4 ms·

I’m convinced that the single best way to improve the current private-insurance based system is that it should be illegal to charge two different patients a dif

by zaroth 5y ago

I’m convinced that the single best way to improve the current private-insurance based system is that it should be illegal to charge two different patients a different price for the same test, drug, or procedure given at the same hospital. I think implementing such a policy could be trivial for many things like labs and drugs and many procedures, and admittedly tricky to implement for complex / one-off procedures, but that shouldn’t stop us from trying. Price transparency is important but eliminating price discrimination is I think the key way to shut down so much of the bloat and corruption currently in the system. The last step would be to make it illegal to do any kind of rebating where patients are billed more than insurance ultimately pays. Charging less for one procedure taken by Patient A in exchange for charging more for another procedure taken by Patient B similarly should just be banned. You end up with a system where the insurance companies and benefits managers have a lot less that they are able to do. Perhaps they would claim they are “hamstrung” but that’s exactly what they should be in this regard.

deleted 5y ago
[deleted]
Spivak 5y ago
You can actually be lighter touch than that and still have things work. Just make it so that you can’t “pay with insurance.” You have to send the bill to the patient who files a claim, gets a cash payout, and pays the bill. Offer senior discount, have a 30% off sales, have hot flash summer, whatever. But now pricing will be predictable because there are no back-room negotiations. If you ever pay for medical services without insurance you’ll find that places can suddenly give you a straight price.
- lotsofpulp 5y ago
  > If you ever pay for medical services without insurance you’ll find that places can suddenly give you a straight price. I have tried many times to get a doctor’s office to give me a price in writing for a completely preventative visit where there could be no possibility of variance in service rendered, and I have always received an answer of no. Edit: so now I just assume any healthcare I get will cost me up to my out of pocket maximum, and budget for that yearly.
  - EForEndeavour 5y ago
    It sounds like the US healthcare system financially incentivizes people to postpone or avoid preventive medical care for as long as humanly possible, worsening the inevitable health crises, thus suppressing population health and wellbeing in favor of corporate profit.
    - refurb 5y ago
      Preventative care is 100% covered at no cost with the ACA changes.
lotsofpulp 5y ago
One of the bigger root causes for the price discrimination and lack of price transparency, and general convoluted-ness is that there is far greater demand for healthcare than there is supply, and this is how the US rations its healthcare. Medicaid pays providers less than Medicare because, politically, the population that needs Medicaid (poor people) does not have the political power that Medicare (old people) does. By paying providers less, there is less incentive to see Medicaid patients, and it effectively limits the amount of healthcare poorer people receive. However, the convoluted nature of the process gives politicians plausibly deniability, since people generally do not understand how care is being rationed. Similarly, employees of large businesses get access to health insurance at pre tax prices, while employees of small businesses do not since businesses with less than 50 employees are not required to offer employer subsidized health insurance. ACA did greatly assist with the price transparency by standardizing what health insurance has to cover though, and by creating healthcare.gov, so we are moving in the right direction. However, the other end of this is that the government uses managed care organizations (MCOs, health insurers), to ration care by having different rules for approving who gets what care. For example, the government pays for both Medicaid and Medicare. But Medicaid is via state governments’, and each state will hire a certain MCO to implement the Medicaid plan’s rules for that state. And the rules of that plan will state patient has to follow so and so healthcare regimen to get X treatment, and so doctors have to follow that specific course of treatment in order to get paid for that patient. So the state will have different rules for the Medicaid patient (more strict, less reimbursement) than the federal government will for Medicare and Tricare patients (less strict, more reimbursement. Meanwhile, people will bitch at MCOs (insurers) not approving payment or doctors will complain about having to get pre authorizations for providing healthcare, when in reality, the rules are not being made by insurers, but rather by the government themselves who then contract with MCOs to implement those rules, and take the heat from the public for doing so.
- zaroth 5y ago
  It’s very late to reply, but I think a bunch of these claims are not entirely true, or at least not true universally across the US. Medicaid has legal acceptance requirements that other insurance does not. I believe large hospitals in particular have to accept Medicaid because they lose other government subsidies if they don’t. In many ways Medicaid is the “best insurance that money can’t buy”. Also, even small business employees can pay for health insurance with pre-tax dollars, although it may need to be claimed on a tax return. Lastly, if a medical treatment is FDA approved and medically necessary typically a plan must cover it, or propose an equivalent treatment (i.e. generics) The plan cannot prescribe a specific treatment regimen, although they can make reimbursement of one treatment contingent on trying something else (usually much cheaper option) first, as long as there isn’t a medical reason not to do so.
snarf21 5y ago
Reference based pricing is a simple, easy to pass (it can be framed as price caps) rule that would cut healthcare spending by 25%. However, part of the reason we spend so much is that we demand so much. We have urgent cares on every block. Someone has to pay for those facilities and staff to be there all the time.
- PoignardAzur 5y ago
  I just googled reference-based pricing, so forgive me if I'm missing something, but isn't that basically state price controls? The way I understand it, it can work if the state uses the right metrics to determine prices, but there's a ton of failure modes where prices are set too high or too low. (Then again, it's more or less how we do healthcare in France, so I dunno)
  - galvin 5y ago
    Medical practitioners and private institutions are not required to follow the state set prices in France. It's the limit of how much the social security will cover so essentially anyone who sets prices above those limits is competing with "free". Technically social security covers 70% of the state set price and insurance must at a minimum cover the other 30% but that's the general idea.
  - snarf21 5y ago
    It wouldn't be state based. The federal government would pass a law that you can't charge more than Medicare +20%. This fixes some major rent-seeking costs in the current system. It gets rid of the need for brokers (which typically charge 5%) because there is no need to negotiate prices. It also gets rid of everything out of network, you know what the max is. You can't have anesthesiologist that are your only option in the hospital but they are not in network even though the hospital is. It would also push a lot of places to take a standard discount for cash at time of service, just pay Medicare rates. They take less but get it now. It does mean that health "insurance" companies would need to start differentiating on price, wellness plans and customer service instead of exploitative pricing deals.
refurb 5y ago
This same proposal actually came up with drug pricing when Trump (and other before him) said the US should just reference the EU. Many people’s first take is that it’s a terrible idea - it would result in spiraling prices reductions and damage R&D. But what is really happening is you’re just forcing a single price across a wide group of customers. Prices in the US would fall, but they would go up everywhere else. This actually happened in the US when Medicaid got “best price” passed - Medicaid has to get at least the best price offered to private insurers, if not lower. Well when the law was passed, prices actually went up. The reason was that if you offer a price to mid-sized customer A and that forces they same (unacceptably low) price for massively huge customer B, well, you basically tell customer A “tough shit” and just price for customer B. And that’s what happened, prices went up for customer A so they didn’t have to also price the same for customer B. So it would be an interesting approach - tell hospitals they can charge whatever they want, complete freedom, but it has to be the same price for everyone. They’d quickly find an equilibrium that’s likely lower for many customers and higher for a few.
galvin 5y ago
Pricing is definitely an issue, I think one of other big issues that is often overlooked is that countries with some form of national or regulated health insurance have an incentive to encourage preventative care. When everyone including healthy people are insured it makes sense to optimize for long term costs and that means keeping people healthy and dealing with health issues as early as possible to avoid letting them get worse and more expensive. As an example, I've seen insurance proactively provide assistance to help people quit smoking. They don't have to pay for patches or whatever but they do because it's a lot cheaper than cancer treatment.

by zaroth 5y ago

deleted 5y ago

[deleted]

Spivak 5y ago

You can actually be lighter touch than that and still have things work. Just make it so that you can’t “pay with insurance.” You have to send the bill to the patient who files a claim, gets a cash payout, and pays the bill. Offer senior discount, have a 30% off sales, have hot flash summer, whatever. But now pricing will be predictable because there are no back-room negotiations. If you ever pay for medical services without insurance you’ll find that places can suddenly give you a straight price.

lotsofpulp 5y ago
> If you ever pay for medical services without insurance you’ll find that places can suddenly give you a straight price. I have tried many times to get a doctor’s office to give me a price in writing for a completely preventative visit where there could be no possibility of variance in service rendered, and I have always received an answer of no. Edit: so now I just assume any healthcare I get will cost me up to my out of pocket maximum, and budget for that yearly.
- EForEndeavour 5y ago
  It sounds like the US healthcare system financially incentivizes people to postpone or avoid preventive medical care for as long as humanly possible, worsening the inevitable health crises, thus suppressing population health and wellbeing in favor of corporate profit.
  - refurb 5y ago
    Preventative care is 100% covered at no cost with the ACA changes.

lotsofpulp 5y ago

One of the bigger root causes for the price discrimination and lack of price transparency, and general convoluted-ness is that there is far greater demand for healthcare than there is supply, and this is how the US rations its healthcare. Medicaid pays providers less than Medicare because, politically, the population that needs Medicaid (poor people) does not have the political power that Medicare (old people) does. By paying providers less, there is less incentive to see Medicaid patients, and it effectively limits the amount of healthcare poorer people receive. However, the convoluted nature of the process gives politicians plausibly deniability, since people generally do not understand how care is being rationed. Similarly, employees of large businesses get access to health insurance at pre tax prices, while employees of small businesses do not since businesses with less than 50 employees are not required to offer employer subsidized health insurance. ACA did greatly assist with the price transparency by standardizing what health insurance has to cover though, and by creating healthcare.gov, so we are moving in the right direction. However, the other end of this is that the government uses managed care organizations (MCOs, health insurers), to ration care by having different rules for approving who gets what care. For example, the government pays for both Medicaid and Medicare. But Medicaid is via state governments’, and each state will hire a certain MCO to implement the Medicaid plan’s rules for that state. And the rules of that plan will state patient has to follow so and so healthcare regimen to get X treatment, and so doctors have to follow that specific course of treatment in order to get paid for that patient. So the state will have different rules for the Medicaid patient (more strict, less reimbursement) than the federal government will for Medicare and Tricare patients (less strict, more reimbursement. Meanwhile, people will bitch at MCOs (insurers) not approving payment or doctors will complain about having to get pre authorizations for providing healthcare, when in reality, the rules are not being made by insurers, but rather by the government themselves who then contract with MCOs to implement those rules, and take the heat from the public for doing so.

zaroth 5y ago
It’s very late to reply, but I think a bunch of these claims are not entirely true, or at least not true universally across the US. Medicaid has legal acceptance requirements that other insurance does not. I believe large hospitals in particular have to accept Medicaid because they lose other government subsidies if they don’t. In many ways Medicaid is the “best insurance that money can’t buy”. Also, even small business employees can pay for health insurance with pre-tax dollars, although it may need to be claimed on a tax return. Lastly, if a medical treatment is FDA approved and medically necessary typically a plan must cover it, or propose an equivalent treatment (i.e. generics) The plan cannot prescribe a specific treatment regimen, although they can make reimbursement of one treatment contingent on trying something else (usually much cheaper option) first, as long as there isn’t a medical reason not to do so.

snarf21 5y ago

Reference based pricing is a simple, easy to pass (it can be framed as price caps) rule that would cut healthcare spending by 25%. However, part of the reason we spend so much is that we demand so much. We have urgent cares on every block. Someone has to pay for those facilities and staff to be there all the time.

PoignardAzur 5y ago
I just googled reference-based pricing, so forgive me if I'm missing something, but isn't that basically state price controls? The way I understand it, it can work if the state uses the right metrics to determine prices, but there's a ton of failure modes where prices are set too high or too low. (Then again, it's more or less how we do healthcare in France, so I dunno)
- galvin 5y ago
  Medical practitioners and private institutions are not required to follow the state set prices in France. It's the limit of how much the social security will cover so essentially anyone who sets prices above those limits is competing with "free". Technically social security covers 70% of the state set price and insurance must at a minimum cover the other 30% but that's the general idea.
- snarf21 5y ago
  It wouldn't be state based. The federal government would pass a law that you can't charge more than Medicare +20%. This fixes some major rent-seeking costs in the current system. It gets rid of the need for brokers (which typically charge 5%) because there is no need to negotiate prices. It also gets rid of everything out of network, you know what the max is. You can't have anesthesiologist that are your only option in the hospital but they are not in network even though the hospital is. It would also push a lot of places to take a standard discount for cash at time of service, just pay Medicare rates. They take less but get it now. It does mean that health "insurance" companies would need to start differentiating on price, wellness plans and customer service instead of exploitative pricing deals.

refurb 5y ago

This same proposal actually came up with drug pricing when Trump (and other before him) said the US should just reference the EU. Many people’s first take is that it’s a terrible idea - it would result in spiraling prices reductions and damage R&D. But what is really happening is you’re just forcing a single price across a wide group of customers. Prices in the US would fall, but they would go up everywhere else. This actually happened in the US when Medicaid got “best price” passed - Medicaid has to get at least the best price offered to private insurers, if not lower. Well when the law was passed, prices actually went up. The reason was that if you offer a price to mid-sized customer A and that forces they same (unacceptably low) price for massively huge customer B, well, you basically tell customer A “tough shit” and just price for customer B. And that’s what happened, prices went up for customer A so they didn’t have to also price the same for customer B. So it would be an interesting approach - tell hospitals they can charge whatever they want, complete freedom, but it has to be the same price for everyone. They’d quickly find an equilibrium that’s likely lower for many customers and higher for a few.

galvin 5y ago

Pricing is definitely an issue, I think one of other big issues that is often overlooked is that countries with some form of national or regulated health insurance have an incentive to encourage preventative care. When everyone including healthy people are insured it makes sense to optimize for long term costs and that means keeping people healthy and dealing with health issues as early as possible to avoid letting them get worse and more expensive. As an example, I've seen insurance proactively provide assistance to help people quit smoking. They don't have to pay for patches or whatever but they do because it's a lot cheaper than cancer treatment.