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>> Cost depends on: 1. Are you an outpatient/Obsveration v. inpatient v. ED? 2. Are you on Medicaid? 3. Is the hospital a part of GPO organization or not? 4. Is

>> Cost depends on: 1. Are you an outpatient/Obsveration v. inpatient v. ED? 2. Are you on Medicaid? 3. Is the hospital a part of GPO organization or not? 4. Is contractual obligations of GPO includes/excludes Aspirin? Those considerations aren't part of what anyone calls cost. How much does the hospital pay for aspirin? How much do they pay someone to administer it to a patient? That's cost. If it's very complicated to determine what the patient or their insurance pays, well that's part of the problem.

garettmd 5y ago
This. It's telling that people working inside this system operate on a totally different set of rules for how to determine basic things like the cost of some input.
- throwthere 5y ago
  You're making the reasonable-sounding (but incorrect) assumption that the cost to the hospital of a drugs is the same for every patient. It's telling how people on the outside have no idea how complex the system is, as if there's one simple way to cost an item (hell, there's not even one simple way to cost an item with GAAP accounting for a widget). These lists are kind of worthless in the current iteration, but they'll hopefully get better with more targeted intervention.
  - karmelapple 5y ago
    I wouldn’t call it worthless at all, because of the rest of your last sentence. It provides a starting point. We need to start setting the expectation of transparency for some small subset of info to get further transparency. Change takes time, as much as we’d like it to drastically improve overnight for real life and death situations like medical prices.
  - garettmd 5y ago
    How does the cost of a drug change based on who is consuming it? That's like saying the cost of a loaf of bread changes based on who is buying it. The price you charge for the bread might change, but the cost is the same regardless of who is purchasing it. There's a difference between varying costs of an item based on accounting methods, versus varying costs of an item due to who is buying it. There seems to be huge disconnect here between people working in healthcare, and pretty much everyone else.
    - throwthere 5y ago
      The hospital's drug cost is the price the distributor charges it. That price varies for each individual patient. It's turtles all the way down.
      - jimbokun 5y ago
        That needs to be made illegal tomorrow. Heck, sounds like there could be a Civil Rights Act case, if prices impact people differently based on race or sex or other protected class.
      - thesimon 5y ago
        Why does the distributor know the identity of the patient?
      - dougmwne 5y ago
        This reads like straight up corruption and extortion. There could be no other reason to do this than to milk as much money as possible out of people who have no alternative. You should absolutely be testifying before Congress, not before HN.
        learc83 5y ago
        This is exactly what happens when a monopoly produces extremely price inelastic goods. If it's not illegal, the monopoly will attempt to charge each customer as much as they can afford.
      - 6gvONxR4sf7o 5y ago
        That doesn't change the question though. It just changes who it's posed to.
  - callmeal 5y ago
    >You're making the reasonable-sounding (but incorrect) assumption that the cost to the hospital of a drugs is the same for every patient. Why shouldn't it be? How hard is it for a hospital to project their annual aspirin/paracetamol/? usage and budget for it?
    - mwerd 5y ago
      Easy. Now try it at a rural critical access hospital for rattlesnake antivenom with a short shelf life, so it usually expires unused. They are required by law to stock it or they cannot have their emergency room open. Estimate the revenue generated from treating the one patient who needs it every other year, and by the way, you have 9 contracted payers with different rates and you don't know which one, if any, the patient will have. Rinse and repeat for every other drug required to provide "critical care". Maybe layer on infusion of exotic chemotherapy drugs or monoclonal antibodies to treat a new pandemic virus. It's not easy.
      - Spivak 5y ago
        Radioactive pharmacy is another example of insane pricing complexity (and logistics) because of the short half life problem.
      - Olreich 5y ago
        So one patient every two years needs one dose of an antivenom. Charge them for the dose of antivenom. Then add up the unused stock as administrative cost and spread that over all emergency care. Simple and effective. Do the same sort of thing for all other short-half-life things that you must keep on hand. It doesn’t have to be hard. I get that it is complicated right now, but let’s focus on the idea that simplifying it would help everyone.
        mwerd 5y ago
        Not my area of expertise but I would bet that would get you a substantial fine from Medicare for misrepresenting your cost of care, or at least be prevented by Medicare cost reporting https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/Hospital-1996-form https://www.cms.gov/Research-Statistics-Data-and-Systems/Dow...
jonathan-adly 5y ago
The cost of the aspirin depends on these things lol. Look up 340B. There is a drug called Oncaspar. It's >$16,000 for one patient, and 5 cents for another (acquisition cost). Same drug, widely different acquisition cost.
- danShumway 5y ago
  When two pills coming from the same company are being made at the same time on the same machines, then they both cost the same. It's pretty obvious that the patient status changes nothing about that. However, the hospital's acquisition cost is variable because you're further down the supply chain and you're seeing the exact same kinds of arbitrary behind-the-scenes price swings that this article is talking about. It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.
  - karmelapple 5y ago
    Drugs typically have a pretty in elastic demand. Whether it costs $16000 or $0.05 for a pill, the end user - whether a doctor or a patient - will simply figure out a way to pay for it to alleviate the pain, symptoms, and perhaps to avoid dying. Seems like 340B (I hadn’t heard of this before, thanks!) may have been created with recognition of this inelasticity. If we can limit prices this way, all it would take are a few more laws to put more price limits in place.
    - fragmede 5y ago
      Sort of? As we're seeing with the pandemic, a not insignificant portion of the population is so used to healthcare being utterly inaccessible that animal medication seems like a reasonable alternative. That $16,000 pill isn't getting to patients, people are simply dying without it instead, going to faith/crystal "healers" instead.
    - 5y ago

garettmd 5y ago

This. It's telling that people working inside this system operate on a totally different set of rules for how to determine basic things like the cost of some input.

throwthere 5y ago
You're making the reasonable-sounding (but incorrect) assumption that the cost to the hospital of a drugs is the same for every patient. It's telling how people on the outside have no idea how complex the system is, as if there's one simple way to cost an item (hell, there's not even one simple way to cost an item with GAAP accounting for a widget). These lists are kind of worthless in the current iteration, but they'll hopefully get better with more targeted intervention.
- karmelapple 5y ago
  I wouldn’t call it worthless at all, because of the rest of your last sentence. It provides a starting point. We need to start setting the expectation of transparency for some small subset of info to get further transparency. Change takes time, as much as we’d like it to drastically improve overnight for real life and death situations like medical prices.
- garettmd 5y ago
  How does the cost of a drug change based on who is consuming it? That's like saying the cost of a loaf of bread changes based on who is buying it. The price you charge for the bread might change, but the cost is the same regardless of who is purchasing it. There's a difference between varying costs of an item based on accounting methods, versus varying costs of an item due to who is buying it. There seems to be huge disconnect here between people working in healthcare, and pretty much everyone else.
  - throwthere 5y ago
    The hospital's drug cost is the price the distributor charges it. That price varies for each individual patient. It's turtles all the way down.
    - jimbokun 5y ago
      That needs to be made illegal tomorrow. Heck, sounds like there could be a Civil Rights Act case, if prices impact people differently based on race or sex or other protected class.
    - thesimon 5y ago
      Why does the distributor know the identity of the patient?
    - dougmwne 5y ago
      This reads like straight up corruption and extortion. There could be no other reason to do this than to milk as much money as possible out of people who have no alternative. You should absolutely be testifying before Congress, not before HN.
      - learc83 5y ago
        This is exactly what happens when a monopoly produces extremely price inelastic goods. If it's not illegal, the monopoly will attempt to charge each customer as much as they can afford.
    - 6gvONxR4sf7o 5y ago
      That doesn't change the question though. It just changes who it's posed to.
- callmeal 5y ago
  >You're making the reasonable-sounding (but incorrect) assumption that the cost to the hospital of a drugs is the same for every patient. Why shouldn't it be? How hard is it for a hospital to project their annual aspirin/paracetamol/? usage and budget for it?
  - mwerd 5y ago
    Easy. Now try it at a rural critical access hospital for rattlesnake antivenom with a short shelf life, so it usually expires unused. They are required by law to stock it or they cannot have their emergency room open. Estimate the revenue generated from treating the one patient who needs it every other year, and by the way, you have 9 contracted payers with different rates and you don't know which one, if any, the patient will have. Rinse and repeat for every other drug required to provide "critical care". Maybe layer on infusion of exotic chemotherapy drugs or monoclonal antibodies to treat a new pandemic virus. It's not easy.
    - Spivak 5y ago
      Radioactive pharmacy is another example of insane pricing complexity (and logistics) because of the short half life problem.
    - Olreich 5y ago
      So one patient every two years needs one dose of an antivenom. Charge them for the dose of antivenom. Then add up the unused stock as administrative cost and spread that over all emergency care. Simple and effective. Do the same sort of thing for all other short-half-life things that you must keep on hand. It doesn’t have to be hard. I get that it is complicated right now, but let’s focus on the idea that simplifying it would help everyone.
      - mwerd 5y ago
        Not my area of expertise but I would bet that would get you a substantial fine from Medicare for misrepresenting your cost of care, or at least be prevented by Medicare cost reporting https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/Hospital-1996-form https://www.cms.gov/Research-Statistics-Data-and-Systems/Dow...

jonathan-adly 5y ago

The cost of the aspirin depends on these things lol. Look up 340B. There is a drug called Oncaspar. It's >$16,000 for one patient, and 5 cents for another (acquisition cost). Same drug, widely different acquisition cost.

danShumway 5y ago
When two pills coming from the same company are being made at the same time on the same machines, then they both cost the same. It's pretty obvious that the patient status changes nothing about that. However, the hospital's acquisition cost is variable because you're further down the supply chain and you're seeing the exact same kinds of arbitrary behind-the-scenes price swings that this article is talking about. It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.
- karmelapple 5y ago
  Drugs typically have a pretty in elastic demand. Whether it costs $16000 or $0.05 for a pill, the end user - whether a doctor or a patient - will simply figure out a way to pay for it to alleviate the pain, symptoms, and perhaps to avoid dying. Seems like 340B (I hadn’t heard of this before, thanks!) may have been created with recognition of this inelasticity. If we can limit prices this way, all it would take are a few more laws to put more price limits in place.
  - fragmede 5y ago
    Sort of? As we're seeing with the pandemic, a not insignificant portion of the population is so used to healthcare being utterly inaccessible that animal medication seems like a reasonable alternative. That $16,000 pill isn't getting to patients, people are simply dying without it instead, going to faith/crystal "healers" instead.
  - 5y ago