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Insured price $2,758, cash price $521

305 points by prostoalex 7y ago

pkaye 7y ago
My understanding is the insured patients are subsidizing all the others covered by medicare, medicaid or those uninsured.
- devoply 7y ago
  Why? Why are insurance companies not demanding cash price and reducing premiums? There should be lawsuits against hospitals, this seems like something which is generally considered highly illegal at this sort of scale... charging different customers different prices -- especially when the ones paying more are more than capable of taking hospitals to court.
  - dantheman 7y ago
    The 80/20 Rule could be one reason -- the more they spend on health care, the more they can spend on other things. https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-...
    - devoply 7y ago
      Sounds like the government needs to sue both insurance companies and hospitals for collusion to stop this.
      - kaibee 7y ago
        It's extremely unlikely that there's actual collusion. But actors acting in their selfish best interest can definitely look like collusion.
    - pkaye 7y ago
      I believe this rule came out of the ACA (Obamacare) however all the problems have existed well before that.
  - rpmisms 7y ago
    I'm a generally anti-legislation kind of person, but as long as breaking up big tech is a hot topic, why not pass a bill requiring cash prices for any not-for-profit insurance providers and co-pay networks? There's a lot of interesting competition happening in those spaces, and making not-for-profit insurance a better deal seems like a great way to get capitalism grinding at the issue of overpriced healthcare.
    - DaiPlusPlus 7y ago
      That doesn’t work for emergency care - where the patient really doesn’t have the time to go window-shopping while having a cardiac arrest. And while greater transparency is good - not everyone in the public is able - or willing - to understand a medical price-sheet and might opt for a cheaper but medically-inappropriate procedure with similar-sounding-name to the procedure they actually need.
      - tareqak 7y ago
        OK, how about mandatory cash prices for non-emergency care?
        pkaye 7y ago
        And what if that price is too high for any uninsured to afford?
        nonbel 7y ago
        Your taxes already pay for emergency care.
    - PorterDuff 7y ago
      I would prefer a system where they charge everyone the same amount. It wouldn't surprise me if the insurance companies would be in favor of that, the whole price negotiation overhead goes out the window.
  - youeseh 7y ago
    Hospitals could also be charging insurance companies more, but not for subsidizing cash patients but for greater profit.
    - vonmoltke 7y ago
      For-profit hospitals, maybe, but what about the non-profit ones?
      - moate 7y ago
        "non-profit" doesn't mean "doesn't make money" its just rules on how you have to spend that money. There's nothing saying a non-profit can't raise prices of service and then expand the hospital to buy a new wing, or better equipment or hire more doctors. They need the money to provide their services.
        vonmoltke 7y ago
        I understand that, but there is a limited amount of that which can be done before it becomes spending for spending's sake, which is pointless. Also "expand the hospital to buy a new wing, or better equipment or hire more doctors" sounds like exactly what they should be doing, because it means they can service more people at a higher standard of care (which is the reason they exist in the first place).
    - pkaye 7y ago
      I found this interesting article on the situation. They say 1/3 are profitable, 1/3 are break even and 1/3 are losing money. And a lot of those losing money are in rural areas. And "In general, hospitals lose money on Medicare and Medicaid patients, but make up for that by charging private-sector insurers more." https://www.nbcnews.com/business/business-news/hospitals-made-21b-wall-street-last-year-are-patients-seeing-n845176 https://www.nbcnews.com/business/business-news/hospitals-mad...
- Relys 7y ago
  Exactly! Nobody seems to realize that we already have a shitty (for-profit) form of socialized health care.
  - ceejayoz 7y ago
    Yup. We've taken the worst aspects of both sorts of system and combined them into a Kafkaesque nightmare.
- pnutjam 7y ago
  But god forbid we make that official with some sort of oversight and functional standard system.
  - paulddraper 7y ago
    God knows there is a ton of oversight. (As anyone who starts an insurance company can attest to.)
    - pnutjam 7y ago
      Oversight into how much we overpay to cover underpayments, like single payer.
- omegaworks 7y ago
  [citation needed] This is a common talking point that smells like an oversimplification.
  - moate 7y ago
    I can't speak to Medicare/Medicade but the general idea is this: Doctors and the things they use/services they provide have a cost associated with them. Insurance works by spreading risk. Guy who breaks his wrist essentially takes money from the pool that wasn't used by the guy who hasn't been to a hospital in 6 years. So far everything is fine. When you have people who exist outside that system of resource reallocation, the doctors have to find ways to ensure they're still getting enough money to cover their costs. One way they can do this is by suing patients who don't pay, but that takes time and more money and doesn't always work. Another option, would be that they then raise their rate to the insurance companies because they know that the insurance companies can afford it since they have such large pools of money. The insurance companies then raise the rates for everyone buying into the resource reallocation pool, and eventually everything spirals out into our current non-system. Is it more complicated than this: yes, but that's the elevator pitch on it.
    - omegaworks 7y ago
      > they know that the insurance companies can afford it since they have such large pools of money This is exactly why Medicare for All is touted as a solution. It would create the largest pool. It would also reduce the significant overhead presently involved with billing N different insurance companies. Why isn't the conversation about those costs imposed by the current system?
astrodust 7y ago
Wouldn't it be nice to have an ultrasound and not know the price, nor care? That's what countries with single-payer are like. America needs to give up on this nonsense. There should be riots.
- minikites 7y ago
  Americans in general are in love with the idea of the "just world". If someone gets sick, it's because they did something to deserve it. If we treat their illness for free, they won't learn. Additionally, lots of employers also love holding their employees hostage via healthcare and they spend millions lobbying to this end.
  - sjg007 7y ago
    Yep, your comment is underrated. Employees need to protest though.. these rising deductibles and coinsurance out of pocket costs are getting out of hand.
- en4bz 7y ago
  Except you often have to wait weeks for non-life threatening issues. In the US you can get imaging done same or next day.
  - minikites 7y ago
    >Except you often have to wait weeks for non-life threatening issues. So it's preferable to have a system where people go bankrupt for routine care? https://ajph.aphapublications.org/doi/10.2105/AJPH.2018.304901?eType=EmailBlastContent&eId=a5697b7e-8ffc-4373-b9d2-3eb745d9debb&=& https://ajph.aphapublications.org/doi/10.2105/AJPH.2018.3049...
    - en4bz 7y ago
      You're presenting a false dichotomy. If people are being gouged then you can pass laws to limit that. You don't need single payer to solve these issues. Everyone knows the pricing system is BS. If that's the case then we should pass laws to change this.
Stratoscope 7y ago
Beyond opaque and variable pricing for the same service, there is also the question of whether something simpler would do the trick. Some years ago, I thought I might have broken my finger. I went to the doctor and it was actually the physician's assistant who saw me. I'd explained at the front desk that I had a high-deductible policy and I would be paying in full for the visit. The PA said "Usually we would send someone for an X-ray, but since your insurance won't cover it, there is a quick test we could do and it would just be part of this office visit." He opened a drawer and pulled out an instrument and asked me if I knew what it was. Being a musician, I said "Yeah, that's a big tuning fork. And with those weights on the end it must vibrate at a very low frequency." He said, "You got it! The idea is we get the fork vibrating and then hold the end against your finger. If it's broken, it will hurt like the dickens, so just holler and we will stop and you go get that X-ray. If it doesn't hurt much, it's just a sprain, so take it easy and you should be fine." We did it, and my finger was fine. Saved me a bunch of time and money! Edit: Thank you everyone for the lively commentary! I would like to mention something that I forgot at first (it was ten years ago) and your comments reminded me of. The PA didn't pull out the tuning fork until going through a complete set of manual range-of-motion and "does this hurt" tests. All indications were that my finger was not broken, it was just a mild sprain. I'd only gone to the doctor in the first place out of the proverbial "abundance of caution". So it was my decision not to get the X-ray. Please, everyone, do not blame this on the American medical insurance system! I could have easily afforded the extra $150 for the X-ray, and of course I still had that option after the tuning fork test. But since both the PA and I were both so sure at this point that it was just a sprain, I figured I would same both time and money by skipping it. It was my call how to proceed with this very minor injury, no one else's.
- rpmisms 7y ago
  That's extremely cool, and has my gears turning about how to encourage that kind of behavior.
  - beebmam 7y ago
    That ISN'T cool, that's quite dangerous, because if it was indeed broken, that may cause harm. Rule #1 of being a doctor is violated. X-ray imaging on a finger is virtually harmless. Using a tuning fork to vibrate a potentially broken bone and causing a patient to feel pain is not harmless.
neonate 7y ago
http://archive.is/U1psP http://archive.is/U1psP
minikites 7y ago
I don't see how mandating clear pricing is supposed to address medical inefficiency. If it threatens your life, you're going to pay no matter what, or in other words, demand is inelastic. Insulin is often used as an example of an inelastic good in Economics 101. I'm not sure how people are supposed to comparison shop for hospitals in an emergency situation and even for elective procedures, lots of hospitals in an area are often owned by the same overarching company and it's not difficult to collude. For "the market" to work, we would need to let people die, which is not very popular among society at large.
- wrs 7y ago
  No. For the market to work, substitute goods would need to have transparent pricing so the customer can choose with price in mind. Most ultrasounds — indeed, most entire hospitals — are pretty close to identical goods. Everyone will die without food, but supermarkets don't take advantage of that fact to mark up food by 500%.
  - minikites 7y ago
    It's easy to evaluate the quality of an apple and there are dozens of substitute goods (other fruit). It's not easy to evaluate the quality of an ultrasound machine, the staff required to operate it, and their interpretation of the results. Depending on the medical issue, there may not be a substitute good (procedure). Medicine does not work with market principles.
    - wrs 7y ago
      I disagree, I would think that imaging centers produce comparable results. On the medical side, the substitute good isn't a different procedure, it's the same procedure done by a different provider. Most people do not currently make any of those evaluations anyway, so as far as the consumer is concerned, they are de facto substitute goods since they have no rationale for making a choice.
- legitster 7y ago
  I would recon life threatening emergency medical care accounts for a small fraction of overall healthcare. Even comparison shopping for birth is virtually impossible and one has 9 months to do it.
johnwheeler 7y ago
I took my 4 year old to the ER because he had a 103 fever. The doctor put an ear thermometer to him and told me to give him some childrens ibuprofen. The visit lasted all of 5 minutes. The cost: $756.00. I refused to pay it. It was the first time I did not pay a debt and the first time I was sent to collections. I refused based on principle, and not because I couldn’t afford it. Collections called me for about 3 months, and every time someone called and said, “is this John Wheeler”, I would never confirm and then go about asking why they are calling for John Wheeler. Eventually, the calls stopped and the collection agency wrote it off to their unpaid reserves (I’m assuming), I never received a ding on my credit report. Everyone is always asking why US healthcare is so expensive. People blame it on the insurance companies and the hospitals, but my theory is it’s the providers. I worked at Vanderbilt on their payroll system, and I would regularly see general practitioners making $350,000 a year, and this was 15 years ago! It wasn’t uncommon to see teaching doctors getting paid a million dollars.
- Aloha 7y ago
  Wait till they sue you, I successfully fought off an almost 4 year old sub $2000 medical debt when I was sued for it.
- point78 7y ago
  Well as screwed up as the system is one little part of why prices are so high is to cover when people don't pay.
  - johnwheeler 7y ago
    Well then it sounds like a vicious circle. Should we fix it by paying exorbitant fees or charging reasonable prices?
    - doctorpangloss 7y ago
      People saying, 'We should pay for the things I do in the economy, but not something someone else does, "out of principle"' is an opinion that exists in reality, it's just an unbecoming and non-constructive one.
gok 7y ago
The "insured price" contributes to your annual out-of-pocket maximum. Care providers want insured patients to hit their cap as soon as possible so that the patients' marginal cost of care drops to zero. Once this happens, they can get patients to keep getting expensive treatments "for free" while the care providers can continue to bill insurance companies whatever they can get away with.
erikig 7y ago
I'll start by saying I agree with the premise of the article - transparency of pricing is not just helpful, it is necessary. However...I can also understand why paying by cash should much cheaper Adding another company or companies into the transaction, trying to standardize the various medical procedures, invoicing and managing co-pays, deductibles etc adds a significant amount of overhead. One would hope that the insurance companies would leverage the volume of transactions and the pools of clients to get price improvements but this is not the case.
- colbyh 7y ago
  Yeah I think the big problem here is related to the scale, not the fact that it's cheaper when you pay in cash. But that insurance would pay $500 (after negotiating the price down) and then push a > $1k charge to the patient when the clinic would have been ok with a $500 payment up front is just wrong. It's also worth noting that many clinics, if not most, won't actually try to collect the balance here. They'll often go through the motions and forgive the balance after some number of attempts to collect.
nonbel 7y ago
It has been good practice for awhile now to claim you have no insurance even if you do: https://selfpaypatient.com/2015/05/12/insured-but-not-letting-the-doctor-know/ https://selfpaypatient.com/2015/05/12/insured-but-not-lettin... Once you know the cash price then you could later say you got insurance but not vice versa.
- mxcrossb 7y ago
  It seems like someone could start an insurance company, where all customers had to claim they had no insurance, but then sent the bill to be reimbursed.
  - nonbel 7y ago
    That sounds like it would be about 10x cheaper, but I am sure some regulation is preventing that.
  - LyndsySimon 7y ago
    "Medishare" programs work this way.
kazinator 7y ago
The cash price being lower is lucky. Sometimes uninsured cash prices are jacked up due to collusion with the insurance racket. We see a hint of that here: "Cigna gets a contractual discount of just over $1,000 because it’s, well, Cigna." In this particular case, the negotiated discounts didn't bring the price below the cash one, but in many cases it will.
- vonmoltke 7y ago
  I recently had a "$140" blood test that Cigna declined. I was billed $6.48 (which is what Cigna would have paid if they accepted). I'm pretty sure I would have been charged more than $6.48 without Cigna involved.
kazinator 7y ago
A lot of this is explained by Camels and Rubber Duckies. https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-duckies/ https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-...
rolltiide 7y ago
It's random from a user experience perspective. There are many times when a practice will quote you a much higher cash price just because you don't have an insurance company negotiating for you. I have privileged foreign friends with private "worldwide insurance" from a European provider, but it is just a reimbursement scheme. So they appear uninsured to American providers and have to float potentially extremely large costs which might not actually get reimbursed. And then things like birth control aren't insured by their "worldwide insurance" nor some dental work deemed cosmetic, and these people aren't surprised their great "worldwide insurance" doesn't cover those things because their state run insurance wouldn't cover those things either, but confused why the cost is so high in America. I have to tell them that "privileged" people in America don't pay those costs, and explain to them how dangerous or ill-advised acting uninsured in America is.
- nonbel 7y ago
  > things like birth control aren't insured Why would you use insurance for something you know you are going to need? I got new glasses and an eye exam and they were surprised I didn't pay via insurance? Why would I want to pay extra to insure for something I know I will need to get? This makes no sense at all.
  - rolltiide 7y ago
    privileged people have the option of using pre-tax + employer funded FSA/HSA accounts, where a wide array of hygienic purchases, medical purchases and even copays can be paid for and further subsidized. These are part of your overall “insurance package”, in conversation this is typically called being insured with no regard to whether an insurance company is actually picking up the tab.
    - nonbel 7y ago
      Wouldn't the "privileged" prefer to have actual money they could spend as they want instead of be forced to use it for a single purpose, including the extra cost of a middle man? It sounds like some sort of tax scam.
ikeboy 7y ago
>The near-total lack of transparency in healthcare pricing is a key reason we have the highest costs in the world — roughly twice what people in other developed countries pay. Nope. We pay around what you'd expect given our consumption in other areas. See https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/ https://randomcriticalanalysis.com/2018/11/19/why-everything...
crazygringo 7y ago
(American here.) Funny, my last several doctors visits the cash price has always been higher than the negotiated price. These are all for services in the $150-300 range, and I was told upfront what the cash price would be, but they couldn't tell me what my negotiated plan rate was. (I inquired because I have a high deductible plan so I'll pay in the end no matter what.) The negotiated prices were all at least 1/3 lower, and the most expensive one turned out to be free because it was classified as preventitive. So it's even worse because you never know. It's certainly not a rule at all that cash prices are lower.
- nonbel 7y ago
  > Funny, my last several doctors visits the cash price has always been higher than the negotiated price. There is nothing funny about it. Once you tell the provider that you have insurance, the price they can quote you is in their contract with the insurance company. You need to go somewhere new and tell them you do not have insurance to get the real price.
  - crazygringo 7y ago
    They didn't have to check that, and certainly didn't. They knew the prices off the top of their head. The doctor had no idea what health plan I had or even if I had one -- they leave that up to their staff to sort out, they couldn't care less personally.
    - nonbel 7y ago
      Then they are just quoting you the "insurance price". Think about it, how could it possibly be more expensive to cut out the middle man?
      - lotsofpulp 7y ago
        Because you don’t want to deal with the type of person that doesn’t have insurance. They may be more likely to not pay, or otherwise unpleasant to deal with.
drblast 7y ago
Insurance is not supposed to make routine things more affordable. It's supposed to spread the risk of catastrophic loss from unlikely events around to a large group of people so you don't have to worry about losing your house if you get struck by lightning. Everyone needs routine medical care at some point so an insurance model doesn't work there. You don't have gas or grocery insurance, do you? If that were a thing would we all expect to pay less for gas and groceries, or would we just be tacking on overhead for routine expenses for no reason? Using insurance for routine, affordable expenses is one of the problems. But it's a race to the bottom where insurance companies win, because everyone in the U.S. thinks "good" insurance pays for everything and makes a 17% profit out of nothing. In addition to the transparency the article advocates for, we'd probably be way better off with a universal health care stipend and very high deductible insurance for rare catastrophic events. Insurance should not be involved in routine care.
- deleted 7y ago
  [deleted]
- habitue 7y ago
  There's still a benefit in insurance for routine procedures to balance costs between the young and old. (As long as young people are required to have insurance)
  - rossdavidh 7y ago
    ...but the fact that the median income of young people (at the beginning of their career, whatever it is) is much lower than old people, pretty much nullifies this. If you want to balance out the costs over a person's life, there are much better ways than making the coffeeshop barrista subsidize the middle-manager's health costs.
    - entee 7y ago
      The reason this logic fails is because income and healthcare costs are on different curves but of similar (or far greater in the case of healthcare) magnitude. Say you start out your career making $30K as a barrista and end up making $150K as a middle manager in your 60s. A single surgery can be $150-$300K and you're more likely to have them when you're older. Cancer patients can cost millions in a given year, again you're more likely to have that as you get older. I don't have the number for a diabetes patient off the top of my head but I think it's 10s of thousands a year. The income growth curve is far shallower than the healthcare cost curve, and the healthcare cost curve is essentially unbounded whereas for most people income doesn't go all that high. Remember median income in the US is something like $55-$60K. Most people won't ever see 6 figures and if they do, they'll see the very low end of that.
techie128 7y ago
Having lived in the US for over a decade, I am disappointed with the system. I also notice that nobody in this thread, so far, has talked about liability and the overly litigious aspect of the American society. There are so many lawyers that are willing to file malpractice lawsuits against anybody in the medical industry which also raises costs overall.
- greedo 7y ago
  Malpractice costs are a relatively small proportion of the total costs for healthcare[1]. Probably around 3%. Doctors love to complain about being sued and about the high cost of premiums, but being able to sue for malpractice is the only recourse a patient has when a doctor or medical practice screws up. [1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3048809/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3048809/
lxe 7y ago
Are "cash" prices always cheaper than what's billed to insurers? What if one starts an "alt-isurance" company that just gives people cash for their medical bills that operates completely outside the medical industry network?
- chiph 7y ago
  We already have that .. sort of. They're called Health Savings Accounts and by law they're tied to high-deductible policies. Mine is $2500, so I'm on the hook up to that amount. With some caveats, such as payments for drugs, etc. The good news is that money is yours to keep and use (only!) for health related expenses. So unlike a FSA the balance will roll over to the next year and continue earning interest. The other trend along these lines are concierge doctors. They don't accept insurance, and typically operate on a subscription basis (X dollars per month).
- usaar333 7y ago
  No. Not all hospitals are willing to offer discounts. Sometimes, the cash price is higher than the insurance rate (which is negotiated). It's pretty hard to pull off an external company since many hospitals won't even tell you what their negotiated rates are (I have an HDHP where I'd think the point is to shop around, but can't because of the lack of price transparency). For what it is worth, goodrx.com is doing a variant of this with drugs.
- yencabulator 7y ago
  That's called "indemnity insurance", and it very much exists. You get $x every time you need to see a doctor (capped to $y/year, or such). E.g. $3000/day if you're confined into a hospital. It's tough to figure out the plan that works well for non-routine things. But then again, bigger operations are tough for everyone who doesn't have the best employer-based HMO/PPO plans.
chiph 7y ago
It really helps to be a shrewd negotiator when it comes time to pay your bill. https://youtu.be/pY-BGNjI2Rg?t=281 https://youtu.be/pY-BGNjI2Rg?t=281 Should you have to do this? No. No one in American healthcare knows how much it costs to deliver care. And as a result, the bills are more like: "They look rich. Let's see if they'll just pay it."
maerF0x0 7y ago
This adds to my recent thought stream that it ought to be charge 2 people a different price for the same thing (basket of things) ... Why is it that someone who is a new customer for service X gets a sweetheart deal but those of us who have faithfully paid for months/years are charged a premium? Why is it that 2 people in a hospital pay entirely different prices for the exact same thing? on and on the insanity goes. I am, of course, not talking about packages/bundles etc. Yes it makes sense that someone who buys 10 could get a better price than someone who buys 1.
- lotsofpulp 7y ago
  Price discrimination yields the most profit for a seller. You want to be able to capture all that each person is willing to pay, because your cost of goods sold remains the same. Also the new customer doesn’t permanently get a sweetheart deal, it’s always a temporary incentive to join, which doesn’t seem unfair to me at all. However, as a buyer, if you’re not always shopping around, expect to pay more than someone who does. That’s just how the game works.
  - maerF0x0 7y ago
    > That’s just how the game works. I agree that you're talking about an optimal analysis of the current game. However, one of the roles of government is to alter games which are suboptimal for society. For example cartels are illegal despite them being optimal for the sellers.
randyrand 7y ago
This ridiculous symptoms come from ridiculous regulations and their unintended consequences. Apart from emergency care, I think the health care industry actually needs very little regulation.
entee 7y ago
It's important to remember that an insurance company has very little to zero incentive to lower costs. The only incentive an insurer has is to ensure costs are predictable. It doesn't matter if costs go up 20% next year as long as they know costs will not go up 25%. The extra cost gets shunted into the premium. There is no party in the current healthcare system whose incentive is to lower prices. Medicare/Medicaid can achieve low costs by fiat, but it's broadly accepted that the whole system as structured today couldn't operate on those prices [1]. This means private insurance picks up the delta. Doctors, Hospitals, Pharmacies, Drug companies, Medical device companies all have zero incentive to lower prices. You might think technology that makes doctors visits (to pick one example) would just win out in the marketplace, but there's a flawed assumption there. Most people are insured, so most people are paying the insured cost. For something like a doctor's visit, you pay your copay (say, $25) and the insurer pays the rest (lets say up to $70). Assume you could get an app or a technology that gets that price down to $35. This would be a huge achievement and you'd go out of business because it's more expensive than what the consumer sees. Ah yes, but maybe you can pitch to insurers, surely they would love a lower cost! Probably not. You're small so you can't reduce their costs across the board. Even if you succeed, they have caps on how many profits they can take (usually something like 15-20%) so if you drop their costs, that might actually force them to refund customers. Good, but not the primary driver for profitability. Let's even grant that the above isn't true. You're still a small player, you basically need to fit inside their (extremely cumbersome) protocols to be able to bill them. Now you have to do all sorts of billing and management, maybe you need to hire extra staff to run billing. That $35 now financially doesn't make sense, maybe it's now $55. Still cheaper but now you're in the system and don't have much of a competitive advantage that's visible to the consumer. Now you differentiate by offering better services, maybe a good online portal, that costs more engineers, and now we're back up to $70. Insurer doesn't care much, you're just another provider, they'll pay, you'll make money, and we're back to square one. We're not even considering the, "Is the cancer doc that costs 25% less the same value as the other guy?" problem, which is damn hard on its own. Healthcare is really hard, and the incentives across the board are perverse. I'm increasingly skeptical a solution that doesn't dramatically reshape the market is likely to make a difference. [1] https://www.healthcarefinancenews.com/news/mgma-majority-practices-say-cost-care-outweighs-medicare-reimbursements https://www.healthcarefinancenews.com/news/mgma-majority-pra...
bobharris 7y ago
I always got a kick out of the DO's in training at a WA DO school telling us they were all on WA medicaid, as they didn't have another option in which to obtain healthcare. Huh, that's odd. A friend who asked how much the retina re-attachement would cost. Weighing her options. I'm just sad that healthcare seems like such a luxury. I do enjoy stories of friends not just being complacent. Going out of country for dental procedures. Getting good results for 1/10 the price.
IronWolve 7y ago
If you have to go to minor emergency clinics that are popping up all over, say you dont have insurance and want the cash price, its 1/4th the cost. If you pay with insurance and have a co-pay or a yearly deductible its just not worth it. Then pay with your HSA card.
ilaksh 7y ago
This type of thing is one of the main reasons I moved to Mexico.
radley 7y ago
I have a prescription that was $35 with Anthem and $17 with Blue Shield. With cash: $12.
intopieces 7y ago
What’s a little tricky here is that the cash price is only $521 because the insured price is $2,758. If the patient were able to choose the cash price or the insured price, the cash price would be much higher. One of my family members once told me he is against socialized medicine because it subsidizes the bad choices of the poor. True enough, but that’s no different from the current situation (since hospitals can’t refuse to treat) except that the one we have is opaque.
mnm1 7y ago
So if the cash price is five hundred something can the lady in the story decide to pay that now instead of her insurance deductible? If not why not?
sjg007 7y ago
I paid like $3k for hearing tests for my kid because my insurance wouldn't cover it. This was at a world famous California children's hospital.
SI_Rob 7y ago
How long has it been broken like this? By my count, at least 346 years, reckoning from the premiere of The Imaginary Invalid by Molière. The opening scene features the protagonist iterating over a series of rationalizations for reducing his medical bills to 1/3 of the list price. That this scene was expected to be received by an audience which could relate to the necessity of performing these sorts of arithmetic gymnastics (though perhaps exaggerated for comedic effect) suggests that this was already a well-established norm in 1673: SCENE I.--ARGAN (_sitting at a table, adding up his apothecary's bill with counters_). ARG. Three and two make five, and five make ten, and ten make twenty. "Item, on the 24th, a small, insinuative clyster, preparative and gentle, to soften, moisten, and refresh the bowels of Mr. Argan." What I like about Mr. Fleurant, my apothecary, is that his bills are always civil. "The bowels of Mr. Argan." All the same, Mr. Fleurant, it is not enough to be civil, you must also be reasonable, and not plunder sick people. Thirty sous for a clyster! I have already told you, with all due respect to you, that elsewhere you have only charged me twenty sous; and twenty sous, in the language of apothecaries, means only ten sous. Here they are, these ten sous. "Item, on the said day, a good detergent clyster, compounded of double catholicon rhubarb, honey of roses, and other ingredients, according to the prescription, to scour, work, and clear out the bowels of Mr. Argan, thirty sons." With your leave, ten sous. "Item, on the said day, in the evening, a julep, hepatic, soporiferous, and somniferous, intended to promote the sleep of Mr. Argan, thirty-five sous." I do not complain of that, for it made me sleep very well. Ten, fifteen, sixteen, and seventeen sous six deniers. "Item, on the 25th, a good purgative and corroborative mixture, composed of fresh cassia with Levantine senna and other ingredients, according to the prescription of Mr. Purgon, to expel Mr. Argan's bile, four francs." You are joking, Mr. Fleurant; you must learn to be reasonable with patients; Mr. Purgon never ordered you to put four francs. Tut! put three francs, if you please. Twenty; thirty sous. [Footnote: As usual, Argan only counts half; even after he has reduced the charge.] "Item, on the said day, a dose, anodyne and astringent, to make Mr. Argan sleep, thirty sous." Ten sous, Mr. Fleurant. (the above is just the first half of Argan's recitations - they go on for another paragraph or two!)
elihu 7y ago
The opposite also happens, where the uninsured price is a lot more than the insured price. I was in this sort of situation once. I needed a CT scan, but it was on a late friday afternoon, and the hospital couldn't get prior approval from the insurance company. They quoted one price that they would bill the insurance company if it was approved, and another much larger priced that I would have to pay if the insurance company rejected the claim. (I ended up getting the CT scan the next day at a hospital that charged a lot less. I think it was covered by insurance.) The thing about this that's bad is that it's over-charging the people least likely to be able to repay, and (if they can come up with the cash) they're effectively subsidizing the insured customers. This is the other side of narrative that poor people are driving up health care costs for everyone else because they don't pay their bills.
newshorts 7y ago
I wanted to level the playing field a few years ago and built the site below. It aims to present users with the highest quality and lowest price hospitals in your area: http://myhospitalscore.com/ http://myhospitalscore.com/
kevindong 7y ago
I'm dealing with an insurance mess right now. I got a physical at a in-network doctor a month ago and they sent my blood sample to an out-of-network lab. My insurer sent me a statement last week saying that $444 of the $954 bill is eligible for payment. However since I hadn't met my deductible for out-of-network spending yet, I would have to pay that entire $444 on top of the $510 that they wouldn't cover even if the sample had been sent to a in-network lab. I believe/am hopeful that since I live in New York, which prohibits out-of-network providers from surprise billing patients without the patient's informed and explicit consent that the procedure would be considered out-of-network [0], that I ultimately won't be held liable for the bill. Fortunately as a software engineer, I can trivially afford to pay the bill in the worst case. But I shudder to think of the consequences for someone in a much less privileged circumstance. [0]: https://www.dfs.ny.gov/consumers/health_insurance/surprise_medical_bills https://www.dfs.ny.gov/consumers/health_insurance/surprise_m...
luminaobscura 7y ago
1. Forbid different pricing for different payers. 2. All prices have to be posted on your website. 3. Patient has to agree on the bill beforehand. (ER is the exception obviously)
yencabulator 7y ago
Relatively routine outpatient surgery: Doctor's fee $750 Anesthetician's fee ~$150 Hospital facility fee ~$24,000 Hospital facility fee, cash price ~$9,000
dontwhy 7y ago
fortune 500 top10 companies 5. McKesson the largest U.S. pharmaceutical distributor 6. UnitedHealth Group 7. CVS Health Can't you tell why?
axaxs 7y ago
I write this very candidly, and many on HN would likely constantly argue if I always chimed in with my personal views. I am a very conservative person, and always have been. That said, I will vote for anyone who promises single payer healthcare. Our healthcare is completely broken, and I feel honestly that anyone defending it is either being paid or brainwashed.
aj7 7y ago
I’ve been purchasing drugs entirely by cash, optimizing markets as best I can, for about 7 years now. I began when I discovered my employer’s drug plan, Optum, was charging me significantly higher prices than the the spot prices on the open market.
truthseeker1 7y ago
Most of you who attack doctors have no idea how this complex health care system works. Doctors are UNDERpaid. A majority of the billing goes to overhead for the hospital facilities, nurses, labs, meds, administrators, etc, with doctors getting much less than 10% of the revenue even though they are responsible for generating most of it. Your resident doctor friend (who has way more qualifications than your software engineer friend - including top tier college, and medical school) gets paid about 60-70k a year for working at least 80 hours a week. Yes, the man or woman who assists in your brain surgery after your aneurysm popped gets paid less than your uber driver for 7 years time, and he sacrificed his/her best years to be a sleep deprived medical student and then brain surgeon working under constant rush and stress, as their 300k med school debt accumulated under high compound interest. Meanwhile, your mediocre software engineer friend graduates debt free, gets paid 160k out of college to build the next best sexting app, at a company with free lunch and gym. Also, don't forget about the malpractices. 10 years down the line, your radiologist friend gets successfully sued for 11 million dollars bc the parents of a child for whom they read a chest radiograph decided to sue because lawyer convinced the parent and jury that radiologist was at fault for not saying the heart is enlarged and somehow that is responsible for all the kids ailments later on in life (the truth is much more complex than that). The radiologist probably got paid 7.50$ for that read, btw. This is actually a true story, look it up in the Boston Globe. Now all providers are on edge and overdiagnosing and overordering everything - who would want to miss a diagnosis.
mewop 7y ago
ITT: people who assume doctors are accountants and go home in their sports car every night to tweak their prices and count the stacks of 100s they made that day The reality is is doctors often have no control over cost. Yes, if you are the increasingly rare private group that is physician owned you do but certainly not if you are employed. These are 100% set by the bean counters who are paid twice my salary and have no idea about what we do on a day-to-day basis. I have no idea what my services cost and for ethical reasons I don't want to. That inflicts bias and can lead to misdiagnosis. I sacrificed 10 years of my life and took on over $275,000 of debt that continues to grow thanks to compound interest. I live in an average house and drive an average car because I have this debt to pay back. Daily I am responsible for not harming dozens of patients while trying to make their lives better. With each decision I make I have the risk of being sued and losing everything I have worked for. All the while, my mid-level providers work relatively liability free because they work under my license and their mistakes are on my back. Adminstration pushes for higher numbers of patients andmore uncompensated work. When was the last time you spoke to a lawyer on the phone or had them complete a 5 page document for free? Think twice before you criticize doctors and the sacrifices we have made. I didn't do this for the money, I assure you.
fulldecent2 7y ago
If you have a similar story: stop reading, open a court case in small claims court and come back to post about it. You will get all the support you need here from extremely qualified people, including specific filings you should make and also answers to every question you will have.

305 points by prostoalex 7y ago

My understanding is the insured patients are subsidizing all the others covered by medicare, medicaid or those uninsured.

devoply 7y ago
Why? Why are insurance companies not demanding cash price and reducing premiums? There should be lawsuits against hospitals, this seems like something which is generally considered highly illegal at this sort of scale... charging different customers different prices -- especially when the ones paying more are more than capable of taking hospitals to court.
- dantheman 7y ago
  The 80/20 Rule could be one reason -- the more they spend on health care, the more they can spend on other things. https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-...
  - devoply 7y ago
    Sounds like the government needs to sue both insurance companies and hospitals for collusion to stop this.
    - kaibee 7y ago
      It's extremely unlikely that there's actual collusion. But actors acting in their selfish best interest can definitely look like collusion.
  - pkaye 7y ago
    I believe this rule came out of the ACA (Obamacare) however all the problems have existed well before that.
- rpmisms 7y ago
  I'm a generally anti-legislation kind of person, but as long as breaking up big tech is a hot topic, why not pass a bill requiring cash prices for any not-for-profit insurance providers and co-pay networks? There's a lot of interesting competition happening in those spaces, and making not-for-profit insurance a better deal seems like a great way to get capitalism grinding at the issue of overpriced healthcare.
  - DaiPlusPlus 7y ago
    That doesn’t work for emergency care - where the patient really doesn’t have the time to go window-shopping while having a cardiac arrest. And while greater transparency is good - not everyone in the public is able - or willing - to understand a medical price-sheet and might opt for a cheaper but medically-inappropriate procedure with similar-sounding-name to the procedure they actually need.
    - tareqak 7y ago
      OK, how about mandatory cash prices for non-emergency care?
      - pkaye 7y ago
        And what if that price is too high for any uninsured to afford?
        nonbel 7y ago
        Your taxes already pay for emergency care.
  - PorterDuff 7y ago
    I would prefer a system where they charge everyone the same amount. It wouldn't surprise me if the insurance companies would be in favor of that, the whole price negotiation overhead goes out the window.
- youeseh 7y ago
  Hospitals could also be charging insurance companies more, but not for subsidizing cash patients but for greater profit.
  - vonmoltke 7y ago
    For-profit hospitals, maybe, but what about the non-profit ones?
    - moate 7y ago
      "non-profit" doesn't mean "doesn't make money" its just rules on how you have to spend that money. There's nothing saying a non-profit can't raise prices of service and then expand the hospital to buy a new wing, or better equipment or hire more doctors. They need the money to provide their services.
      - vonmoltke 7y ago
        I understand that, but there is a limited amount of that which can be done before it becomes spending for spending's sake, which is pointless. Also "expand the hospital to buy a new wing, or better equipment or hire more doctors" sounds like exactly what they should be doing, because it means they can service more people at a higher standard of care (which is the reason they exist in the first place).
  - pkaye 7y ago
    I found this interesting article on the situation. They say 1/3 are profitable, 1/3 are break even and 1/3 are losing money. And a lot of those losing money are in rural areas. And "In general, hospitals lose money on Medicare and Medicaid patients, but make up for that by charging private-sector insurers more." https://www.nbcnews.com/business/business-news/hospitals-made-21b-wall-street-last-year-are-patients-seeing-n845176 https://www.nbcnews.com/business/business-news/hospitals-mad...
Relys 7y ago
Exactly! Nobody seems to realize that we already have a shitty (for-profit) form of socialized health care.
- ceejayoz 7y ago
  Yup. We've taken the worst aspects of both sorts of system and combined them into a Kafkaesque nightmare.
pnutjam 7y ago
But god forbid we make that official with some sort of oversight and functional standard system.
- paulddraper 7y ago
  God knows there is a ton of oversight. (As anyone who starts an insurance company can attest to.)
  - pnutjam 7y ago
    Oversight into how much we overpay to cover underpayments, like single payer.
omegaworks 7y ago
[citation needed] This is a common talking point that smells like an oversimplification.
- moate 7y ago
  I can't speak to Medicare/Medicade but the general idea is this: Doctors and the things they use/services they provide have a cost associated with them. Insurance works by spreading risk. Guy who breaks his wrist essentially takes money from the pool that wasn't used by the guy who hasn't been to a hospital in 6 years. So far everything is fine. When you have people who exist outside that system of resource reallocation, the doctors have to find ways to ensure they're still getting enough money to cover their costs. One way they can do this is by suing patients who don't pay, but that takes time and more money and doesn't always work. Another option, would be that they then raise their rate to the insurance companies because they know that the insurance companies can afford it since they have such large pools of money. The insurance companies then raise the rates for everyone buying into the resource reallocation pool, and eventually everything spirals out into our current non-system. Is it more complicated than this: yes, but that's the elevator pitch on it.
  - omegaworks 7y ago
    > they know that the insurance companies can afford it since they have such large pools of money This is exactly why Medicare for All is touted as a solution. It would create the largest pool. It would also reduce the significant overhead presently involved with billing N different insurance companies. Why isn't the conversation about those costs imposed by the current system?

astrodust 7y ago

Wouldn't it be nice to have an ultrasound and not know the price, nor care? That's what countries with single-payer are like. America needs to give up on this nonsense. There should be riots.

minikites 7y ago
Americans in general are in love with the idea of the "just world". If someone gets sick, it's because they did something to deserve it. If we treat their illness for free, they won't learn. Additionally, lots of employers also love holding their employees hostage via healthcare and they spend millions lobbying to this end.
- sjg007 7y ago
  Yep, your comment is underrated. Employees need to protest though.. these rising deductibles and coinsurance out of pocket costs are getting out of hand.
en4bz 7y ago
Except you often have to wait weeks for non-life threatening issues. In the US you can get imaging done same or next day.
- minikites 7y ago
  >Except you often have to wait weeks for non-life threatening issues. So it's preferable to have a system where people go bankrupt for routine care? https://ajph.aphapublications.org/doi/10.2105/AJPH.2018.304901?eType=EmailBlastContent&eId=a5697b7e-8ffc-4373-b9d2-3eb745d9debb&=& https://ajph.aphapublications.org/doi/10.2105/AJPH.2018.3049...
  - en4bz 7y ago
    You're presenting a false dichotomy. If people are being gouged then you can pass laws to limit that. You don't need single payer to solve these issues. Everyone knows the pricing system is BS. If that's the case then we should pass laws to change this.

Stratoscope 7y ago

Beyond opaque and variable pricing for the same service, there is also the question of whether something simpler would do the trick. Some years ago, I thought I might have broken my finger. I went to the doctor and it was actually the physician's assistant who saw me. I'd explained at the front desk that I had a high-deductible policy and I would be paying in full for the visit. The PA said "Usually we would send someone for an X-ray, but since your insurance won't cover it, there is a quick test we could do and it would just be part of this office visit." He opened a drawer and pulled out an instrument and asked me if I knew what it was. Being a musician, I said "Yeah, that's a big tuning fork. And with those weights on the end it must vibrate at a very low frequency." He said, "You got it! The idea is we get the fork vibrating and then hold the end against your finger. If it's broken, it will hurt like the dickens, so just holler and we will stop and you go get that X-ray. If it doesn't hurt much, it's just a sprain, so take it easy and you should be fine." We did it, and my finger was fine. Saved me a bunch of time and money! Edit: Thank you everyone for the lively commentary! I would like to mention something that I forgot at first (it was ten years ago) and your comments reminded me of. The PA didn't pull out the tuning fork until going through a complete set of manual range-of-motion and "does this hurt" tests. All indications were that my finger was not broken, it was just a mild sprain. I'd only gone to the doctor in the first place out of the proverbial "abundance of caution". So it was my decision not to get the X-ray. Please, everyone, do not blame this on the American medical insurance system! I could have easily afforded the extra $150 for the X-ray, and of course I still had that option after the tuning fork test. But since both the PA and I were both so sure at this point that it was just a sprain, I figured I would same both time and money by skipping it. It was my call how to proceed with this very minor injury, no one else's.

rpmisms 7y ago
That's extremely cool, and has my gears turning about how to encourage that kind of behavior.
- beebmam 7y ago
  That ISN'T cool, that's quite dangerous, because if it was indeed broken, that may cause harm. Rule #1 of being a doctor is violated. X-ray imaging on a finger is virtually harmless. Using a tuning fork to vibrate a potentially broken bone and causing a patient to feel pain is not harmless.

neonate 7y ago

http://archive.is/U1psP http://archive.is/U1psP

minikites 7y ago

I don't see how mandating clear pricing is supposed to address medical inefficiency. If it threatens your life, you're going to pay no matter what, or in other words, demand is inelastic. Insulin is often used as an example of an inelastic good in Economics 101. I'm not sure how people are supposed to comparison shop for hospitals in an emergency situation and even for elective procedures, lots of hospitals in an area are often owned by the same overarching company and it's not difficult to collude. For "the market" to work, we would need to let people die, which is not very popular among society at large.

wrs 7y ago
No. For the market to work, substitute goods would need to have transparent pricing so the customer can choose with price in mind. Most ultrasounds — indeed, most entire hospitals — are pretty close to identical goods. Everyone will die without food, but supermarkets don't take advantage of that fact to mark up food by 500%.
- minikites 7y ago
  It's easy to evaluate the quality of an apple and there are dozens of substitute goods (other fruit). It's not easy to evaluate the quality of an ultrasound machine, the staff required to operate it, and their interpretation of the results. Depending on the medical issue, there may not be a substitute good (procedure). Medicine does not work with market principles.
  - wrs 7y ago
    I disagree, I would think that imaging centers produce comparable results. On the medical side, the substitute good isn't a different procedure, it's the same procedure done by a different provider. Most people do not currently make any of those evaluations anyway, so as far as the consumer is concerned, they are de facto substitute goods since they have no rationale for making a choice.
legitster 7y ago
I would recon life threatening emergency medical care accounts for a small fraction of overall healthcare. Even comparison shopping for birth is virtually impossible and one has 9 months to do it.

johnwheeler 7y ago

I took my 4 year old to the ER because he had a 103 fever. The doctor put an ear thermometer to him and told me to give him some childrens ibuprofen. The visit lasted all of 5 minutes. The cost: $756.00. I refused to pay it. It was the first time I did not pay a debt and the first time I was sent to collections. I refused based on principle, and not because I couldn’t afford it. Collections called me for about 3 months, and every time someone called and said, “is this John Wheeler”, I would never confirm and then go about asking why they are calling for John Wheeler. Eventually, the calls stopped and the collection agency wrote it off to their unpaid reserves (I’m assuming), I never received a ding on my credit report. Everyone is always asking why US healthcare is so expensive. People blame it on the insurance companies and the hospitals, but my theory is it’s the providers. I worked at Vanderbilt on their payroll system, and I would regularly see general practitioners making $350,000 a year, and this was 15 years ago! It wasn’t uncommon to see teaching doctors getting paid a million dollars.

Aloha 7y ago
Wait till they sue you, I successfully fought off an almost 4 year old sub $2000 medical debt when I was sued for it.
point78 7y ago
Well as screwed up as the system is one little part of why prices are so high is to cover when people don't pay.
- johnwheeler 7y ago
  Well then it sounds like a vicious circle. Should we fix it by paying exorbitant fees or charging reasonable prices?
  - doctorpangloss 7y ago
    People saying, 'We should pay for the things I do in the economy, but not something someone else does, "out of principle"' is an opinion that exists in reality, it's just an unbecoming and non-constructive one.

gok 7y ago

The "insured price" contributes to your annual out-of-pocket maximum. Care providers want insured patients to hit their cap as soon as possible so that the patients' marginal cost of care drops to zero. Once this happens, they can get patients to keep getting expensive treatments "for free" while the care providers can continue to bill insurance companies whatever they can get away with.

erikig 7y ago

I'll start by saying I agree with the premise of the article - transparency of pricing is not just helpful, it is necessary. However...I can also understand why paying by cash should much cheaper Adding another company or companies into the transaction, trying to standardize the various medical procedures, invoicing and managing co-pays, deductibles etc adds a significant amount of overhead. One would hope that the insurance companies would leverage the volume of transactions and the pools of clients to get price improvements but this is not the case.

colbyh 7y ago
Yeah I think the big problem here is related to the scale, not the fact that it's cheaper when you pay in cash. But that insurance would pay $500 (after negotiating the price down) and then push a > $1k charge to the patient when the clinic would have been ok with a $500 payment up front is just wrong. It's also worth noting that many clinics, if not most, won't actually try to collect the balance here. They'll often go through the motions and forgive the balance after some number of attempts to collect.

nonbel 7y ago

It has been good practice for awhile now to claim you have no insurance even if you do: https://selfpaypatient.com/2015/05/12/insured-but-not-letting-the-doctor-know/ https://selfpaypatient.com/2015/05/12/insured-but-not-lettin... Once you know the cash price then you could later say you got insurance but not vice versa.

mxcrossb 7y ago
It seems like someone could start an insurance company, where all customers had to claim they had no insurance, but then sent the bill to be reimbursed.
- nonbel 7y ago
  That sounds like it would be about 10x cheaper, but I am sure some regulation is preventing that.
- LyndsySimon 7y ago
  "Medishare" programs work this way.

kazinator 7y ago

The cash price being lower is lucky. Sometimes uninsured cash prices are jacked up due to collusion with the insurance racket. We see a hint of that here: "Cigna gets a contractual discount of just over $1,000 because it’s, well, Cigna." In this particular case, the negotiated discounts didn't bring the price below the cash one, but in many cases it will.

vonmoltke 7y ago
I recently had a "$140" blood test that Cigna declined. I was billed $6.48 (which is what Cigna would have paid if they accepted). I'm pretty sure I would have been charged more than $6.48 without Cigna involved.

kazinator 7y ago

A lot of this is explained by Camels and Rubber Duckies. https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-duckies/ https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-...

rolltiide 7y ago

It's random from a user experience perspective. There are many times when a practice will quote you a much higher cash price just because you don't have an insurance company negotiating for you. I have privileged foreign friends with private "worldwide insurance" from a European provider, but it is just a reimbursement scheme. So they appear uninsured to American providers and have to float potentially extremely large costs which might not actually get reimbursed. And then things like birth control aren't insured by their "worldwide insurance" nor some dental work deemed cosmetic, and these people aren't surprised their great "worldwide insurance" doesn't cover those things because their state run insurance wouldn't cover those things either, but confused why the cost is so high in America. I have to tell them that "privileged" people in America don't pay those costs, and explain to them how dangerous or ill-advised acting uninsured in America is.

nonbel 7y ago
> things like birth control aren't insured Why would you use insurance for something you know you are going to need? I got new glasses and an eye exam and they were surprised I didn't pay via insurance? Why would I want to pay extra to insure for something I know I will need to get? This makes no sense at all.
- rolltiide 7y ago
  privileged people have the option of using pre-tax + employer funded FSA/HSA accounts, where a wide array of hygienic purchases, medical purchases and even copays can be paid for and further subsidized. These are part of your overall “insurance package”, in conversation this is typically called being insured with no regard to whether an insurance company is actually picking up the tab.
  - nonbel 7y ago
    Wouldn't the "privileged" prefer to have actual money they could spend as they want instead of be forced to use it for a single purpose, including the extra cost of a middle man? It sounds like some sort of tax scam.

ikeboy 7y ago

>The near-total lack of transparency in healthcare pricing is a key reason we have the highest costs in the world — roughly twice what people in other developed countries pay. Nope. We pay around what you'd expect given our consumption in other areas. See https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/ https://randomcriticalanalysis.com/2018/11/19/why-everything...

crazygringo 7y ago

(American here.) Funny, my last several doctors visits the cash price has always been higher than the negotiated price. These are all for services in the $150-300 range, and I was told upfront what the cash price would be, but they couldn't tell me what my negotiated plan rate was. (I inquired because I have a high deductible plan so I'll pay in the end no matter what.) The negotiated prices were all at least 1/3 lower, and the most expensive one turned out to be free because it was classified as preventitive. So it's even worse because you never know. It's certainly not a rule at all that cash prices are lower.

nonbel 7y ago
> Funny, my last several doctors visits the cash price has always been higher than the negotiated price. There is nothing funny about it. Once you tell the provider that you have insurance, the price they can quote you is in their contract with the insurance company. You need to go somewhere new and tell them you do not have insurance to get the real price.
- crazygringo 7y ago
  They didn't have to check that, and certainly didn't. They knew the prices off the top of their head. The doctor had no idea what health plan I had or even if I had one -- they leave that up to their staff to sort out, they couldn't care less personally.
  - nonbel 7y ago
    Then they are just quoting you the "insurance price". Think about it, how could it possibly be more expensive to cut out the middle man?
    - lotsofpulp 7y ago
      Because you don’t want to deal with the type of person that doesn’t have insurance. They may be more likely to not pay, or otherwise unpleasant to deal with.

drblast 7y ago

Insurance is not supposed to make routine things more affordable. It's supposed to spread the risk of catastrophic loss from unlikely events around to a large group of people so you don't have to worry about losing your house if you get struck by lightning. Everyone needs routine medical care at some point so an insurance model doesn't work there. You don't have gas or grocery insurance, do you? If that were a thing would we all expect to pay less for gas and groceries, or would we just be tacking on overhead for routine expenses for no reason? Using insurance for routine, affordable expenses is one of the problems. But it's a race to the bottom where insurance companies win, because everyone in the U.S. thinks "good" insurance pays for everything and makes a 17% profit out of nothing. In addition to the transparency the article advocates for, we'd probably be way better off with a universal health care stipend and very high deductible insurance for rare catastrophic events. Insurance should not be involved in routine care.

deleted 7y ago
[deleted]
habitue 7y ago
There's still a benefit in insurance for routine procedures to balance costs between the young and old. (As long as young people are required to have insurance)
- rossdavidh 7y ago
  ...but the fact that the median income of young people (at the beginning of their career, whatever it is) is much lower than old people, pretty much nullifies this. If you want to balance out the costs over a person's life, there are much better ways than making the coffeeshop barrista subsidize the middle-manager's health costs.
  - entee 7y ago
    The reason this logic fails is because income and healthcare costs are on different curves but of similar (or far greater in the case of healthcare) magnitude. Say you start out your career making $30K as a barrista and end up making $150K as a middle manager in your 60s. A single surgery can be $150-$300K and you're more likely to have them when you're older. Cancer patients can cost millions in a given year, again you're more likely to have that as you get older. I don't have the number for a diabetes patient off the top of my head but I think it's 10s of thousands a year. The income growth curve is far shallower than the healthcare cost curve, and the healthcare cost curve is essentially unbounded whereas for most people income doesn't go all that high. Remember median income in the US is something like $55-$60K. Most people won't ever see 6 figures and if they do, they'll see the very low end of that.

techie128 7y ago

Having lived in the US for over a decade, I am disappointed with the system. I also notice that nobody in this thread, so far, has talked about liability and the overly litigious aspect of the American society. There are so many lawyers that are willing to file malpractice lawsuits against anybody in the medical industry which also raises costs overall.

greedo 7y ago
Malpractice costs are a relatively small proportion of the total costs for healthcare[1]. Probably around 3%. Doctors love to complain about being sued and about the high cost of premiums, but being able to sue for malpractice is the only recourse a patient has when a doctor or medical practice screws up. [1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3048809/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3048809/

lxe 7y ago

Are "cash" prices always cheaper than what's billed to insurers? What if one starts an "alt-isurance" company that just gives people cash for their medical bills that operates completely outside the medical industry network?

chiph 7y ago
We already have that .. sort of. They're called Health Savings Accounts and by law they're tied to high-deductible policies. Mine is $2500, so I'm on the hook up to that amount. With some caveats, such as payments for drugs, etc. The good news is that money is yours to keep and use (only!) for health related expenses. So unlike a FSA the balance will roll over to the next year and continue earning interest. The other trend along these lines are concierge doctors. They don't accept insurance, and typically operate on a subscription basis (X dollars per month).
usaar333 7y ago
No. Not all hospitals are willing to offer discounts. Sometimes, the cash price is higher than the insurance rate (which is negotiated). It's pretty hard to pull off an external company since many hospitals won't even tell you what their negotiated rates are (I have an HDHP where I'd think the point is to shop around, but can't because of the lack of price transparency). For what it is worth, goodrx.com is doing a variant of this with drugs.
yencabulator 7y ago
That's called "indemnity insurance", and it very much exists. You get $x every time you need to see a doctor (capped to $y/year, or such). E.g. $3000/day if you're confined into a hospital. It's tough to figure out the plan that works well for non-routine things. But then again, bigger operations are tough for everyone who doesn't have the best employer-based HMO/PPO plans.

chiph 7y ago

It really helps to be a shrewd negotiator when it comes time to pay your bill. https://youtu.be/pY-BGNjI2Rg?t=281 https://youtu.be/pY-BGNjI2Rg?t=281 Should you have to do this? No. No one in American healthcare knows how much it costs to deliver care. And as a result, the bills are more like: "They look rich. Let's see if they'll just pay it."

maerF0x0 7y ago

This adds to my recent thought stream that it ought to be charge 2 people a different price for the same thing (basket of things) ... Why is it that someone who is a new customer for service X gets a sweetheart deal but those of us who have faithfully paid for months/years are charged a premium? Why is it that 2 people in a hospital pay entirely different prices for the exact same thing? on and on the insanity goes. I am, of course, not talking about packages/bundles etc. Yes it makes sense that someone who buys 10 could get a better price than someone who buys 1.

lotsofpulp 7y ago
Price discrimination yields the most profit for a seller. You want to be able to capture all that each person is willing to pay, because your cost of goods sold remains the same. Also the new customer doesn’t permanently get a sweetheart deal, it’s always a temporary incentive to join, which doesn’t seem unfair to me at all. However, as a buyer, if you’re not always shopping around, expect to pay more than someone who does. That’s just how the game works.
- maerF0x0 7y ago
  > That’s just how the game works. I agree that you're talking about an optimal analysis of the current game. However, one of the roles of government is to alter games which are suboptimal for society. For example cartels are illegal despite them being optimal for the sellers.

randyrand 7y ago

This ridiculous symptoms come from ridiculous regulations and their unintended consequences. Apart from emergency care, I think the health care industry actually needs very little regulation.

entee 7y ago

It's important to remember that an insurance company has very little to zero incentive to lower costs. The only incentive an insurer has is to ensure costs are predictable. It doesn't matter if costs go up 20% next year as long as they know costs will not go up 25%. The extra cost gets shunted into the premium. There is no party in the current healthcare system whose incentive is to lower prices. Medicare/Medicaid can achieve low costs by fiat, but it's broadly accepted that the whole system as structured today couldn't operate on those prices [1]. This means private insurance picks up the delta. Doctors, Hospitals, Pharmacies, Drug companies, Medical device companies all have zero incentive to lower prices. You might think technology that makes doctors visits (to pick one example) would just win out in the marketplace, but there's a flawed assumption there. Most people are insured, so most people are paying the insured cost. For something like a doctor's visit, you pay your copay (say, $25) and the insurer pays the rest (lets say up to $70). Assume you could get an app or a technology that gets that price down to $35. This would be a huge achievement and you'd go out of business because it's more expensive than what the consumer sees. Ah yes, but maybe you can pitch to insurers, surely they would love a lower cost! Probably not. You're small so you can't reduce their costs across the board. Even if you succeed, they have caps on how many profits they can take (usually something like 15-20%) so if you drop their costs, that might actually force them to refund customers. Good, but not the primary driver for profitability. Let's even grant that the above isn't true. You're still a small player, you basically need to fit inside their (extremely cumbersome) protocols to be able to bill them. Now you have to do all sorts of billing and management, maybe you need to hire extra staff to run billing. That $35 now financially doesn't make sense, maybe it's now $55. Still cheaper but now you're in the system and don't have much of a competitive advantage that's visible to the consumer. Now you differentiate by offering better services, maybe a good online portal, that costs more engineers, and now we're back up to $70. Insurer doesn't care much, you're just another provider, they'll pay, you'll make money, and we're back to square one. We're not even considering the, "Is the cancer doc that costs 25% less the same value as the other guy?" problem, which is damn hard on its own. Healthcare is really hard, and the incentives across the board are perverse. I'm increasingly skeptical a solution that doesn't dramatically reshape the market is likely to make a difference. [1] https://www.healthcarefinancenews.com/news/mgma-majority-practices-say-cost-care-outweighs-medicare-reimbursements https://www.healthcarefinancenews.com/news/mgma-majority-pra...

bobharris 7y ago

I always got a kick out of the DO's in training at a WA DO school telling us they were all on WA medicaid, as they didn't have another option in which to obtain healthcare. Huh, that's odd. A friend who asked how much the retina re-attachement would cost. Weighing her options. I'm just sad that healthcare seems like such a luxury. I do enjoy stories of friends not just being complacent. Going out of country for dental procedures. Getting good results for 1/10 the price.

IronWolve 7y ago

If you have to go to minor emergency clinics that are popping up all over, say you dont have insurance and want the cash price, its 1/4th the cost. If you pay with insurance and have a co-pay or a yearly deductible its just not worth it. Then pay with your HSA card.

ilaksh 7y ago

This type of thing is one of the main reasons I moved to Mexico.

radley 7y ago

I have a prescription that was $35 with Anthem and $17 with Blue Shield. With cash: $12.

intopieces 7y ago

What’s a little tricky here is that the cash price is only $521 because the insured price is $2,758. If the patient were able to choose the cash price or the insured price, the cash price would be much higher. One of my family members once told me he is against socialized medicine because it subsidizes the bad choices of the poor. True enough, but that’s no different from the current situation (since hospitals can’t refuse to treat) except that the one we have is opaque.

mnm1 7y ago

So if the cash price is five hundred something can the lady in the story decide to pay that now instead of her insurance deductible? If not why not?

sjg007 7y ago

I paid like $3k for hearing tests for my kid because my insurance wouldn't cover it. This was at a world famous California children's hospital.

SI_Rob 7y ago

How long has it been broken like this? By my count, at least 346 years, reckoning from the premiere of The Imaginary Invalid by Molière. The opening scene features the protagonist iterating over a series of rationalizations for reducing his medical bills to 1/3 of the list price. That this scene was expected to be received by an audience which could relate to the necessity of performing these sorts of arithmetic gymnastics (though perhaps exaggerated for comedic effect) suggests that this was already a well-established norm in 1673: SCENE I.--ARGAN (_sitting at a table, adding up his apothecary's bill with counters_). ARG. Three and two make five, and five make ten, and ten make twenty. "Item, on the 24th, a small, insinuative clyster, preparative and gentle, to soften, moisten, and refresh the bowels of Mr. Argan." What I like about Mr. Fleurant, my apothecary, is that his bills are always civil. "The bowels of Mr. Argan." All the same, Mr. Fleurant, it is not enough to be civil, you must also be reasonable, and not plunder sick people. Thirty sous for a clyster! I have already told you, with all due respect to you, that elsewhere you have only charged me twenty sous; and twenty sous, in the language of apothecaries, means only ten sous. Here they are, these ten sous. "Item, on the said day, a good detergent clyster, compounded of double catholicon rhubarb, honey of roses, and other ingredients, according to the prescription, to scour, work, and clear out the bowels of Mr. Argan, thirty sons." With your leave, ten sous. "Item, on the said day, in the evening, a julep, hepatic, soporiferous, and somniferous, intended to promote the sleep of Mr. Argan, thirty-five sous." I do not complain of that, for it made me sleep very well. Ten, fifteen, sixteen, and seventeen sous six deniers. "Item, on the 25th, a good purgative and corroborative mixture, composed of fresh cassia with Levantine senna and other ingredients, according to the prescription of Mr. Purgon, to expel Mr. Argan's bile, four francs." You are joking, Mr. Fleurant; you must learn to be reasonable with patients; Mr. Purgon never ordered you to put four francs. Tut! put three francs, if you please. Twenty; thirty sous. [Footnote: As usual, Argan only counts half; even after he has reduced the charge.] "Item, on the said day, a dose, anodyne and astringent, to make Mr. Argan sleep, thirty sous." Ten sous, Mr. Fleurant. (the above is just the first half of Argan's recitations - they go on for another paragraph or two!)

elihu 7y ago

The opposite also happens, where the uninsured price is a lot more than the insured price. I was in this sort of situation once. I needed a CT scan, but it was on a late friday afternoon, and the hospital couldn't get prior approval from the insurance company. They quoted one price that they would bill the insurance company if it was approved, and another much larger priced that I would have to pay if the insurance company rejected the claim. (I ended up getting the CT scan the next day at a hospital that charged a lot less. I think it was covered by insurance.) The thing about this that's bad is that it's over-charging the people least likely to be able to repay, and (if they can come up with the cash) they're effectively subsidizing the insured customers. This is the other side of narrative that poor people are driving up health care costs for everyone else because they don't pay their bills.

newshorts 7y ago

I wanted to level the playing field a few years ago and built the site below. It aims to present users with the highest quality and lowest price hospitals in your area: http://myhospitalscore.com/ http://myhospitalscore.com/

kevindong 7y ago

I'm dealing with an insurance mess right now. I got a physical at a in-network doctor a month ago and they sent my blood sample to an out-of-network lab. My insurer sent me a statement last week saying that $444 of the $954 bill is eligible for payment. However since I hadn't met my deductible for out-of-network spending yet, I would have to pay that entire $444 on top of the $510 that they wouldn't cover even if the sample had been sent to a in-network lab. I believe/am hopeful that since I live in New York, which prohibits out-of-network providers from surprise billing patients without the patient's informed and explicit consent that the procedure would be considered out-of-network [0], that I ultimately won't be held liable for the bill. Fortunately as a software engineer, I can trivially afford to pay the bill in the worst case. But I shudder to think of the consequences for someone in a much less privileged circumstance. [0]: https://www.dfs.ny.gov/consumers/health_insurance/surprise_medical_bills https://www.dfs.ny.gov/consumers/health_insurance/surprise_m...

luminaobscura 7y ago

1. Forbid different pricing for different payers. 2. All prices have to be posted on your website. 3. Patient has to agree on the bill beforehand. (ER is the exception obviously)

yencabulator 7y ago

Relatively routine outpatient surgery: Doctor's fee $750 Anesthetician's fee ~$150 Hospital facility fee ~$24,000 Hospital facility fee, cash price ~$9,000

dontwhy 7y ago

fortune 500 top10 companies 5. McKesson the largest U.S. pharmaceutical distributor 6. UnitedHealth Group 7. CVS Health Can't you tell why?

axaxs 7y ago

I write this very candidly, and many on HN would likely constantly argue if I always chimed in with my personal views. I am a very conservative person, and always have been. That said, I will vote for anyone who promises single payer healthcare. Our healthcare is completely broken, and I feel honestly that anyone defending it is either being paid or brainwashed.

aj7 7y ago

I’ve been purchasing drugs entirely by cash, optimizing markets as best I can, for about 7 years now. I began when I discovered my employer’s drug plan, Optum, was charging me significantly higher prices than the the spot prices on the open market.

truthseeker1 7y ago

Most of you who attack doctors have no idea how this complex health care system works. Doctors are UNDERpaid. A majority of the billing goes to overhead for the hospital facilities, nurses, labs, meds, administrators, etc, with doctors getting much less than 10% of the revenue even though they are responsible for generating most of it. Your resident doctor friend (who has way more qualifications than your software engineer friend - including top tier college, and medical school) gets paid about 60-70k a year for working at least 80 hours a week. Yes, the man or woman who assists in your brain surgery after your aneurysm popped gets paid less than your uber driver for 7 years time, and he sacrificed his/her best years to be a sleep deprived medical student and then brain surgeon working under constant rush and stress, as their 300k med school debt accumulated under high compound interest. Meanwhile, your mediocre software engineer friend graduates debt free, gets paid 160k out of college to build the next best sexting app, at a company with free lunch and gym. Also, don't forget about the malpractices. 10 years down the line, your radiologist friend gets successfully sued for 11 million dollars bc the parents of a child for whom they read a chest radiograph decided to sue because lawyer convinced the parent and jury that radiologist was at fault for not saying the heart is enlarged and somehow that is responsible for all the kids ailments later on in life (the truth is much more complex than that). The radiologist probably got paid 7.50$ for that read, btw. This is actually a true story, look it up in the Boston Globe. Now all providers are on edge and overdiagnosing and overordering everything - who would want to miss a diagnosis.

mewop 7y ago

ITT: people who assume doctors are accountants and go home in their sports car every night to tweak their prices and count the stacks of 100s they made that day The reality is is doctors often have no control over cost. Yes, if you are the increasingly rare private group that is physician owned you do but certainly not if you are employed. These are 100% set by the bean counters who are paid twice my salary and have no idea about what we do on a day-to-day basis. I have no idea what my services cost and for ethical reasons I don't want to. That inflicts bias and can lead to misdiagnosis. I sacrificed 10 years of my life and took on over $275,000 of debt that continues to grow thanks to compound interest. I live in an average house and drive an average car because I have this debt to pay back. Daily I am responsible for not harming dozens of patients while trying to make their lives better. With each decision I make I have the risk of being sued and losing everything I have worked for. All the while, my mid-level providers work relatively liability free because they work under my license and their mistakes are on my back. Adminstration pushes for higher numbers of patients andmore uncompensated work. When was the last time you spoke to a lawyer on the phone or had them complete a 5 page document for free? Think twice before you criticize doctors and the sacrifices we have made. I didn't do this for the money, I assure you.

fulldecent2 7y ago

If you have a similar story: stop reading, open a court case in small claims court and come back to post about it. You will get all the support you need here from extremely qualified people, including specific filings you should make and also answers to every question you will have.