All of the above is a problem for a various number of reasons.

Though what the poster in question seems to want(or imply, even if he isn't aware) is to transition America to an entirely POS(point of service) system, which, I guess you could do through federal regulation, and there is probably some validity to the underlying logic(not sure it's the best solution overall) because the asymmetrical nature of the market and the often unexplainable variances in pricing from even hospitals nearly across the street from one another is a real problem. Not to mention one of the dynamics once thought true, that larger health insurers benefit from better negotiated reimbursement rates is often not true, and for inexplicable reasons. Economies of scale and competition, which is often a defense used by people defending for-profit private insurance, is completely broken in the employer insurance space specifically. The entire pricing dynamics in health care are incredibly broken and warped. Anyone that tries to apply normal economic assumptions to this space is showing their ignorance to how much of the market fits the economic definition of a market failure. Not their elementary understanding of perfectly competitive markets that you almost always hear uninformed status quo defenders apply to these conversations to dismiss calls for reform.

Anything investigated by Sarah Kliff is pretty good at illustrating how broken the system is

LINK
LINK

This post was edited on 7/14/22 at 10:44 am

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Posted by BluegrassBelle

RIP Hefty Lefty - 1981-2019

Member since Nov 2010

99351 posts

Posted on 7/14/22 at 10:47 am to Bronc

quote:
Not to mention one of the dynamics once thought true, that larger health insurers benefit from better negotiated reimbursement rates is often not true, and for inexplicable reasons. The entire pricing dynamics in health care are incredibly broken and warped. Anyone that tries to apply normal economic assumptions to this space is showing their ignorance to how much of the market fits the economic definition or a market failure.

To further illustrate your point, my experience recently with having an EGD (upper endoscopy):

I have Humana commercial insurance. I had to have a scope done to verify whether I was having bile reflux (potential complication from last year's gallbladder removal). Really simple, common, procedure. Outpatient takes less than 15 minutes for the scope itself.

Night before the hospital calls me to tell me that the insurance company had still not verified my procedure that was occurring the next morning (and had been scheduled almost two weeks before). I had already paid the $1,800 they estimated would be my up front (due to having not met the deductible).

They proceed to tell me that if my insurance doesn't cover the procedure it's ok, as the hospital would consider it covered by my $1800 pre-pay as a negotiated deal.

The insurance did cover it, the total bill was over $10k and I'm now being billed an additional $600 by the hospital because the insurance does not want to cover the small biopsy they did of my stomach lining (I've had a history of gastritis, so it was a valid biopsy).

The same exact procedure was performed on my cousin, who has Medicaid, and she paid nothing.

Make it make sense, y'all. I'm having a hard time seeing where the government could do much fricking worse.

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Posted by Wiener

Member since Apr 2019

29 posts

Posted on 7/14/22 at 11:11 am to Bronc

quote:
All of the above is a problem for a various number of reasons.

How are doctors not transparent about costs? I can and do tell a patient exactly how much I charge for an office visit, procedure, etc. If a hospital is involved, I then tell them it's anybody's guess about what the rest will cost due to copays, coinsurances, and the shell game that the hospitals and insurance companies play about how much something actually costs.

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Posted by LaLadyinTx

Cypress, TX

Member since Nov 2018

6095 posts

Posted on 7/15/22 at 9:53 am to Bronc

quote:
because the asymmetrical nature of the market and the often unexplainable variances in pricing from even hospitals nearly across the street from one another is a real problem. Not to mention one of the dynamics once thought true, that larger health insurers benefit from better negotiated reimbursement rates is often not true, and for inexplicable reasons. Economies of scale and competition, which is often a defense used by people defending for-profit private insurance, is completely broken in the employer insurance space specifically. The entire pricing dynamics in health care are incredibly broken and warped.

You sound fairly knowledgeable about healthcare. You know that pricing doesn't equal payment or cost. Pricing generally makes zero difference in what the patient pays and it rarely impacts what the insurance company or Medicare pays. There are a handful of plans with stop loss provisions and also Medicare has Outlier payments for extremely high cost cases in which charges do have a small impact on payment. Many years ago, when Medicare 1st started, hospital payments were tied to actual costs, based on a cost to charge ratio and there was a settle up after the reporting year ended. Costs quickly escalated under that system, as there was incentive to spend more money, because Medicare paid for it. Now, pretty much every payor pays either a prospective or contracted rate and costs and charges have no impact whatsoever on your payment. The public doesn't understand this and focuses on the Aspirin that costs $5.00.

After 38 years in healthcare administration and audit, the insurance company adds nothing to the equation other than to limit services, something traditional Medicare does not do.

After all these years in healthcare, I'm completely convinced that we already have enough money in the system between Medicare, Medicaid, Obamacare, and insurance. We allocate our $$$ extremely poorly.

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