
The anatomy of a ripoff - rglovejoy
http://www.nydailynews.com/opinion/anatomy-a-ripoff-article-1.1002077
======
CWuestefeld
My wife is the manager of budget and reimbursement at a hospital, and from
many conversations with her, I can imagine that this article is accurate.
However, if I were writing this, I would have given greater emphasis to the
effect that Medicare has on these problems.

The article does mention that Medicare typically pays fees that are _below
actual cost_ for the procedures, and that hospitals must therefore increase
charges to other customers (the article says they must do this to make profit,
but actually they must do this just to break even and stay in business).

But the problem goes even farther than that. Because Medicare is essentially a
monopsony and gets to call the shots as far as charges are concerned, it
actually matters far less what the actual costs are. As a result, few
hospitals today have modern cost accounting processes, and so they only have
wild guesses as to what a given procedure costs. Obviously, then, their charge
list is going to be made largely from guesswork, and so it's very much
expected that two different hospitals will, at the micro per-item level at
least, have very different charges.

Medical care is the most highly regulated industry in the economy, and so
nothing you see happening is going to bear very much resemblance to reality.
And in the coming years this isn't going to get any better. What you are
likely to see, though, is increased politicization of these charges, as the
political process takes even greater control of the industry.

~~~
rdtsc
> Medical care is the most highly regulated industry in the economy, and so
> nothing you see happening is going to bear very much resemblance to reality.

You make it sound like one follows from the other in an obvious way. Can you
expand on why that would be?

~~~
Symmetry
As just one example, look at the RBRVS:
[http://www.slate.com/articles/news_and_politics/prescription...](http://www.slate.com/articles/news_and_politics/prescriptions/2009/09/the_fix_is_in.html)

Paying people on a cost-plus basis provides them with an incentive to maximize
costs, whether they're doctors or defense contractors.

Then there's also the FDA's use of production quotas for drug production. We
had a big shortage of Aderall recently because the FDA has to give permission
ahead of time for a given amount of production of the drug for each company.
And when the FDA decided that one of the producers wasn't up to snuff and was
no longer allowed to make the drug, it failed to raise the quotas of the other
producers to compensate.

To the extent that you run a section of the economy like the USSR was run, you
shouldn't expect it to be run efficiently. The US healthcare system would
still have quite a ways to go before it becomes quite that bad, but its closer
than most people seem to think.

~~~
llimllib
> We had a big shortage of Aderall recently because the FDA has to give
> permission ahead of time for a given amount of production of the drug for
> each company.

As I understand it, the DEA, not the FDA, sets the quotas. They're currently
arguing publicly over the shortage:
[http://www.nytimes.com/2012/01/01/health/policy/fda-is-
findi...](http://www.nytimes.com/2012/01/01/health/policy/fda-is-finding-
attention-drugs-in-short-supply.html?_r=2)

The DEA claims there is no shortage (insert Star Wars hand wave here) while
the FDA wants them to raise the quotas. (How Soviet does that sound?)

No disagreement on the rest of your comment.

------
a5seo
Bottom line is that if you're middle class and don't have health insurance, a
serious accident could bankrupt you. The system was designed with the idea
that you don't exist, and would never actually pay the rack rates that
hospitals charge.

Planet Money had some good coverage of the joke that is medical billing a
couple of years ago:

[http://www.npr.org/blogs/money/2010/07/06/128338526/ex-
ambul...](http://www.npr.org/blogs/money/2010/07/06/128338526/ex-ambulance-
driver-tries-squeezing-cash-from-health-insurance-companies)

[http://www.npr.org/blogs/money/2010/07/01/128243987/medical-...](http://www.npr.org/blogs/money/2010/07/01/128243987/medical-
billing-is-a-hassle)

[http://www.npr.org/blogs/money/2009/11/podcast_paying_doctor...](http://www.npr.org/blogs/money/2009/11/podcast_paying_doctors.html)

[http://www.npr.org/blogs/money/2009/08/the_wild_wild_west_of...](http://www.npr.org/blogs/money/2009/08/the_wild_wild_west_of_health_c.html)

~~~
snorkel
I don't understand why an uninsured patient who pays out of pocket can not
dispute the charges and prove that the price has been fraudulently inflated
due to "cost shifting".

~~~
a5seo
You can /try/ to negotiate, but you don't have much leverage after the fact.
If your BATNA is going bankrupt, you get into a game of brinksmanship.

Should you really have to threaten to declare bankruptcy to settle a hospital
bill?

------
jerrya
I have spent a week in a hospital twice, once in the late 90s, once in the
lates 00s. Different hospitals, different health plans.

Here's the thing: in the 90s experience, I received a complete itemized bill,
organized by time and day, for everything that was done to me. I didn't have
to pay, my insurance did, but I received copies of the bill. In the 00s, I
received virtually nothing. Again, my insurance paid, and I was just given the
very briefest of letters explaining that I was covered, and how to handle
short term disability, and the like.

I found receiving the complete itemized bill truly enlightening. What I
learned was:

    
    
        + exactly what was done to me in the hospital and when
          (I was not in a position to understand when I was admitted)
        + exactly what was being charged
        + exactly how expensive everything was
        + some charges did seem erroneous, perhaps for treatments that did not take place
    

The sum of the bill was staggering. But it was truly a good thing to see the
bill. It helped me understand exactly what had happened. It served as a
reference for googling my illness and treatment. It helped me understand the
costs.

It helped me appreciate the efforts by others to get me that coverage. And it
let me return some of that by giving me a way to check for mistakes in the
billing.

I hope everyone has the coverage they need when they need it.

I do think that part of every medical service should be a completely itemized
bill. I think it's a useful reference for the patient, I think it's a simple
way to inform everyone on the complexities and costs of healthcare, and it's a
simple way to encourage informed use, and correct mistakes.

If everyone had these bills, there would be websites developed to explain,
compare, manage them, and it would help eliminate many of the games that
hospitals seem forced to play.

So it would also encourage better accounting and put better incentives in
place to have that better accounting.

~~~
klenwell
I agree. I've been active in helping my grandparents manage their affairs the
last few years and I find it interesting how frictionless it is for them,
under the Kaiser HMO, to get medical services, especially prescriptions. I
find it a little too frictionless at times.

They sometimes show me the paperwork Kaiser gives them, but I don't remember
ever seeing an itemized bill. I'd find it insightful, as I think they would
too, to see a list of expenses. I'd also like them, and everyone (especially
seniors), to see how much of those costs the government bears.

Although I don't get too deeply into the politics of it with them, my
grandparents are part of that Fox News senior demographic that would probably
happily repeal "Obamacare" while being kept blissfully unaware of the benefits
they enjoy because of government assistance.

~~~
CWuestefeld
_I'd also like them, and everyone (especially seniors), to see how much of
those costs the government bears._

At the risk of being pedantic, this is one case where one needs to remember
that the government never bears any costs of anything. To the point:

I'd also like them, and everyone (especially seniors), to see how much of
those costs _their fellow taxpayers_ bear.

~~~
kenjackson
Just curious, who is the government, if not your fellow taxpayers? I always
assume the government are fellow taxpayers. A lot people seem to think
government is some group of people they've never met that live in a far away
land.

------
pavelkaroukin
My wife recently had some tests done. Hospital's receptionist forgot to add
insurance information to wife's profile, so accordingly to hospital's records
she was uninsured.

Month later we receive bill for ~$1,400. After quick googling we find that if
she would go to any local hospital and pay up front with cash, it would cost
her maximum ~$400. Obviously, she went back to hospital to find out what's
wrong with them (hospital owned by insurance company, so it is very wrong).
There they found they did not record her insurance info, excused and said they
will send corrected bill.

Month later we received her new, corrected bill. $74.68

You guys in USA have something very-very-very wrong with health care industry
=)

~~~
ErrantX
_hospital owned by insurance company, so it is very wrong_

Wait what?

How on earth is that allowed to happen!

~~~
steve-howard
Kaiser Permanente has both insurance subsidiaries and hospitals. I can't
imagine this is unique.

------
joezydeco
Something must be tightening up somewhere, though. Just before my daughter
went through an outpatient surgical procedure, the hospital (which was acting
as the surgical facility _only_ here) called my wife. They noticed we had a
high-deductible plan. Would we be willing to prepay part of the O/R costs now?

I talked to the hospital at length to try and understand this change in
procedure. Apparently the number of patients with high-deductible plans is
growing, and people don't realize what that means. When you visit the E/R and
your plan has a $5000 deductible, that's what you're gonna pay. People freak
out. People refuse to pay. The hospital starts calling to make sure people
understand their obligations. It seems the people they use to rely on for
cashflow are disappearing.

~~~
yummyfajitas
This is why high deductible insurance offers the best hope for cost control.

Too bad it becomes illegal in 2014.

~~~
yardie
I think it only delays the inevitable and ends up making things worse. If
people don't have the money for surgery (and really how many of us can pull ou
$5000, right no). They'll delay it. Delay it too long and that $4000 surgery
becomes a $50000 intensive care, emergency operation.

~~~
yummyfajitas
The RAND experiment disagrees with you. It shows that cost sharing induces
people to use 30% less medicine with no significant effects on health.

<http://www.rand.org/health/projects/hie.html>

Unfortunately, we never repeated the rand experiment, so it's a bit dated. For
some reason we never tried repeating it before pushing massive changes in the
law.

~~~
_delirium
"No significant effects on health" isn't entirely accurate; the "average"
participant had no negative effects on health, but several of the subgroups
did, mainly poor people with chronic conditions who had better compliance with
treatment regimens, and better outcomes, in the free-care case. Here's the
abstract: <http://www.nejm.org/doi/full/10.1056/NEJM198312083092305>

~~~
yummyfajitas
I'm familiar with this paper. Unfortunately it's deeply flawed.

The RAND health experiment studied 30 measures of health. Two of them were
statistically significantly improved - vision (due to free eyeglasses,
p=0.001) and blood pressure (p=0.03).

Simple math shows that 0.97 ^ 30 = 0.4. This means that the RAND experiment
had a 60% chance of showing an effect in at least one particular submeasure
even if there was no effect in any of them.

(The result on eyeglasses is strong enough to avoid this effect, however. So
we can conclude that free glasses help people see better.)

------
johnschrom
This article only scratches the surface of how messed up our health care
system is. I'd be shocked if either hospital system was able to figure out how
much money the writer's son actually cost the hospital... the organizations
I've worked for take at least a year to calculate cost (if they ever
successfully do it), making (as CWuestefeld said) many of their other
calculations come largely from guesses. Sometimes that guess is as simple as
"just multiply what Medicare pays by 3, and then charge the insurance company
for that amount."

To compound this problem further, I've worked on federal grant applications
that ask what the "cost of care" is. Since the hospital has no means of
calculating this, I've been told to just sum the charges for each patient. As
the writer experienced, the charges can often be a full order of magnitude
greater than the cost. You can imagine how yucky this gets.

Someday I would like to walk in to a Best Buy, pick up a Playstation 3, and
then inform the cashier that I will only be paying $20 for it. I wonder how
well that would go over...

~~~
yummyfajitas
_Sometimes that guess is as simple as "just multiply what Medicare pays by
3..._

Interestingly, medicare does roughly the same thing - multiply the private
sector cost by some number less than 1.

~~~
Symmetry
This seems apropos: <http://www.michaeleisen.org/blog/?p=358>

------
Mc_Big_G
The real scam perpetrated by hospitals and doctor's offices is rebilling.

It works like this:

1) They send a bill with no information about the services performed.

2a) You waste your time tracking down what it was and then pay it.

OR

2b) You pay the bill without wasting your time to verify.

3) They wait somewhere between a month and 6 months.

4) After receiving payment, they bill you again for the same services.

5a) You waste your time tracking down the services and the fact that you
already paid. Then you waste more time calling and forcing them to stop
billing you. You get an "Oops, sorry! I can't imagine how that happened."

OR

5b) You pay the bill without wasting your time to verify.

Repeat steps 3 through 5 until they've sucked as much time and money out of
you as possible.

~~~
droithomme
Yes. There is extensive intentional fraud and corruption in the system, along
with rampant profiteering that exists regardless of whether an entity has been
granted "non-profit" status. (Non-profit doesn't mean you can't pay everyone
on the board of directions millions in compensation.)

Each time I've dealt with it (mostly helping relatives with their confusing
bills) there's been double and triple billing, and billing for procedures not
performed, and for work done by people that weren't present, or on days the
patient wasn't even present. The more complex the treatment, the more entities
jump in to the feeding trough for a share. You have to keep extensive records
of everything actually done, which is not always possible if you are not with
the patient 24/7. Then when the bills come they are full of hundreds of
cryptic codes. You might have some procedure done that takes 30 minutes, and
get 20 different bills from 10 different entities, sent over a period of 18
months following the procedure, which apparently now lasted days and involved
dozens of people, medicines, tools, and tests, some done multiple times.

The primary reason medicine costs crazy amounts in the US is because of
corruption and fraud. Sending a lot of these people to prison could do a lot
to reduce costs and straighten things out. That and single payer.

~~~
sethg
You don’t even need there to be conscious corruption. If the system churns out
incorrect bills through simple error (perhaps because the hospital never
bothered to drag its accounting system out of the 1970s), and an overcharge is
just as likely to be paid as a correct bill¹, then the bad system will stay in
place without anyone twirling his mustache and sneering about his obscene
profits.

¹Which is to say: Consumers in bad financial situations will dispute or
default on overcharges, but they’ll do the same for correct bills. Insurance
companies will occasionally dispute an overcharge, leading to six months of
paperwork back and forth until they agree on what to pay, but they’ll put
correct bills through the same wringer.

------
jiggy2011
Wow , I'm glad I don't have to expend mental energy on stuff like this.

Universal Healthcare, get it.

It's really good. Honest.

~~~
goatforce5
Due to my own stupidity I fell off my bike on the weekend. A few minutes later
I realised my little finger was swelling up and hurting a whole lot.

Universal healthcare let me go to a hospital get 3 x-rays and a doctor to tell
me nothing was broken. Took 3 hours, but multiple people apologised for it
taking so long while I was there (to be honest, I thought it was quick. A sore
finger must just about be last on the list of emergency room priorities.)

Total out-of-pocket to me: $0.

I expect if I was in the US i'd currently be sitting here awaiting a bill for
several thousand dollars.

~~~
wildmXranat
Huh ? I'm glad that your finger is better, but you procedure was not 'out-of-
pocket' $0. Here in Canada, where the similar treatment would be $0 at the
time of treatment, I would've paid in thousands already into the health care
system in federal/provincial pay deductions. I consider, the money lost to be
a continuous out of pocket expenditure. I still like this system more tbh.

~~~
goatforce5
The out-of-pocket was 0 in the sense that my tax is already paid and there was
no additional expense in me choosing to go to hospital to be checked out.

So, yes, I pay for it. A big chunk of my pay packet goes to tax, but i'm happy
knowing I can receiving good treatment without having to work out if I can
afford it.

I'm also happy it means those less fortunate than myself (re: current income
levels) will receive the same level of treatment.

After hitting the road and dusting myself off, it meant I didn't have to do a
cost/benefit analysis of going to hospital vs. walking it off.

~~~
krschultz
And I really can't emphasize enough how much it sucks to do a cost/benefit
analysis on going to the hospital or not. A couple of years ago my girlfriend
and I were on crappy insurance (i.e. catastrophic coverage only) because
that's all we could afford. She had a medium level concussion and we were
debating the cost of going or not. Going and getting a cat scan was a sure way
to spend $2,000 that we simply did not have. They might proscribe a
painkiller, but otherwise she would sit around for a couple of days with a
headache and be OK. If she didn't go to the hospital, there was a 99% chance
that she would sit around and take advil and be OK. But there was that 1%
lingering chance that it was worse than we thought and that not going was a
horrible decision. We opted not to go to the hospital. It sucked worrying for
days. Luckily she was ok in the end. But now that we have the means, my policy
is that no matter what the cost, any recommended/optional healthcare gets paid
for.

~~~
arethuza
In 1952 Aneurin Bevan, arguably the architect of the UK NHS, wrote a book
about his beliefs - interestingly enough he called it _In Place of Fear_ which
pretty much sums up what the NHS achieved:

<http://en.wikipedia.org/wiki/Aneurin_Bevan>

------
derda
Every time I read about the US health-care system it amazes me more (in a
negative way).

The point that I find worrying the most is, that it is impossible to figure
out the costs before you get treatment. Also I am surprised, that there are no
prenegotiated rates for treatment-procedures. The way it works in Germany is,
that there is a catalog which contains all the standard procedures and a price
that can be charged for the treatment/procedure, this system dates back to
1924. While "upselling" (doctors performing tests that are not necessary) is
pretty common, prices are quite reasonable. Actually there are two catalogs,
one for private insured patients and people without insurance (its almost
impossible to be uninsured in Germany) and another one for public insured, the
later one is based on a points system rather than prices and is supposed to be
an administrative nightmare for doctors.

~~~
Loic
This is not an administrative nightmare for doctors. They all have the
software, put the insurance card in the slot, check the right cases and
everything is immediately done. The real nightmare for doctors is the private
insurances because they need to manage the invoicing themselves. But they get
more money out of the privately insured, so they are doing it happily.

If you take the time to discuss with doctors (I have several friends who are
doctors in Germany and my family is a doctor family in France) their life is
really nice. Way more relaxed than any other engineer working for a company
under _standard_ pressure. The only ones who are pushed like any other worker
in a company are the ones in hospitals.

------
tansey
Can someone please explain to me why it would be a bad idea to make it illegal
for hospitals to negotiate rates?

It seems like the majority of the problem here is that we let the insurance
companies bargain with hospitals, so everyone pays a different rate. Just make
everyone pay the same rate and let insurance worry about how to drive the
costs down across the board by encouraging people to get/stay healthier and
reducing the burden on the hospital.

~~~
drumdance
This American Life did a story on this a while back. I don't remember all the
details, but it turns out that insurance companies have very little bargaining
power with hospitals in general. What ends up happening is that one or two
carriers dominate a given local market and get preferential pricing, and
everyone else either leaves or doesn't try hard to compete.

------
tdfx
I'm in the US. I just recently switched to a high-deductible plan last year
with an HSA account. My deductible is $5000 and my monthly premium is $98 (for
an individual plan -- self employed here). I have and plan to always
contribute the maximum amount to my HSA each year. My plan covers 2 checkup
visits a year, and everything else I pay out of pocket up until I hit my
deductible.

I really think this is the way insurance should be. I have a strong incentive
not to needlessly get every possible test done or seek medical care that I
don't need. I check my bills very carefully. I already located urgent care
clinics that I can go to when I don't really need to visit the ER. I won't go
to the doctor for a runny nose. It makes consumers care about costs.

I'm far from an expert on US healthcare and I'd love to get other peoples'
more informed views on this. Could we put everyone on high deductible plans?
If people can't afford their premiums or deductibles then perhaps there could
be government assistance to pay those things based on their income. What would
the pitfalls be in such a system?

~~~
drumdance
Just curious, what's the maximum you can contribute? If it's $5k, that works
out to about $416/month, so you're total monthly cost is $514.

~~~
bzbarsky
The maximum you can contribute is somewhat inflation-pegged. As of this year,
it's $3050 for an individual plan and $6150 for a family plan (plus an extra
$1000 per person involved over the age of 55).

Note that the contribution is pre-tax, so if you're at the 25% marginal
federal rate and contribute $3000 you have to compare that to getting at most
~$2020 in after-tax money: HSA contributions are not subject to FICA (7.65%)
or federal income tax (25% on the margin per above assumption). They're not
subject to state income taxes either; those can range from 0% to 12% depending
on state and income level.

Another important thing to keep in mind is that this is a health _savings_
account. Your contribution stays in the account if you're not spending it on
actual medical care; it doesn't disappear at year end. Money in the HSA can be
invested if desired (though it's probably a good idea to leave at least the
deductible amount in liquid funds). Interest, dividends, and capital gains on
the money are not taxed. When you reach retirement age, you can withdraw the
money for any reason, not just medical care.

So basically an HSA is just like a traditional IRA in terms of tax treatment,
but with the added ability to make early withdrawals to pay for medical care.
The only drawback is that you can only open one if you have a high-deductible
plan (defined as at least $1200 for an individual and $2400 for a family, as
of this year). So you're basically gambling that the tax savings and possible
future growth of the money, plus what you save on premiums, will be higher
than the deductible.

Going back to our case of a single individual at the 25% marginal rate, with
$100 premiums for the high-deductible plan and $300 premiums for the low-
deductible plan, the difference in premiums is $2400. If you're depositing
those $3000, your tax savings are about $1000. So you'd have to spend more
than $3600/year on average on medical care to lose out. For most young-and-
healthy folks, spending on medical care is likely to be less than this. Note
that the 25% bracket starts at a taxable income of about $34,500, so figure a
salary of at most $50,000. If you're earning more than that and are single,
chances are an HSA is a good deal for you.

------
turar
I could never understand why there's such a huge financial difference in the
way emergencies that threaten human lives are dealt with in the US. You never
expect a huge bill from the fire department or the police department should
you require their urgent help. How is ER different?

~~~
asmithmd1
The US has socialized fire fighting and policing. We have decided not to
socialize medicine.

~~~
asmithmd1
This is absolutely true. Firefighting used to be handled by the private sector
through insurance companies. This was "socialized" mainly because of the free
rider problem - firefighters would put out a fire even if the house was Not
insured. Now all houses in a town pay for firefighting through local taxes.

------
js2
Tangent: I was curious about the widget the article uses to present the bill
as it's really well done. It's provided by DocumentCloud, which I'd never
heard of before:

 _DocumentCloud is a catalog of primary source documents and a tool for
annotating, organizing and publishing them on the web. Documents are
contributed by journalists, researchers and archivists._

<http://documentcloud.org/>

~~~
lizzard
DocumentCloud is pretty cool. It won a major Knight Foundation grant and a
bunch of newspapers are using it now.

------
RyanMcGreal
And we're supposed to believe that universal, single payer health care is
_inefficient and wasteful_?

------
dbcfd
Further obfuscation on the part of the medical industry to hide the cost of
covering the uninsured. Hospitals need reimbursement, insurance only wants to
pay for your procedures, not the cost of others receiving treatment without
insurance.

Taxed as single payer or taxed as hidden costs, anyone with insurance is being
taxed for those without insurance. At least with single payer, you know those
receiving treatment are now kicking something in as well.

~~~
roc
Absolutely. Cost-shifting is why philosophical discussions about whether the
US should have private insurance or socialized medicine (or even some hybrid)
are pointless. Our society has long since decided that doctors shouldn't let
people die in the gutter and that they shouldn't be then themselves forced
into poverty for serving society's will. So everyone who pays, whenever they
pay, pays more to cover the rest.

So the whole question of whether we _should_ pay is a charade. We _do_ pay and
if Americans were remotely willing to let people die in the gutter, there
would already be people dying in the gutter.

People might as well be arguing about whether or not we ought to live on Mars
next year. [2]

[1] Many young people in the US spend significant amounts of time uninsured.
Many families will also fall in and out of coverage as household members
switch jobs, as marital statuses change, etc. Most of us make largely the same
decisions, but by dumb luck alone some will acquire an illness or be involved
in an accident during a period of non-coverage and be, if not bankrupted
outright, seriously financially penalized for the grand sin of having only
been as conservative and careful as everyone else.

[2] Which is to say: a question that isn't wrong to _discuss_ , but one that's
irrelevant to any practical discussion about housing costs.

------
CaptainZapp
Sorry, but isn't it just outright fraud to charge > 400$ for a medication,
which has a "retail price" of a few $?

~~~
dbcfd
Nope, that's capitalism. Someone (the insurance) is willing to pay that price.

It'd only be fraud if the government was paying for it.

[Edit]Some hate against my comment. For those that fail to understand...

It isn't fraud if you go to a gas station that is charging $0.10 more a
gallon, and fill up there. It's fraud if you pay for that gas, and its water.
The insurance is still buying the same drug, they have just chosen to
negotiate a price that is higher with one hospital than another. They have
their own reasons for deciding that price.

Likewise it would be fraud if the government was paying for it, since they
have set rates. To achieve a higher payment would require billing them for
some other product.

~~~
adolph
Taking advantage of the predicament of others is not capitalism; it is price
gouging. It would be one thing if the consumer were able to compare prices and
other aspects of the product and make a choice based on the consumer's values
(of which price may not be the most important thing). This is a bit more like
a gas station charging 10x more during a hurricane evacuation.

~~~
dbcfd
Price gouging is an aspect of capitalism. Demand goes up, price goes up.
Without market interference, this should force demand down.

Health care can't be forced down by price (at least, life saving health care),
so you either have to stop providing care to those that need it but can't pay,
or pass along the costs to others.

~~~
Tsagadai
Health care costs can be forced down. The supply of doctors, nurses and other
health professionals can be greatly increased (with free medical education or
immigration, for example). Medicines can be mass produced by walking around
(or over) copyrights and patents. Increasing competition (making it easier to
switch provider, building more hospitals and facilities, etc. All these
approaches have been tried, many of them are still working and result in lower
costs without killing everyone.

I'm not saying those approaches don't have flow on effects, because they do
but they can be used to lower costs. Don't assume price cannot be controlled
by governments or industry, because it can be, and is.

~~~
dbcfd
Yeah, that's why I said they can't be forced down by price. The supply/demand
side is a whole other issue.

Medical school is entirely too expensive, which limits doctors going into
general or emergency care, which causes further strain on the system.

------
blyuher
FYI: there is a recent big thread on reddit about how a man was charged $105k
for one night hospital stay:
[http://www.reddit.com/r/WTF/comments/ngngy/merry_fucking_chr...](http://www.reddit.com/r/WTF/comments/ngngy/merry_fucking_christmas_what_to_expect_for_1/)

------
lizzard
This is a big part of what's driving people into poverty in this country.

------
viandante
The more I see this prices, the more I think that: 1) we have too less doctors
due to stupid closed numbers policies in schools; 2) we have a patent system
that allows companies to legally rip us of for medicines and machinery. With
an aging population, this is just not sustainable.

------
jisaacstone
Interesting that California requires posted fees. I'd be interested to see a
study of the effects.

Back when I was uninsured I was very frustrated that no one anywhere ever knew
how much anything cost, and frequently gave false information.

------
rskar
tldr; (exactly from the article): "The driving force behind all this,
according to Aetna, is the way hospitals and the government do business. The
rates that insurance companies pay are negotiated based on what they believe a
hospital’s true costs are. But then those rates are jacked up an average of
30% to 50% to make up for money that hospitals lose in treating patients who
don’t have private insurance - which is the majority of them. So to make up
the difference, they overcharge patients who are insured. This practice is
called cost-shifting. In a typical hospital, upward of half the patients are
covered by Medicare and Medicaid - neither of which pays the full cost of
treatment. Another 10% to 15% of patients are uninsured; maybe they can afford
to pay, but more likely they’re broke and can’t cover their bills either. Any
profit the hospital makes must come out of the remaining 40% - patients with
private insurance."

\----

Considering that the per capita medical costs in the US are about twice that
of the other OECD countries, clearly there's more than just cost-shifting
going on.

Whatever your views, as a matter of law (well before "ObamaCare") we are still
going to subsidize medical care for the old, poor, children, and the
irresponsible through our taxes and direct payments.

------
Ex-PraliteMonk
How much of the silliness in U.S. health care is caused directly by the tax
code? For instance the largest health insurance company in my area also owns
several hospitals. The hospital charges the insurance company for a procedure.
The insurance company pays only half that amount. The rest I believe is
written off by the hospital as a loss which lowers their taxes. But both the
hospital and the insurance company are the same company.

------
WalterBright
This contains a detailed explanation of why costs are so high:

[http://www.theatlantic.com/magazine/archive/2009/09/how-
amer...](http://www.theatlantic.com/magazine/archive/2009/09/how-american-
health-care-killed-my-father/7617/)

------
joeyespo
The print-friendly version, with no ads and all on one page:
[http://www.nydailynews.com/opinion/anatomy-a-ripoff-
article-...](http://www.nydailynews.com/opinion/anatomy-a-ripoff-
article-1.1002077?print)

------
marciovm123
For anyone who smelled a startup opportunity increasing pricing transparency
in healthcare, check out Castlight Health. They were founded in 2008 to attack
this exact problem and are making a killing targeting large employers.

------
gizzlon
I find the name of the hospital highly ironic. After all, didn't the good
Samaritan pay for the treatment and "hospitalization" of the victim?

One would expect a stay at the Good Samaritan Hospital to be free.

------
moozeek
As far as I can tell from the facts given in the EU you would have paid about
the same amount the author had to pay out of his own pocket (~ 700 USD). If
you had no health insurance at all.

~~~
viandante
As far as I know in EU public insurance is mandatory, so you would never pay
such ammount.

~~~
_delirium
It varies a lot by country. In Denmark, all hospital visits are free to
anyone, whether a resident or visitor. In other countries, non-EU visitors to
an ER might pay substantial amounts, though usually still quite a bit less
than in the US. Also, some EU countries tie insurance to payroll-tax
contributions, so the unemployed may not be covered.

~~~
viandante
Well, been living in 4 European countries and never paid anything but in mine
(Italy). I am also pretty sure unemployed are covered too. Don't know in
Germany, where I still can't get how insurance works, but I would guess there
is a way to get cover there too.

------
brianbreslin
Not to sound like an ass, but their kid choked twice in 2 weeks?? Anyone else
see a problem there?

~~~
mcherm
If you read the full article, he explains that there was an underlying medical
cause and that the second hospital found it.

~~~
brianbreslin
Ah I didn't see that part. Now I do seem like an ass.

~~~
epistasis
Even without an underlying medical cause, what sort of "problem" do you see
with a child choking twice? Are you insinuating that it's the child's or
parents' problem? I don't understand what you could be getting at.

