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For better or for worse, everything in America is a business -- healthcare is no exception. Helpful to keep in mind when you think about potential improvements

by nugget 9y ago

For better or for worse, everything in America is a business -- healthcare is no exception. Helpful to keep in mind when you think about potential improvements or solutions.

lkrubner 9y ago
"everything in America is a business" If by "business" you mean a public/private hybrid in which profits are privatized while losses are socialized, then you are correct, in so far as health care goes. And that seems to be the model that is now being adopted in more and more areas of economic activity.
- wyager 9y ago
  I don’t like that wording because it implies that hospitals somehow benefit from government involvement; in reality, it just sucks for everyone. In general, I agree - very few medical institutions in the US actually get to be private. I will say that truly private medicine is, in my reasonably broad experience, excellent. I use a private subscription-only medical service in the US which is excellent (and procedures are generally cheaper than they would be in a public hospital, whether I’m paying with insurance or out of pocket), and my experiences with private medicine in SE Asia and Mexico have been excellent (and affordable) as well (to a greater degree than can be explained by labor cost differences).
  - jdminhbg 9y ago
    > it implies that hospitals somehow benefit from government involvement But they very clearly do. A huge proportion of their income comes from government sources (Medicare/Medicaid/VA), they are subsidized by tax exemption for health spending, and government grants them the power to deny competitive entrants into their markets via "certificates of need."
    - chimeracoder 9y ago
      > But they very clearly do. A huge proportion of their income comes from government sources (Medicare/Medicaid/VA) Hospitals lose money on Medicare and Medicaid patients on the margin. They have to overcharge private insurers to make up the difference. It's so bad that Medicare has not one but multiple programs to compensate hospitals that don't see enough private patients to make up the difference, because otherwise they wouldn't be able to sustain themselves on Medicare reimbursement rates. I don't know why you're even mentioning the VA; it's not relevant here at all.
      - jdminhbg 9y ago
        Hospitals are obviously capable of accounting such that Medicare patients are money-losers on the margin, but they keep taking them for some reason. > I don't know why you're even mentioning the VA; it's not relevant here at all. Normal non-VA hospitals accept VA patients and are reimbursed for them.
        chimeracoder 9y ago
        > Hospitals are obviously capable of accounting such that Medicare patients are money-losers on the margin, but they keep taking them for some reason. You seem to be under the impression that there's some deception going on here. There's not, and it's pretty plainly evident. Medicare's reimbursement rates are below COGS. Hospitals control neither of those two things (Medicare sets rates by fiat, and if hospitals could lower COGS by paying vendors less, they would). As for why they keep taking them - they oftentimes have no choice, legally. Though, incidentally, in recent years, we've started to see hospitals find more creative ways to close their doors to Medicare patients for this exact reason. > Normal non-VA hospitals accept VA patients and are reimbursed for them. The number of VA patients hospitals see is negligible. The amount of revenue they receive, proportional to the number of patients they see, is even less.
WalterSear 9y ago
You've identified the root cause.

by nugget 9y ago

For better or for worse, everything in America is a business -- healthcare is no exception. Helpful to keep in mind when you think about potential improvements or solutions.

lkrubner 9y ago

"everything in America is a business" If by "business" you mean a public/private hybrid in which profits are privatized while losses are socialized, then you are correct, in so far as health care goes. And that seems to be the model that is now being adopted in more and more areas of economic activity.

wyager 9y ago
I don’t like that wording because it implies that hospitals somehow benefit from government involvement; in reality, it just sucks for everyone. In general, I agree - very few medical institutions in the US actually get to be private. I will say that truly private medicine is, in my reasonably broad experience, excellent. I use a private subscription-only medical service in the US which is excellent (and procedures are generally cheaper than they would be in a public hospital, whether I’m paying with insurance or out of pocket), and my experiences with private medicine in SE Asia and Mexico have been excellent (and affordable) as well (to a greater degree than can be explained by labor cost differences).
- jdminhbg 9y ago
  > it implies that hospitals somehow benefit from government involvement But they very clearly do. A huge proportion of their income comes from government sources (Medicare/Medicaid/VA), they are subsidized by tax exemption for health spending, and government grants them the power to deny competitive entrants into their markets via "certificates of need."
  - chimeracoder 9y ago
    > But they very clearly do. A huge proportion of their income comes from government sources (Medicare/Medicaid/VA) Hospitals lose money on Medicare and Medicaid patients on the margin. They have to overcharge private insurers to make up the difference. It's so bad that Medicare has not one but multiple programs to compensate hospitals that don't see enough private patients to make up the difference, because otherwise they wouldn't be able to sustain themselves on Medicare reimbursement rates. I don't know why you're even mentioning the VA; it's not relevant here at all.
    - jdminhbg 9y ago
      Hospitals are obviously capable of accounting such that Medicare patients are money-losers on the margin, but they keep taking them for some reason. > I don't know why you're even mentioning the VA; it's not relevant here at all. Normal non-VA hospitals accept VA patients and are reimbursed for them.
      - chimeracoder 9y ago
        > Hospitals are obviously capable of accounting such that Medicare patients are money-losers on the margin, but they keep taking them for some reason. You seem to be under the impression that there's some deception going on here. There's not, and it's pretty plainly evident. Medicare's reimbursement rates are below COGS. Hospitals control neither of those two things (Medicare sets rates by fiat, and if hospitals could lower COGS by paying vendors less, they would). As for why they keep taking them - they oftentimes have no choice, legally. Though, incidentally, in recent years, we've started to see hospitals find more creative ways to close their doors to Medicare patients for this exact reason. > Normal non-VA hospitals accept VA patients and are reimbursed for them. The number of VA patients hospitals see is negligible. The amount of revenue they receive, proportional to the number of patients they see, is even less.

WalterSear 9y ago

You've identified the root cause.