5 ms·

I see this argument in many places. Who dictates the cost of providing services? Why are these costs so high? My pet theory is the insane costs (money, time,

by tcbawo 10y ago

I see this argument in many places. Who dictates the cost of providing services? Why are these costs so high? My pet theory is the insane costs (money, time, high selectivity) of medical training and office overhead. Medical professionals feel entitled to $$ for their risk. Perhaps older specialists who didn't have these costs are spoiled. I would love to see how tuition amnesty would affect price elasticity.

refurb 10y ago
The costs you typically see quoted are from the chargemaster that hospitals are required to keep. That's not what's actually paid, but rather the starting point for a negotiation (or what you are billed if uninsured). One reason for the inflated chargemaster prices (e.g. $100 for a tylenol) is that payers (Medicare is a big one) simply negotiate by saying "I'll pay you 50% of your chargemaster". Then when the hospital updates their chargemaster, they tack on another 20% and the payer comes back and says "I'll pay you 25% of your chargemaster". It's a vicious cycle where the chargemaster prices have no bearing on reality.
- tcbawo 10y ago
  Perhaps we need to borrow a tactic from countries fighting currency inflation and introduce an alternate 'chargemaster' with more realistic (ideally public) prices.
tclAmockingbird 10y ago
Physician and staff salaries (outside of staff to manage insurance companies) are not what drive increasing medical costs. Most physicians don't make that much money, all things considered. An insurer last month for a relative's pediatrics practice announced that they were having difficulties with their accounting system and so they would only be making a half payment on their outstanding AR (and naturally, they announced this problem right before the payment was due to be sent). My relative's practice has no practical recourse other than to wait for the full payment to be sent. This is not an uncommon occurrence. My relative's practice is regrettably not able to use the same argument for their bills that are due. It costs my relative money to administer vaccines in their peds practice, i.e., most insurances pay less than what it costs to purchase and give the vaccine. My relative continues to offer many vaccines at a loss because they believe vaccines are one of medicine's greatest gifts and because they have good success in persuading unsure parents to vaccinate their children. From a pure numbers perspective, it is a mistake. Insurance companies not paying physicians on time as agreed drives up costs. Insurance (Medicaid included) not paying what it actually costs for a procedure drives up costs. Insurance companies arguing against the best course of treatment for a patient, requiring additional staff to be hired in order to deal with the pushback, drives up costs.
- tcbawo 10y ago
  When you say insurance isn't paying what it costs for a vaccination, what determines the cost of the procedure? Is it the vaccine itself? Office overhead? Liability insurance? I know pediatricians are generally overworked and underpaid. But, it seems we desperately need innovation on the cost side. Maybe we need to drop kiosks into pharmacies that can read biometric markers, get doctor approval, and deliver vaccines.
  - chimeracoder 10y ago
    > When you say insurance isn't paying what it costs for a vaccination, what determines the cost of the procedure? Is it the vaccine itself? The vaccine itself. Medicare and Medicaid are notorious for this, as they have no mandate to cover marginal costs of supplies (and they have the ability to force providers to accept less than that). So, depending on the practice, those providers could very well be losing money on every Medicare patient they treat before they even have a chance to think about paying for their office space, paying their staff, etc.
    - tclAmockingbird 10y ago
      Yes, in my relative's case (being peds) it is Medicaid. It's a really frustrating thing, as a physician you want to treat everyone, but accepting Medicare and Medicaid can really hurt the operation of your business.
    - tcbawo 10y ago
      Do you have any idea of the distribution of vacine prices between providers (ie hospital networks vs private practices)? Is there a large discrepancy, or do hospitals use this as a 'loss leader'?
- gnopgnip 10y ago
  Practicing physicians are the most highly paid workers in America. In what way do they not make that much money?

by tcbawo 10y ago

refurb 10y ago

The costs you typically see quoted are from the chargemaster that hospitals are required to keep. That's not what's actually paid, but rather the starting point for a negotiation (or what you are billed if uninsured). One reason for the inflated chargemaster prices (e.g. $100 for a tylenol) is that payers (Medicare is a big one) simply negotiate by saying "I'll pay you 50% of your chargemaster". Then when the hospital updates their chargemaster, they tack on another 20% and the payer comes back and says "I'll pay you 25% of your chargemaster". It's a vicious cycle where the chargemaster prices have no bearing on reality.

tcbawo 10y ago
Perhaps we need to borrow a tactic from countries fighting currency inflation and introduce an alternate 'chargemaster' with more realistic (ideally public) prices.

tclAmockingbird 10y ago

Physician and staff salaries (outside of staff to manage insurance companies) are not what drive increasing medical costs. Most physicians don't make that much money, all things considered. An insurer last month for a relative's pediatrics practice announced that they were having difficulties with their accounting system and so they would only be making a half payment on their outstanding AR (and naturally, they announced this problem right before the payment was due to be sent). My relative's practice has no practical recourse other than to wait for the full payment to be sent. This is not an uncommon occurrence. My relative's practice is regrettably not able to use the same argument for their bills that are due. It costs my relative money to administer vaccines in their peds practice, i.e., most insurances pay less than what it costs to purchase and give the vaccine. My relative continues to offer many vaccines at a loss because they believe vaccines are one of medicine's greatest gifts and because they have good success in persuading unsure parents to vaccinate their children. From a pure numbers perspective, it is a mistake. Insurance companies not paying physicians on time as agreed drives up costs. Insurance (Medicaid included) not paying what it actually costs for a procedure drives up costs. Insurance companies arguing against the best course of treatment for a patient, requiring additional staff to be hired in order to deal with the pushback, drives up costs.

tcbawo 10y ago
When you say insurance isn't paying what it costs for a vaccination, what determines the cost of the procedure? Is it the vaccine itself? Office overhead? Liability insurance? I know pediatricians are generally overworked and underpaid. But, it seems we desperately need innovation on the cost side. Maybe we need to drop kiosks into pharmacies that can read biometric markers, get doctor approval, and deliver vaccines.
- chimeracoder 10y ago
  > When you say insurance isn't paying what it costs for a vaccination, what determines the cost of the procedure? Is it the vaccine itself? The vaccine itself. Medicare and Medicaid are notorious for this, as they have no mandate to cover marginal costs of supplies (and they have the ability to force providers to accept less than that). So, depending on the practice, those providers could very well be losing money on every Medicare patient they treat before they even have a chance to think about paying for their office space, paying their staff, etc.
  - tclAmockingbird 10y ago
    Yes, in my relative's case (being peds) it is Medicaid. It's a really frustrating thing, as a physician you want to treat everyone, but accepting Medicare and Medicaid can really hurt the operation of your business.
  - tcbawo 10y ago
    Do you have any idea of the distribution of vacine prices between providers (ie hospital networks vs private practices)? Is there a large discrepancy, or do hospitals use this as a 'loss leader'?
gnopgnip 10y ago
Practicing physicians are the most highly paid workers in America. In what way do they not make that much money?