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In 2015 I did several months of due diligence in this market - price comparison for diagnostic imaging - before concluding that it wasn't feasible to build the
by nugget 6y ago
In 2015 I did several months of due diligence in this market - price comparison for diagnostic imaging - before concluding that it wasn't feasible to build the product we wanted to build. This new law provides the data that we were unable to access (at scale) on our own.
From the data we did get our hands on, I remember seeing price differences like $200 vs $4k for the exact same procedure. The low cost provider was usually a private practice radiologist in a small shopping mall type retail location who ran a very efficient, low overhead practice. They were terrible at marketing and ran discounts for volume from certain channels. They were only open Monday to Friday from 8am to 4pm, read times could often (but not always) be slow, they handled the least complex cases and no emergencies. Cash pay up front from patients resulting in no/minimal collections. The high cost provider was usually a large University affiliated medical center who ran a less efficient, high overhead radiology department but who also, in their defense, had to handle more complex cases as well as be open 24/7 to service one or multiple emergency departments with faster read times. Lots of fighting with insurance companies for eventual reimbursement. Lots of bad debt that went to collections and had to be written down.
If you pay University prices for a simple MRI you are effectively subsidizing the ED admit who needs a complex imaging procedure in the middle of the night. If consumers start to shop for MRIs the way they shop for airline tickets - which they probably should - one downstream effect will be to remove billions of dollars of "subsidies" from the most well-resourced radiology departments in the country. If I remember correctly the diagnostic imaging market was something like $150 billion/year in 2015, and probably even bigger now, i.e. plenty of potential fat to cut.
- kfarr 6y agoResponse time / availability is not something I considered in medical service pricing before but wow it makes a lot of sense.
- wjossey 6y agoFor folks who don’t believe in universal medical coverage, this is part of the reason why it’s so inefficient for it not to exist. The uninsured person going to the hospital at 1AM that requires an MRI because slipped a disc in their back still ends up getting that MRI. When they fail to pay that bill, which would be 5%-10% of their annual earnings, we all still pay for it. We just decided to layer in debt collection, anxiety, and depression onto the patient in lieu of cash. As someone who still considers themselves a fiscal conservative, and also believes we need true universal coverage for all Americans, this seems like a no brainer to me at this point (and I say that as someone who would have not supported this in the 00s but has evolved significantly on this issue).
- nugget 6y agoMy takeaway from all that research was the same. Almost everyone benefits from universal coverage but the system has to incentivize patients to shop around for the optimal balance of price, quality, and convenience. This can be accomplished with an annual deductible of a few thousand dollars perhaps capped at a % of income. Without this incentive, costs skyrocket. Price transparency is a pre-requisite without which consumers can't easily shop around, so this law is a giant leap forward in the right direction. That is the #1 most effective thing that Americans can do to reduce health care costs. #2 would be to change the standard American diet and eat healthier to reduce rates of obesity and diabetes. Almost every other proposed structural change or intervention we looked at was minimal by comparison.
- zaphod12 6y agoThere was an attempt at this with prescription drugs. Encourage patients to take generics by forcing a larger amount of cost onto the patients in the form of higher copays. Pharma companies realized and started giving copay vouchers (still charge insurance more, but short circuit the patient incentive). When that loophole got tighter they formed charitable foundations to give the vouchers instead. I'm not disagreeing with your points, per se. It's just amazing what entrenched interests can manage.
- smachiz 6y agoDo you have any studies or sources to back this up? As I understand it, in most EU markets there's no price component, nor much of a choice component and costs haven't skyrocketed.
- coredog64 6y agoI lived under the French system for years, and it’s entirely untrue that there is no cost or choice component. You pick the doctors and you pay them fully out of pocket. Your insurance company reimburses you at ~80% of reasonable and customary rates. If you wind up going for inpatient care it’s different, as is the situation for those in extreme poverty. Also, you can pay extra for 100% coverage if you want, but ISTR it was expensive and not really worth it for us. Now, when I left, the doctors and insurance companies were setting up an analog of the US system: If you saw certain doctors, they would not charge you at point of delivery and there was no co-insurance requirement. It was still new and inconvenient, so I don’t know how that’s worked out. I don’t have direct experience with the Swiss system, but from everything I’ve read, conversations, etc., it’s a slightly cheaper version of the US system. You buy leveled insurance, you have to pay some out of pocket, etc.