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> I bet making structural changes so that cost of care is more visible to patients would help a lot in the US. It would, but it would be politically infeasible

> I bet making structural changes so that cost of care is more visible to patients would help a lot in the US. It would, but it would be politically infeasible. Medicare would never let it happen, because providing price transparency in the private market would undermine the convoluted system that allows them to use private insurers to subsidize the care of Medicare patients.

triangleman 10y ago
Explain how. I thought Medicare was rife with fraud and overbilling, so that they end up subsidizing private payers.
- maxerickson 10y ago
  Medicare is about 1/6 of US healthcare spending so it obviously isn't subsidizing private payers, even if you make a ridiculous assumption like 100% of payments are fraudulent. And then in reality fraud rates seem to be quite low, at most a few percentage points of overall Medicare spending.
  - triangleman 10y ago
    What I meant by fraud, was not cases of outright fraud where someone bills Medicare for services never performed, although I'm sure that happens all the time. I meant cases like the late night commercials "call now and get a free motor scooter! Just fill out a simple form and we will bill Medicare." And more relevant are the cases where hospitals bill medicare huge amounts for long patient stays. Medicare always pays what they are billed, after all it's the government paying, they just write a check. Meanwhile if you bill an insurance company they will negotiate, argue, refuse to pay, deny coverage, etc. If you bill an uninsured person they can also just decide not to pay in favor of paying more important bills like food and shelter. So, the hospital is actually fine with this, they simply write off the unpaid amount on their taxes as a charitable expense, and increase rates, which Medicare will pay. So, as you can see, Medicare (plus tax breaks) create a situation where the government subsidizes and distorts everyone else's health care costs.

triangleman 10y ago

Explain how. I thought Medicare was rife with fraud and overbilling, so that they end up subsidizing private payers.

maxerickson 10y ago
Medicare is about 1/6 of US healthcare spending so it obviously isn't subsidizing private payers, even if you make a ridiculous assumption like 100% of payments are fraudulent. And then in reality fraud rates seem to be quite low, at most a few percentage points of overall Medicare spending.
- triangleman 10y ago
  What I meant by fraud, was not cases of outright fraud where someone bills Medicare for services never performed, although I'm sure that happens all the time. I meant cases like the late night commercials "call now and get a free motor scooter! Just fill out a simple form and we will bill Medicare." And more relevant are the cases where hospitals bill medicare huge amounts for long patient stays. Medicare always pays what they are billed, after all it's the government paying, they just write a check. Meanwhile if you bill an insurance company they will negotiate, argue, refuse to pay, deny coverage, etc. If you bill an uninsured person they can also just decide not to pay in favor of paying more important bills like food and shelter. So, the hospital is actually fine with this, they simply write off the unpaid amount on their taxes as a charitable expense, and increase rates, which Medicare will pay. So, as you can see, Medicare (plus tax breaks) create a situation where the government subsidizes and distorts everyone else's health care costs.