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We really need to move to reference based pricing. We can cut so much waste out of the current system including brokers. Reference based pricing also get rids

We really need to move to reference based pricing. We can cut so much waste out of the current system including brokers. Reference based pricing also get rids of the loopholes for things like anesthesiologists being "out of network" at a hospital/facility that is "in network". It also gets rid of the situation where if you offer cash you get one price but if you submit for the same code, it could be 3x or 10x or even more.

whatshisface 4y ago
What's reference-based pricing?
- antisthenes 4y ago
  It's basically price-controls. A regulatory body looks at how much something "should" cost based on its history of reimbursement and the cost of its inputs and then sets a cap of say, cost + 20%. The problem is having an independent body that is free of influence of health insurance companies and hospitals, both of which have perverse incentives to continue profiteering.
  - db48x 4y ago
    Not to mention the fact that it will eventually cause a supply shortage.
    - alxhill 4y ago
      Germany has reference pricing for their drugs system and doesn't seem to have a supply issue. Genuine question, is there something that makes you think that wouldn't be true for the US?
      - whatshisface 4y ago
        How would anyone notice a shortage when shortages came in the from of it not being standard practice to prescribe a medicine in a certain situation?
      - spaetzleesser 4y ago
        " Genuine question, is there something that makes you think that wouldn't be true for the US?" The US is too big, too diverse, too whatever else, blablabla for things that work perfectly anywhere else in the world. Nothing can be learned from other countries unless it makes capitalists richer.
      - junofan 4y ago
        No compulsory licensing.
      - db48x 4y ago
        I was thinking more in terms of procedures. Look for waiting lists, those are the procedures where the government–chosen price is too low. Meanwhile more profitable procedures will not have a waiting list. Medicines are more complicated because the manufacturer will probably have patents that grant them a manufacturing monopoly, meaning they can always set the price to whatever they want anyway. Not to mention that a multinational can afford to make less in some countries as long as on average they make enough to continue doing research. If Germany somehow sets a price that is egregiously low, the manufacturer can simply sell their medicine elsewhere instead.
- snarf21 4y ago
  The sibling is right but in this case we'd probably do something like Medicare + 20%, which is actually close to what most insurers do for some of the codes already. It just removes the cost of negotiation, brokers, out of network, etc. and actually lets you know the cost up front for most appointments. We also need to get rid of service levels for most appointments. It is just used as an excuse to up charge by having patients fill out pointless paperwork. We also need to reimagine our service provider models. We have already move to CMAs to take blood pressure, etc. We also need to move to PA or LPN instead of a Dr for most cases. Ear infections, colds, flus, etc. are a majority of family appointments and can be handled by lower levels. The Dr can then review cases and deal with the more complicated cases where her expertise is most needed.
  - thaumasiotes 4y ago
    > in this case we'd probably do something like Medicare + 20%, which is actually close to what most insurers do for some of the codes already. But this is how Medicare sets its own prices - they pay a percentage of the minimum price you charge anybody else. You can't then have the non-Medicare parties charging a percentage of Medicare; that's a circular reference that could result in absolutely any price.
  - refurb 4y ago
    I’ll admit I haven’t thought of all of the potential consequences, but this seemed like a good idea. Medicare collects cost data from hospitals and uses it to set their DRG payments. They have the data. You could make some law saying providers can’t charge more than X% of what Medicare rates are. You could even make it 200% (lots of room for higher reimbursement) and it would be a massive change. You won’t have one hospital charging $2000 for an MRI and another $15,000 (actual numbers I’ve seen - the payment insurers made!). That would force hospitals and insurers to at least keep price somewhat closer to reality and they’d need to stop the game of “ill take an insurance payment below cost for X-rays but make it up in MRI reimbursment” which is what a lot of hospital do - they look at line of service finances not procedure costs (so they don’t care if X loses money if they make it up on Y). Problem is, most hospitals have no clue what things cost (a friend worked at a major hospital and said they’ve never calculated what it costs, all in, for say an MRI). It would be massively disruptive for a while but eventually contracts would be renegotiated and you’d end up with bills that are at least in the ballpark of actual costs.
arcticbull 4y ago
Or we can have one network every doctor is in, and the state pays for everything. All doctors are independent contractors to the state. Everything is paid for. There's one price for everything. Everyone is covered. All this garbage just disappears. Then there's one nice fee schedule like this, with all the prices on it, but it doesn't even matter, unless you're a physician doing your billing. [1] [edit] As you can see from the PDF, a dermatology consult (A025) is $72CAD. [1] https://www.health.gov.on.ca/en/pro/programs/ohip/sob/physserv/sob_master.pdf https://www.health.gov.on.ca/en/pro/programs/ohip/sob/physse...
- spaetzleesser 4y ago
  You don’t need to have the state pay. Make them charge the same price to all customers. Then you can have insurances compete. My body shop doesn’t charge one insurance $10/hr and another insurance $100/hr for the same work.
  - ars 4y ago
    So many don't realize that this is entirely because Medicaid pays less than the cost of treatment. So hospitals make it up by charging other customers more. If you actually wanted this then your taxes would go up because Medicaid expenses go up dramatically. Maybe it's worth it - but at least be aware of what you are asking for.
    - heretogetout 4y ago
      I'd be interested in reading more about this. A lot of the cost of medicine is overhead interfacing with insurance providers and all the layers of profit therein, but I don't know exactly how much.
    - Hellbanevil 4y ago
    - spaetzleesser 4y ago
      "So many don't realize that this is entirely because Medicaid pays less than the cost of treatment. So hospitals make it up by charging other customers more." I would like see an accounting of that. I bet they charge way more than they have to if they want to make up for Medicaid.

whatshisface 4y ago

What's reference-based pricing?

antisthenes 4y ago
It's basically price-controls. A regulatory body looks at how much something "should" cost based on its history of reimbursement and the cost of its inputs and then sets a cap of say, cost + 20%. The problem is having an independent body that is free of influence of health insurance companies and hospitals, both of which have perverse incentives to continue profiteering.
- db48x 4y ago
  Not to mention the fact that it will eventually cause a supply shortage.
  - alxhill 4y ago
    Germany has reference pricing for their drugs system and doesn't seem to have a supply issue. Genuine question, is there something that makes you think that wouldn't be true for the US?
    - whatshisface 4y ago
      How would anyone notice a shortage when shortages came in the from of it not being standard practice to prescribe a medicine in a certain situation?
    - spaetzleesser 4y ago
      " Genuine question, is there something that makes you think that wouldn't be true for the US?" The US is too big, too diverse, too whatever else, blablabla for things that work perfectly anywhere else in the world. Nothing can be learned from other countries unless it makes capitalists richer.
    - junofan 4y ago
      No compulsory licensing.
    - db48x 4y ago
      I was thinking more in terms of procedures. Look for waiting lists, those are the procedures where the government–chosen price is too low. Meanwhile more profitable procedures will not have a waiting list. Medicines are more complicated because the manufacturer will probably have patents that grant them a manufacturing monopoly, meaning they can always set the price to whatever they want anyway. Not to mention that a multinational can afford to make less in some countries as long as on average they make enough to continue doing research. If Germany somehow sets a price that is egregiously low, the manufacturer can simply sell their medicine elsewhere instead.
snarf21 4y ago
The sibling is right but in this case we'd probably do something like Medicare + 20%, which is actually close to what most insurers do for some of the codes already. It just removes the cost of negotiation, brokers, out of network, etc. and actually lets you know the cost up front for most appointments. We also need to get rid of service levels for most appointments. It is just used as an excuse to up charge by having patients fill out pointless paperwork. We also need to reimagine our service provider models. We have already move to CMAs to take blood pressure, etc. We also need to move to PA or LPN instead of a Dr for most cases. Ear infections, colds, flus, etc. are a majority of family appointments and can be handled by lower levels. The Dr can then review cases and deal with the more complicated cases where her expertise is most needed.
- thaumasiotes 4y ago
  > in this case we'd probably do something like Medicare + 20%, which is actually close to what most insurers do for some of the codes already. But this is how Medicare sets its own prices - they pay a percentage of the minimum price you charge anybody else. You can't then have the non-Medicare parties charging a percentage of Medicare; that's a circular reference that could result in absolutely any price.
- refurb 4y ago
  I’ll admit I haven’t thought of all of the potential consequences, but this seemed like a good idea. Medicare collects cost data from hospitals and uses it to set their DRG payments. They have the data. You could make some law saying providers can’t charge more than X% of what Medicare rates are. You could even make it 200% (lots of room for higher reimbursement) and it would be a massive change. You won’t have one hospital charging $2000 for an MRI and another $15,000 (actual numbers I’ve seen - the payment insurers made!). That would force hospitals and insurers to at least keep price somewhat closer to reality and they’d need to stop the game of “ill take an insurance payment below cost for X-rays but make it up in MRI reimbursment” which is what a lot of hospital do - they look at line of service finances not procedure costs (so they don’t care if X loses money if they make it up on Y). Problem is, most hospitals have no clue what things cost (a friend worked at a major hospital and said they’ve never calculated what it costs, all in, for say an MRI). It would be massively disruptive for a while but eventually contracts would be renegotiated and you’d end up with bills that are at least in the ballpark of actual costs.

arcticbull 4y ago

Or we can have one network every doctor is in, and the state pays for everything. All doctors are independent contractors to the state. Everything is paid for. There's one price for everything. Everyone is covered. All this garbage just disappears. Then there's one nice fee schedule like this, with all the prices on it, but it doesn't even matter, unless you're a physician doing your billing. [1] [edit] As you can see from the PDF, a dermatology consult (A025) is $72CAD. [1] https://www.health.gov.on.ca/en/pro/programs/ohip/sob/physserv/sob_master.pdf https://www.health.gov.on.ca/en/pro/programs/ohip/sob/physse...

spaetzleesser 4y ago
You don’t need to have the state pay. Make them charge the same price to all customers. Then you can have insurances compete. My body shop doesn’t charge one insurance $10/hr and another insurance $100/hr for the same work.
- ars 4y ago
  So many don't realize that this is entirely because Medicaid pays less than the cost of treatment. So hospitals make it up by charging other customers more. If you actually wanted this then your taxes would go up because Medicaid expenses go up dramatically. Maybe it's worth it - but at least be aware of what you are asking for.
  - heretogetout 4y ago
    I'd be interested in reading more about this. A lot of the cost of medicine is overhead interfacing with insurance providers and all the layers of profit therein, but I don't know exactly how much.
  - Hellbanevil 4y ago
  - spaetzleesser 4y ago
    "So many don't realize that this is entirely because Medicaid pays less than the cost of treatment. So hospitals make it up by charging other customers more." I would like see an accounting of that. I bet they charge way more than they have to if they want to make up for Medicaid.