We certainly need a better pricing system for healthcare, and transparency should be the top priority. That being said, hospitals and physicians need to charge enough to cover costs, including the overhead of running the business. It is just plain wrong that those who can least afford it pay the most.
Mind Blown - 8 years ago
It boggles the mind that our healthcare system can price gouge the way it does. A number of years ago my daughter was involved in an accident that was not her fault. We received the bill for her care before everything was completed legally - total cost $85,000+ for a helicopter ride, an emergency room visit and 1 day in ICU (for a broken collar bone). Once the insurance company received the bill and "negotiated" the price the final total was $16,000. Imagine if we would have had to pay for that bill out of pocket with no insurance? Even using my best negotiating skills I'm confident I wouldn't have been able to get it down to $16K. Sadly our healthcare system is a for-profit racket right now. Hopefully one day these types of questions will no longer be relevant.
Ron - 8 years ago
I do not have traditional Health Insurance. I recently needed an elective procedure and since I would be paying the bill began shopping, much the same way that you shop for a new car. Having the CPT code for the procedure it was easy to make the ask, but unlike the car dealers, the folks that provide price quotes for hospitals and surgery centers earn no commission, and generally place price shoppers as a low priority. It usually took 2-3 transfers to get to the correct person and then typically 24 hours for a call back. I have discovered that the facilities that wanted my business were the most aggressive in explaining expected costs and discounts, remarkably, for patients that could pay 50% day of surgery and the remainder within 30 days, the discount against the estimated bill was 75%.
I believe that this is significant because what I found out is that they were not the only ones with an oversized discount policy. Fully three health systems in my market offer discounts of at least 70% in my market. Is this random ?? I don't think so. But not every system got the memo, there was a single multi-facility system that only offers a 25% discount, unfortunately they are the facility closest to my home. My impression is that they still believe that the patient that is paying cash, ( may not have insurance or want to disclose their insurance) must be a charity case.
Brian Ahier - 8 years ago
Nick hit the nail squarely on the head. We need price fairness and transparency.
Mindy - 8 years ago
Personal example just days ago. I had a CT completed that, had I not had insurance and been a cash paying customer, it would have cost me $2400! Since I did have insurance, but with the beauty of Obamacare had not met my deductible yet, I had to pay the total allowable which was $808. How is someone who cannot afford insurance ever going to afford $2400? Look at the markup! Ridiculous!
James - 8 years ago
Just to clarify, when you say "cash-paying people" do you mean people who show up with a thick wad of $100 bills to negotiate before services are rendered? Or do you mean people who are (statistically) likely to be poor credit risks who expect to be extended credit without any discussion of ability to pay?
You typically do a good job of debunking poorly designed research. In this case it bugs me that you are using the term "cash" when for all practical purposes you really mean "credit" (think of the difference between the cash price and the credit price at the gas pump).
I wonder what the spread would be if you asked, "Should vendors have to offer the same credit terms to high risk borrowers as to low risk borrowers?" (By the way, how did that sub-prime mortgage thing work out?) If you want to subsidize poor people, then man up and vote for higher taxes and welfare. Don't impose irrational behavior on already tight providers!
Anonymous - 8 years ago
A more rational system of health services payment would be an even better Idea but in the meantime the individuals who are least able to bear high costs shouldn't be left in medical bankruptcy and treated least fairly. So I voted yes but have one caveat. Medicaid rates shouldn't be included as one of the insurers for calculating the lowest rate. Some of the physician rates for Medicaid are incredibly low and don't come close to offsetting costs (for example, I believe my specialty currently gets $12 for a hospital followup visit). Individuals without insurance typically have more complex medical needs and psychosocial complexities and often require more time spent to provide appropriate care. The cost to hospitals and physicians of such an approach should be tracked and adjustments to insurance rates should be made as indicated to assure that the brunt of the costs of this approach aren't simply shifted onto providers.
Nick van Terheyden - 8 years ago
Much like term limits on all politicians - forcing hospitals and health companies to accept the net discounted rate they offer to big insurers with all the buying power might also produce a price book that would allow people to comparison shop which is what we need to create price transparency
We certainly need a better pricing system for healthcare, and transparency should be the top priority. That being said, hospitals and physicians need to charge enough to cover costs, including the overhead of running the business. It is just plain wrong that those who can least afford it pay the most.
It boggles the mind that our healthcare system can price gouge the way it does. A number of years ago my daughter was involved in an accident that was not her fault. We received the bill for her care before everything was completed legally - total cost $85,000+ for a helicopter ride, an emergency room visit and 1 day in ICU (for a broken collar bone). Once the insurance company received the bill and "negotiated" the price the final total was $16,000. Imagine if we would have had to pay for that bill out of pocket with no insurance? Even using my best negotiating skills I'm confident I wouldn't have been able to get it down to $16K. Sadly our healthcare system is a for-profit racket right now. Hopefully one day these types of questions will no longer be relevant.
I do not have traditional Health Insurance. I recently needed an elective procedure and since I would be paying the bill began shopping, much the same way that you shop for a new car. Having the CPT code for the procedure it was easy to make the ask, but unlike the car dealers, the folks that provide price quotes for hospitals and surgery centers earn no commission, and generally place price shoppers as a low priority. It usually took 2-3 transfers to get to the correct person and then typically 24 hours for a call back. I have discovered that the facilities that wanted my business were the most aggressive in explaining expected costs and discounts, remarkably, for patients that could pay 50% day of surgery and the remainder within 30 days, the discount against the estimated bill was 75%.
I believe that this is significant because what I found out is that they were not the only ones with an oversized discount policy. Fully three health systems in my market offer discounts of at least 70% in my market. Is this random ?? I don't think so. But not every system got the memo, there was a single multi-facility system that only offers a 25% discount, unfortunately they are the facility closest to my home. My impression is that they still believe that the patient that is paying cash, ( may not have insurance or want to disclose their insurance) must be a charity case.
Nick hit the nail squarely on the head. We need price fairness and transparency.
Personal example just days ago. I had a CT completed that, had I not had insurance and been a cash paying customer, it would have cost me $2400! Since I did have insurance, but with the beauty of Obamacare had not met my deductible yet, I had to pay the total allowable which was $808. How is someone who cannot afford insurance ever going to afford $2400? Look at the markup! Ridiculous!
Just to clarify, when you say "cash-paying people" do you mean people who show up with a thick wad of $100 bills to negotiate before services are rendered? Or do you mean people who are (statistically) likely to be poor credit risks who expect to be extended credit without any discussion of ability to pay?
You typically do a good job of debunking poorly designed research. In this case it bugs me that you are using the term "cash" when for all practical purposes you really mean "credit" (think of the difference between the cash price and the credit price at the gas pump).
I wonder what the spread would be if you asked, "Should vendors have to offer the same credit terms to high risk borrowers as to low risk borrowers?" (By the way, how did that sub-prime mortgage thing work out?) If you want to subsidize poor people, then man up and vote for higher taxes and welfare. Don't impose irrational behavior on already tight providers!
A more rational system of health services payment would be an even better Idea but in the meantime the individuals who are least able to bear high costs shouldn't be left in medical bankruptcy and treated least fairly. So I voted yes but have one caveat. Medicaid rates shouldn't be included as one of the insurers for calculating the lowest rate. Some of the physician rates for Medicaid are incredibly low and don't come close to offsetting costs (for example, I believe my specialty currently gets $12 for a hospital followup visit). Individuals without insurance typically have more complex medical needs and psychosocial complexities and often require more time spent to provide appropriate care. The cost to hospitals and physicians of such an approach should be tracked and adjustments to insurance rates should be made as indicated to assure that the brunt of the costs of this approach aren't simply shifted onto providers.
Much like term limits on all politicians - forcing hospitals and health companies to accept the net discounted rate they offer to big insurers with all the buying power might also produce a price book that would allow people to comparison shop which is what we need to create price transparency