Right there is the perfect example of how healthcare costs are ridiculously out of control and unregulated in America. You don’t just write off $107K in costs because of some bad publicity…they wrote it off because it was mostly excess. St. David’s is likely a non-profit, so if the insurance company had already paid them enough to cover the hospital’s actual costs for Mr. Calver’s care, they can write off everything else quite easily, even use the “lost” income as a tax break against other income. Meanwhile, it escapes public notice that this “non-profit” hospital was attempting to soak this poor guy for over $100K in marked up costs.
People keep saying this, but it’s not true. There are hospitals that close their doors every year. The numbers are not arbitrarily made up.
Doctor’s offices - which is what I imagine you mean by clinic - frequently get reimbursed at lower rates for labs than a hospital, even if the test performed is identical down to specimen container and instrument used. Which I would imagine incentivises the clinic to have a higher base rate.
Except in this case even the ‘marked down’ price was higher than the hospitals initial rate.
After insurance we ‘owe’ $980. I say ‘owe’ because fuck that. The initial bill from the hospital, pre discounts, was $940.
Keep in mind this was the exact same tests, done two years apart. Offensively overcharged.
Except they kind of are…
Prices for procedures and drugs in American healthcare are often 5x higher than the same procedures and drugs in other first-world nations. When quality of care, equipment used and drug components are identical across the board, the only difference is the methods used to determine “costs”.
Hospitals and other providers often set prices based on a complex and flawed system of cost and profit calculation called the Chargemaster. Prices in the Chargemaster actually are completely fabricated, but for many reasons. One is that hospitals know insurance companies will “discount” any charge assessed for patient care, so the larger the charge, the better the profit margin post-insurance discount. Another is that non-profit hospitals (and many for-profit ones) can use the ridiculously high chargemaster rates to calculate how much charity work they do, effectively counting money that would never have been paid to them as income lost to “charitable work”. While chargemaster prices aren’t passed directly to the consumer on a dollar per dollar basis, it’s estimated they do add $0.15-$0.20 per dollar to the bill. That means that a stent that costs the hospital $1500, but is listed in the chargemaster as a $15,000 item (like the case in the article above), brings in an additional $2,700 in revenue when passes on to the consumer at only 20% of chargemaster cost. And that assumes the hospital doesn’t try to pull a fast one like they did with the gentleman in the story above, charging $10K for a $1.5K item (66% of chargemaster cost).
Healthcare is broken, and it’s absolutely due in large part to the complete chaos of medical billing that allows providers to essentially charge whatever the hell they want (or at least think they can get away with) for just about anything.
The hospitals closing their doors every year are doing so because they either exist in areas where there are not enough patients to service to make them profitable (and again, thanks to explosive healthcare growth, “profitable” doesn’t mean making a small profit, it means you either rake in the money like Scrooge McDuck or the investors demand your closure so they can open a more lucrative facility somewhere else) or because the facility itself is so old and or mismanaged that it’s more profitable to close up shop and build a new facility (with all it’s wonderful tax incentives) somewhere else.
I don’t think there is anything I can say at this point that will ever change your mind, but that is not what the ChargeMaster is. That’s some cheap and easy reporting there.
It’s not just number of patients. It can often be the Payor Mix.
This reminds me of a “wonderful” experience my son had. He looked up an in-network doctor, made an appointment months ahead, went to the doctor, and the doctor had a lab in the same office that did the bloodwork. Problem is, the doctor’s office was no longer in network by the time his appointment came around and neither the doctor’s office nor the lab is still in-network. So what should have been a $30 bill wound up being $150 after the “negotiated out of network” costs. We got a wonderful benefits summary about how much Aetna “saved” us.
Personal anecdote : My daughter had a stress fracture in her foot back in April. Part of the treatment was a boot she had to wear on the foot that provided support and relieved pressure so the bone could heal properly.
- The doctor’s office charged $380 for the boot.
- The insurance company paid/discounted that cost down to $170, which I paid.
- When I looked up the exact same boot (using the model number printed on it) online, I could purchase it myself, just a guy off the street, from multiple online medical supply sites, for $120 with free shipping.
Keep in mind, this was the line item for ONLY the boot, so it’s not like the cost of physicians care, x-ray or anything else was rolled into that $380. Basically the doctor charged 4X what I am sure they paid for the boot (since they certainly don’t pay the $120 retail price), and the “discounted” insurance rate was still almost 50% more than retail price.
Multiply this effect out by thousands of medical supplies and procedures done daily all over America…it’s not difficult to see the problem.
One thing to reconcile Nesrie’s position with many other posters is this: the market imperfection of inelastic demand doesn’t just affect the patient-provider interaction; it also affects interactions between “retail” providers like hospitals and medical practices and “wholesale” or intermediary providers like manufacturers of equipment, etc. What I mean is, not having a necessary piece of equipment or other necessary good/service can kill or harm a patient with drastic consequences not just for the patient but also the provider. This means that patient-facing providers can’t bargain in a proper market fashion with suppliers, so they get pinched on pricing as well. This also applies to hospitals having specialists on call.
Basically, inelastic demand affects every level of health care and thus the market is seriously imperfect at all levels in health care, not just the patient-facing provider level. However, since most of us are patients, not part of the system like Nesrie, we only see the patient-facing side. I’m guessing Nesrie sees the problems further up the chain, which then flow downstream.
Well by that kind of math we should probably put plumbers, electricians, auto mechanics, and most the other professionals who charge for their services, for the building they use and might not charge you at cost for the parts they use too.
I get you’re upset with what you pay, but I’m telling you the description of the Charge Master you want to use is grossly oversimplified. These numbers are not just made-up to screw patients. If you come at it from that point-of-view then you’re simply not absorbing nor even wanting to see the whole picture.
That is an inapplicable analogy, as service providers like mechanics, plumbers and attorneys who overcharge for their services will quickly find themselves with no customers in the free market economy. Healthcare providers who overcharge are protected by the very system they’re taking advantage of. You can’t shop around when you’re having a heart attack, and you’re not going to take your teenage daughter who is in obvious pain to three different doctors to see who will give you the best estimate. Hell, healthcare doesn’t even do estimates like mechanics, plumbers and even attorneys do.
I’m not trying to place ALL of the blame on providers like doctors and hospitals. I have more than enough friends in the healthcare industry to know that it’s not a bunch of doctors and administrators in a room somewhere making it rain hundred dollar bills while laughing at all us suckers…it’s the system overall that is the issue, and fixing it will take a lot of work to change a lot of different aspects that all go into how broken it’s become. But COSTS are a big factor, and we can’t fix healthcare until we control and regulate costs.
An MRI on your knee should be a procedure that costs the same amount of money (with a small range of difference for localized cost factors) at any hospital in the United States. Same thing with a pneumatic boot, or a dose of Tylenol. There is simply no reason for wild fluctuations in pricing between providers and patients for such services.
I think that you will find that there are emergencies with plumbing and electricians and try traveling to a small town and shopping around for auto mechanics. I mean people die every year because they lost power.
Look i get everyone wants to treat healthcare like it’s magically different, and no one wants to talk about price when it comes to lives although we really do put a price on lives in a lot of areas, say not fixing bridges that fall apart.
But if you’re going to fix a system, if you are going to talk prices, then maybe there should be more information on understanding the reality behind what is going on instead of the once every three month puff piece some article puts out.
This makes no sense. We don’t even charge the same amount for a McDonald’s cheeseburger in every part of the country, and you think you can do that with an MRI? Are you even trying to have an real conversation about this?
Yes, we do, with a small range of difference for localized cost factors. Franchisers more or less insist on it, it’s core to their brand.
COLA can be quite different actually. For example, the difference between what a Cop makes in LA and what they make in Beverly Hills is around 30k a year and that’s just a few hours apart. In CA the fast food employees make a lot more than they do in Oregon and that’s not really looking at two states who have as drastically different minimum wage laws like the west and south do.
The request is not realistic at all.
Look, I’m not going to do this again where I get some pile on and then Adam B shows up and tells me fuck you.
You guys don’t want to know. So that’s fine.
OK. You can’t respect me, then we’re done. I would think you, being in healthcare, would understand that it IS entirely possible, as Medicare/Medicaid does this every single day.
As for the cheeseburger analogy, sure, you will pay $0.49 more, maybe even $0.99 more, for a Big Mac in some parts of the country versus others (and I covered this with the comment about localized costs). However, please find me a McDonald’s anywhere that charges $10 for a Big Mac versus the $3.99 national average. Yet this routinely happens in healthcare every single day, even between providers in the same city.
Yes, I know, but the differences in operating cost are not mysterious. It is not the case that the differences in medical services costs are driven by geographical cost differences. If that were so, it would not have been the case that one provider charged me $400 for a sonogram while another charged me $2200 for the same procedure, when the two providers were 5 miles from each other in metro Phoenix.
And what is the deal with department stores? I walked into one the other day and they had a pair of shoes for $170. But shoeguy1975 had the exact same pair on eBay for $120 with free shipping!
Here is the thing: you can reduce costs if customers are willing to wait a few days and get their product in the mail. Amazon and other companies built their businesses on this principle.
Insurance companies want to save money too. Mine won’t let me fill my prescription at a drug store any more, I have to wait for it to be shipped. And still they want to save more money. So, are you willing to wait a few days for orthopedic products? I have a feeling that we’ll find out soon enough. But expecting a doctor’s office to price match an online retailer is as unrealistic as expecting a small boutique to price match Amazon.
But but but FREE MARKET!
Again, this is an inapplicable analogy. The price of the pneumatic boot had absolutely nothing to do with how willing I was to wait for it, and I have no idea where your Ebay comment is coming into it. The point of my comparison is that if I can purchase a single piece of brand new medical equipment from a certified medical equipment supplier (not Ebay) for a $120 flat cost, a hospital or orthopedic doctor’s office should be able to purchase the exact same piece of equipment at a lower cost because chances are good they are not paying retail for it and they’re ordering in bulk.
I’m not saying some amount of markup isn’t applicable, but to then mark up that same piece of equipment to nearly FOUR TIMES their own cost…why? Simple, because:
A) Captive market…you want that boot today, right now, because the doctor says you need it.
and
B) Price blindness…you have no idea what the real cost of that boot is, or what he will bill you for it, or what the insurance company will decide to pay or not pay. This creates an opportunity for enhanced profit at the consumers expense. How many people actually go out and research the cost of their medical device AFTER they’ve purchased it, had it implanted or whatever? Very few. So the system continues unchallenged.
I mean, I’m sorry, but if you can’t see how that is a system designed to fleece it’s consumers, then I’m not sure how better to explain it.
Here’s the thing: If you want to pretend that medical expenditures are like other consumer expenditures, you can do that, but no one has to take you seriously, and few will.