and it doesn't bankrupt the individual.
I had to go to the corporate owned emergency room recently. They told me that as an uninsured person my discount was 70%. They wouldn't tell me what the insured discount was even though I asked. For 5 minutes with the doctor and there's nothing we can do today follow up with you GP doctor tomorrow or ASAP, the bill was only $145.50, discounted from $485.
The follow up with my doctor during weekday hours was $70.
I was badly bitten by a dog. The ambulance took me to a trauma center that was out-of-network. The retail cost of my 6 hour stay was $11,800. This didn’t include the ER doctor and radiologist.
My insurance covered only $2800 of the $11,800 (what they considered reasonable). I have a $7900 deductible.
Since they were out-of-network, the hospital could have billed me for the entire amount (balance billing).
That requires ethical people to run and heavy enforcement otherwise it turns in to a corruption fest where doctors run their own private practices in addition to state funded and waiting lists run rampant forcing you to go private.
What is needed is real competition in the health care sector - because at the moment the whole thing in America is a coalition/monopoly between insurance, pharma and health care companies with the sole intent of giving you no choice but to pay and say thank you.
The supposed evil sole individual human you postulate as the source of dire evil is not the problem usually, rather the evil collective corporation or other organization calls the shots when we see these sorts of industry wide systematic abuses.
I think the point here is that you're making a completely irrelevant comparison. Comparing an ER visit to a transatlantic flight isn't even apples and oranges, it's apples and the kuiper belt.
To be fair, a $111 (100 euro) ambulance ride would not be a reasonable amount if you were paying for it outright. You're paying for the time of 2 EMTs, your share of the supplies in the ambulance, your share of the ambulance vehicle, gas. Plus you're not just paying for the time it took for your ride, you're paying for your portion of the entire day (since not all their time is utilized). Even without considering profit, that's well over $111.
The fact that you're paying 100 Euro for the trip means is subsidized. Which is great, and it should be, but don't pretend 100 Euro is a reasonable price if you're actually paying for it.
No subsidy, these are for private ambulances and a result of real competition.
Using an average wage in the US to be double of Europe I'd say $200 for an ambulance ride in the US is a reasonable price.
Also an ambulance ride is like 20-30mins tops and within a day there can easily be 4-5 calls in a larger city - that's more than enough to be profitable.
Perhaps you know better, but my uneducated guess would be that just an ambulance vehicle costs 15k/month, then every medic costs 10k/month at least and there will be expensive weird things like commercial insurance that costs another 5k/month. 100k/month might make you break even in the long run.
Why is how many times you can fly between two places relevant to how much medical bills cost? All you did was choose a metric that makes your argument appear more reasonable, even though they are entirely unrelated.
You also seem to be arguing that Europe healthcare is cheaper and therefore better, even though it obviously is not that simple (I'm sure you know it isn't that simple. That's just how your reply comes across). For example, if I get cancer I would much rather be in the United States, despite the problems with their health care system, simply because I have a higher chance of living.
That doesn't prove anything about hospital quality.
From your source: "Around 40% of cancer cases could be prevented by reducing exposure to cancer risk factors including diet, nutrition and physical activity".
Americans live a lifestyle (fast food, less walking) that leads to a much higher risk of cancer than Europeans, the difference in mortality rate is mostly explained by this.
Another way of thinking about this, looking at your data, do you really think Australia has the worst hospitals in the world because they have the highest cancer rate?
My wife had a three day stay in hospital and pins surgically placed in her shattered foot while we were on vacation in Australia in the early 2000s. $700 - and that was the non-resident price.
The sales tactic is to price things so high the insurers have not idea who is getting what discounts on what services. So the article here would actually come into play in this case
I once paid $1000 because my wife had to basically go to the ER for an antibiotic prescription. You know, when you already know you have a upper respiratory infection, but you required to see the doctor. They wouldn’t negotiate with me. So don’t rely on this in the future.
Under the ACA, in and out of network must have the same cost sharing for ER care. It’s the risk you run having such a high deductible plan. But I’m sure you’ve saved monthly by paying lower premiums for such a low coverage plan.
? When you pay a % of the allowed amount that’s called coinsurance (not a copay). This is paid after deductible in most cases. So he would owe up to his deductible ($7,900) before his coinsurance would kick in.
A minimum value ACA plan must have > 60% AV and cover the essential health benefits. The coinsurance % is irrelevant so long as it meets those requirements.
One of my favorite things about the US insurance market is that the lack of transparency into pricing actually hurts both the insured and the institutions providing care.
Small and medium size practices have very few guarantees about how much they will get reimbursed for a procedure and the patient has no idea how much they will pay. It's truly insane.
Is anyone honestly trying to solve those problems right now?
Hrmm...not sure most of what you said is true. Small and medium business may lose claims, but they know the reimbursement for each procedure and if thier claims are legit, they will get reimbursed. There's a requirement to share how much a consumer needs to pay before procedures are done also. Unless your talking about ER care specifically, that's a different beast where you are somewhat correct.
I work in the industry. Fee schedules are an upper bound, but the lower bound is very hard to get numbers on and often approaches 0.
If I go in for a procedure at a medium sized specialist clinic they are going to take the fee schedule for this CPT, discount by my 20% expected contribution (or whatever), and then hope that the insurer pays them > 50% of the remainder.
A lot of the time my insurer will, but not always. Bigger systems negotiate their own fees and many doctors at larger clinics only track RVUs for each procedure (specifically because the clinics realize that paying based on insurance payout isn't fair or scalable, in that way RVU allocations act as a pool). But overall it's not a transparent system for the majority of people working within in.
Used to do medical billing. How is this not true? Your telling me doctors are running their businesses with just some random returns for procedures? are you out of your mind?
Also, it is true that thier is a requirement for estimates. Granted, insurance companies can turn down procedures - but like I said, if it's a competent diagnosis than it works out.
But you can just ignore all the words in my post to be dramatic, that's fine.
I think he is definitely talking about ER but I’m pretty sure you don’t get the up front cost for random doctor visits or procedures. They simply collect your insurance information and then tell you that the insurance will send the final outstanding balance. This happens regardless if you have enough coverage or not.
I recently visited an Emergency Room and the whole process behind is really obscure.
Like for example, I got a bill from the health care provider for an owed amount and one letter from the insurance company saying that I owed the healthcare provider another different amount. They are not even close.
The whole experience in the ER was pretty fast and high quality but I feel they did a bunch of extra blood work and stuff just for the sake of getting more money out of the insurance and not necessarily because it was needed.
The way I see it the healthcare system in the US is just designed to squeeze as much as possible from the carriers and viceversa but without thinking too much who is the actual liable party which happens to be the sick individual.
I think this is how we ended up with a super expensive healthcare system that bankrupts people. All parties involved (insurance carriers, healthcare providers, healthcare product suppliers, pharmaceutical companies, doctors) think that the opposing party in any transaction is swimming in money so they optimize for squeezing the shit out of the other. That’s how you end up with ridiculous bill items like $1500 dollars for a simple fluids IV.
There are hundreds of medium-size providers that do Urgent Care & Walk-In Clinics. So maybe my error was generalizing ER. I'm speaking about going to an urgent care clinic and then being remitted to an actual ER. Either way, I have never been charged upfront or given a cost beforehand in neither of those.
Recently had to take my son to the hospital. It started in the ER, but he was then admitted to the pediatric ward for a few days. There was nothing, not a thing, that changed in pricing disclosure for procedures and tests between the two. Neither in the ER nor the pediatric unit was any price or any money ever at all spoken about. The closest it ever came was when the admiting clerk in the ER took the insurance card. Now, a few months later, come the bills, and fighting with insurance over partial or no coverage for miscellaneous line items.
I have an idea of how to improve transparency, similar to how some insurers provide more information to patients regarding the cost of an MRI at different places in town. However, it requires healthcare consumer buy in at a larger scale, with potential privacy hurdles.
I'm not entirely sure if it would have the intended effect of reducing costs, but it would definitely add more transparency.
Ooh a whole $300 a day. Scary. That's $110k a year roughly. Pocket change for either the hospital or the insurance companies should they wish to not disclose these prices. That's if they even survive a court challenge and if the drug price disclosure is anything to go by, they won't. This is just bullshit the current administration is pushing to pretend like they are doing something positive for healthcare when all they want is to take people's healthcare away and let them die so that money can be used to line the pockets of insurance and other companies.
I don't see how it could directly cause harm...but I'm also having trouble seeing how it will help, and if it doesn't help it may cause indirect harm.
The indirect harm would be that by spending effort on something ineffective it may make it harder to do things that would be effective, by taking some of the heat off politicians on the health care cost issue.
I don't know if the WSJ article mentioned this, because I cannot read it, but according the the NYT article on this [1] when asked where the legal authority to force such disclose comes from the administration cites an ACA provision that requires hospitals to make a public list of standard charges.
But this same administration is currently arguing in Federal court that the entire ACA is invalid, which means that they are also arguing that this new proposal has no legal basis.
Fixing the US healthcare system really is not that hard. Just low incentive for the upper crust with plans that subsidize 90%+ of their healthcare through their companies/employers.
How to fix it:
1. Single payer - hard to maintain equality without it, insurers are not incentivized to lower healthcare trend due to max MLR rules
2. High OOP plans for all - force consumerism, sliding scale of ded/oopm based on income so poor are inherently subsidized more than rich
3. Easier path to becoming MD - more docs, more competition
4. Higher standards for maintaining license to practice medicine - more pressure to provide high quality care
5. Transparent prices - ability to shop for healthcare like any other good, prices will naturally hit an equilibrium due to consumerism and increased competition
6. Add a steerage layer to the system for all - call med-help line or go to web/app for care - type in symptoms, it gives you options with distance/prices etc to allow people to make more informed/economical decisions
7. Better Interoperability in EHRs - easily share medical records with a new provider, reduce duplicative care and waste
Just these items would help bring trend back in line with CPI. I like this solution because everyone gives a little - providers and consumers and the insurers and brokers give a lot (but eliminating their costs alone would be a boon). The biggest risk would be the ability of a public entity to implement and enforce such a system and to keep incentives high for providers and researchers
A small step but a good one towards price transparency. What industry apart from healthcare do you know where you first get service and then find out the price of it. lol
The sad part about all this is that the level of healthcare pricing transparency we all need/want must come down from the top. Are there any startups looking at this problem?
I feel that Trump's administration has not considered the ways this will hurt poorer people and especially minorities. Or maybe they did, and went ahead anyway.
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[ 2.7 ms ] story [ 171 ms ] threadFrom CNBC: "The public comment period will be open until the end of September. If finalized, the rule would take effect in January."
So, leave a comment. Ask for something large, tied to inflation or to hospital revenue.
It'll matter for little urgent care shops staffed by a handful of people. City hospitals will laugh at $109,572 per year.
Well, it's a step in the right direction.
"If the hospital fails to respond to CMS’ request to submit a corrective action plan or comply with the requirements of a corrective action plan, CMS may impose a civil monetary penalty on the hospital not in excess of $300 per day, and publicize these penalties on a CMS website."
I guess a "name and shame" strategy could lead to increased public awareness, and later to political pressure, which in time would translate into political action. At least that's how democracy is supposed to work.
Separately, the public is asked for feedback on the proposed rule until 27-Sept-2019. Not sure how this works, but I guess a grassroots movement could result in an increase in this diminutive fine.
[1]https://www.cms.gov/newsroom/fact-sheets/cy-2020-medicare-ho...
No, it's about the salary of a nurse. The cost (salary + benefits + overhead) of a nurse is much higher.
Of course this depends on the location and the type of nurse. I'm not in California, the most expensive place to get a nurse, where the average salary of a Registered Nurse is actually $102,700. Other states have salaries that are half of that. Even for the national average, a Licensed Practical Nurse is only getting $48,251.
Allowing a factor of 2 for benefits and overhead, nurses generally cost about $100,000.
1. For people without insurance it would possibly give them a little more bargaining power in the negotiations around bills. Right now the hospital holds all the cards, especially when it comes to "costs".
2. It would shine a little light into an area that is generically murky. A lot of people are champions of capitalism/markets being the solution for all/most problems, but market systems do not work well at all when there is a heavy information imbalance. Pretty much every theory of capitalism talks about that. Right now an enormous information imbalance pretty much sums up the U.S. healthcare system.
If you go down the street, however:
https://www.vox.com/2019/1/22/18183534/zuckerberg-san-franci...
However disclosing these practices is not enough. The end consumer has no negotiating leverage particularly if they have no insurance. The government or some big organization needs to negotiate the best price for them.
[0] https://en.wikipedia.org/wiki/Goodhart%27s_law
That law only applies when the ultimate desired goal is different from the target. When the target is the goal then using it as a measure works perfectly.
Most likely it will make hospitals less likely to allow any single price to be negotiated too low.
Consider that when negotiating a basket of goods, the buyer and seller may agree on a low price for item A and a high price for item B based on their own preferences, but this does not mean that they cared specifically about item A or B since the negotiation was over the basket.
We see this all the time whenever products and services are bundled. The negotiation may result in some prices being lowered, but overall the seller has a lot of knobs to adjust to make the buyer happy.
So all this will do is modify the negotiation slightly and possibly provoke some sensational headlines in the near term.
So, the short is, yes, transparency would help.
This explains why prices are some services surprisingly high, while others are more normal. We've all heard about the $100+ cup of Advil line item in a bill. I never had thought about health care pricing before in this context.
I'm sure both the hospital and the insurance come into the negotiation with existing datasets about the frequency of goods/services are billed for. The hospital knows what it will receive in aggregate from the hospital given a set of line item prices for all of its offered goods/services; conversely, the insurance company would have a rough sense of what they'd be paying.
You get the short end of the stick if you end up consuming a proportionally higher amount of goods/services that were negotiated arbitrarily high price end.
There are lots of procedures where consumers have time to shop around. Presently, nobody is incentivized to compete on (or advise to) price. With transparency, that changes.
I'd estimate this is 1% of healthcare spending.
This whole system of discounted rates is why you're pretty much forced to have insurance as a "payment intermediary," even for stuff that you'd otherwise think paying out of pocket would be reasonable for.
Which arguments are those?
On the other hand healthcare providers competing on an open market with transparent pricing would presumably actually reduce costs.
(for the record I personally just want the simplest thing that's very likely to work—single payer—rather than any complicated poke-the-market-and-pray solutions, but I think that's the idea of such a measure)
Insurance companies in the US have enormous leverage over just about every other party involved in healthcare: the patients, the providers, and the pharmaceutical manufacturers. This is even more true for medications like insulin, where there isn’t much difference in efficacy between brands. In a normal market, these companies would try to compete on price. But for insulin, price continues to rise. This is because insurance companies, and their negotiators, Pharmacy Benefit Managers (aka PBMs) have a vested interest in prices rising. PBMs make their money by negotiating prices with pharma companies to secure discounted prices for insurers, and in doing so, create the insurers’ “formularies”, which are basically the list of all the medications an insurer will cover, the prices they will pay, and the conditions that must be met. PBMs get a cut of the discount they negotiate with the pharma company. If drug A has a list price of $200, and they negotiate it down to $150 for their insurance clients, they take home x% of all the savings that are made at $50 a pop.
This creates a perverse incentive however: a PBM stands to make more from a drug that costs $300 and is negotiated down to $150 than a drug that is $200 that is negotiated down to $150, even if everything else is the same. That means you are more likely to get better insurance coverage for your drug by starting high and giving deep discounts. And for drugs like insulin, where similarities between products are so small that the only place you can compete is price, how well you are covered by insurers compared to your competitors will make or break your business.
Insurance companies themselves also love drugs with high costs that are then discounted deeply, because when they charge a patient coinsurance, it’s based on the list price, and not the price the insurer is paying. So even though they’ve negotiated the price of insulin down by over 50% with the pharma company, they are still going to charge you y% based on the full price. So if they continue to get insulin from manufacturers for $Y per unit every year, they continue to charge you 20% of a cost that continues to rise further and further away from $Y, meaning they are actually paying less and less as prices rise. They will claim to be using the reduced costs to lower premiums, but if reduced costs are only the result of increased costs for the sick, then all we’ve done is create an insurance system where the sick are subsidizing the healthy, which is entirely backwards. So now we have a system where manufacturers raise prices year after year, only to also give ever increasing discounts to insurance companies and PBMs, in hopes that it actually increases the number of patients who can afford their products (i.e. those with decent insurance). But those left holding the bag are the individuals without insurance or those with high deductible plans (which are becoming increasingly common).
It’s also important to note exactly how much power these middlemen have. It’s a common narrative that Big Pharma is able to get away with bad practices because of their power. But in reality, only a single pharmaceutical company is in the Fortune 50, and none of the insulin makers are. In contrast, 80% of the PBM market is controlled by 3 companies, 2 of which are Fortune 50, and the third is a subsidiary of United Health, which is an insurer and is also Fortune 50. In fact, 10 of the Fortune 50 companies are middlemen (insurers, PBMs, or drug distributors) in the healthcare industry.
Basically, discounting and rebates have ironically been a big driver behind increasing healthcare costs. They serve primarily to reduce insurers costs but they don’t pass those benefits to consumers, and have actually created a system that rewards high-cost healthcare.
The wider the gap between costs for insurers to pay for operation A vs for you to pay for operation A, the more value you get as a consumer get from having insurance which means the insurance company can earn more profit.
Dumb example. If it costs you a billion dollars and the insurance company a million dollars. The insurance company can comfortably charge you a premium that protects you from the billion dollar risk instead of the million dollar risk.
I would assume that, if rates were equal for both parties, insurance premiums would go up and insurance profitability would go down. If insurance profitability goes down, suddenly the insurance company is incentivized to decrease the costs of healthcare for everyone.
Right now the insurance company has the incentive to INCREASE the generic cost of healthcare and decrease for them only.
I am not an expert here.
I do like the idea though.
How about taxing suppliers on the published rate, rather than what they actually get paid? That might stop them being quite as egregious. If they charge an uninsured person more for an equivalent procedure, their tax bill will suddenly go up.
On top of this, medical providers must disclose the full cost structure of any non-emergency service up front and get my initials, just like auto mechanics. Emergency services should be strongly regulated.
The goal here is to have price transparency where it matters: with the patient, and to prevent insurance from corrupting the market.
Abusive medical consolidation like we have in the Bay Area won’t happen, since there would be no benefit for providers to merge to improve their insurance contracts.
As evidence that this could work, look at dentistry. Every dental provider I have ever encountered can tell you, in advance, exactly what they will charge. The prices are not insane the way non-dental medical prices are. And there are no surprise bills in dentistry.
I've done it for a few childbirths with midwives and I've done it many times for dentists.
I think this used to be standard, and may relate to that whole annoyance about you being responsible for whatever charges aren't covered. When you give your insurance info to the medical provider, you're not changing who ultimately pays. The medical provider is simply offering two things: they will handle the paperwork and they will loan you the cost of the treatment until the insurance claim is processed.
Neither of which is the kind of medicine that is so badly corrupted by insurance. Try doing it for a routine non-elective procedure at almost any major hospital as you’ll have a rather different experience.
Flat pricing for all is possible and workable under single-payer.
Insurers would still have hospitals they deem to be good enough and cheap enough
It would just mean that the cheap enough part isn’t a special deal for them specifically.
I am not an expert in this area.
At the least, healthcare companies could reduce a huge amount of labor tied up in billing and insurance could do the same for labor tied up in fighting claims
In the context of healthcare, using the current Medicare system as a proxy. Yes, it mostly works. CMS sets prices, generally based on what things should cost with a reasonable margin, and in general Medicare patients are receiving quality care.
Beyond that I don’t have much knowledge. I’m sure you’re referencing some examples of fixed corn prices and how it resulted in shortages or something like that. Which may be valid.
However, I think you could get creative and build some pricing models that were much more effective than a fixed price. Or, the minimum government involved way, would be to simply mandate that payors of all types are billed and pay the same amount for same services. Then the market is responsible for compliance.
Either way, the way to get ahold of healthcare is on price. The only reason Medicare for all has any legs is because Medicare is known for controlling price. But the downside is government becoming the administrator. I’m just saying there’s other ways to focus on price and the government could help through legislation.
The second step being setting caps on what health care providers can charge to those who are uninsured, or for which a particular insurer won't cover.
Instead of some ridiculous number that no one actually pays, they should only be able to charge the uninsured a maximum which is the average of what they actually receive.
If they receive, on average, $850 for an MRI then that should be the most they are legally allowed to charge someone who is uninsured. Clearly it's still profitable for them to do so at this price point, and it doesn't bankrupt the individual.
Yelp reviews for cardiologists, I can see it now: "Well, I'm still alive, so that's a plus, but he told me very rudly to cut down on salt! One star!"
The follow up with my doctor during weekday hours was $70.
My insurance covered only $2800 of the $11,800 (what they considered reasonable). I have a $7900 deductible.
Since they were out-of-network, the hospital could have billed me for the entire amount (balance billing).
Happily they reduced the charge to $1000.00
In the end you're happy to pay $1000 for a 6 hour stay...
Anywhere else in the world if they tried asking $1000 for that they'd get laughed out of the room, $11,800? Heads would roll.
My care included a tetanus shot, intravenous liquids and antibiotics.
So yes, I considered the $1000 reasonable.
The ER doctor and radiologist were in-network so I paid the insurance negotiated price.
All-in-all, the dog bite cost me $5000. The ambulance was $1800.
For that money you can get a week's care at a premium private hospital in Europe.
An emergency ambulance costs 100 euro.
I think America has been with an extortionate health care system for so long you guys are starting to consider it 'reasonable'
It isn't.
Let me put it another way. You can fly from America to Europe three times for $1800.
I want a single payer system.
What is needed is real competition in the health care sector - because at the moment the whole thing in America is a coalition/monopoly between insurance, pharma and health care companies with the sole intent of giving you no choice but to pay and say thank you.
The supposed evil sole individual human you postulate as the source of dire evil is not the problem usually, rather the evil collective corporation or other organization calls the shots when we see these sorts of industry wide systematic abuses.
Also, emergency last minute round trip flights to Europe are absolutely not $600 as you claim.
Also no wonder healthcare is so expensive in the US - you're actually arguing for it...
https://www.google.com/flights?lite=0#flt=/m/02_286./m/056_y...
The fact that you're paying 100 Euro for the trip means is subsidized. Which is great, and it should be, but don't pretend 100 Euro is a reasonable price if you're actually paying for it.
Using an average wage in the US to be double of Europe I'd say $200 for an ambulance ride in the US is a reasonable price.
Also an ambulance ride is like 20-30mins tops and within a day there can easily be 4-5 calls in a larger city - that's more than enough to be profitable.
The omission of things like liability insurance is curious, as well.
(And they are all employed by the state [NHS], the state self-insures for liability, just like it self-insures for the ambulance’s car insurance.)
For a fun little exercise, look up the average salary of an EMT.
When I did it on the side, six years ago, starting salary was $9.60/hr. (Thankfully I was doing it for experience, not a living).
You also seem to be arguing that Europe healthcare is cheaper and therefore better, even though it obviously is not that simple (I'm sure you know it isn't that simple. That's just how your reply comes across). For example, if I get cancer I would much rather be in the United States, despite the problems with their health care system, simply because I have a higher chance of living.
From your source: "Around 40% of cancer cases could be prevented by reducing exposure to cancer risk factors including diet, nutrition and physical activity".
Americans live a lifestyle (fast food, less walking) that leads to a much higher risk of cancer than Europeans, the difference in mortality rate is mostly explained by this.
Another way of thinking about this, looking at your data, do you really think Australia has the worst hospitals in the world because they have the highest cancer rate?
Under ACA Bronze, the worst plan, his copay should have been 40%.
Is it your assertion that $7,900 is 40% of $11,800?
A minimum value ACA plan must have > 60% AV and cover the essential health benefits. The coinsurance % is irrelevant so long as it meets those requirements.
Small and medium size practices have very few guarantees about how much they will get reimbursed for a procedure and the patient has no idea how much they will pay. It's truly insane.
Is anyone honestly trying to solve those problems right now?
This is not true.
"There's a requirement to share how much a consumer needs to pay before procedures are done"
This is not true.
If I go in for a procedure at a medium sized specialist clinic they are going to take the fee schedule for this CPT, discount by my 20% expected contribution (or whatever), and then hope that the insurer pays them > 50% of the remainder.
A lot of the time my insurer will, but not always. Bigger systems negotiate their own fees and many doctors at larger clinics only track RVUs for each procedure (specifically because the clinics realize that paying based on insurance payout isn't fair or scalable, in that way RVU allocations act as a pool). But overall it's not a transparent system for the majority of people working within in.
Also, it is true that thier is a requirement for estimates. Granted, insurance companies can turn down procedures - but like I said, if it's a competent diagnosis than it works out.
But you can just ignore all the words in my post to be dramatic, that's fine.
I recently visited an Emergency Room and the whole process behind is really obscure.
Like for example, I got a bill from the health care provider for an owed amount and one letter from the insurance company saying that I owed the healthcare provider another different amount. They are not even close.
The whole experience in the ER was pretty fast and high quality but I feel they did a bunch of extra blood work and stuff just for the sake of getting more money out of the insurance and not necessarily because it was needed.
The way I see it the healthcare system in the US is just designed to squeeze as much as possible from the carriers and viceversa but without thinking too much who is the actual liable party which happens to be the sick individual.
I think this is how we ended up with a super expensive healthcare system that bankrupts people. All parties involved (insurance carriers, healthcare providers, healthcare product suppliers, pharmaceutical companies, doctors) think that the opposing party in any transaction is swimming in money so they optimize for squeezing the shit out of the other. That’s how you end up with ridiculous bill items like $1500 dollars for a simple fluids IV.
I'm not entirely sure if it would have the intended effect of reducing costs, but it would definitely add more transparency.
OODA Health already has some major partnerships/investments from providers and payers. https://www.ooda-health.com/
Lumedic was acquired last year by Providence St. Joseph, a large hospital system. https://lumedic.io/
The indirect harm would be that by spending effort on something ineffective it may make it harder to do things that would be effective, by taking some of the heat off politicians on the health care cost issue.
But this same administration is currently arguing in Federal court that the entire ACA is invalid, which means that they are also arguing that this new proposal has no legal basis.
[1] https://www.nytimes.com/2019/07/29/health/hospital-rates-ins...
How to fix it: 1. Single payer - hard to maintain equality without it, insurers are not incentivized to lower healthcare trend due to max MLR rules 2. High OOP plans for all - force consumerism, sliding scale of ded/oopm based on income so poor are inherently subsidized more than rich 3. Easier path to becoming MD - more docs, more competition 4. Higher standards for maintaining license to practice medicine - more pressure to provide high quality care 5. Transparent prices - ability to shop for healthcare like any other good, prices will naturally hit an equilibrium due to consumerism and increased competition 6. Add a steerage layer to the system for all - call med-help line or go to web/app for care - type in symptoms, it gives you options with distance/prices etc to allow people to make more informed/economical decisions 7. Better Interoperability in EHRs - easily share medical records with a new provider, reduce duplicative care and waste
Just these items would help bring trend back in line with CPI. I like this solution because everyone gives a little - providers and consumers and the insurers and brokers give a lot (but eliminating their costs alone would be a boon). The biggest risk would be the ability of a public entity to implement and enforce such a system and to keep incentives high for providers and researchers
The sad part about all this is that the level of healthcare pricing transparency we all need/want must come down from the top. Are there any startups looking at this problem?