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"where Medicare will set payouts below cost." I think the data on what hospitals, insurance companies, and drug companies call the "cost" shows it's over-infla

"where Medicare will set payouts below cost." I think the data on what hospitals, insurance companies, and drug companies call the "cost" shows it's over-inflated BS. If they're lying and price-gouging, then whoever is charging them should demand payouts below their "costs" if they can't force them to do a reasonable profit above actual costs. Quick article off the top of Google with examples of the "costs" at hospitals: https://www.foxbusiness.com/features/outrageous-e-r-hospital-charges-what-to-do https://www.foxbusiness.com/features/outrageous-e-r-hospital...

AnthonyMouse 7y ago
The list prices for US medicine are completely fictitious. It doesn't cost them $30 for an aspirin, what it costs them is millions of dollars to staff and supply an emergency room with the capacity to handle a bus accident even though most of the time there isn't a bus accident. Which they then try to recover with higher margins on ordinary commodities when they can. It's certainly the case that some of the underlying costs are higher than they ought to be. The problem is you can't fix that by lowering payouts across the board -- if certain medical devices are too expensive because of a lack of competition, the hospital can't lower the price the other company charges (or they'd have done it regardless). Nor can they reduce regulatory compliance costs when they still have to comply with the same regulations. So they have to cut something else instead. Which isn't what you want when the something else was a cost effective method of improving patient outcomes. There isn't a "make it cost less" button that can magically lower prices across the board. Some things already have reasonable margins. To reduce costs without killing people you have to specifically target the waste (and its causes, which in many cases are high compliance costs, barriers to entry and a lack of competition).

AnthonyMouse 7y ago

The list prices for US medicine are completely fictitious. It doesn't cost them $30 for an aspirin, what it costs them is millions of dollars to staff and supply an emergency room with the capacity to handle a bus accident even though most of the time there isn't a bus accident. Which they then try to recover with higher margins on ordinary commodities when they can. It's certainly the case that some of the underlying costs are higher than they ought to be. The problem is you can't fix that by lowering payouts across the board -- if certain medical devices are too expensive because of a lack of competition, the hospital can't lower the price the other company charges (or they'd have done it regardless). Nor can they reduce regulatory compliance costs when they still have to comply with the same regulations. So they have to cut something else instead. Which isn't what you want when the something else was a cost effective method of improving patient outcomes. There isn't a "make it cost less" button that can magically lower prices across the board. Some things already have reasonable margins. To reduce costs without killing people you have to specifically target the waste (and its causes, which in many cases are high compliance costs, barriers to entry and a lack of competition).