5 ms·

Hospitals are required to treat the uninsured, but the government doesn't actually compensate them for that. So they jack up everyone else's bills in the hopes

by wmil 8y ago

Hospitals are required to treat the uninsured, but the government doesn't actually compensate them for that. So they jack up everyone else's bills in the hopes that enough people will pay that they'll make a profit. Insurance companies will usually push back, so (sometimes partially) uninsured people with decent credit hit with huge charges.

josho 8y ago
> So they jack up everyone else’s bills No. That’s the justification given so that people get angry at the wrong thing. Hospitals charge this because they CAN. They are doing what businesses do and that is maximizing their profit. Don’t get angry at the uninsured get angry at the politicians for enabling a broken system.
- vonmoltke 8y ago
  > Hospitals charge this because they CAN. They are doing what businesses do and that is maximizing their profit. Including all the non-profit hospitals? What's their motivation?
  - ceejayoz 8y ago
    Fancy new buildings, giant endowments, amenities for staff, raising administrator salaries "to retain premium talent", etc. "Non-profit" doesn't mean "can't make a profit".
    - chimeracoder 8y ago
      > Fancy new buildings Rarely paid for with reimbursement revenues. > giant endowments Definitely not paid for with reimbursement revenues. > amenities for staff Try cutting these, and see how quickly 1199 SEIU comes down on you. > raising administrator salaries "to retain premium talent", etc. Even if you assumed that there were no relationship between the wages paid and the quality of work performed (there is), these are nowhere near big enough to account for the difference. They're also not that far out of line with other countries, either: 25% in the US, compared to 20% in the Netherlands, for example. But more so than that: they're SG&A expenses, which are further down the balance sheet than the reimbursement revenues. And yet, hospitals actually lose money on the top line for Medicare patients (who represent about 40% of the market). That's the real reason reimbursement rates are raised for private insurers - the private insurers are required (by law) to pay more, and they need to subsidize the sub-COGS reimbursements from the public insurers (Medicare, and to a lesser extent Medicaid). So no, none of the things you listed actually explain the reason hospitals charge private insurers the rates they do.
  - josho 8y ago
    People misunderstand non-profits. There is nothing stopping you or I from starting a non-profit and soliciting donors then paying yourself a $1M salary. Non-profit simply means any surplus of revenue is spent. So, the more revenue generated by a non-profit's paying customers means they get to funnel that to their core mission (likely research, possibly those that can't pay, or cynically more salary for those running the show).
    - eximius 8y ago
      http://lmgtfy.com/?q=nonprofit+reasonable+compensation http://lmgtfy.com/?q=nonprofit+reasonable+compensation That is patently false. Basically every part of what you said is false. There are rules that prevent that and that is not what a non-profit means.
- chimeracoder 8y ago
  > No. That’s the justification given so that people get angry at the wrong thing. Hospitals charge this because they CAN. They are doing what businesses do and that is maximizing their profit. Hospitals make very low profit margins; hospitals have been hemorrhaging money and either being bought out by hospital systems or insurers, or even shutting their doors entirely. In any case, it's not uninsured patients that cost the hospital money; there aren't enough of them to make a difference at most hospitals. The patients that cost hospitals money are Medicare patients, because Medicare reimburses rates that are below COGS, and private insurers are required by law to reimburse more. In other words, yes, it's the politicians that enable a broken system, but no, it's not the uninsured patients who are at fault, and it's not "profit-maximizing businesses" that are at fault either. Hospitals don't want this convoluted billing system any more than patients do, but it's literally forced on them as a result of accepting Medicare patients.
jclay 8y ago
For this reason, I'm beginning to think that we do in fact have "universal" healthcare in that anyone can turn up to the hospital and be treated despite their income. For those who don't pay (or don't have insurance) the hospital spreads that cost out over their other patients and likely marks up the price to insure against non-payment. So we end up with an unregulated mess where any one hospital has to insure themselves (in the form of passing on costs) against the percentage of patients that will simply never pay. Given that this is going on, why not just switch to a single payer system and spread this out over a much larger population rather than each hospital trying to insure against it?
- ceejayoz 8y ago
  We have universal care for emergency treatment, and only to the point of stabilization, and in a manner that basically combines all the worst aspects of various systems. You can't get months worth of chemo or physical therapy or dermatological consults or whatnot at an ER.
vkou 8y ago
> Hospitals are required to treat the uninsured, but the government doesn't actually compensate them for that. What percentage of hospital budgets is lost to this? If it's anything less then 95%, I don't see how the assistance of an out-of-network nurse could possibly cost $5,000.
6t6t6t6 8y ago
> Hospitals are required to treat the uninsured, but the government doesn't actually compensate them for that. How many patiens are uninsured? 10%? 20%? This still does not explain how the hospital can bill $5k for one hour of a nurse that may be making herself $50 per hour at most.
lojack 8y ago
> Hospitals are required to treat the uninsured This is actually only a half truth. Emergency rooms are required to treat patients who need emergency care. They don't need to fix all ailments. If you have cancer they can turn you away, but if your organs are failing as the result of cancer they have to treat you. If you need a heart surgery they can turn you away, but if you're having a heart attack they need to treat you. For the most part, treatment is pretty much just making sure you're stable and can leave the hospital without immediately dying. This only applies to emergency rooms as well. Where you go to get surgeries is usually not the same place you go to treat an emergency condition. It might be affiliated with the same hospital, and might be attached to the emergency room, but it isn't itself an emergency room.

by wmil 8y ago

josho 8y ago

> So they jack up everyone else’s bills No. That’s the justification given so that people get angry at the wrong thing. Hospitals charge this because they CAN. They are doing what businesses do and that is maximizing their profit. Don’t get angry at the uninsured get angry at the politicians for enabling a broken system.

vonmoltke 8y ago
> Hospitals charge this because they CAN. They are doing what businesses do and that is maximizing their profit. Including all the non-profit hospitals? What's their motivation?
- ceejayoz 8y ago
  Fancy new buildings, giant endowments, amenities for staff, raising administrator salaries "to retain premium talent", etc. "Non-profit" doesn't mean "can't make a profit".
  - chimeracoder 8y ago
    > Fancy new buildings Rarely paid for with reimbursement revenues. > giant endowments Definitely not paid for with reimbursement revenues. > amenities for staff Try cutting these, and see how quickly 1199 SEIU comes down on you. > raising administrator salaries "to retain premium talent", etc. Even if you assumed that there were no relationship between the wages paid and the quality of work performed (there is), these are nowhere near big enough to account for the difference. They're also not that far out of line with other countries, either: 25% in the US, compared to 20% in the Netherlands, for example. But more so than that: they're SG&A expenses, which are further down the balance sheet than the reimbursement revenues. And yet, hospitals actually lose money on the top line for Medicare patients (who represent about 40% of the market). That's the real reason reimbursement rates are raised for private insurers - the private insurers are required (by law) to pay more, and they need to subsidize the sub-COGS reimbursements from the public insurers (Medicare, and to a lesser extent Medicaid). So no, none of the things you listed actually explain the reason hospitals charge private insurers the rates they do.
- josho 8y ago
  People misunderstand non-profits. There is nothing stopping you or I from starting a non-profit and soliciting donors then paying yourself a $1M salary. Non-profit simply means any surplus of revenue is spent. So, the more revenue generated by a non-profit's paying customers means they get to funnel that to their core mission (likely research, possibly those that can't pay, or cynically more salary for those running the show).
  - eximius 8y ago
    http://lmgtfy.com/?q=nonprofit+reasonable+compensation http://lmgtfy.com/?q=nonprofit+reasonable+compensation That is patently false. Basically every part of what you said is false. There are rules that prevent that and that is not what a non-profit means.
chimeracoder 8y ago
> No. That’s the justification given so that people get angry at the wrong thing. Hospitals charge this because they CAN. They are doing what businesses do and that is maximizing their profit. Hospitals make very low profit margins; hospitals have been hemorrhaging money and either being bought out by hospital systems or insurers, or even shutting their doors entirely. In any case, it's not uninsured patients that cost the hospital money; there aren't enough of them to make a difference at most hospitals. The patients that cost hospitals money are Medicare patients, because Medicare reimburses rates that are below COGS, and private insurers are required by law to reimburse more. In other words, yes, it's the politicians that enable a broken system, but no, it's not the uninsured patients who are at fault, and it's not "profit-maximizing businesses" that are at fault either. Hospitals don't want this convoluted billing system any more than patients do, but it's literally forced on them as a result of accepting Medicare patients.

jclay 8y ago

For this reason, I'm beginning to think that we do in fact have "universal" healthcare in that anyone can turn up to the hospital and be treated despite their income. For those who don't pay (or don't have insurance) the hospital spreads that cost out over their other patients and likely marks up the price to insure against non-payment. So we end up with an unregulated mess where any one hospital has to insure themselves (in the form of passing on costs) against the percentage of patients that will simply never pay. Given that this is going on, why not just switch to a single payer system and spread this out over a much larger population rather than each hospital trying to insure against it?

ceejayoz 8y ago
We have universal care for emergency treatment, and only to the point of stabilization, and in a manner that basically combines all the worst aspects of various systems. You can't get months worth of chemo or physical therapy or dermatological consults or whatnot at an ER.

vkou 8y ago

> Hospitals are required to treat the uninsured, but the government doesn't actually compensate them for that. What percentage of hospital budgets is lost to this? If it's anything less then 95%, I don't see how the assistance of an out-of-network nurse could possibly cost $5,000.

6t6t6t6 8y ago

> Hospitals are required to treat the uninsured, but the government doesn't actually compensate them for that. How many patiens are uninsured? 10%? 20%? This still does not explain how the hospital can bill $5k for one hour of a nurse that may be making herself $50 per hour at most.

lojack 8y ago

> Hospitals are required to treat the uninsured This is actually only a half truth. Emergency rooms are required to treat patients who need emergency care. They don't need to fix all ailments. If you have cancer they can turn you away, but if your organs are failing as the result of cancer they have to treat you. If you need a heart surgery they can turn you away, but if you're having a heart attack they need to treat you. For the most part, treatment is pretty much just making sure you're stable and can leave the hospital without immediately dying. This only applies to emergency rooms as well. Where you go to get surgeries is usually not the same place you go to treat an emergency condition. It might be affiliated with the same hospital, and might be attached to the emergency room, but it isn't itself an emergency room.