Question for those who support medicare-for-all.
I apologize as this has probably been answered before, but I was in a meeting with our insurance broker as we’re moving to a different coverage (due to Aetna jacking up their rates 50%). One of the things she mentioned is that one of the reasons hospital visits are so expensive is that hospitals charge high fees to make up for the low payments they receive through medicare/ medical. So if you shifted everyone to a medicare-for-all system, it would seem these hospitals would be hit heavily by a dramatic reduction in payments, to the point that some of these hospitals could suffer a budget crisis. I’m just conjecturing, but it seems that would be the result at least at first glance.
Therefore what it is it that helps ensure that if we shifted to a medicare-for-all system that hospitals would not be heavily hit and suffer budget problems?
jeffd
3382
Some probably would be. Hospitals are providers and if we ever want to get healthcare cost growth under control providers are going to be the ones taking the biggest haircut.
Houngan
3383
This is anecdotal, but most doctors rely on medicare/caid for half of their business or more. The big difference is that different payers have different amounts for different procedures, so if the hospital had it’s way it would have medicare pay for the MRI but insurance pay for a CAT scan and the patient pay for penicillin out of pocket, or some equally complicated combination based on who was willing to pay what.
One enormous benefit of a single payer system would be to eliminate the insane amount of bargaining, paperwork, and gaming that the current system requires. It’s a big reason that the VA system is consistently ranked as the most efficient and effective, everything is under one umbrella so you get to pay attention to the medicine.
H.
Good point. Some doctors also charge LESS for those who pay out of pocket, because they don’t have to deal with the insurance paper work (which is costly in man-hours) and because insurers don’t always pay the full amount anyway. So you might charge 500 dollars for something, and the insurer only gives you 300. The balance isn’t paid by the patient. It’s just lost.
This has likely led to a slow creep, in order to get the fees the providers actually want. A single-pay system would allow better oversight and more consistent standards, if done correctly. That last part is the sticky one, and the one that worries opponents of such an approach (rightly so, I think). The key to any system is that it must be done correctly, and the details aren’t always obvious.
Everything I’ve read has indicated the opposite; that hospitals charge high fees to make up for the incredibly small payouts by private insurance companies, who have a tendency to fight quite hard for the right to not pay the doctors/hospitals what they agreed to pay.
My father in law passed away a few months back and he was totally uninsured. He spent his final few days hospitalized and racked up some impressive bills which we now have to sort through and pay off as part of handling his estate. We called up the hospital billing people and let them know that the patient was completely uninsured and asked if they could give us a break. They immediately cut 50% off the bill with no further questions asked. I was shocked at how easy it was to get a discount that big.
So yeah, there’s a lot of padding going on in the billing. Presumably so that hospitals can do well despite insurance companies trying to play BS games to short them.
Hospitals charge as much as they can. Insurance companies pay as little as they can.
Insurance companies are a lot better at paying hospitals less than you are, since they negotiate up-front and have leverage. You, in contrast, aren’t going to haggle over your EKG’s price while you’re having a heart attack, and will likely be billed whatever the hospital thinks they can get away with.
Insurance companies can and do pull bullshit games to try to avoid paying what they should, but they aren’t the only guilty party involved in this mess.
Well said. This is why we need a single payer system.
jpinard
3389
As others have said, that is totally wrong. Medicare/Medicaid is a strictly run entity that does not give the doctors/hospitals the profits they might like. But at the same time, the doctors/hospitals are not taking a loss except for in states like TX and AZ where the state kicks in so much less than other states like MA.
The difference is paying for uninsured individuals. This is the biggest reason we need socialized healthcare. Because those that are insured are paying massive amounts to cover those who contribute nothing to health coverage. And the numbers of people who can’t pay anything at all are increasing dramatically which is a terribly destructive cycle.
We need everyone to pay, the same % no matter what their salary, so everyone can be taken care of. The main people who don’t want this are those that are wealthier because they don’t want to help pay for anyone but themselves. The irony though, is the only people who lose in this situation is the Middle Class. Because insurance rates are so high they can’t be afforded, yet they have investments/equity that can be taken away.
jpinard
3390
I wanted to point something else out about our “for profit” healthcare schemes:
[LEFT]
[LEFT]While insurers seek to distribute $1.2 billion in dividends…
[LEFT]Data from state regulators showed that the dividends represented 18.7 percent of Oxford Health Plan’s New York premiums, 16 percent of Aetna Health’s premiums, 2.5 percent of Empire’s premiums and 10.3 percent of United Healthcare’s premiums.
[/LEFT]
[/LEFT]
So when you get that 15-20% increase in your premiums each year you know who to thank…[/LEFT]
Houngan
3391
I’m reminded of the newt that has some sort of ultravenom, evolved over the millennia in an arms race with some other predator, to the point that in order for this small newt to compete with a small lizard, the newt can kill you by looking at you, and the lizard is so poison-proof it licks syringes for fun. Or something like that. Killed three dudes when they accidentally boiled one in a coffeepot.
H.
wahoo
3392
For what it’s worth, the academic community’s findings disagree with this board. Cutler (CAP’s favorite heatlh care scholar) found profund cost shifting when Medicare reimbursements rates dropped (1998 paper Cost Shifting or Cutting). He found that in some of the later Medicare cuts, providers couldn’t shift costs so they cut services (reduced staff, nurses etc).
More recently Viv Wu’s research showed hospitals shift when they can but can only shift about a third of it.
I believe most studies that have used SGR or the 1997 BBA found evidence of shifting or a drop in supply.
The question is not whether there is cost shifting; obviously, if revenue from any source drops, there will be cost shifting. You could say the same about if you dropped revenue from out-of-pocket payers, or from charitable donations!
The real question is whether doctors get more net out of Medicare/Medicaid than out of private insurance, including the transactional costs and as applied to the amount they actually receive, rather than the amount the insurance companies promise to pay.
wahoo
3394
I haven’t looked as much as Medicare but my sense is no. For medicaid, there’s no question. Medicaid sucks to receive as a provider, which is why many of them don’t see Medicaid patients. Medicaid pays way lower than private HI or M’care.
I haven’t looked at Medicaid, but I know that the one chance I got to actually look in depth at the numbers from someone who was running a pediatrics practice, Medicare paid out significantly higher than private insurance once you factored in the transactional costs of actually getting paid.
maxle
3396
Given that the insurance office I work for (a rather successful–and large–company, I should note) routinely slashes medical bills by a minimum of 1/3, and more typically 1/2 or more, my sense is yes. And yeah, getting payment out of us costs time and money.
Have people checked out http://www.healthcare.gov which helps people know about the reform act and also how to go about finding insurance? It’s really well done.
I’ve already helped people who have pre-existing conditions find affordable insurance through the Pre-Existing Condition Insurance Plan High Risk Poll (PCIP) ($199 a month premium with a $1500 deductible, $2500 out of pocket maximum)
Ranulf
3398
FL shoots, scores! GOOOOOOOAAAAAL!
All tied up now, 2-2. On to the supremes?
No severability? Ouchie.
WarrenM
3399
At a time when there is virtually unanimous agreement that health care reform is needed in this country, it is hard to invalidate and strike down a statute titled “The Patient Protection and Affordable Care Act.”
Very difficult indeed but if this judge is to get his 15 minutes of fame and do the talk show circuit, it has to be done.
JeffL
3400
I haven’t had a chance to complete reading of the 78 page ruling:
Sounds like you have completed it. Which specific parts do you think he’s got wrong in his ruling?
