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I wrote Hacking Healthcare for O'Reilly and I've spent the bulk of my career as a CEO and senior executive operating large health systems. It is a meaningful st

I wrote Hacking Healthcare for O'Reilly and I've spent the bulk of my career as a CEO and senior executive operating large health systems. It is a meaningful step forward to have most of this data in the public sphere but I think it is still early and that a lot of work has to continue to shape and analyze this information in a way that is more meaningful and practical for patients. Appreciate the complexity of billing codes, these are not created by hospitals but by by the American Medical Association, Center for Medicaid/Medicare and a soup of other organizations. There are tens of thousands of procedure and drug codes (things that are done or given) and tens of thousands of diagnostic codes (reasons justifying the procedure), creating a space well into the quadrillions of possible routine combinations. That's a large restaurant menu. There are a number of other comments comparing hospital pricing to retail type interactions. It is also important to consider that hospital interactions involve unexpected and unknown things that aren't easily captured in a pricing context before you get there. From an instution standpoint there are some bad apples but a lot of organizations that are not complying are not complying because they are facing technology and operational issues that are stopping them from complying. From the trenches in my consulting practice one example is an institution whose has a core element of their billing system, that is largely a black box even to them, using technologies that are decades old. Why would someone continue to rely on that? Because it has direct integration with critical partners and counterparties that was set up decades ago and that continues to work. Replacing it is underway but is costing 8 figures and taking years. The potential fines are small relative to that and there isn't much they can do to comply in the immediate term anyway. For context understand that Medicare billing routinely involved actual physical dial-up modems somewhere in the chain (even if it was invisible to you) until late 2018.

senortumnus 4y ago
One benefit of this transparency initiative is that patients will come to see how little of their bill goes to physicians.
paws 4y ago
Thanks for sharing! Billing codes certainly seem like a significant source of complexity. Another area that seems problematic to me is an apparent surfeit of middlemen. What conclusions might we draw from the fact e.g. a "Pharmacy Benefit Manager" is a job that exists only in the US [0]? Why does it feel like my insurance premiums pay for lots of things that are difficult to attribute to actual improved health outcomes? Appreciate your insight. [0] https://www.goerie.com/story/opinion/2021/06/12/op-ed-when-comes-prescription-drugs-pbms-have-power/7617580002/ https://www.goerie.com/story/opinion/2021/06/12/op-ed-when-c...
- duffpkg 4y ago
  Something that is very little known to most lay people but has profound implications on how the industry is structured are laws loosely called "Corporate Practice of Medicine" (CPOM). A little more than half the states have some version of them. Simply put they require that the organization legally practicing medicine must be owned and operated by people holding medical licenses only. This defacto creates a medical entity for that purpose and a sistered non-medical entity for business operations. Not speaking to the broader reasons of why those laws can potentially be good, the practical result of those laws all but requires many "middle men" in the operation of medical organizations.
  - paws 4y ago
    TIL about CPOM, thanks! Another question I'm curious about, if you don't mind, is why there is no apparent urgency in fixing the painful billing experience for patients. (aka "why don't billing coordinators seem to coordinate with the patient front and center?") Seems like lots of people are fearful of medical billing, and not only because it's expensive. I realize providers may be out of network, carriers take time to adjust claims, etc. Still, the staggered/surprise billing seems unique to medicine and a 2nd order effect might be people avoiding preventive care to their own detriment. Say a patient goes to get some procedure done, the medical work is completed in one day. Shortly afterwards they receive bill A. OK, that's fine. But then X months later, they receive bill B with more charges from some provider that they may not even remember. I thought avoiding that was supposed to be the job of a billing coordinator. Presumably coordinators are constrained by "things" -- what are the factors that make this experience so dreadful for patients and why are they not being changed?
    - duffpkg 4y ago
      I'm not sure the short answer is adequate but a few things: 1) US healthcare is absolutely huge, it's perhaps 20% of the total macro economy. Changing anything in 20% of the entire economy is going to take a long time. 2) There has been really significant changes regarding price transparency and "surprise" billing in the past 5 years, so there is momentum to improve the patient experience but see #1 3) Regarding hospitals, many hospitals might appear to be one thing but are not (some systems are fully vertically integrated). They are much more like medical malls, often as a result of CPOM. What you percieve as one thing actually involved dozens of different business entities and hence very discoordinated billing.
prepend 4y ago
> From an instution standpoint there are some bad apples but a lot of organizations that are not complying are not complying because they are facing technology and operational issues that are stopping them from complying. From the trenches in my consulting practice one example is an institution whose has a core element of their billing system, that is largely a black box even to them, using technologies that are decades old. I recognize this is the reality. But it seems insane that they have not fixed this in decades and instead charge people based on a “black box.” I’m sure the fact that they make more money this way has nothing to do with their inability to comply. From my perspective, as a patient and taxpayer who funds these things through Medicare and Medicaid, I think those who are incompetent and shady are the same to me. I’d almost rather have a health system try to cheat than so stupid they don’t know what’s happening. The company that cheats on billing seems more likely to be competent than the one who doesn’t know how to cost their care and hasn’t known for decades.
- mistermann 4y ago
  It seems like a classic "just so" story to me, perfect for keeping the public in the dark. I'd think a serious and honest country would develop standard systems that is capable of serving the needs of the majority of users (providers and customers) and then charge proportionally for usage, or else just leave it as funded by the government.
  - hattmall 4y ago
    You might think that but the US couldn't even design a website to sell you insurance. Healthcare.gov is still a cumbersome nightmare.
    - mistermann 4y ago
      It seems to me that the US Government can get impressive things done if they set their mind to it - as examples, consider their prowess at things like propaganda and waging war.
      - 4y ago
manv1 4y ago
Realistically speaking, this is bullshit. Billing has all the data that's required for implementation. The fact that most health systems don't want to publish that data is a reflection of the nature negotiated rates and not a technical problem.
heywire 4y ago
What are your thoughts on insurance companies like Surest (now owned by UHC, formerly named Bind), who hide this complexity behind a single all-in copay amount with no surprise billing and no deductible? My employer offered this plan during open enrollment this year and I’ve decided to give it a try after a few years of getting burned on our HDHP with HSA.
- duffpkg 4y ago
  I don't think I know enough about it to offer a meaningful opinion. It appears to be an offering that is employee sponsored so without understanding the costs to the employer it is difficult to compare it with anything. A point that I don't think is all that well understood is that some employer funded plans, while administered by someone like UHC, it's actually the employer that has a large say who, what and how much something is covered. Speaking for myself, I would want to consider what my out of pocket cost to see a top specialist of my choosing in my area would be. Also personally I am not a fan of HSA plans.
  - otoburb 4y ago
    For families that frequent HN, wouldn't HSAs be the superior option since this demographic is more likely (for better or worse) to have higher discretionary income to weather the up-front HSA costs until hitting the family deductible limit, after which point incremental medical costs are (mostly) covered by the HSA plan? I agree that HSA plans aren't great for families that have less discretionary cash on hand.
    - heywire 4y ago
      This was why I originally chose the HDHP a few years ago, as it was cheaper than our traditional copay plan, and I received ~$2k each January to put into our HSA from my employer. However, as we’ve gotten older, we’re hitting our deductible more often, meaning that we’re putting in a few thousand in addition to my employers part, which has also declined this year to $1400. This new plan from Surest is $40 more per month, and we lose that $1400, but there’s no deductible and copays are like $10-20 for dr visit, $30 for urgent care, and $325 for ER visit. These are all-in prices, so no more surprise bills for the random out of network dr that looked at your X-ray, or 3rd party labs.
boplicity 4y ago
> Appreciate the complexity of billing codes, these are not created by hospitals but by by the American Medical Association, Center for Medicaid/Medicare and a soup of other organizations. Indeed. This "complexity" hides so many obvious scams. Errr...well, rather, it sometimes hides these scams. For example, they billed my wife for an "ER Visit" when she gave birth. Even though the ER was in another building. (Well, except for a little sign that said "ER" over the door to the admitting room. We spent 5 minutes in that room, but it resulted in a multi thousand dollar bill.) This happens regularly and intentionally. Sure, there's the unexpected things that happen. But, the complexity of billing lets the experts (hospital administrators) deceptively game the system, and get away with it without any recourse. Enough things happen on a recurring basis that its shockingly easy for them to create "policies" about what to code and when to code -- policies explicitly designed to maximize revenue. (Even if they're stretching the truth.)
- temporallobe 4y ago
  > This happens regularly and intentionally. And there are absolutely zero consequences for this, which is why it will never stop. It’s not even negligence, it’s straight up fraud; and if you refuse to pay, your credit can be ruined, so in effect you’re being intimidated and coerced into just paying it “or else”. I sure wish I had the power to send someone a bill for non-existent goods or services and that it could be legally backed by governments and corporations.
- fhsm 4y ago
  It never crossed my mind that OB ERs would be seen as fraud instead of specialized care for readily identified special populations. I guess this is a major case of YMMV but with three* lifetime trips to an emergency room under my belt I think the separate OB ER is a fantastic idea. The OB ER provided rapid definitive care vs the regular adult ED which was a hellscape. *the third trip, like you, was passing through the OB ER on the way to delivery and I’d never count it normally… then again unlike you my total cost out of pocket was $5. The financial experience of childbirth has been one of the most useful tools in reframing my understanding of total comp as something very different than salary.
freedomben 4y ago
Why don't we see some doctors opting out and just doing away with all that stuff? I.e. refuse all insurance and just bill for their time (and supplies)? I would expect the majority to continue with the current system, but it surprises me that (if it's not about money but rather is about complexity) there aren't doctors opting out.
- tomrod 4y ago
  High opex. Most doctors are also joining provider networks and are somewhat shielded from the ever increasing complexity.
- helpfulclippy 4y ago
  They are. They call it direct primary care. I pay my doctor a flat monthly rate, on top of whatever the price is for any supplies. No insurance accepted.
- duffpkg 4y ago
  There are. In fact this is a quickly growing segment. Often these folks cater to richer patients and are called "Concierge Doctors". Atlas MD in Kansas is a very interesting system aimed at all levels of income and they call it "Direct Primary Care".
  - twoodfin 4y ago
    Which you ideally can supplement with a high-deductible plan for catastrophic care.
- tryptophan 4y ago
  If the gov takes 1k in and another 1k goes to insurance companies, it kinda hard to get people to pay 1k(say a Dr offers a service outside both the gov and insurance) to do whatever when they have already paid 2k and gotten nothing. This is despite that just dealing directly with the dr is a 50% discount...
- devilbunny 4y ago
  Outside of that DPC model others mention, it's very difficult for doctors to do. And while most people think of going to a doctor's office - family medicine, internal medicine, pediatrics, or OB/GYN - as what doctors do, they're actually a minority of doctors, and OB/GYN's do a lot of their work in the hospital. Some of us - I'm an anesthesiologist, but also radiologists, pathologists, critical care doctors, and so forth - don't have a clinic at all. Nobody's going to pay me a monthly or yearly fee, and establishing a billing relationship that doesn't involve insurance would be a real nightmare.
billiam 4y ago
>From an instution standpoint there are some bad apples but.... He makes it easy to tell where he is coming from by using the straw man for all apologists for system failure, those pesky few bad apples. Fortunately he also states clearly the main problem with a healthcare system run in a semi-corrupt, neoliberal developed country (think aging population): >I've spent the bulk of my career as a CEO and senior executive operating large health systems.
tinglymintyfrsh 4y ago
Outside of elective surgical realms, I've also seen and heard of trends of expensive non-treatment treatments that prolong misery. Take orthopedics with routine cortisone and/or hyaluronic acid injections: delaying the "inevitable" and sometimes hurrying it along. Then there's the outright Medicare fraud of orthotics, braces, and all sorts of overpriced, shoddy paraphernalia that's mostly concerned with coding (billing) rather than patient comfort or wellbeing.
- pyuser583 4y ago
  Delaying the inevitable is one of medicines core functions.
maxerickson 4y ago
If it's a Medicare requirement that routine combinations be billed a certain way, how is it complicated? Or is the idea that routine combinations are always used to justify the billing code with the highest possible revenue? I was pretty pissed off when the local ER and traveling doctor used the CT scan I got to justify a more complicated case, when what happened is that the radiologist made a definitive diagnosis for $20 and basically eliminated any liability for sending me home with a prescription for antibiotics. (a sinus infection irritated the nerves in one of my teeth and I became concerned about the degree of pain during the night on a weekend...not a particularly grave condition in the end, but easy enough to become concerned about pain radiating through your jaw)
- ghufran_syed 4y ago
  doesn’t the fact that the CT scan was ordered make it a more complicated case? vs one that involved no testing?
  - maxerickson 4y ago
    In terms of risk and unknowns, no. Which is basically my point. They charged me a lot for a test that de-risked them (and ruled out much further effort on my case) and then charged me more because they ordered it. I suppose in the case it didn't give them a definitive answer it might be more complicated.
alfalfasprout 4y ago
While it's great that you've been working in the space for a while, this comment does smell of "hand wringing" of the problem as "too complex to solve". At the end of the day, people just want a "good enough" estimate of what a hospital visit will cost in the typical case for their reason for visiting the hospital. In the event there's variability, that's fine. Just surface that. Knowing several doctors who have seen what has actually been charged for their patients... the vast majority of procedures aren't going to have wild variability for most patients. Let's look at one common issue that people face: they get charged $400 for a pill of ibuprofen or $2k for a bag of saline with no meds. Even exposing consumable prices is a step in the right direction.
- duffpkg 4y ago
  I am in agreement that it is reasonable for most patients most of the time to be able to receive some sort of useful estimate to make decisions with. The passage of the "No Surprises Act" was a very positive development in my opinion. https://www.cms.gov/nosurprises https://www.cms.gov/nosurprises
- Klinky 4y ago
  Relying on the patient to gauge what is fair pricing & what is gouging, then haggle when they get the bill seems like trying to solve the problem from the wrong end. Free marketeers will say a fair price is what someone is willing to pay. Trying to make price decisions when your health is in the balance seems like it will lead to either poor decisions on price or on health. These attempts at pricing transparency seem like another way to put blame on the patient for making "poor choices" when really the system needs to be less complex for the patient. Let auditors & regulators handle pricing and gouging, ideally within a single-payer/public option system.
  - mikepurvis 4y ago
    Yeah. I know Americans tire of hearing about the rest of the world on this issue, but truly the only sane way for this to be is where you go to the hospital and literally never see a bill. This is how it is in Canada. Our politicians are currently busy fighting over dental, optical, and prescription drugs [1], and truthfully that's just as baffling— why should going to the dentist be any different than going to the hospital? Is getting eyeglasses somehow "elective"? [1]: https://www.ndp.ca/better-care?focus=13934141 https://www.ndp.ca/better-care?focus=13934141
dools 4y ago
Imagine if the government just paid for healthcare!
- JKCalhoun 4y ago
  Or, as I believe Japan does, dictate what a procedure costs.
  - throwaway14356 4y ago
    i forget the details but it also use to be like that in the US though some kind of membership org and in europe by gov committee. Doctors could opt out but got no patients from the system.
- psychlops 4y ago
  Okay. Then what? It would be free? The codes would be cleaned up and complexity would go away? Magic!
  - dools 4y ago
    Then it would just be yet another complicated bureaucratic government process about which the private sector would be blissfully unaware. The OP is about price transparency to make the market function more efficiently. If you have a single payer, there is no market, just healthcare administration.
    - psychlops 4y ago
      This is true. It would be as easy as getting a passport. Perhaps we may even use a healthcare version of a TSA precheck for an expedited line.
      - dools 4y ago
        Every US citizen already has a social security number which is similar to the Medicare number that all Australians have. When I go to a doctor or a hospital, I just give them my Medicare number.
some_furry 4y ago
> There are tens of thousands of procedure and drug codes (things that are done or given) and tens of thousands of diagnostic codes (reasons justifying the procedure), creating a space well into the quadrillions of possible routine combinations. 10^5 * 10^5 = 10^10 which is tens of billions, not quadrillions That said, a combinatorial space can be simply represented as a tuple of two columns (10^5, 10^5) instead of having to map every possible (including nonsensical) permutation. Increase for three or four dimensions.
- dokein 4y ago
  Patients have easily 20-30 codes per one hospital visit / one bill and ordering matters so sadly quadrillions may be an underestimate.
  - some_furry 4y ago
    I'm unfortunately aware, but you don't need every possible permutation to have a unique identifier. That's like trying to enumerate all 2^256 or so Bitcoin private keys. It's a stupid way to approach the problem. Enumerate atomic elements, not molecules. Only the most useful or common combinations need naming.
- psychlops 4y ago
  So this is assuming that someone would give chemotherapy drugs to a flu patient. The realistic combinations would be much smaller.
mattparmett 4y ago
Thanks for dropping in and providing a lot of good context here! I’m a former healthcare venture capitalist who left my role back in May to learn CS and tackle some of these problems from the trenches…where in particular would you recommend I focus my efforts given your years of experience?
- duffpkg 4y ago
  There is the classic triangle of patients, providers and insurance. I think in any path you choose you have to think about which leg of the tripod you want to put forward. There is this wealth of new pricing data but I haven't yet seen it employed in really practical ways that help patients day to day so I think there are some oppourtunities there. I think GoodRX has done a very good job in improving patients decision making around drugs as an example. The other point I frequently make is maybe not to overshoot too far. There are a LOT of simple problems that need solving. I think I see a pitch about this or that "reimaging healthcare" every day. In practice there are huge and obvious problems in the basics of provider and patient communication. For people with serious illness making sure the patient knows and can get to the right place at the right time is very underserved.
karmelapple 4y ago
Simply asking for a price estimate for a very non urgent screening a few years ago got me a reaction from the people at front desk that was somewhere between flabbergasted and suspecting I must be broke. Here’s a write up I did about the experience: https://blog.karlbecker.com/should-health-care-be-profitable https://blog.karlbecker.com/should-health-care-be-profitable
- komali2 4y ago
  Interesting article, I have some questions: > I want income for health care companies. I want enough to make sure they are there when me and my loved ones need them. Every company, whether a non-profit or profit, needs income. I'm curious about the assumption here: why is market-based income necessary for the existence of a health care institution (hospital, doctor's office, pharmacy, etc) ? These institutions exist just fine when they're socialized and nationalized: see... well, any other country on earth lol. > And the people providing the extremely worthwhile service of healing people, and easing people’s pain, should be paid well. Why the assumption that they can't be if the system is detached from profits entirely, such as if it's socialized or nationalized? I think the quote by your cousin Adam is funny, but I think I disagree with his assessment. Similar arguments are made to counter subsidized or socialized food distribution, the "buying lobsters on food stamps" argument basically. It's kind of a funny argument because it's sort of victim blaming: for the first time in someone's life they can eat like the rich people they see in media, enjoy a high quality of food, and like a human can be expected to, they do it in excess, and that's somehow... bad. But also, it's just mostly untrue, and I think anybody can know this for themselves asking a simple question: would you REALLY eat steak every day? (the cousin claims yes?) Knowing what that would do to your health? Knowing you surely would bore of the meal? And shit, if our society can provide a sustainable system where people CAN eat steak every meal (or whatever "extravagant delicacy" you can dream up), isn't that a GOOD thing? Can't we say the same of healthcare? If we can create a system where EVERYONE can get high quality healthcare at low or no costs, isn't it GOOD that everyone will thus get high quality healthcare? The counter argument may be "we can't create this system," but I saw, no, you definitely can, other countries have and are doing so, I live in Taiwan and high quality healthcare is extremely accessible to the entire population, and a national effort to increase outcomes and accessibility is underway. I like to say, if you've got money for fighter jets, you've got money for free healthcare.
kortex 4y ago
> There are tens of thousands of procedure and drug codes (things that are done or given) and tens of thousands of diagnostic codes www.mcmaster.com has half a million products. Amazon has who the hell knows. Even factoring in combinations, sheer number alone should not make the problem any more complex than any inventory/product system.
- medizin123 4y ago
  Conveniently, I have worked both in a publishing firm with a catalogue of several million books and in a health firm and am neck-deep in translating algorithmic coverage systems into someone else’s algorithmic coverage system. Please allow me to bloviate: It is logically complicated far and beyond ordering a book. Understanding what is even needed for billing up-front isn’t possible in all cases. What happens when you have extra bleeding during a procedure and now need additional units of blood and associated equipment and care? How do you bill this in advance? Then, we have “medically necessary” issues. Your insurance may cover an issue if it is medically necessary, but it often isn’t clear if it is or isn’t until game-day. Then what? Or, of course, the hospital and insurer may have different professionals engaged in a spirited debate over whether or not a given piece of academic literature supports or denies the necessity of a procedure. So there we have an issue that isn’t algorithmic at all (a human debate!) Then we have all kinds of other fun issues, like the coding being a living document. The AMA regularly “refactors” coding as the medical world evolves. What was billed yesterday as one code may become two or three different items each with their own conditions applied. Except the old code is still supported as well so now someone has to go back and sus out the discrepancy between the ordering provider and the insurance payer. So, for very rote procedures it actually is easy to give flat rates and solid estimates. I have a local Doc-in-a-Box facility that offers a flat-rate $90 service for a standard visit which even includes things like x-rays and steroid shots. When I went in with a stomach bug and needed some add-ons it was a simple piece-sheet line item as you wish. BUT! The world isn’t this simple, medicine is a very complex practice, and so we can’t simply estimate a price out-of-the-gate. As an exercise, think to yourself - my friend walked up and asked me to make his awesome Facebook-for-Cats app. Well, please provide me an exact billing of what you will need in terms of time and cost. If you’re now thinking “well shoot, what features does he need?” You’ve now founded yourself in a bounded-but-open question. These also happen in medicine and are why “just give me the number” isn’t easy.
ngcc_hk 4y ago
Excuses are excuses. That is you have to force them so they give the info their patients. Well, just continue pay fine until you comply would be an option. Not just it is a black box and I do not care how money change hand. And at what price. It is a black box after all It is a black box after all … This hell loop need to escape especially their patients.

senortumnus 4y ago

One benefit of this transparency initiative is that patients will come to see how little of their bill goes to physicians.

paws 4y ago

Thanks for sharing! Billing codes certainly seem like a significant source of complexity. Another area that seems problematic to me is an apparent surfeit of middlemen. What conclusions might we draw from the fact e.g. a "Pharmacy Benefit Manager" is a job that exists only in the US [0]? Why does it feel like my insurance premiums pay for lots of things that are difficult to attribute to actual improved health outcomes? Appreciate your insight. [0] https://www.goerie.com/story/opinion/2021/06/12/op-ed-when-comes-prescription-drugs-pbms-have-power/7617580002/ https://www.goerie.com/story/opinion/2021/06/12/op-ed-when-c...

duffpkg 4y ago
Something that is very little known to most lay people but has profound implications on how the industry is structured are laws loosely called "Corporate Practice of Medicine" (CPOM). A little more than half the states have some version of them. Simply put they require that the organization legally practicing medicine must be owned and operated by people holding medical licenses only. This defacto creates a medical entity for that purpose and a sistered non-medical entity for business operations. Not speaking to the broader reasons of why those laws can potentially be good, the practical result of those laws all but requires many "middle men" in the operation of medical organizations.
- paws 4y ago
  TIL about CPOM, thanks! Another question I'm curious about, if you don't mind, is why there is no apparent urgency in fixing the painful billing experience for patients. (aka "why don't billing coordinators seem to coordinate with the patient front and center?") Seems like lots of people are fearful of medical billing, and not only because it's expensive. I realize providers may be out of network, carriers take time to adjust claims, etc. Still, the staggered/surprise billing seems unique to medicine and a 2nd order effect might be people avoiding preventive care to their own detriment. Say a patient goes to get some procedure done, the medical work is completed in one day. Shortly afterwards they receive bill A. OK, that's fine. But then X months later, they receive bill B with more charges from some provider that they may not even remember. I thought avoiding that was supposed to be the job of a billing coordinator. Presumably coordinators are constrained by "things" -- what are the factors that make this experience so dreadful for patients and why are they not being changed?
  - duffpkg 4y ago
    I'm not sure the short answer is adequate but a few things: 1) US healthcare is absolutely huge, it's perhaps 20% of the total macro economy. Changing anything in 20% of the entire economy is going to take a long time. 2) There has been really significant changes regarding price transparency and "surprise" billing in the past 5 years, so there is momentum to improve the patient experience but see #1 3) Regarding hospitals, many hospitals might appear to be one thing but are not (some systems are fully vertically integrated). They are much more like medical malls, often as a result of CPOM. What you percieve as one thing actually involved dozens of different business entities and hence very discoordinated billing.

prepend 4y ago

> From an instution standpoint there are some bad apples but a lot of organizations that are not complying are not complying because they are facing technology and operational issues that are stopping them from complying. From the trenches in my consulting practice one example is an institution whose has a core element of their billing system, that is largely a black box even to them, using technologies that are decades old. I recognize this is the reality. But it seems insane that they have not fixed this in decades and instead charge people based on a “black box.” I’m sure the fact that they make more money this way has nothing to do with their inability to comply. From my perspective, as a patient and taxpayer who funds these things through Medicare and Medicaid, I think those who are incompetent and shady are the same to me. I’d almost rather have a health system try to cheat than so stupid they don’t know what’s happening. The company that cheats on billing seems more likely to be competent than the one who doesn’t know how to cost their care and hasn’t known for decades.

mistermann 4y ago
It seems like a classic "just so" story to me, perfect for keeping the public in the dark. I'd think a serious and honest country would develop standard systems that is capable of serving the needs of the majority of users (providers and customers) and then charge proportionally for usage, or else just leave it as funded by the government.
- hattmall 4y ago
  You might think that but the US couldn't even design a website to sell you insurance. Healthcare.gov is still a cumbersome nightmare.
  - mistermann 4y ago
    It seems to me that the US Government can get impressive things done if they set their mind to it - as examples, consider their prowess at things like propaganda and waging war.
    - 4y ago

manv1 4y ago

Realistically speaking, this is bullshit. Billing has all the data that's required for implementation. The fact that most health systems don't want to publish that data is a reflection of the nature negotiated rates and not a technical problem.

heywire 4y ago

What are your thoughts on insurance companies like Surest (now owned by UHC, formerly named Bind), who hide this complexity behind a single all-in copay amount with no surprise billing and no deductible? My employer offered this plan during open enrollment this year and I’ve decided to give it a try after a few years of getting burned on our HDHP with HSA.

duffpkg 4y ago
I don't think I know enough about it to offer a meaningful opinion. It appears to be an offering that is employee sponsored so without understanding the costs to the employer it is difficult to compare it with anything. A point that I don't think is all that well understood is that some employer funded plans, while administered by someone like UHC, it's actually the employer that has a large say who, what and how much something is covered. Speaking for myself, I would want to consider what my out of pocket cost to see a top specialist of my choosing in my area would be. Also personally I am not a fan of HSA plans.
- otoburb 4y ago
  For families that frequent HN, wouldn't HSAs be the superior option since this demographic is more likely (for better or worse) to have higher discretionary income to weather the up-front HSA costs until hitting the family deductible limit, after which point incremental medical costs are (mostly) covered by the HSA plan? I agree that HSA plans aren't great for families that have less discretionary cash on hand.
  - heywire 4y ago
    This was why I originally chose the HDHP a few years ago, as it was cheaper than our traditional copay plan, and I received ~$2k each January to put into our HSA from my employer. However, as we’ve gotten older, we’re hitting our deductible more often, meaning that we’re putting in a few thousand in addition to my employers part, which has also declined this year to $1400. This new plan from Surest is $40 more per month, and we lose that $1400, but there’s no deductible and copays are like $10-20 for dr visit, $30 for urgent care, and $325 for ER visit. These are all-in prices, so no more surprise bills for the random out of network dr that looked at your X-ray, or 3rd party labs.

boplicity 4y ago

> Appreciate the complexity of billing codes, these are not created by hospitals but by by the American Medical Association, Center for Medicaid/Medicare and a soup of other organizations. Indeed. This "complexity" hides so many obvious scams. Errr...well, rather, it sometimes hides these scams. For example, they billed my wife for an "ER Visit" when she gave birth. Even though the ER was in another building. (Well, except for a little sign that said "ER" over the door to the admitting room. We spent 5 minutes in that room, but it resulted in a multi thousand dollar bill.) This happens regularly and intentionally. Sure, there's the unexpected things that happen. But, the complexity of billing lets the experts (hospital administrators) deceptively game the system, and get away with it without any recourse. Enough things happen on a recurring basis that its shockingly easy for them to create "policies" about what to code and when to code -- policies explicitly designed to maximize revenue. (Even if they're stretching the truth.)

temporallobe 4y ago
> This happens regularly and intentionally. And there are absolutely zero consequences for this, which is why it will never stop. It’s not even negligence, it’s straight up fraud; and if you refuse to pay, your credit can be ruined, so in effect you’re being intimidated and coerced into just paying it “or else”. I sure wish I had the power to send someone a bill for non-existent goods or services and that it could be legally backed by governments and corporations.
fhsm 4y ago
It never crossed my mind that OB ERs would be seen as fraud instead of specialized care for readily identified special populations. I guess this is a major case of YMMV but with three* lifetime trips to an emergency room under my belt I think the separate OB ER is a fantastic idea. The OB ER provided rapid definitive care vs the regular adult ED which was a hellscape. *the third trip, like you, was passing through the OB ER on the way to delivery and I’d never count it normally… then again unlike you my total cost out of pocket was $5. The financial experience of childbirth has been one of the most useful tools in reframing my understanding of total comp as something very different than salary.

freedomben 4y ago

Why don't we see some doctors opting out and just doing away with all that stuff? I.e. refuse all insurance and just bill for their time (and supplies)? I would expect the majority to continue with the current system, but it surprises me that (if it's not about money but rather is about complexity) there aren't doctors opting out.

tomrod 4y ago
High opex. Most doctors are also joining provider networks and are somewhat shielded from the ever increasing complexity.
helpfulclippy 4y ago
They are. They call it direct primary care. I pay my doctor a flat monthly rate, on top of whatever the price is for any supplies. No insurance accepted.
duffpkg 4y ago
There are. In fact this is a quickly growing segment. Often these folks cater to richer patients and are called "Concierge Doctors". Atlas MD in Kansas is a very interesting system aimed at all levels of income and they call it "Direct Primary Care".
- twoodfin 4y ago
  Which you ideally can supplement with a high-deductible plan for catastrophic care.
tryptophan 4y ago
If the gov takes 1k in and another 1k goes to insurance companies, it kinda hard to get people to pay 1k(say a Dr offers a service outside both the gov and insurance) to do whatever when they have already paid 2k and gotten nothing. This is despite that just dealing directly with the dr is a 50% discount...
devilbunny 4y ago
Outside of that DPC model others mention, it's very difficult for doctors to do. And while most people think of going to a doctor's office - family medicine, internal medicine, pediatrics, or OB/GYN - as what doctors do, they're actually a minority of doctors, and OB/GYN's do a lot of their work in the hospital. Some of us - I'm an anesthesiologist, but also radiologists, pathologists, critical care doctors, and so forth - don't have a clinic at all. Nobody's going to pay me a monthly or yearly fee, and establishing a billing relationship that doesn't involve insurance would be a real nightmare.

billiam 4y ago

>From an instution standpoint there are some bad apples but.... He makes it easy to tell where he is coming from by using the straw man for all apologists for system failure, those pesky few bad apples. Fortunately he also states clearly the main problem with a healthcare system run in a semi-corrupt, neoliberal developed country (think aging population): >I've spent the bulk of my career as a CEO and senior executive operating large health systems.

tinglymintyfrsh 4y ago

Outside of elective surgical realms, I've also seen and heard of trends of expensive non-treatment treatments that prolong misery. Take orthopedics with routine cortisone and/or hyaluronic acid injections: delaying the "inevitable" and sometimes hurrying it along. Then there's the outright Medicare fraud of orthotics, braces, and all sorts of overpriced, shoddy paraphernalia that's mostly concerned with coding (billing) rather than patient comfort or wellbeing.

pyuser583 4y ago
Delaying the inevitable is one of medicines core functions.

maxerickson 4y ago

If it's a Medicare requirement that routine combinations be billed a certain way, how is it complicated? Or is the idea that routine combinations are always used to justify the billing code with the highest possible revenue? I was pretty pissed off when the local ER and traveling doctor used the CT scan I got to justify a more complicated case, when what happened is that the radiologist made a definitive diagnosis for $20 and basically eliminated any liability for sending me home with a prescription for antibiotics. (a sinus infection irritated the nerves in one of my teeth and I became concerned about the degree of pain during the night on a weekend...not a particularly grave condition in the end, but easy enough to become concerned about pain radiating through your jaw)

ghufran_syed 4y ago
doesn’t the fact that the CT scan was ordered make it a more complicated case? vs one that involved no testing?
- maxerickson 4y ago
  In terms of risk and unknowns, no. Which is basically my point. They charged me a lot for a test that de-risked them (and ruled out much further effort on my case) and then charged me more because they ordered it. I suppose in the case it didn't give them a definitive answer it might be more complicated.

alfalfasprout 4y ago

While it's great that you've been working in the space for a while, this comment does smell of "hand wringing" of the problem as "too complex to solve". At the end of the day, people just want a "good enough" estimate of what a hospital visit will cost in the typical case for their reason for visiting the hospital. In the event there's variability, that's fine. Just surface that. Knowing several doctors who have seen what has actually been charged for their patients... the vast majority of procedures aren't going to have wild variability for most patients. Let's look at one common issue that people face: they get charged $400 for a pill of ibuprofen or $2k for a bag of saline with no meds. Even exposing consumable prices is a step in the right direction.

duffpkg 4y ago
I am in agreement that it is reasonable for most patients most of the time to be able to receive some sort of useful estimate to make decisions with. The passage of the "No Surprises Act" was a very positive development in my opinion. https://www.cms.gov/nosurprises https://www.cms.gov/nosurprises
Klinky 4y ago
Relying on the patient to gauge what is fair pricing & what is gouging, then haggle when they get the bill seems like trying to solve the problem from the wrong end. Free marketeers will say a fair price is what someone is willing to pay. Trying to make price decisions when your health is in the balance seems like it will lead to either poor decisions on price or on health. These attempts at pricing transparency seem like another way to put blame on the patient for making "poor choices" when really the system needs to be less complex for the patient. Let auditors & regulators handle pricing and gouging, ideally within a single-payer/public option system.
- mikepurvis 4y ago
  Yeah. I know Americans tire of hearing about the rest of the world on this issue, but truly the only sane way for this to be is where you go to the hospital and literally never see a bill. This is how it is in Canada. Our politicians are currently busy fighting over dental, optical, and prescription drugs [1], and truthfully that's just as baffling— why should going to the dentist be any different than going to the hospital? Is getting eyeglasses somehow "elective"? [1]: https://www.ndp.ca/better-care?focus=13934141 https://www.ndp.ca/better-care?focus=13934141

dools 4y ago

Imagine if the government just paid for healthcare!

JKCalhoun 4y ago
Or, as I believe Japan does, dictate what a procedure costs.
- throwaway14356 4y ago
  i forget the details but it also use to be like that in the US though some kind of membership org and in europe by gov committee. Doctors could opt out but got no patients from the system.
psychlops 4y ago
Okay. Then what? It would be free? The codes would be cleaned up and complexity would go away? Magic!
- dools 4y ago
  Then it would just be yet another complicated bureaucratic government process about which the private sector would be blissfully unaware. The OP is about price transparency to make the market function more efficiently. If you have a single payer, there is no market, just healthcare administration.
  - psychlops 4y ago
    This is true. It would be as easy as getting a passport. Perhaps we may even use a healthcare version of a TSA precheck for an expedited line.
    - dools 4y ago
      Every US citizen already has a social security number which is similar to the Medicare number that all Australians have. When I go to a doctor or a hospital, I just give them my Medicare number.

some_furry 4y ago

> There are tens of thousands of procedure and drug codes (things that are done or given) and tens of thousands of diagnostic codes (reasons justifying the procedure), creating a space well into the quadrillions of possible routine combinations. 10^5 * 10^5 = 10^10 which is tens of billions, not quadrillions That said, a combinatorial space can be simply represented as a tuple of two columns (10^5, 10^5) instead of having to map every possible (including nonsensical) permutation. Increase for three or four dimensions.

dokein 4y ago
Patients have easily 20-30 codes per one hospital visit / one bill and ordering matters so sadly quadrillions may be an underestimate.
- some_furry 4y ago
  I'm unfortunately aware, but you don't need every possible permutation to have a unique identifier. That's like trying to enumerate all 2^256 or so Bitcoin private keys. It's a stupid way to approach the problem. Enumerate atomic elements, not molecules. Only the most useful or common combinations need naming.
psychlops 4y ago
So this is assuming that someone would give chemotherapy drugs to a flu patient. The realistic combinations would be much smaller.

mattparmett 4y ago

Thanks for dropping in and providing a lot of good context here! I’m a former healthcare venture capitalist who left my role back in May to learn CS and tackle some of these problems from the trenches…where in particular would you recommend I focus my efforts given your years of experience?

duffpkg 4y ago
There is the classic triangle of patients, providers and insurance. I think in any path you choose you have to think about which leg of the tripod you want to put forward. There is this wealth of new pricing data but I haven't yet seen it employed in really practical ways that help patients day to day so I think there are some oppourtunities there. I think GoodRX has done a very good job in improving patients decision making around drugs as an example. The other point I frequently make is maybe not to overshoot too far. There are a LOT of simple problems that need solving. I think I see a pitch about this or that "reimaging healthcare" every day. In practice there are huge and obvious problems in the basics of provider and patient communication. For people with serious illness making sure the patient knows and can get to the right place at the right time is very underserved.

karmelapple 4y ago

Simply asking for a price estimate for a very non urgent screening a few years ago got me a reaction from the people at front desk that was somewhere between flabbergasted and suspecting I must be broke. Here’s a write up I did about the experience: https://blog.karlbecker.com/should-health-care-be-profitable https://blog.karlbecker.com/should-health-care-be-profitable

komali2 4y ago
Interesting article, I have some questions: > I want income for health care companies. I want enough to make sure they are there when me and my loved ones need them. Every company, whether a non-profit or profit, needs income. I'm curious about the assumption here: why is market-based income necessary for the existence of a health care institution (hospital, doctor's office, pharmacy, etc) ? These institutions exist just fine when they're socialized and nationalized: see... well, any other country on earth lol. > And the people providing the extremely worthwhile service of healing people, and easing people’s pain, should be paid well. Why the assumption that they can't be if the system is detached from profits entirely, such as if it's socialized or nationalized? I think the quote by your cousin Adam is funny, but I think I disagree with his assessment. Similar arguments are made to counter subsidized or socialized food distribution, the "buying lobsters on food stamps" argument basically. It's kind of a funny argument because it's sort of victim blaming: for the first time in someone's life they can eat like the rich people they see in media, enjoy a high quality of food, and like a human can be expected to, they do it in excess, and that's somehow... bad. But also, it's just mostly untrue, and I think anybody can know this for themselves asking a simple question: would you REALLY eat steak every day? (the cousin claims yes?) Knowing what that would do to your health? Knowing you surely would bore of the meal? And shit, if our society can provide a sustainable system where people CAN eat steak every meal (or whatever "extravagant delicacy" you can dream up), isn't that a GOOD thing? Can't we say the same of healthcare? If we can create a system where EVERYONE can get high quality healthcare at low or no costs, isn't it GOOD that everyone will thus get high quality healthcare? The counter argument may be "we can't create this system," but I saw, no, you definitely can, other countries have and are doing so, I live in Taiwan and high quality healthcare is extremely accessible to the entire population, and a national effort to increase outcomes and accessibility is underway. I like to say, if you've got money for fighter jets, you've got money for free healthcare.

kortex 4y ago

> There are tens of thousands of procedure and drug codes (things that are done or given) and tens of thousands of diagnostic codes www.mcmaster.com has half a million products. Amazon has who the hell knows. Even factoring in combinations, sheer number alone should not make the problem any more complex than any inventory/product system.

medizin123 4y ago
Conveniently, I have worked both in a publishing firm with a catalogue of several million books and in a health firm and am neck-deep in translating algorithmic coverage systems into someone else’s algorithmic coverage system. Please allow me to bloviate: It is logically complicated far and beyond ordering a book. Understanding what is even needed for billing up-front isn’t possible in all cases. What happens when you have extra bleeding during a procedure and now need additional units of blood and associated equipment and care? How do you bill this in advance? Then, we have “medically necessary” issues. Your insurance may cover an issue if it is medically necessary, but it often isn’t clear if it is or isn’t until game-day. Then what? Or, of course, the hospital and insurer may have different professionals engaged in a spirited debate over whether or not a given piece of academic literature supports or denies the necessity of a procedure. So there we have an issue that isn’t algorithmic at all (a human debate!) Then we have all kinds of other fun issues, like the coding being a living document. The AMA regularly “refactors” coding as the medical world evolves. What was billed yesterday as one code may become two or three different items each with their own conditions applied. Except the old code is still supported as well so now someone has to go back and sus out the discrepancy between the ordering provider and the insurance payer. So, for very rote procedures it actually is easy to give flat rates and solid estimates. I have a local Doc-in-a-Box facility that offers a flat-rate $90 service for a standard visit which even includes things like x-rays and steroid shots. When I went in with a stomach bug and needed some add-ons it was a simple piece-sheet line item as you wish. BUT! The world isn’t this simple, medicine is a very complex practice, and so we can’t simply estimate a price out-of-the-gate. As an exercise, think to yourself - my friend walked up and asked me to make his awesome Facebook-for-Cats app. Well, please provide me an exact billing of what you will need in terms of time and cost. If you’re now thinking “well shoot, what features does he need?” You’ve now founded yourself in a bounded-but-open question. These also happen in medicine and are why “just give me the number” isn’t easy.

ngcc_hk 4y ago

Excuses are excuses. That is you have to force them so they give the info their patients. Well, just continue pay fine until you comply would be an option. Not just it is a black box and I do not care how money change hand. And at what price. It is a black box after all It is a black box after all … This hell loop need to escape especially their patients.