4 ms·

Has anyone here ever worked in this industry? I'm curious what the justification for these prices is? I can't imagine it is quite the scrooge mcduck caricatur

by blhack 7y ago

Has anyone here ever worked in this industry? I'm curious what the justification for these prices is? I can't imagine it is quite the scrooge mcduck caricature where the people reaping these profits are literally trying to defraud people. I would love to talk to a health insurance insider or something and ask them to justify this stuff.

chooseaname 7y ago
Two guesses: 1) return money to investors at all costs. 2) inability of us to get any sort of Tort reform going in this country.
war1025 7y ago
My mom worked in medical records at a small hospital. The way she explained it to me was that insurance companies negotiate prices way down, and expect to. So in order to make enough money to cover costs, the hospital has to put astronomical sticker prices on everything so that insurance can "talk them down" to the actual price they expect to receive. Mostly our healthcare system is completely fucked and we should all feel bad.
noelsusman 7y ago
I've spent my whole career working for hospitals primarily dealing with cost data. There's not much incentive to create a sensible pricing structure because very few patients actually pay the posted prices. Most revenue comes from the government or insurers, and neither of them give a fuck what you charge for a sling. Hospitals have limited resources, and dealing with insurers is a big enough operation as it is. Most chargemasters are created by multiplying acquisition cost or Medicare rates by some absurd number (typically 8-10) and calling it a day. Frankly, I see this whole thing as a red herring. I get why people get upset about it, but if you ended this practice then the money would just shift somewhere else. Hospitals are mostly non-profits with small margins, so the money has to come from somewhere. Instead of charging 10 times cost for everything they would just dump it all into a generic fee. This kind of stuff isn't actually relevant to the core problem of why healthcare is so expensive in the US. It's definitely not a scrooge mcduck caricature situation. Like I said, most hospitals are non-profits who post their financial statements online. You can probably go look at your local hospital's statements to see what kind of margins they're working with. There are exceptions, but I'd bet they're pretty low.
- Paul-ish 7y ago
  Non-profit just means they don't pass money on to shareholders, right? That doesn't mean there isn't management taking a large cut. Recently a hospital near my family was bought up by CHI[1], making them the only game in town. Is there any reason to believe prices wont go up? * https://en.wikipedia.org/wiki/Catholic_Health_Initiatives https://en.wikipedia.org/wiki/Catholic_Health_Initiatives

by blhack 7y ago

chooseaname 7y ago

Two guesses: 1) return money to investors at all costs. 2) inability of us to get any sort of Tort reform going in this country.

war1025 7y ago

My mom worked in medical records at a small hospital. The way she explained it to me was that insurance companies negotiate prices way down, and expect to. So in order to make enough money to cover costs, the hospital has to put astronomical sticker prices on everything so that insurance can "talk them down" to the actual price they expect to receive. Mostly our healthcare system is completely fucked and we should all feel bad.

noelsusman 7y ago

I've spent my whole career working for hospitals primarily dealing with cost data. There's not much incentive to create a sensible pricing structure because very few patients actually pay the posted prices. Most revenue comes from the government or insurers, and neither of them give a fuck what you charge for a sling. Hospitals have limited resources, and dealing with insurers is a big enough operation as it is. Most chargemasters are created by multiplying acquisition cost or Medicare rates by some absurd number (typically 8-10) and calling it a day. Frankly, I see this whole thing as a red herring. I get why people get upset about it, but if you ended this practice then the money would just shift somewhere else. Hospitals are mostly non-profits with small margins, so the money has to come from somewhere. Instead of charging 10 times cost for everything they would just dump it all into a generic fee. This kind of stuff isn't actually relevant to the core problem of why healthcare is so expensive in the US. It's definitely not a scrooge mcduck caricature situation. Like I said, most hospitals are non-profits who post their financial statements online. You can probably go look at your local hospital's statements to see what kind of margins they're working with. There are exceptions, but I'd bet they're pretty low.

Paul-ish 7y ago
Non-profit just means they don't pass money on to shareholders, right? That doesn't mean there isn't management taking a large cut. Recently a hospital near my family was bought up by CHI[1], making them the only game in town. Is there any reason to believe prices wont go up? * https://en.wikipedia.org/wiki/Catholic_Health_Initiatives https://en.wikipedia.org/wiki/Catholic_Health_Initiatives