4 ms·

I'm the author. A question I have is: how did so many prices ever get negotiated in the first place? What kind of systems are in place to do this kind of micro-

• gffrd 4y ago
  Super curious about this, too. Also! What did they do before they could store 100TB of pricing data? How has pricing (and care quality) changed as a result of being able to do this type of thing?
  • yojo 4y ago
    Possibly the original data is logically compressed. E.g. payer A pays 110% of our standard rates, payer B pays 85% of our standard rates. Those two rows could translate into thousands of CSV lines depending on the number of procedures. Maybe you have a couple one off negotiations for high volume procedures, but even still the source data could be several orders of magnitude smaller than the dumps.
  • acchow 4y ago
    They are obviously not computing pricing this way. Their pricing system applies rules. But they are dumping every possible combination.
  • kderbyma 4y ago
    this would be a great social study. cases where technology has enabled the racketeering and price gouging by corporations with almost no gains in efficiency or output or quality or any metric of value.
• thechao 4y ago
  Any time you can convert a problem from an `N x K` problem to an `N + K` problem, there's some asshole administrator trying to turn an `N + K` problem into an `N x K` problem. It wouldn't surprise me if there's huge amounts of redundant information in there.
  • acchow 4y ago
    > In the newly-released data, each "negotiated rate" (or simply "price") is associated with a lot of metadata, but it boils down to: who's paying, who's getting paid, what they're getting paid for, plus some extra fluff to keep track of versioning. The hundreds of billions of prices in the dataset (probably over a trillion) result from all the possible combinations of these things. They basically denormalized all the dimensions. Imagine you have a function which takes 5 arguments and returns one value. You could give me the source code and let me run this function. Or you could give me a mapping of every possible combination of the 5 inputs to the returned value. The former could be quite small, but the latter would be a massive number of rows.
    • imoverclocked 4y ago
      > You could give me the source code and let me run this function If I understand correctly, in this case, that function's source is highly distributed in wetware. It's about as closed-source as it gets; nobody has anywhere near the full source. Each hospital is its own fiefdom!
      • acchow 4y ago
        Yeah this is part of the problem. But even if you had like 10M rows of pricing and then gave a 2% discount to entity A, 3% discount to entity B, 4% discount to C, etc. You could publish these discount rules. Or you could just multiply the 10M rows by the number of different entities giving 10*n M rows. And then let the consumer of the data try to figure out the rules from the output...?
        • ctchocula 4y ago
          It would be interesting to see whether it's possible to reconstruct the rules by comparing the negotiated prices to a baseline like Medicare price, and doing classification into discount buckets to recover the categories insurers negotiated.
• gmarx 4y ago
  The next question would be 'how long did the average negotiation take' followed by 'how much were the average people on each side of the negotiation paid?" (or are most of these negotiations the result of computers talking to each other? Either way with a few assumptions one could make an estimate of the smallest amount these different prices cost the system. Might be huge
• huslage 4y ago
  They aren't negotiated individually. They are negotiated categorically. They generate individual prices based on some discount rate off of a negotiated max.
• dj_gitmo 4y ago
  The US healthcare system is wildly complicated and inefficient because it is a double-bureaucracy; pubic and private. The government bureaucracy makes a bunch of rules and also provide healthcare through Medicare/Medicaid. The private bureaucracy compete with each other, and hospitals, and pharma companies, ect. Many of the private health providers are for-profit and lobby against rule changes that would reduce complexity and save the system money. It know this may sound glib, but if you are trying to understand the US healthcare system and something seems strange, usually it's because it makes someone money and they'll fight hard to keep it that way.
  • KennyBlanken 4y ago
    > Many of the private health providers are for-profit and lobby against rule changes that would reduce complexity and save the system money. This is almost certainly an anti-competitive move. By keeping many rules and regulations, you need more staff to deal with them - and smaller insurers have fewer patients to amortize those salaries over.
  • deleted 4y ago
    [deleted]
  • spaetzleesser 4y ago
    "usually it's because it makes someone money and they'll fight hard to keep it that way" And it's not just some money but very BIG money they make.
  • refurb 4y ago
    Canada is the only country I know of that has only one system - public. So your claim of public + private being the issue makes no sense when almost every country has that.
    • abrichr 4y ago
      Also Cuba and North Korea.
    • geenew 4y ago
• e_i_pi_2 4y ago
  My understanding (not an expert by any means) is that we basically have two tiers of negotiation - the fed. govt. has way more leverage but also some amount of corruption that goes into pricing, then afterwards individual hospitals and "networks" of providers will negotiate with the insurer - sometimes after the procedure has already happened - to figure out the final price. The end result is that you might end up with an individual doctor having to work with the insurance company for pricing, so the same procedure can cost vastly different amounts at hospitals down the road from each other providing the same level of care. To make it worse we also have laws preventing healthcare providers from providing prices upfront, out of a fear that people will forego necessary care they can't afford. Edit: seems like this changed 01-01-2021, now we do have some price transparency laws - https://www.cms.gov/hospital-price-transparency https://www.cms.gov/hospital-price-transparency
  • celestialcheese 4y ago
    > To make it worse we also have laws preventing healthcare providers from providing prices upfront, out of a fear that people will forego necessary care they can't afford. What are these laws? This seems so backwards - I know personally I have put off medical care in my past because I had high deductible insurance, and no guarantee that the bill I'd get wouldn't wipe me out, and no way to price shop. Paralysis of unknown.
    • e_i_pi_2 4y ago
      Ah thanks for making me look this up! Seems like it did change recently (Jan 1, 2021) https://www.cms.gov/hospital-price-transparency https://www.cms.gov/hospital-price-transparency Now assuming the hospital is compliant the information should be available. To be fair my understanding of the argument for the old law was that you didn't want a hospital with a big sign out front saying "Broken arm repair: $10k" and having people not go in for it when there might be some financial aid they could get afterwards
      • willcipriano 4y ago
        I'm sure the real reason is that the hospital up the road will set up a sign "Broken arm repair: $9k" to compete and that isn't something the lobbyists want.
• woobar 4y ago
  Are we sure they negotiated unique prices with each provider? I wouldn't be surprised if they have a dozen of templates that get replicated every time a new entity accept preexisting price sheet. Basically they have dumped a denormalized data set.
• balderdash 4y ago
  I would assume these get negotiated as a large list with each payer so if you have 500 services, and 4 payers, you probably and up with 1k-2k unique prices?
• bawana 4y ago
  Today in Massachusetts, physicians cannot get paid unless they belong to an organization that negotiates their rates with the insurers. These negotiating entities are like unions but not really. If the insurer and the organization disagree, the insurer simply goes to a different organization to make a contract. Prices were not publicly available so each negotiation resulted in a different fee schedule. On top of that, insurers invent different 'products' with different amounts of 'coverage' for different premiums. Each of these 'products' had their own negotiation, their contracts, and their own subset of physicians who chose to participate. So what do these organizations do for the cut that they take? They reduce the burden of the insurers so they dont have to negotiate with each individual provider. Hospitals are an entirely different system. They have much more negotiating power and if an insurer has a customer that goes to a hospital emergency room outside of their contract, the insurer has to pay outlandish rates. So it is in the insurer's interest to make a deal. They achieve this by inventing different 'products' with different amounts of 'coverage' for different premiums. Each of these 'products' had their own negotiation and their contracts. Price transparency is the first good thing that has been mandated. However, this misses the mark. The focus is the patient, not the insurer, the hospital or the physician. Accordingly, patients should be allowed to submit their explanation of benefits and their bills-this is the data that reflects the true cost of healthcare. All of the numbers provided by hospitals, insurers and physicians has been massaged and buried in a forest of minutiae.
• tyingq 4y ago
  What was negotiated was probably more blanket style discounts like "10% off your published medicare rate for procedures in categories a/b/c" for one customer and "15% off retail price for all categories other than x/y/z but only in these geographic areas" for another customer, and so on. But, when publishing, they omit the context and just dump every negotiated rate. Because it's technically compliant, but keeps things opaque.
  • amaranth 4y ago
    This is probably the data as they have it and instead the people responsible for inputting things in to whatever system this data came from just have a little print out taped next to their screen reminding them customer XPN305 has a 10% discount on codes that start with FJR and so on.
• throw123123123 4y ago
  It's an entire pipeline of billing to extract the tax benefit of insurance. The real economy has way many more prices than this one - from each store of anything in the country that negotiates from straws to bread. The difference is that these ones happen in a system that has a paper trail from the doctor, to the insurance, and this admin burden is only (apparently) worth it because the vast majority of money in healthcare goes through tax-advantaged insurance. Cash based payment should suffice for 50~70% of healthcare expenditues and it would have more prices and not have expensive and abusive billing processes.
• ecommerceguy 4y ago
  There are hundreds of regional networks across the Country. Heck how many Blue Cross Blue Shields are there?
• stevage 4y ago
  And I, as an Australian citizen, am wondering why we don't have this mess. Afaik in our system, each insurer just has one flat price for how much they cover of each procedure. And each provider has a flat price for how much the procedure costs. No individual negotiations between providers and insurers.
• duffpkg 4y ago
  There is not a universal practice. Predominantly just excel, a lot of emails, conference calls and meetings. Different institutions have distinct personalities and that reflects in how things are done between them. Some people still have actual mainframes involved. When it comes to large parties, multi-practice groups, health systems, etc, an overall fee schedule or charge master for an existing institution is typically not renegotitated line by line every year but as incremental changes from the previous. Many/most of the parties involved have been working together for decades, some even longer. Many plans administered by familiar names like Anthem are actually funded and controlled by the large employers the plan services. In those cases the employer plays a role in defining what will and will not be covered and what will be paid and the insurer is a middleman (acting as a third party administrator).