4 ms·

Very cool. Does anyone pay the chargemaster price though?

by bezdekt 13y ago

RougeFemme 13y ago
I thought uninsured folks were charged the chargemaster price. They may not end up PAYING that price. . .even if they spend their entire lives trying. . .but I thought that's what uninsured folks were CHARGED.
aguynamedben 13y ago
Chargemaster is kind of like (a more screwed up) MSRP when you buy a car, so not exactly, but it's an indicator of the pricing disparity for the same procedures. We've also indexed the Medicare DRGs which are a more accurate predictor. Eventually we'd like to index Paid Claims data for insurance companies, which are what actually gets paid. The prices are all over the map in general, beyond just the chargemaster prices.
- cosmie 13y ago
  Chargemaster is also a brilliant and evil tax deduction[1]. [1] http://www.nytimes.com/2013/05/17/business/bayonne-medical-center-has-highest-us-billing-rates.html?hp&_r=1&pagewanted=all& http://www.nytimes.com/2013/05/17/business/bayonne-medical-c...
- jparker165 13y ago
  Yah, the joke I've heard from industry folks is that "only the Sultan of Brunei would pay those prices." But since many actual prices are determined as a percentage of the chargemaster, the provider with the lowest chargemaster price is likely to have the lowest actual price. Directionally correct data is better than no data? no?
ars 13y ago
No, no one pays that. And I don't think the chargemaster price is even correlated with the final price, so it's not even useful as a relative measure. I wish it was a real price though - maybe this site could push hospitals that way. But I doubt it because the reason hospitals are able to afford Medicare prices is only because they overcharge the rest, and the prices are made opaque specifically so that that people do not complain about that. The only way to make transparent healthcare prices is to raise medicare prices so that everyone pays the same, but that'll never happen. So what happens is that insured people pay an extra premium to help out the rest. Airlines do the same thing, and they too have very convoluted hard to understand prices.
- aguynamedben 13y ago
  Yeah, fair. Regarding "I wish it was a real price though" that's why we want to run this analysis for insurance companies. They're the ones that have the best real data, and can benefit from it the most.
- cosmie 13y ago
  >because the reason hospitals are able to afford Medicare prices is only because they overcharge the rest That's simply not true. Medicare prices are explicitly designed to cover costs, based off of collected data and input from the self-interested American Medical Association[1]. They almost carte blanche accept the AMA at their word, and I doubt the doctors at the AMA are shooting themselves in the foot (although they appear to be backstabbing under-represented GPs). What Medicare doesn't do is pay excessively, so poorly ran facilities may go red. One of the motivations behind incentivizing (and soon requiring) electronic health records is the ability it gives Medicare to objectively analyze this information, rather than taking the doctor's subjective assessment. What does inflate private insurance rates is unnecessary market saturation, where hospitals are expanding to capture patients from competitors and lowering per-hospital utilization in the process. Particularly an issue with non-profits, which have little other recourse to spend their profits on except higher salaries and facility expansion. The other main reason for higher insurance rates is bad debt, which is the percentage of care hospitals write-off because they don't expect to recoup the charges[2]. Since Medicare payments are supposedly break even, this is almost solely absorbed by private insurance. That's one of the reasons hospitals are for Obamacare, because there will be fewer uninsured and hence less write offs; yet, current reimbursement contracts account for that bad debt already, so they're going to get a lovely profit boost until the payors correct the imbalance. Anecdotely, revenue cycle departments (that collect payments) love Medicare, because it just pays. Private insurers dispute everything and threaten to pass the bill directly to patients, which the hospital knows will never get paid because the member expects their insurance to take care of it. [1] http://www.washingtonpost.com/business/economy/how-a-secretive-panel-uses-data-that-distorts-doctors-pay/2013/07/20/ee134e3a-eda8-11e2-9008-61e94a7ea20d_story.html http://www.washingtonpost.com/business/economy/how-a-secreti... [2] http://www.acainternational.org/products-health-care-collection-statistics-5434.aspx http://www.acainternational.org/products-health-care-collect...

Very cool. Does anyone pay the chargemaster price though?

by bezdekt 13y ago

Very cool. Does anyone pay the chargemaster price though?

I thought uninsured folks were charged the chargemaster price. They may not end up PAYING that price. . .even if they spend their entire lives trying. . .but I thought that's what uninsured folks were CHARGED.

aguynamedben 13y ago

Chargemaster is kind of like (a more screwed up) MSRP when you buy a car, so not exactly, but it's an indicator of the pricing disparity for the same procedures. We've also indexed the Medicare DRGs which are a more accurate predictor. Eventually we'd like to index Paid Claims data for insurance companies, which are what actually gets paid. The prices are all over the map in general, beyond just the chargemaster prices.

cosmie 13y ago
Chargemaster is also a brilliant and evil tax deduction[1]. [1] http://www.nytimes.com/2013/05/17/business/bayonne-medical-center-has-highest-us-billing-rates.html?hp&_r=1&pagewanted=all& http://www.nytimes.com/2013/05/17/business/bayonne-medical-c...
jparker165 13y ago
Yah, the joke I've heard from industry folks is that "only the Sultan of Brunei would pay those prices." But since many actual prices are determined as a percentage of the chargemaster, the provider with the lowest chargemaster price is likely to have the lowest actual price. Directionally correct data is better than no data? no?

ars 13y ago

No, no one pays that. And I don't think the chargemaster price is even correlated with the final price, so it's not even useful as a relative measure. I wish it was a real price though - maybe this site could push hospitals that way. But I doubt it because the reason hospitals are able to afford Medicare prices is only because they overcharge the rest, and the prices are made opaque specifically so that that people do not complain about that. The only way to make transparent healthcare prices is to raise medicare prices so that everyone pays the same, but that'll never happen. So what happens is that insured people pay an extra premium to help out the rest. Airlines do the same thing, and they too have very convoluted hard to understand prices.

aguynamedben 13y ago
Yeah, fair. Regarding "I wish it was a real price though" that's why we want to run this analysis for insurance companies. They're the ones that have the best real data, and can benefit from it the most.
cosmie 13y ago
>because the reason hospitals are able to afford Medicare prices is only because they overcharge the rest That's simply not true. Medicare prices are explicitly designed to cover costs, based off of collected data and input from the self-interested American Medical Association[1]. They almost carte blanche accept the AMA at their word, and I doubt the doctors at the AMA are shooting themselves in the foot (although they appear to be backstabbing under-represented GPs). What Medicare doesn't do is pay excessively, so poorly ran facilities may go red. One of the motivations behind incentivizing (and soon requiring) electronic health records is the ability it gives Medicare to objectively analyze this information, rather than taking the doctor's subjective assessment. What does inflate private insurance rates is unnecessary market saturation, where hospitals are expanding to capture patients from competitors and lowering per-hospital utilization in the process. Particularly an issue with non-profits, which have little other recourse to spend their profits on except higher salaries and facility expansion. The other main reason for higher insurance rates is bad debt, which is the percentage of care hospitals write-off because they don't expect to recoup the charges[2]. Since Medicare payments are supposedly break even, this is almost solely absorbed by private insurance. That's one of the reasons hospitals are for Obamacare, because there will be fewer uninsured and hence less write offs; yet, current reimbursement contracts account for that bad debt already, so they're going to get a lovely profit boost until the payors correct the imbalance. Anecdotely, revenue cycle departments (that collect payments) love Medicare, because it just pays. Private insurers dispute everything and threaten to pass the bill directly to patients, which the hospital knows will never get paid because the member expects their insurance to take care of it. [1] http://www.washingtonpost.com/business/economy/how-a-secretive-panel-uses-data-that-distorts-doctors-pay/2013/07/20/ee134e3a-eda8-11e2-9008-61e94a7ea20d_story.html http://www.washingtonpost.com/business/economy/how-a-secreti... [2] http://www.acainternational.org/products-health-care-collection-statistics-5434.aspx http://www.acainternational.org/products-health-care-collect...