
What Happens When Doctors Only Take Cash (2017) - SQL2219
http://time.com/4649914/why-the-doctor-takes-only-cash/
======
linsomniac
My local mechanic is required by law to tell me how much something is going to
cost me before they start work. Why is my doctor not held to the same
standard. Ever tried calling a provider to find out how much something is
going to cost?

Sounds like the medical industry had better lobbyists.

~~~
conanbatt
Because the cost is unknown until treatment is over.

Also, funny comparison, try to make it with software engineering.

~~~
thephyber
> Because the cost is unknown until treatment is over.

If you held a mechanic to the same standard, they "wouldn't know the cost"
either.

Maybe the doctor's office doesn't know your out-of-pocket cost, but they
generally know (within a reasonable rage) how much they will bill the
insurance company for. Perhaps an underlying problem is that a health
insurance-medical pratcice contract prevents the medical practice from
revealing the negotiated+contracted costs.

In the case that the nurse/doctor/surgeon decides to change the
prognosis/prescription during the visit, there are provisions for that type of
action with auto mechanics, too.

~~~
conanbatt
> Maybe the doctor's office doesn't know your out-of-pocket cost, but they
> generally know (within a reasonable rage) how much they will bill the
> insurance company for

We don't know either. In fact you have to build infrastructure just to know
estimates, which will be cleared months later, and a result might be less or
more price. It is not a transparent system for the provider either, specially
when you are a small one.

> In the case that the nurse/doctor/surgeon decides to change the
> prognosis/prescription during the visit, there are provisions for that type
> of action with auto mechanics, too.

I honestly think the problem is fee-as-service, where you have to make very
complex calculations based on how each thing is claimed. It would be very
different if work was provided per-hour basis, or even per-result (complex,
but market is leaning towards that right now).

Figure a software engineer consultant charging differently per language,
platform, stack version, LOC, cost of materials etc each time he works an
hour. IF you are an engineer try to picture how that works.

1- You diagnose a problem to solve

2- You look into a list of 70k items to look for the corresponding code to
that problem (C10.023 Turn iterative code to recursion)

3- You now write what you are going to do to solve it

4- Now you have to pick a billing code (CPT code 94102 -> Iterative on GC
language to functional programming language ). You estimate 94102 will pay
50$, but are tempted to put 94103 which will pay 75$, from Iteractive non GC,
because actually your custom language settings have GC turned off, but are
unsure if the insurance company will believe or care

5- The client asks you how much will charge, considering he is personally
liable for 20% of it because the actual client doesn't re-imburse everything.

That was a single visit. Doctors get 12-16 a day.

------
harrisreynolds
I've been wondering for a while now why health insurance companies exist at
all. They introduce a massive bureaucracy and massive costs and provide very
little value.

They evolved from a reasonable idea into a monster that just drains our system
and do not provide enough value to justify their existence in my opinion.

~~~
conanbatt
And yet, health insurance companies have very low profit margins, the lowest
amongst the insurance companies. So who is getting all the money?

~~~
noobhacker
The high health care cost is due to a lot of unnecessary procedures being
performed. This can happen in two ways.

First, there are a lot of tests and procedures ordered by doctors that only
have some, but very small, benefits for the patients [0]. Doctors are
incentivized to do this because each procedure has a set price (negotiated
with insurance companies and Medicare / Medicaid) and the only way to get more
revenue is to perform more procedures.

Second, patients themselves order a lot of procedures out of fear. Arguably,
they can be better off without these procedures. A prime example is end-of-
life care, where patients and families often want to "do everything possible"
even if those intrusive medical procedures bring nothing but a few weeks of
miserable living [1]. Those end-of-life procedures are extremely expensive
while having questionable benefits in terms of bringing a "happy" life rather
than just a longer life [2].

[0] [https://www.scientificamerican.com/article/unnecessary-
tests...](https://www.scientificamerican.com/article/unnecessary-tests-and-
treatment-explain-why-health-care-costs-so-much/)

[1]
[https://www.npr.org/sections/money/2014/03/05/286126451/livi...](https://www.npr.org/sections/money/2014/03/05/286126451/living-
wills-are-the-talk-of-the-town-in-la-crosse-wis)

[2] [https://www.amazon.com/Being-Mortal-Illness-Medicine-
Matters...](https://www.amazon.com/Being-Mortal-Illness-Medicine-
Matters/dp/1250081246)

~~~
semperdark
Third, doctors order unnecessary but "by-the-book" tests to document things
that they already know in case of a malpractice lawsuit.

[https://en.wikipedia.org/wiki/Defensive_medicine](https://en.wikipedia.org/wiki/Defensive_medicine)

------
serichsen
From my german perspective, every assumption in this article looks quite gross
and barbaric.

Here, everyone is insured. If you break your arm, you get it fixed. If you get
cancer, you get therapy. If you get the flu, you get a prescription. The
overall cost is paid by the entire population, through the insurance system.

For what is the alternative? Maybe the overall monetary cost would be lower if
everyone had to watch the price, but you would pay for it in human lives and
suffering, when people have to decide between dying of illness or dying of
hunger, or between lifelong pain or clothes for their children.

~~~
tomohawk
From my American perspective, the national health systems of other countries
have their own barbarities. There is a reason why so many people from other
countries come to the US for health care.

When I was looking to have a very serious health problem taken care of, I
heavily researched getting the procedure done anywhere in the world. It was
pretty obvious that all the best places to have it done were in the US. The
facility we went to had quite a few patients from other countries - and we're
not talking 3rd world countries. Many of these patients had already had care
in their own country, where the care was botched or insufficient. They were
coming to the US to get it done right. On their own dime.

Not sure how Germany is, but average wait time for an MRI in Canada is over 10
weeks.

[https://www.fraserinstitute.org/studies/waiting-your-turn-
wa...](https://www.fraserinstitute.org/studies/waiting-your-turn-wait-times-
for-health-care-in-canada-2015-report)

In the US you can go right into an MRI on the same day. This is key to getting
an appropriate standard of care.

In Canada, average wait time for an ultrasound is 4 weeks. Our pets get better
care in the US. I really don't see how people tolerate such things.

~~~
qubex
In northern Italy‘ve gone ”right into” an MRI with the public health system
twice (once when I had a migraine aurea of incredible intensity with visual
hallucinations and disorientation) and another time when I had smashed up my
ankle so badly they needed to figure out the effect on the soft tissues after
a bunch of X-rays in the broken bones. There’s a lot of myths about queues and
waiting times (in my experience at least). When I was in the UK (of which I am
also a citizen) while studying in very early 2000s I had slightly longer
waiting times for specialist visits (allergy specialist, and then a
dermatologist) but certainly not the kind of waiting times I hear tossed
around now (on the order of a couple of weeks, tops).

------
dukoid
I think it's an important reminder that markets need some level of
transparency to function. And perhaps that relatively simple regulation (like
a requirement to publish the prices -- or in other areas the first sale
doctrine) might be the best regulation where feasible....

~~~
prostoalex
Hospital chargemasters are required to be public in California
[https://www.oshpd.ca.gov/Chargemaster/](https://www.oshpd.ca.gov/Chargemaster/)

Unfortunately,

1) The price agreements between hospitals and insurance companies are
confidential, as both sides compete in their own industry and don't want to
reveal their hands.

2) Consequently, chargemasters post some ridiculous price per procedure (with
discounts available, naturally, to insurance carriers, who are the bulk buyers
in the business). Which makes chargemasters similar to list prices you see at
most retail establishments - only schmucks are expected to pay those.

~~~
Clubber
There is an Adam Ruins Everything episode about that. Basically hospitals were
reasonable, then insurance companies came along and brought extra business to
hospitals. For that, they felt they deserved a cut. Since the hospitals were
mostly non-profits, or low profit, they didn't have anywhere to cut, so in
response they raised their rates to provide a cut. There is more to it, but
that's the origin of the charge master.

Of course regulation requires administrative staff which costs more money as
well.

Malpractice is ungodly expensive too.

Other costs are the requirement that hospitals treat the uninsured. I was
listening to NPR when the ACA debate was going on, and the CEO of a local
large hospital said about 25% of his costs are due to treating people who
couldn't pay. That's a huge number.

~~~
maxerickson
The American Hospital Association tracks uncompensated care (bad debt and
forgiven bills):

[https://www.aha.org/system/files/2018-01/2017-uncompensated-...](https://www.aha.org/system/files/2018-01/2017-uncompensated-
care-factsheet.pdf)

It's around $40 billion per year in recent years (for all US hospitals). With
hospital spending around $1 trillion, it's 4 or 5% across the industry. There
are of course individual hospitals that face higher costs.

~~~
Clubber
Thanks. I must have remembered it wrong. Even with a variance, 25% seems way
to high.

~~~
maxerickson
Could be related to costs vs charges.

Would still be lots of net income though (for the uncompensated care to
represent a larger fraction of total costs).

Could also be including Medicare and Medicaid (which the numbers in that pdf
explicitly exclude). They pay, but not always enough to cover the cost of care
delivered.

------
SQL2219
Need surgery? Here are the prices:

[https://surgerycenterok.com/pricing/](https://surgerycenterok.com/pricing/)

~~~
maxxxxx
A price list like this should be mandatory for all doctors.

~~~
killjoywashere
Should software developers and lawyers also have upfront pricelists for all
services?

I will gladly develop a cure for cancer, for the low, low price of $20B.

~~~
maxxxxx
When I hire a software developer or a lawyer I get an upfront price list.
Would you hire a lawyer that either would not give you any price or told you
"it costs between 2000 and 60000 depending on your insurance and some other
factors we won't tell you"?

~~~
killjoywashere
The difference is law, software, car repair, home remodels, etc, are all man-
made systems. Medicine is dealing with a system that I think we can all agree
man did not make.

~~~
maxxxxx
A hospital is a very man made system and most tools they use are man made too.
Most procedures are pretty standard too. There is no reason that they can't
publish numbers other than that it's beneficial to them to keep them secret.
Insurances have these numbers too but they don't want to publish them either.
Everybody knows the pricing, the only participant being kept in the dark is
the customer, aka patient who eventually has to pay.

------
qubex
> Setting and casting a basic leg

Oh good God, I’d never thought of this... I’ve broken more bones than I care
to count (wrist, triple torsion fracture in my ankle, two ribs twice,
shoulder) and I’ve never paid a penny (here in Italy). I’d never even remotely
contemplated it might be a cost beyond the annoyance.

~~~
t3rmi
How does one break so many bones?

~~~
Giacomot
Free healthcare is a great incentive to be careless with your body. /s*

edit: I was being sarcastic

~~~
qubex
I see you're being voted down but you might actually be right... if I feared
that kind of monetary consequence I'd never walk out the door.

~~~
berbec
I walk around fully aware I am one slip and fall away from inescapable,
permanent financial ruin. I have insurance, but my $8,000 deductible means if
I break my leg falling down a flight of stairs, I'll be in bankruptcy court
once the cast comes off.

------
tomohawk
Such a novel concept that when we seek to provide health care, we actually pay
for care instead of insurance.

Rand Paul made a similar case last summer that if the government is seeking to
to provide care for people who can't afford it, it should put the money into
care instead of into insurance companies. It would be much cheaper an much
more effective.

Note that if you go to the highlighted facility, you can still contact your
insurance to pay for the procedure - its just that the doctors in this case
are not doing that for you. I've never understood why doctors involved
themselves in dealing with insurance companies. It's the patient's company, so
the patient should deal with it. If more doctors did this, patients would
realize that the real problem is the insurance companies. Market forces might
even cause insurance companies to provide better service.

------
kolbe
I like that they take responsibility for complications. Instead of shoddy work
being an opportunity for future revenue like with the rest of the system, it's
an actual disincentive.

------
asmithmd1
_Cash payments don 't count toward a patient's (insurance) deductible_

This seems like a problem. How is this not an anti-trust violation? In order
to benefit from the insurance contact you purchased, you must use a provider
who will submit to an insurance company's capricious payment system.

~~~
ksenzee
This is probably a simplification. Normally if you use an out-of-network
provider, the cost counts against your out-of-network deductible, which is
significantly higher than your in-network deductible. So it may well be that
his insurance would count this against his out-of-network deductible, which is
so high that he would never reach it anyway.

~~~
javadocmd
No. In order to utilize your insurance plan's out-of-network services, the
insurance company has to be in the loop. A cash-based system completely
circumvents insurance.

~~~
ksenzee
Right, you certainly have to loop in your insurance company, by filing a claim
(which they won't pay, obviously).

------
expertentipp
I've seen similar trends in post-Communist EU countries. We are importing the
worst patterns from US. Public health insurance is most of the times
miserable.

~~~
tmnvix
> Public health insurance is most of the times miserable.

I expect that your statement is about public health insurance _in post-
communist EU countries_ (I have no experience of this). Public health
insurance in Australasia is very good (though has arguably been better in the
past in some senses and could obviously be better in the future).

------
mrfusion
What about making a website people can enter the price of past procedures,
their insurance plan and note where it was done. Then you could help people
comparison shop before hand by showing typical prices.

~~~
wu-ikkyu
That seems interesting. Such a site would be prone to fake
entries/astroturfing though. I wonder how that could be avoided?

~~~
mrfusion
Just ask for a receipt to be scanned in.

------
DoreenMichele
_Since their surgery center does not employ the army of administrators that is
often required to haggle with insurers and follow up on Medicare
reimbursements, their overhead is smaller._

This is part of why Obamacare is fundamentally broken. Using the existing
commercial insurance system to try to provide universal coverage injects
unavoidable extra expense and complications.

Really happy to hear about the trend the article is describing.

~~~
killjoywashere
This may work for chronic conditions and non-lethal problems, but creates a
problem when you're talking about urgent care: stroke has a 2-3 hour window
for administration of TPA. The goal for intervention in a myocardial
infarction is under an hour, same for trauma, where people may be in the ICU
for days to months (a lot of months). Who covers those costs?

~~~
Turing_Machine
Every insurance company in the United States, along with Medicare and
Medicaid, _already has_ a fixed amount that they will pay the caregiver for
administration of TPA. I guarantee it, even without bothering to look up what
TPA is. If the procedure is covered by insurance _at all_ , there's a pre-
approved reimbursement amount for doing it.

Outside of an expensive, time-consuming, and almost always useless appeals
process, that flat rate is all the doctors are going to get. They can take it
or leave it.

There are medical codes for every imaginable procedure, and essentially every
medical code has a fixed, preset amount that the insurance company will pay to
have it performed.

~~~
killjoywashere
I get that. Do you know the history of the CMS billing schedules? They called
Dr. DeBakey and he sent a couple of his fellows to Washinton and they priced
out every single thing. That has been revised, amended, and addended many
times since, but yes, I'm well aware.

The point is that there's no shopping around in the emergent cases. You can't
say "Well, in my incapacitated, mid-stroke state, let me check the menu of the
3 nearest hospitals for the cost of a stroke admission." It ranges from
"nothing to do here, looks like it was a TIA, patient demands to go home" to
"We need to take your wife to the OR for an emergent craniotomy and clot
removal to decompress the foramen of Monroe. Right now. Because minutes are
brain cells."

~~~
Turing_Machine
"The point is that there's no shopping around in the emergent cases."

Why would "shopping around" matter if the amount the doctor was going to get
paid was fixed (and published) in advance?

I don't understand why you think that pre-published fees would make this
(alleged) problem worse rather than better.

In the (unlikely, IMO) scenario where one hospital really was massively more
expensive than another, patients will almost certainly know that in advance,
just as they know that they're going to pay more at Wolfgang Puck's restaurant
than McDonalds.

~~~
killjoywashere
The rates generally are published, via CMS. This whole thing is barking up the
wrong tree. The rates are one thing. Coding is the real art. Making sure you
captured every RVU, CPT code (do you have any idea how many arterial lines
might be started on a patient dying of diffuse intravascular coagulopathy?)
How do you capture all that?

------
friedButter
> If unforeseen complications arose during or after the procedure, the Surgery
> Center would cover those costs

Doesnt this expose the facility to additional risk? Overall healthy patients
and those with sufficient insurance coverage do not have a reason to visit
this place, while those without insurance coverage (who I assume are likely to
be less healthy and hence have more complications) are more likely to visit
the place.

If instead they accepted insurance, and charged people based on complications,
they would have a more average risk profile while being able to maintain
higher profits, and keeping a USP of transparent charges (which would apply to
non insurance patients w/o complications)

------
achanda358
Interestingly, all-inclusive medical packages have been very common in India
since last 10-15 years.

------
bawana
We could adopt two simple precepts from this example of private enterprise.
transparency and consistency. If this were applied to our healthcare system
pricing would fix a lot.

------
erroneousfunk
"If unforeseen complications arose during or after the procedure, the Surgery
Center would cover those costs. Villa wouldn't see another bill."

So there is a sort of built-in insurance to this system. Those who don't have
any complications are paying more to cover patients who do. They're simply
passing the first line of medical costs (known, anticipated, where a price
estimate can be created) on to consumers while letting insurance handle un-
estimatable medical emergency type situations.

------
WillReplyfFood
Man you guys have to be busy beavers for this. Cheers frome europe.

------
Feniks
That would be a problem, I can't even withdraw more than €1000 from an ATM.
Most of my transactions are plastic or digital, like 99%.

~~~
gwern
"Cash" here means 'not wacky insurance schemes'. Their FAQ says

"To keep our prices as low as possible, cashier’s checks or cash are the
methods preferred. Credit cards are accepted on a case by case basis. Human
resource departments or divisions of self-insured companies can make other
arrangements if necessary."

(They also have a partnership with some sort of personal loan/financing
company which presumably would take credit cards or bank transfers.)

------
otakucode
You son has broken his arm. The doctors in your town will only take cash.

One of the doctors charges $50 to set the broken arm. The other doctor charges
$500.

Which one are you going to take your child to? Most likely, the $500 one.
Because going to the bargain basement doctor is not something you do when
dealing with medical issues if there is absolutely any way to afford it. It
creates what I call 'reverse capitalism.' You can only draw more customers by
charging the highest price in the area.

If your customers stop even being the ones footing the bill, it accelerates to
a patently insane level. That makes footing peoples insurance bills a
ludicrous and idiotic business to get into. Unless, of course, you've got
protection from the government or special considerations where antitrust laws
do not apply to you so you can engage in price-fixing, intimidation, and other
tactics.

Made to compete fairly, medical insurance companies would be out of business
overnight because it's a downright stupid business to begin with.

~~~
conanbatt
I don't think thats true. There is a price bias, but thats not the only
quality signal for medical care. There's reviews, facility and installations,
reputation, etc.

People are price sensitive regarding their own life and their children's. You
can find how much they value things with "revealed preferences", an economists
principle.

Its a bigger problem that as a consumer you don't have to or face the decision
of choosing by price, eliminating marketing mechanics from healthcare.

~~~
SpikeDad
"Little Billy - would you mind biting on a bullet for an hour while I check
Yelp and online reviews to find the cheapest doctor to set your broken arm."

...said no one ever.

~~~
conanbatt
"No time to look for the closest hospital, we need to drive straight to the
one I know thats 1h away, lets go".

Also, most care is not urgent care.

