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> As long as we have a system where the prices for goods and services come as a complete surprise to everybody, it is impossible to have a working "market" for

by Ntrails 10y ago

> As long as we have a system where the prices for goods and services come as a complete surprise to everybody, it is impossible to have a working "market" for insurance against risk. Bearing in mind I'm English, so there's risk of ignorance here... My understanding is that Insurance companies have agreed pricing deals with providers? That was the point of restricting access to certain providers etc within schemes - so that they could keep users in a relatively controlled pricing system. Realistically though - pricing needs to be agreed at a national level and then have all providers/insurers included. Of course, this prevents strategies like vertical integration but frankly I don't see that as a great loss.

refurb 10y ago
You are correct. Payers (insurance companies) and providers enter into contracts that lay out costs. It may as simple as "I'll pay you 30% of your chargemaster rates" (these are the crazy inflated list prices for the hospital) or they can anchor to Medicare rates - "I'll pay you 130% of what Medicare pays". That's why you end up with preferred providers and in-network/out-of-network providers. Where things get interesting is that rates are often dependent upon negotiating power. If you're a big insurer and you can push a lot of volume to a provider, you have more power to push reimbursement lower. If you're a provider in an area where they are lots of other providers, you lose leverage vs. being the only provider in a semi-rural area.
CWuestefeld 10y ago
pricing needs to be agreed at a national level The USA is a big country, with vastly different demographics across it. Medical provider costs (especially wages) are going to be vastly higher in some locales than others. Also, the risks in some areas (complications due to pneumonia, for example) are going to vary by region. So it can't really be a single national list.

by Ntrails 10y ago

refurb 10y ago

You are correct. Payers (insurance companies) and providers enter into contracts that lay out costs. It may as simple as "I'll pay you 30% of your chargemaster rates" (these are the crazy inflated list prices for the hospital) or they can anchor to Medicare rates - "I'll pay you 130% of what Medicare pays". That's why you end up with preferred providers and in-network/out-of-network providers. Where things get interesting is that rates are often dependent upon negotiating power. If you're a big insurer and you can push a lot of volume to a provider, you have more power to push reimbursement lower. If you're a provider in an area where they are lots of other providers, you lose leverage vs. being the only provider in a semi-rural area.

CWuestefeld 10y ago

pricing needs to be agreed at a national level The USA is a big country, with vastly different demographics across it. Medical provider costs (especially wages) are going to be vastly higher in some locales than others. Also, the risks in some areas (complications due to pneumonia, for example) are going to vary by region. So it can't really be a single national list.