
Opaque and sky high bills are breaking Americans, and our health care system - jseliger
https://www.vox.com/policy-and-politics/2017/10/16/16357790/health-care-prices-problem
======
tynpeddler
Price transparency is the number 1 hurdle facing American healthcare. How are
you supposed to fix a cost problem if you don't know what anything costs?
Worse yet, how can there be a market for a service if there are no prices???
Less than 10% of healthcare expenditures are emergencies, that leaves a lot of
room for shopping around.

I'm also really glad that people are starting to realize that Obamacare had
critical conceptual failures. There was nothing in the ACA that tackled
healthcare costs, it was only concerned with spreading healthcare costs.
Affordable healthcare is not the same thing as affordable health insurance.
The Democrats are certain that they already know the right answer, lack of
data be damned. The Republican leadership on the other hand doesn't really
grok yet that there is a problem (or rather currently they think that
Obamacare is the problem, when in truth Obamacare is neither the problem or
the solution).

~~~
sjg007
Price transparency is basically a red herring.

Prices are largely set by the CMS (medicare and medicaid) and sometimes
insurance companies will pay a little bit on top sometimes depending on their
clout and competition from other providers / insurers. The hospital counters
with the "master charge" sheet which is overinflated fiction. Then they have a
giant song and dance negotiating prices / threatening to pull their patients
etc... But the bulk of their revenue comes from medicaid/medicare patients so
prices basically round down to those reimbursement rates.

Then the ACA keeps costs down by having doctors focus on quality rather than
quantity. If patients are readmitted they get dinged on their medicare
reimbursement rate. There are also other provisions in there as well to
regulate reimbursement rates as well.

The ACA also reduced health care induced bankruptcies. You still may have high
premiums but those were addressed by subsidies in many cases. Taking on people
with pre-existing conditions was also addressed by subsidies. The expectation
is that as these people get healthier, the whole system will eventually
converge to a steady state where cost is mostly regulated by the CMS.

If insurers don't want to play ball then the government should just let people
buy into medicaid. We already pay medicaid and medicare taxes anyway.

~~~
chimeracoder
> But the bulk of their revenue comes from medicaid/medicare patients so
> prices basically round down to those reimbursement rates.

This is totally wrong. Private insurers reimburse several times what Medicare
does. In fact, they're literally required by law to pay more.

Medicare prices are so low that providers can't sustain themselves on Medicare
reimbursements alone; the government provides a special subsidy to providers
who see a lot of Medicare patients because otherwise they'd operate at a loss.

~~~
sjg007
>This is totally wrong. Private insurers reimburse several times what Medicare
does. In fact, they're literally required by law to pay more.

That's not true.

[http://money.cnn.com/2014/04/21/news/economy/medicare-
doctor...](http://money.cnn.com/2014/04/21/news/economy/medicare-
doctors/index.html)

And check out table 1 in
[https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5375010/](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5375010/)

~~~
chimeracoder
> That's not true. [http://money.cnn.com/2014/04/21/news/economy/medicare-
> doctor...](http://money.cnn.com/2014/04/21/news/economy/medicare-doctor..).
> And check out table 1 in
> [https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5375010/](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5375010/)

Both of the links you provide corroborate what I said. Mass-market media tends
to do a terrible job with reporting nuanced details like the medical billing
process (or computer security), but even this watered-down CNN overview notes:

> The differences can be stark. Private insurers allow an average of $1,226
> for low-back disc surgery, while Medicare will only permit $654, for
> instance. And the gap can grow wider depending on where the patient is. In
> New York, insurers allow $1,352 for a gall bladder removal, compared to $580
> for Medicare. Some services are more comparable. For office visits by
> established patients, for instance, Medicare will allow 92% of what insurers
> do.

As for Table 1 in the paper you linked, _every single city_ listed there
receives less from Medicare than the black-box FAIR estimates. In the case of
San Francisco, Medicare basically pays 33% of what the private insurers are
estimated to pay.

And that's just tracking Level 3 office visits, which is where the Medicare
shortfall is generally the _smallest_ (generalized and routine care).

------
festidious
The problem is US health care providers are immune to true competition:

1\. They often enjoy state-sanctioned monopolies in the form of overly
restrictive licensing laws. They're basically unions that enshrine certain
false assumptions about what form of training is necessary to accomplish
tasks.

2\. They don't even have to be held to any cost agreements.

How can you have competition or any kind of viable health care economy when no
one actually knows the price of a service until it is set by the provider
after the fact, and there is no way of offering an alternative means of
offering the service?

It's absurd. I don't even understand how most of this is legal. The price
should be set beforehand, or at least there should be an estimate on request,
and the final price should be with in a small fraction of that estimate, and
licensing should be dramatically loosened or eliminated, to allow providers
who are competent but have alternate educational paths (e.g., optometrists
expanding their practice, or psychologists prescribing, or nurses or
pharmacists increasing their role).

~~~
amoorthy
There is a downside to pricing being front-and-center. It encourages the
patient to make a judgement call on what procedure to undertake based more on
cost than on need. Since they are not qualified to assess need they rely on
cost more than they probably should. The result may be poor short-term
decisions which leads to health complications down the line.

Healthcare is a service like none other. The consumer is not knowledgeable
about the details and trusts a third party (doctor). They often buy the
service when they are not in the best frame of mind. They may not have the
ability to exercise choice in location or provider in an emergency situation.
All these factors make it hard for consumers to make a rational decision when
it comes to healthcare services. Since these factors are unlikely to change I
don't think we should rely on a traditional market-based approach where
competition will solve all ills.

More important than transparent pricing is a singular price for a procedure
regardless of if the patient has insurance or not. That alone will solve many
problems.

~~~
csydas
But then again, the opposite of this is they're also not equipped to make a
judgement for non-critical operations or and they also are provided with
absolutely no information as to the costs they're about to undertake for
procedures that otherwise would be in their right frame of mind, and they have
poor ability to understand how their insurance will work each time they
undergo a procedure, whether it's a routine check or a critical procedure.
Already prior to the affordable care act people were performing their own
medical procedures since they could not get medical coverage due to pre-
existing conditions, making equally bad decisions because they had no means to
determine how costly a procedure would be and they still lacked the ability to
know whether or not a procedure was required.

The information asymmetry is bad for many reasons, as I do appreciate what
you're saying that we really don't want people self-diagnosing; but at the
same time, should we really have people going into debt just to get a minor
biopsy done? My last biopsy cost $6300 when it was all said and done and
insurance refused to pay any of it on the basis that it was "unnecessary",
never-ending that three separate doctors were extremely concerned as they had
no idea what a lesion on my leg was and they were fearful it was cancerous.
I'm not really sure how that can be deemed unnecessary; even from a straight
cost perspective, $6300 out of their pocket now means saving potentially
hundreds of thousands on costs later.

I live abroad and my work colleagues are continually flabbergasted when I
explain how health care and insurance works in the US - they cannot fathom the
idea of paying for a service that can just decide not to hold up their end of
the bargain for whatever reason, or that the answer to the simple question
"Let's say I break my leg - how much can I expect to pay to get it fixed?" is
"I really can't say, it depends on a lot of things." Here, they're used to
pretty dead set figures; an X-Ray is this much, a cast is this much, each
follow up visit is $X, and this is all provided ahead of time so that they
know the total cost up front.

So yeah, I do get what you're saying - we don't want people just going to
WebMD and thinking they have SuperCancer. But the alternative is people
terrified of the potential costs and having absolutely no idea what they're
getting billed for or why, and an Insurance system that just dictates prices
to them.

~~~
amoorthy
Agreed that cost transparency is good. Better is what your non-US friends are
saying: "an X-ray is this much" regardless of where you get the service and if
you have insurance or not.

ps: hope your biopsy was ok. Must be a very stressful thing to go to, and then
have to deal with payment issues after.

------
xenihn
I was recently billed $6500 for an MRI. I ended up being completely fine, but
I'm really annoyed with what happened. An MRI is typically $500, but I went to
UCLA's radiology facility because I was referred there by a UCLA specialist at
a clinic. The $6000 was a hospital fee that was tacked on because the
radiology facility is located on hospital grounds. The explanation/itemization
from UCLA is that it's because hospital equipment was used, but it wasn't any
different from equipment at any other radiology center.

My insurance paid most of it ($4000ish) and I'm "only" responsible for around
$500, but I'm extremely soured by the experience. I've had major surgeries
that cost around that much. An MRI anywhere else would have cost me $50 total.
I feel completely bilked by UCLA and I wish I could avoid giving them any more
money, but I don't have very many choices around their campus when it comes to
accepting my insurance.

It makes me never want to set foot in a hospital again unless I'm literally
dying.

~~~
rconti
Something similar happened to me, except my insurance company helped me dodge
a bullet. My doctor is at Stanford so when an MRI was recommended, they just
scheduled me at their facility for an MRI in a couple of weeks.

Well, a couple of days after my initial visit, my insurance company had
someone call me and say "hey, just so you know, we authorized your MRI at
Stanford, and we will cover it to the tune of 90%, but the price is higher
than most in your area, so we want to make you aware of more affordable
options." I'm a pretty stubborn person, and I hate feeling like my insurance
company is trying to screw me, so I thanked him for his time and declined.

Then, after a few minutes, I started coming to my senses. Yes, I have good
insurance. Yes, they'll pay. That said, should I really have a $5000 MRI
instead of a $750 one? Yeah, I can afford the $500 copay, but do I really want
to? I'm used to just taking whatever services are recommended, but this time I
went ahead and cancelled the Stanford MRI and took the $750 one instead. Saved
myself some money, saved my insurance company a lot of money, and sent all of
those dollars to a provider giving me a service at a reasonable cost.

(sort of related, my wife was recently in an accident where she went to the
Stanford ER and was in the hospital for almost a week, plus some surgery. We
accidentally gave the wrong insurance info so of course I got an Explanation
of Benefits from my insurance company a few weeks later, saying "you owe your
provider: $200,000" which is quite a funny thing to receive. Maybe it it was
$20k it would be stressful, but once it hits the hundreds of thousands you
realize you're not going to pay for it anyway. Amusingly, I think it didn't
even include the surgery, or at least not the anesthesia, so I'm quite sure
the true cost was north of $300 or $400k, and wouldn't be surprised if it
broke a half million dollars after followups)

~~~
xenihn
Yeah, I wish my insurance had called me :(

I can easily afford the $500 and I'm really grateful for that, but I feel like
I was taken advantage of.

How much did you pay in the end for Stanford ER?

~~~
rconti
I have no idea what Stanford cost. It was not on my insurance, it was on my
wife (she was double covered at the time, it was a mistake to submit to my
insurance rather than hers-- I didn't get the concept of primary=your
insurance, secondary=someone else's insurance).

So I've never seen the EOB for her insurance and supposedly we owe $0. I've
never seen a bill, and I called Stanford to confirm there was once a balance
for a visit on or about that date, and that the balance is now $0.

------
pxeboot
Lack of transparent pricing is a huge issue with US health care.

I dispute almost every bill I get. Prices get reduced or insurance agrees to
pay more in almost every case. They are banking on people just paying.

~~~
noobhacker
How does one dispute a bill? On what basis can we say that this bill should
have been $X instead of $Y? I'd love to start doing this but I don't know how.

~~~
creaghpatr
First step is to ask for an itemized bill, usually comes out to be a couple
pages in a hospital. Then check for anything that looks wrong or charged
wrong. 90% of medical bills contain at least one error. There are also
advocacy companies that will do this for you, a solid investment if you're
paying 10k+.

~~~
noobhacker
"Check for anything that looks wrong or charged wrong." Could you clarify
against which should I check? The original problem is that no price is
published in the first place.

------
alistproducer2
The "free market" is just a terrible solution to providing health care. There
are some cases where it can work, but as a general solution it doesn't. Roads
are the same way. Does a private, market solution (toll roads) work sometimes?
Sure. Could we build our entire network of roads using tolls. Of course not.

In a way this is a bit of a cop out because no one can/will up end the entire
system.One thought experiment I like to run is what happens to prices if we
use to government to subsidize supply of services? Provide free schooling and
other government benefits for people willing to train to become medical
workers. Take the rural dentist crisis. IMO the government should be training
people who live in those communities to become dentists for free.

We have limited examples in places like Cuba. I'm not saying that full on
socialism is a magic bullet, but I think smartly applied it works better for
markets like healthcare.

~~~
mjevans
Yes, I believe competition can exist, but the time for competition is the
'market' setting the proper price for a procedure (in something like a dutch
auction contract).

A single payer system can (and should) still have competition. Not when
someone in need of services is going to a doctor, but when the single
"insurance plan" is deciding which local doctors to contract with at a given
rate.

------
mjevans
The only real way to drive down prices is competition.

I honestly don't understand why we can't make the military's medical system
available as such a source of competition; if government waste is so rampant
and procurement so expensive, surely private companies can easily beat them on
price if they are also in the market.

------
tcj_phx
Sometimes doctors do good work, sometimes the medical-industrial complex makes
work for itself. When insurance is paying the bills, no one has to care about
effectiveness or costs.

Elisabeth Rosenthal recently published _An American Sickness_. These lines
from _Insurance policy: How an industry shifted from protecting patients to
seeking profit_ [0] concisely summarize the medical industry's current
business model:

>> The very idea of health insurance is in some ways the original sin that
catalyzed the evolution of today’s medical-industrial complex.

>> The people who founded the Blue Cross Association in Texas nearly a century
ago had no idea how their innovation would spin out of control. They intended
it to help the sick. And, in the beginning, it did.

>> A hundred years ago medical treatments were basic, cheap and not terribly
effective. Often run by religious charities, hospitals were places where
people mostly went to die. “Care,” such as it was, was delivered at
dispensaries by doctors or quacks for minimal fees.

[0] [http://stanmed.stanford.edu/2017spring/how-health-
insurance-...](http://stanmed.stanford.edu/2017spring/how-health-insurance-
changed-from-protecting-patients-to-seeking-profit.html)

Court-ordered psychiatry is the biggest racket of all because the doctors (who
think they know what they're doing) don't have to get their patients' informed
consent [1] before hurting them.

[1]
[https://en.wikipedia.org/wiki/Informed_consent](https://en.wikipedia.org/wiki/Informed_consent)

edit: 'racket' above changed to 'business model'

~~~
occultist_throw
I would love for someone to explain how keeping the pricing information away
from me, for weeks or months equates "Informed Consent"?

Because if I would have known the price, I would have chosen not to "consume"
the services. I would love to see a lawsuit based on this very area, with
complete lack of informed consent with regards to cost and health benefit.

Because the way it's currently handled is like if I went into a Walmart,
loaded up with lots of stuff, and walked out the door. Then 3 months later, I
get letters saying I owe X*$1,000 on threat of all sorts of things
(garnishment, lawsuit, etc).

------
wmeredith
Serious question: can anyone point me to some good stories where someone just
told these hospitals to fuck off when they try to charge hundreds of dollars
for a band-aid or an aspirin? I suspect that would be my response. What
happens? Do they just wreck your credit by turning you over to a collection
agency?

Another question: Can they be sued for price gouging? I'd love to see them
legally justify before the court some of this garbage pricing that varies by
tens of thousands of percent between providers for commodity items like
saline, bandages, and generic drugs.

When I read some of these horror stories, I suspect that I would declare
bankruptcy out of principal were I to have this misfortune to get hit with one
of these bills. The whole health care industry in this country has become a
cancer on society. What's the hidden cost of the stress and anxiety this
causes in our day to day lives. When an ER visit can financially ruin you for
years, how much better is this than living without modern health care at all?

~~~
creaghpatr
As a matter of fact, most patients don't pay their medical bills, hospitals
only collect about 20% of Patient A/R.

The reason the ER facilities charge is so high is that people abuse the ER and
threaten the lives of people who actually need saving. The ER can't legally
turn people away and asking them to pay a bill is pretty fruitless, especially
for underbanked Americans. Meanwhile, the hospitals jack up the charges to
offset the losses on the aforementioned patients.

Taxpayers subsidize these losses in addition to paying for health insurance.

~~~
Cacti
I think you massively overestimate the costs of ER care for the uninsured that
do not pay their bills. Charity costs are around 2.3% of operating expenses
for your average non-profit hospital. 2.3% loss is not how you end up with
bills that are 6, 10, or 15 times inflated.

Poor people in the ER isn't what is driving health care or hospital costs.

------
MR4D
Imagine you go to get an oil change for your car. You ask how much it will
cost and hear back that it’s $20. So you get the oil change, pay the bill, and
go on your merry way.

One week later, you get a $30 for environment remediation.

And other week later, and you get a $15 bill for an engine-rev specialist and
another $2 bill for an oil plug specialist.

One month later you get a statement (not a bill !) from your car maker that
the $187 cost is partially paid by them. You don’t know why, and still aren’t
sure how much you owe. So you ignore all the bills and continue on your merry
way.

60 more days later you get a letter from a debt collector. You have not paid
$103 in oil change bills, and you have two weeks to do so or your credit score
will be impacted.

Nervous, you call them up, and a very rude woman tells them you better pay the
bill or else!

This, ladies and gentlemen, is healthcare in America.

------
maxxxxx
The number one thing that should be done is to require medical providers to
post public prices and their billing to be detailed enough to tell what the
charges are for. I have seen bills "Lab services: $12000". How is a patient to
tell if this is legitimate or not?

------
ianbicking
I'm surprised that HMOs haven't become more of a thing. I.e., systems where
the insurance and care are combined in one private system. It seems like HMOs
should be politically acceptable to all sides, and are akin to a privatized
single payer system. HMOs would seem to address the pricing issue.

~~~
hnal943
I thought this was tried in the 90s. Everyone hated HMOs because of the
byzantine restrictions they placed on care without lowering costs.

------
justwantaccount
I'm in the healthcare industry, so I try my best to pay attention to it
through news and blogs and such, though I don't claim to be an expert in the
field.

My impression is that price transparency is the least of the healthcare
industry's problems. On aggregate, Medicare pays out about 25% of what the
hospital or physician asks for, and private insurances apparently about 50%.
The pricing for the uninsured is the initial price that hospitals/physicians
set to get the maximum they can out of different insurance companies, and are
not meant to be the charge for uninsured patients. There's been studies
talking about how price transparency doesn't change physician behavior in
hospitals that tried it out. Some patients report trying to compare prices for
procedures across physicians and hospitals, but didn't get the quality of
treatment due to picking the cheapest one.

Instead, the #1 concern you hear about all the time is EHR (electronic health
records). It's the #1 reason physicians give for feeling burned out, according
to some surveys. The popular opinion on electronic healthcare records seem to
be that they're glorified cash registers for keeping track of claims data to
bill insurance, but doesn't contain much clinically relevant data - for
example, I hear physicians complaining online about how they can find when a
patient went to an ER and through what means, but they have trouble finding
what clinical reasons the patient went to the ER for. Granted, apparently a
few percentage of physicians think that their EHR contain clinically relevant
data, but most EHR systems that people are using right now aren't that
sophisticated, usually due to cost and to the stupid time it would take to
update to the new system and train people to use it properly. Word is that it
takes years for a practitioner to learn how to use the EHR system (EPIC,
Cerner, etc.). Different hospitals use different systems, which makes
interoperability impossible, since there aren't good standards for recording
EHRs, or they're over-complicated, or something according to people who
develop EHRs. I also hear hospital C-level people talking about how expensive
EHR systems are - one hospital reported upgrading to a new one cost about half
a billion dollars, which was a third of their net patient revenue. Independent
physicians are opting for direct primary care models (where you directly pay
the physician some monthly fee, circumventing insurance) or to be employed by
larger hospitals or physician groups, because the federal government requires
that you try to implement some level of EHR, which is too expensive for
independent physicians that can't afford hiring IT people on top of everyone
else. Some surverys say that physicians spend half their time on looking at /
putting data into EHRs, which can be twice as much time as they spend on
seeing patients face-to-face.

Health insurance billing being extremely complicated doesn't help, either. You
have to learn CPT/ICD-9/ICD-10 codes to bill correctly and get reimbursed, and
it's so complicated that apparently some people get paid ~$40,000 a year just
to convert diagnoses/procedures to CPT/ICD-9/ICD-10 codes.
Hospitals/physicians end up needing to pay for those jobs as well, on top of
IT people for maitaining/upgrading EHRs. In fact, there's a lot of
consultation groups out there that advise you on how to bill insurance /
submit required documents for Medicare / set up EHR.

There's a lot of other administrative overhead costs that contribute to
healthcare costs seems to need higher priority, to me.

