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Sorry, but I'm not sure I understand. I was under the impression that different doctors could already charge different rates for the same procedures. Insurance

by epmaybe 10y ago

Sorry, but I'm not sure I understand. I was under the impression that different doctors could already charge different rates for the same procedures. Insurance companies could just refuse to reimburse after a certain percentage, though.

phkahler 10y ago
The problem is that a given provider (doctor or hospital) charges different rate to patients for the same service (procedure). Now lets not confuse what the patient pays with what the provider receives because insurance can be involved. the thing is the insurance companies "negotiate" lower rates in addition to paying their portion of the bill. Say two people get their appendix out and the hospital bill is about 15K. One person is uninsured, so they get a bill for the full amount. The other is insured, so their insurance company gets a bill for 15K. The insurance company has an existing agreement with the hospital and says "We're only going to pay 12K" and that's what the hospital gets. Then they pass on the 30 percent of 12K to the patient and get that. This is seen as a bonus the insurance companies provide - negotiating better prices - 12K vs 15K. But what's really happening is the hospital is going to try to get 3K more from the uninsured guy. My argument (how I think it should be) is that the hospital has to demand the same payment from everyone for that procedure - you will be responsible for whatever portion your insurance company doesn't pay, which is full price for the uninsured. Now the other hospital across town is free to offer the same procedure for 13K or 8K or 25K - whatever they think they can get, but they have to charge that price to all patients. This promotes competition between providers AND insurance companies and it will result in lower prices for both.
- epmaybe 9y ago
  So how granular can the price be? Say you need stents for your coronary artery disease. Do you price at the number of stents? The number of catheters used? Just a flat rate for a procedure, regardless of the complexity?

by epmaybe 10y ago

phkahler 10y ago

The problem is that a given provider (doctor or hospital) charges different rate to patients for the same service (procedure). Now lets not confuse what the patient pays with what the provider receives because insurance can be involved. the thing is the insurance companies "negotiate" lower rates in addition to paying their portion of the bill. Say two people get their appendix out and the hospital bill is about 15K. One person is uninsured, so they get a bill for the full amount. The other is insured, so their insurance company gets a bill for 15K. The insurance company has an existing agreement with the hospital and says "We're only going to pay 12K" and that's what the hospital gets. Then they pass on the 30 percent of 12K to the patient and get that. This is seen as a bonus the insurance companies provide - negotiating better prices - 12K vs 15K. But what's really happening is the hospital is going to try to get 3K more from the uninsured guy. My argument (how I think it should be) is that the hospital has to demand the same payment from everyone for that procedure - you will be responsible for whatever portion your insurance company doesn't pay, which is full price for the uninsured. Now the other hospital across town is free to offer the same procedure for 13K or 8K or 25K - whatever they think they can get, but they have to charge that price to all patients. This promotes competition between providers AND insurance companies and it will result in lower prices for both.

epmaybe 9y ago
So how granular can the price be? Say you need stents for your coronary artery disease. Do you price at the number of stents? The number of catheters used? Just a flat rate for a procedure, regardless of the complexity?