
Many Hospitals Charge Double or Even Triple What Medicare Would Pay - pseudolus
https://www.nytimes.com/2019/05/09/health/hospitals-prices-medicare.html
======
AtomicOrbital
I consider it institutionalized corruption when we allow healthcare providers
to charge X to uninsured patients yet a tiny fraction of X to patients with
insurance ... this distortion should be highly illegal ... this is how the
insurance industry forces people to get insured ... healthcare providers cost
of services to the patient should be independent of the patients level of
insurance coverage

~~~
phkahler
They should be required to charge the same to everyone. If an insurer doesn't
want to pay that price, the patient will have to cover the rest and insurance
companies will have to compete. If there were to be an exception, it should be
the provider giving the patient a break on their portion.

This would be putting people first, and it's exactly opposite of what we have.

~~~
riahi
This is called balance billing and many states have banned it.

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tomohawk
Medicare processes and payments have very little basis in reality. The
payments are so low that doctors and hospitals often factor in the lost money
into non-medicare bills to make up the difference.

So, the real story is that these doctors and hospitals are so committed to
providing care, that they're willing to figure out ways to provide it
_despite_ medicare.

~~~
maxxxxx
The US health system is full of stories like "Medicare payments are below cost
therefore we have to charge other patients more", "International drug prices
are too low, therefore we have to charge US prices more", "There are a lot of
uninsured patients treated for free therefore we need to charge others more".

I tend to call BS on all of them. None of them explains why especially
hospitals tend to charge almost random prices for the same thing, make
constant billing mistakes and haunt the patient for years with changes that
already have been settled with the insurance. It doesn't explain why the
medical device my company sells for 30k gets charged 140k by the hospital
(happened to my girlfriend). Or why for the same 1 hour surgery one hospital
anesthesiologist charges 12k while somewhere else the charge is 3k.

The whole system is totally corrupt, opaque and highly profitable for doctors,
administrators and middlemen. Each of them blames the other while never
providing any real accounting with hard numbers.

~~~
gremlinsinc
Agreed, maybe medicare is too low -- but then single payer MINUS insurers
could beef up medicare too something like 2x what it now, but as a nation we'd
still pay less total on medical (if hospitals mark up insurance 4x and the
insurer marks up 2x the cost or more, that's 6x the cost that we're all paying
for... Cut off 4x and tell the hospitals to be happy and downsize their
operations, and get costs under control. Medicines should only be charged at
cost for delivery, charging $40 for a single ibuprofen tablet is INSANE! It
takes a nurse 5 minutes to deliver pills, say she makes $50/hour, that's like
$5 labor + 30 cents for an ibuprofen, so 5.30 even doubled to $10 is much
fairer than $40 for a single pill, or hell make some sort of automated
delivery system that pops out medicine by hydraulics as needed and cut the
cost even more.

With single payer the government could also put together some emergency
grants/funds for hospitals that can't cope -- as long as they accept auditing
from the government of all their processes/administration salaries/etc.. and
follow guidelines take pay cuts to recommended averages, etc...

TLDR; Medicare for all will solve this issue, it will need to set the low-end
higher obviously to compensate for where hospitals make the bulk of their
money, but it'll need to hold hospitals accountable for better money
management, and pay structures, and price gouging. Not to mention one of the
largest cost savings : single-bulk-payer for drug purchases.

~~~
tomohawk
Single payer or medicare is basically the imposition of price controls, which
cause shortages and leads to rationing.

In the US, you can get an MRI pretty much immediately from one of many
facilities. The wait time in Canada is pretty ridiculous, and far below the
standard of care anyone should expect.

[https://www.fraserinstitute.org/studies/waiting-your-turn-
wa...](https://www.fraserinstitute.org/studies/waiting-your-turn-wait-times-
for-health-care-in-canada-2017)

I've known people who moved to the US from Canada because they could not get
adequate health care under the single payer system. Hospitals on the border
with Canada routinely have to deal with the spill over from Canada because
Canada's system does not have the capacity to deal with all of the cases (I
have relatives in such hospitals who talk about this). Medical tourism to the
US from Canada is one of the few options people have to get timely access to
needed healthcare.

We already have an enormous amount of regulation and control of this area by
the government and it is not working. Regulation can be like violence - its
practitioners always seem to want to use more if it when it is not working.
It's time to take a step or two back and reevaluate.

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throwayEngineer
The article implies that Medicare is the correct rate.

If anyone has Medicare, or has worked at a clinic that accepts Medicare, or
has filled out Medicare paperwork- you know Medicare isn't a gold, silver or
bronze standard.

It's dollar store quality.

Things take longer, are often riddled with wrong denials, and him major
limitations for patients.

~~~
hurryskurry
Medicare rate and the reality of using Medicare are separate issues though

For me the issue is that if you had something like a hernia it would
essentially cost less to fly to Europe, have the surgery, and stay a couple of
weeks than to pay out of pocket in the US. And many European healthcare
systems tend to rank better than the US.

So it seems that the procedure can be done for less, maybe even for less than
Medicare costs; the "dollar store quality" doesn't seem to come from the
inexpensiveness.

~~~
throwayEngineer
Then your issue is likely with the extraordinary wages of Physicians in the
United States.

The American Medical Association is the 3rd biggest lobby in the United
States.

Physicians/surgeons in Europe do not make 300k/year.

~~~
conanbatt
This is part of it , but physician salaries are 10% of the spending. This
could be fixed by laxing licensing laws, allowing doctor immigration and
reducing the cost of education.

But only one of many reforms needed.

~~~
mercutio2
I’m not sure where you got the number 10% from. Perhaps you’re dispatching
heavily on the word “salary”, when most doctors and surgeons operate as small
businesses, and don’t earn much income directly as salary?

Doctor plus nurse compensation dominate every chart I’ve ever seen of US
medical spending.

People like to imagine it’s all the fault of insurance companies,
pharmaceuticals, and malpractice; those are collectively a tiny fraction of US
spending. It’s mostly labor costs.

The US is rich, health is a good with infinite demand. It’s hard to reduce
costs in that context.

~~~
conanbatt
[https://www.cms.gov/Research-Statistics-Data-and-
Systems/Sta...](https://www.cms.gov/Research-Statistics-Data-and-
Systems/Statistics-Trends-and-
Reports/NationalHealthExpendData/downloads/highlights.pdf)

This one shows 20%, though when you say clinical services you include nurses,
mid levels and medical assistants, though it doesnt explain how much of the
hospital spending goes to providers, so higher.

Also, add that the amount of debt physicians graduate with, does not make it a
very healthy career, particularly in primary care (where you could do most of
cost control).

PCP's have high burnout and suicide rates, work 50+60hour weeks until their
50's , etc. There is nuance to the analysis of provider spending.

In any case, i can assure you there are plenty of marginally useless rank-file
employees that exist thanks to the current regulatory framework.

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coredog64
Completely missing context from the story: If a healthcare provider accepts
Medicare patients, legally they cannot charge anyone a lower price than they
give Medicare. The Medicare price is the price floor, not the average price.
Once you understand that, the charge rates make more sense. However, I suppose
adding that context wouldn’t gin up the correct amount of outrage...

~~~
merpnderp
I used to see a doctor who had an angry note in his front office stating he
would charge less if he could but his group had negotiated a price with
Medicare and it was against the law for him to charge less. In lieu, he took
donations to pay for the needy and I strongly suspect laundered his own
profits into that pot effectively circumventing Medicare’s insane rules. I
suspect this because lots of people used the donations but he would never
accept any from me.

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et2o
This is not news, I'm surprised it's in the NYT. Medicare and Medicaid
reimbursement rates are very low and hospitals lose money on these patients.
All hospitals depend upon private insurers paying higher rates in order to
stay in business. They call this the payor mix (private/medicare/Medicaid).

~~~
bensonn
Based on how they framed it, I am not too surprised it is in the NYT.

Headline: _Many Hospitals Charge Double or Even Triple What Medicare Would
Pay_

You have to get about 80% of the way through to read a more accurate version
of the truth: _" Medicare payment rates, which reimburse below the cost of
care, should not be held as a standard benchmark for hospital prices”_

~~~
excoder
If you’re going to quote the article, I think it’s important to include
context. So let’s broaden your article quote (that is, the article is quoting
someone else) just a smidge:

 _“Medicare payment rates, which reimburse below the cost of care, should not
be held as a standard benchmark for hospital prices,” said Melinda Hatton,
general counsel for the American Hospital Association, AN INDUSTRY TRADE
GROUP, in an emailed statement._ [emphasis mine]

You claim that the quoted statement is more accurate / truthful than the
statement that private insurers pay more than the Medicare rate, and seem to
imply that the Times’ reporting is biased. Did I get that right?

Would you like to furnish some support for those claims?

~~~
ymck
Check any of the studies from the AHA, AMA, Beckers, or any of the financial
institutions/investment firms reporting on the healthcare sector. It's ugly
out there. Beckers tracked 20+ health care orgs that went bankrupt in 2018,
Morgan Stanley reported 450 being at risk for 2019. Some links:
[https://www.beckershospitalreview.com/finance/21-hospital-
cl...](https://www.beckershospitalreview.com/finance/21-hospital-closures-
in-2018.html)
[https://www.beckershospitalreview.com/finance/450-hospitals-...](https://www.beckershospitalreview.com/finance/450-hospitals-
at-risk-of-potential-closure-morgan-stanley-analysis-finds.html)
[https://www.bloomberg.com/news/articles/2018-08-21/hospitals...](https://www.bloomberg.com/news/articles/2018-08-21/hospitals-
are-getting-eaten-away-by-market-trends-analysts-say)
[https://www.beckershospitalreview.com/finance/12-latest-
hosp...](https://www.beckershospitalreview.com/finance/12-latest-hospital-
bankruptcies-041019.html)

------
ensignavenger
A lot of comments on here about Medicare not paying enough compared to private
insurance- so here is one from a very recent personal experience with private
insurance. My wife had surgery followed by 6 days in the hospital for
recovery. (This is I think her 9th surgery in the 8 years of our marriage, and
every time the billing is similiar.) I just received the explanation fo
benefits from my private insurance from the hospital. They billed $245,000!
The negotiated amount with the insurance company was $36,000. They billed for
6.8X what they actually got from private insurance. The amount that the
hospital bills is completely made-up gibberish.

------
a13n
Hospitals are one of those things that just shouldn't be run like a for-profit
business. There should be regulated set amounts for how much various services
cost, and those amounts should be equal (or at least close) to what the
government/insurance programs cover.

It's bonkers to me how much resources and technology we have as a species, and
how we decide to not let people access it because money/capitalism.

Obviously the US is notably worse at this than other countries, and it doesn't
feel like we're on a path to fixing it.

~~~
gbacon
Economics 101: Price controls create shortages.

Note that I’m not defending the broken U.S. system, but attempting to fix it
with price controls will exacerbate its problems.

~~~
2trill2spill
Sure, but US hospitals are also known to charge up to 1000% more then a
procedure actually costs[1]. That should be illegal.

[1]: [https://www.washingtonpost.com/national/health-
science/why-s...](https://www.washingtonpost.com/national/health-science/why-
some-hospitals-can-get-away-with-price-gouging-patients-study-
finds/2015/06/08/b7f5118c-0aeb-11e5-9e39-0db921c47b93_story.html?utm_term=.27ff0b2e8c0e)

~~~
conanbatt
Software charges 1000000000% its costs, maybe it should be made illegal as
well.

~~~
2trill2spill
I highly doubt that any company charges that much of a premium for software,
you have any sources or examples?

~~~
conanbatt
Take any digital book sale from amazon.

~~~
2trill2spill
Seriously, book publishing is your example? You know writing, editing and
publishing a book takes a lot of time and skill. Also the majority of book
authors are not making out like bandits on books sales, even digital ones.
Book Authors and Publishers are not making 1000000000% on digital book sales,
otherwise we would probably see Goldman Sachs in the book publishing/writing
business.

~~~
mises
You're correct, but that is all fixed cost. The marginal cost of an e-book is
essentially zero. In the short run, a publisher can keep selling an e-book at
almost any price.

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TazeTSchnitzel
Hospitals don't have to accept Medicare or Medicaid patients. If they are
truly losing money on them, then why do they accept them?

~~~
razakel
>Hospitals don't have to accept Medicare or Medicaid patients.

An emergency room has to treat anyone until they're stable, regardless of
their means to pay. You don't exactly have time to shop around for an
affordable doctor if you've just had a heart attack.

Why do you think medical debt is a key reason for 2/3rds of US bankruptcies?

~~~
chrisgd
Turning away patients and accepting payment are two different things

~~~
mises
A patient is accepted, cared for, and cannot pay. The patient has medicare.
Would you, as a hospital, refuse any payment; or would you take what you could
get (medicare)? A below-market rate is bad, but nothing is worse.

------
chrisgd
Hospitals negotiate for the rate with the insurance companies, including
Medicare. They don’t have to accept Medicare payments at all. It is the right
price because that is what the group with the most bargaining power says it
is. That doesn’t mean Humana should pay less, but should work harder to add
people. Maybe there is a way for one entity to have all the people?

