

One hospital charges $8,000 — another, $38,000 - mitmads
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/08/one-hospital-charges-8000-another-38000/

======
rdl
I have to admit I was against ACA for a variety of reasons, but if the first
step is increased price transparency and exposing that data, it will do a lot
of good.

The best reform I can think of would be a combination of individually
purchased (vs. employer) HSAs, where poor people get grants of up to the the
full deductible per year in some kind of special account IFF they sign up for
HSAs, and price transparency. Employers who currency pay for your entire
insurance could give you an equivalent amount (plus deductible) which goes
into your Health Savings Account.

You're then effectively paying an army of 300 million to constantly search for
the best prices (or rather, to find third party organizations to search for
the best prices for them). $3-5k/person is actually not _that_ unreasonable
for the poorest 30mm people and those covered by medicare/va/medicare-for-
kids/etc.

I'm confident this could drop the prices of procedures by >10x, comparable to
other countries. Americans are really good at driving down costs _when they
know the costs and are paying them out of pocket_ ; look at how much cheaper
it is to buy an iPhone in the USA vs. where it's made.

~~~
humanrebar
That's not a political reality. Since healthcare bought by an employer counts
as an tax-deductible expense and healthcare bought by an individual gets no
such breaks, there is a huge incentive (equal to the marginal tax rate) for
individuals to have someone else write the checks for the bulk of their
healthcare costs.

Before market-based healthcare will work, either 1) employer-provided health
insurance benefits must be taxed as income or 2) individual healthcare
purchases must be tax-free.

1) is an obvious political non-starter. 2) is a huge new loophole in the tax
code and an accounting nightmare.

~~~
greedo
Individual healthcare purchases (not insurance) can be deducted from your
taxes, either explicitly if you're filing a long form, or implicitly if you're
claiming the standard deduction.

I don't see why it would be a huge burden to make individual health insurance
tax deductible.

~~~
humanrebar
Only healthcare expenses over 7.5% of adjusted gross income are tax
deductible. Plus, the poor and lower-middle class don't tend to much in income
taxes (if any), so they wouldn't qualify for the discount.

In contrast, corporations always write off employee healthcare premiums on
their taxes. The issue isn't just the fairness of who pay taxes when, it's
also about the distortions in healthcare markets caused by these policies.

------
epistasis
This is why the ACA is such a boon for people that thonk health care should be
a free market. It takes the free market ideals and embraces them; the
accusations of socialism are more telling of the accuser than the accused.
That's not to say that I think health care should be a free market, just that
its the goal of the ACA, and the current situation in the US is much less free
a market, and due to employer provided insurance, barely a market at all. No
price information is communicated to consumers, and the ACA will start to do
that.

~~~
Jayschwa
One good aspect doesn't make it a boon. In my personal experience, the law has
made insurance less affordable. I'm in between jobs and bought an inexpensive
short-term, high-deductible plan. However, the plan has been deprecated (no
renewals after a certain date) because it does not meet all provisions of the
ACA.

~~~
rdl
My long-term HDHP went from $80/mo to $118/mo, which is high in percentage
terms, but still not a big deal IMO. In the process they gave me unlimited
lifetime coverage, added free preventive care, etc. -- which IMO seems
actuarially impossible, but I'm on the buy side of this transaction.

~~~
gojomo
Can you share the name of your provider (or their peer set)?

~~~
rdl
It really varies by state. I went to an online insurance comparison app (I
should promote Leaky or SimplyInsured here, but at the time in 2010, I used
ehealthinsurance), searched for HDHPs, then picked based on reputation. I
picked a Blue Shield provider with no lifetime cap (or a $6mm lifetime cap, I
forget).

The only states I know are WA and CA. In WA, I like Regence Blue Shield; plans
seem to be in the $100-150/mo range now.

In CA, there are also a lot of HDHPs in the $100-150/mo range. I'd
specifically avoid Kaiser as an employer giving coverage, as some people
really dislike Kaiser since you must use a Kaiser doctor, hospital, or other
facility, but if you're an individual and like a Kaiser doctor, it might be a
good choice. Otherwise a lot of people I know use Health Net, Anthem, etc.

I'm not a lawyer nor am I a licensed insurance agent so I'm hesitant to
recommend specific plans.

I think these rates are low due to being HDHPs and the "best" patient group;
26-35 year old single male. Those are exactly the people who don't get
_individual_ insurance unless they're cautious people who join AAA, change oil
on time, buy fire extinguishers, look both ways before crossing the street,
etc. (and thus exceptionally good risks), and even then seek to minimize
contact with doctors. I suspect the unhealthy ones are particularly likely to
take jobs with insurance, or be on medicaid/prison/etc., in that bracket, or
are so irresponsible as to have no insurance (because hey, even $120/mo is
better spent on beer).

Rates don't seem that much worse for women (which is weird, since I'd assume
most women get enough extra covered services covered now by an HSA to destroy
the actuarial model for a $100/mo plan). The rates 4x once you add children,
though. I tried also plugging in numbers for people born in 1969, 1959, 1950,
and rates do go up, but only maybe 4x, too. So the prices are generally within
a 10x range per insured, at least for healthy people or in places where there
is no medical underwriting, tops, and under ACA, that will converge to 4x
(although I'm sure by raising the low end by 50-150% and only lowering the top
end by a trivial amount.) I always assumed all insurance was $500+/mo/insured,
since that's what the group rates for small businesses seem to be, but that's
due to adverse selection and inefficiency I think.

The real problem seems to be if you're unhealthy when looking for insurance,
or have children (particularly with high medical costs), or have an acute
high-cost event, or are poor enough that $100-200/mo _is_ a hardship (even
though I think $100-200/mo for health insurance, whether paid by the
individual or the government, is pretty reasonable), or are, worst case, so
unhealthy that you're _also_ poor and thus doubly screwed.

~~~
rdl
Wow, this is insanity: I priced some NY (10024) and MA (02139) zip codes on
ehealthinsurance and the coverage looked approximately 5x CA or WA rates. I'm
not sure if that's specific to the site and their mix of carriers, or if
insurance really is that much more expensive on the East Coast.

~~~
gojomo
Thanks for all your pointers and observations! I will likely be in the market
for an HDHP soon and these will give my own search a running start.

------
digitalengineer
I do not understand why there is no public list online with the basic costs of
operations (including all the variables). With price transparency a lot of
this unequal treatment and prices would surface. I understand there are a lot
of variables, but not like it wouldn't be possible. (I understand a treatment
at Hopkins would be more expensive than say at your local hospital, but at the
very least it would be clear how much more expensive it actually is.

EDIT: One way to do it nationwide would be to ask people to send in their
bills (anonymized).

~~~
chao-
Operations are one type of unknown cost, but the problem extends to all parts
of medical treatment. I know of at least one _company_ (SnapHealth [1]) trying
to solve this problem, from one small angle: tests and doc visits, as opposed
to operations. But what I think you're asking for (and I would agree with) is
a public list ala some regulatory mandate to publish costs of specific
treatments?

[1] - <https://www.snaphealth.com/>

~~~
digitalengineer
Yes. The _minimum cost_ for a standard operation/procedure (without
complications). X people doing the check-in, X-doctors for the procedure, X
time in hospital bed to get well again, X time with checkups afterwards... You
get the idea... EDIT: Forgot the link you send in. Looks good!

------
nostromo
I wonder, since we strangely expect employers to provide healthcare insurance
in the US, what if employers just decided to provided actual healthcare.

Imagine taking all of the health premiums Google pays for its employees, and
instead of feeding it in to a broken system, you build a world class health
facility in Mountain View that's free to employees.

~~~
cmelbye
But then what happens when they need care when they're not near the company
hospital? You'd need to set up company run hospitals all around the state and
the country to manage the costs. And suddenly, you've reinvented Kaiser.

~~~
reycharles
Kaiser Permanente (<http://en.wikipedia.org/wiki/Kaiser_Permanente>) is a
»integrated managed care consortium« (health insurance, I guess). I did not
know that.

~~~
azernik
Yeah - they're basically the outgrowth of Kaiser Shipyards doing exactly what
nostromo proposed back in the 40s, and then letting other people buy in to
their network.

------
mitmads
"a health system that can set prices with impunity because consumers rarely
see them — and rarely shop for discounts"

~~~
DanBC
Why aren't the insurance companies working to drive prices down?

I understand the theory: People buy insurance; the insurance companies
'police' medical providers and regulate (through the market) the pricing of
services.

From the outside it doesn't look like that works. From the outside it looks
like very many more (often unneeded) tests are conducted. And it looks like
the insurance companies are not squeezing the providers of health care, but
are squeezing the patients.

~~~
anateus
Most private health insurance in the US is provided by employers. Thus, the
people paying for the services are not the patients but insurance companies,
and the insurance companies are selected by employers not the patients.

~~~
DanBC
But that says nothing about why insurance companies are not pushing prices
down.

They get paid by employers, but they'd make more profit if the health care
they buy is cheaper. Since I regularly hear that prices are cheaper if you
negotiate with the doctors it seems that insurance companies are not doing
that negotiation.

So, given that they appear to be losing out on some profit, why? Why aren't
they pushing the costs down?

~~~
refurb
They are pushing costs down. That's why when you get a bill from your
insurance and it says "Procedure X - $5000" followed by "Negotiated rate -
$1000 accepted".

Insurance companies figure out what stuff should actually cost, then enter
into contracts with providers that says "Hey I know you're still making a
decent profit if I only pay you $100 instead of $150, so take $100 and you'll
make it up on volume when you become one of my preferred providers."

------
ck2
Always tell them you are paying in cash.

Take bill home and sumbit to insurance if you are lucky enough to have
insurance.

You just saved the system at least 75% of the cost.

~~~
yitchelle
"if you are lucky enough to have insurance."

This is one of the many sad points about the health system. Luck should have
absolutely NO relation to whether you can afford reasonable health care.
Reasonable health care should be available to Joe Blow who is earning minimum
wage at your local city council and to Mr. Burns who is earning 20x more than
Joe Blow.

~~~
ck2
Great news, they solved this in a very profitable way.

In a few years it will literally be a crime to not have insurance. So cannot
afford it? Not their problem - YOUR problem.

Yay 'murica.

~~~
seanmcdirmid
The nice thing about making something mandatory is that their is then outrage
when people can't afford what they must have. Society can't ignore the problem
anymore and must attack it head on.

Can't afford insurance? Well, here is a subsidy, or why not just go on
medicaid? Can't afford insurance and make $60K a year; well, maybe individual
plans should be more affordable...single payer is looking more desirable. Oh,
you make $100K a year and STILL can't afford insurance (let's say no family is
involved). Well how the f*ck are you spending your money? Oh, you just don't
want to buy it because you are young and invincible? That's not how insurance
works.

Yeh for America; they are finally catching up with the rest of the developed
world!

~~~
anonymoushn
> Oh, you just don't want to buy it because you are young and invincible?
> That's not how insurance works.

In the US it does. It will be much more cost-effective for healthy people to
pay the penalty each year than to buy insurance. When they need care, they can
buy insurance at the normal rate, since it will be illegal to deny them
coverage based on a pre-existing condition. This is more than a little bit
like shopping for fire insurance after your house has burned down. The primary
difference is that politicians have not spent great amounts of effort telling
me that I should be entitled to place bets on past events relating to burning
houses.

~~~
seanmcdirmid
Not sustainable to game the system like that. I think the whole system will
strain at the contradictions in place, but that is what was politically
viable. Now that we have to live with a new reality, the contradictions will
be solved eventually.

This kind of system works very well in Switzerland, but the swiss system is
much more mature and they've figured out all the kinks (the people are also
responsible enough to vote for it directly).

------
axefrog
Why does the US tie health care to employment? Why is it not tied to the
individual and thus transferrable between employers?

~~~
rdl
It started as a legacy of wage controls during WW2 (they added a bunch of
fringe benefits to compete without technically breaking the law), but
continues because medical insurance is tax deductible for an employer who buys
it for his employees, but NOT for an individual who buys it for himself or his
own family. So it essentially costs an individual 20-55% more than it could
cost an employer.

(There's also the risk-pooling aspect; an employer can get a group rate with
guaranteed issuance because it's assumed they will be selecting employees for
moderate to good health (or else they'd be disabled vs. working), or at worst
randomly, with only random-in-population odds of high-cost dependents. There's
an adverse selection with voluntary individual insurance; healthy people would
rationally not get insurance if it were really expensive relative to their
expected utilization, whereas someone with a chronic condition or high risk
actually would get insurance even at a relatively high cost. Which in turn
drives up the costs per insured, which drives up the rate...eventually
becoming uneconomic. In practice, a lot of people with chronic conditions in
their families actually do seek out stable jobs with big employers with good
insurance to cover it, vs. doing startups or whatever, which imposes a loss on
the economy if they would otherwise have been the next Elon Musk.)

The Republicans in 2008 (McCain?) were actually arguing for making medical
insurance non-deductible for employers and I think deductible for individuals,
which was then seized upon as "taking away your health insurance". Ironically
that position of moving insurance away from employers seems to be a long-term
goal of the ACA/ObamaCare.

------
gordaco
8000, 38000, both insanely expensive. I haven't seen a single sane price in
the whole article.

~~~
Xylakant
8000 USD for a hospital treatment does not seem insanely expensive for me.
Hospitals are by definition expensive - 24/7 on-site staff, highly trained
experts (doctors), lots of expensive machines. A simple bed in a hospital is
far more complicated and expensive than your standard home mattress. Hospitals
need to overprovision on a constant basis since the can't just return a "503
Retry Later" in case of emergencies.

There's certainly ways to save money on the lowest price, but the spread is
far more interesting - given that you should get a solid treatment in each of
the hospitals, why does one manage to offer you a fifth of the highest price?

~~~
chii
> a fifth of the highest price?

may be because those higher charges are more bureaucracy than actual value
adding?

~~~
LekkoscPiwa
or maybe because there are developers who are $30 and hour and there are
developers who are $100 an hour ?

Isn't that the same with the doctors? Isn't that the same with the equipment?

Isn't that the same with the medication?

Who cares if they can kill you on the cheap? The point is to save lives no
matter what the cost.

------
dkhenry
So great I now know that hospitals charge different fees which is still
pointless since my federally mandated heath insurance will pay either one of
those prices at no difference in cost to me. In reality I can get my hip
replaced at any institution and pay nothing more then the $300 a month I pay
for my health insurance. So in the real world the price of all those
procedures _to me_ is $300 a month.

This is not a free market. Making these prices public isn't going to make it a
free market. No problems have been fixed. Only new and novel problems have
been introduced.

~~~
jnorthrop
You're completely missing the bigger picture. You may be paying a fixed rate
for your care, but if healthcare costs continue to rise unabated then you
won't be paying $300/month next year, you may be paying $500/month. In
addition the mandate to get everyone into the coverage pool plays a factor in
helping keep your costs low.

If hospitals can charge rates set seemingly at random, and the "customer" has
little or no opportunity to understand what the cost of their choices are, or
even make a choice of where to go, then the system will likely continue to
spiral out of control. And it is out of control.

My company, with 50 employees, will paying in excess of $500k for healthcare
benefits this year. That doesn't even include the contribution required from
the employees. That cost has risen ~12% every year. You are deluded if you see
recent attempts to control these costs as only introducing new problems.
Something has to be done.

~~~
dkhenry
No your deluded if you think people will shop around for something that has no
direct influence on their finances. Your absolutely correct that ideally
everyone would do the "right thing" and make the financially prudent decision
that benefits society and shop around for a good price on a procedure. However
no one will do that. Most people don't care because like I said it doesn't
influence me and even if I did the "right thing" I am bound by both my fellow
employees ( via our small pool ) and US tax law ( by medicare and insurance
subsidies ) to split the cost of _everyone's_ actions so unless a majority of
society gets on board my actions matter little.

In effect I will continue to go to the nice hospital for elective surgery
because its nice there, ya so what they charge someone else 300% more for the
same stuff, the food is better and I get free TV in my room.

------
khebbie
In this regard USA is a development country

------
cwmma
The table this is based on uploaded to fusion tables.

[https://www.google.com/fusiontables/DataSource?docid=1VlO_qd...](https://www.google.com/fusiontables/DataSource?docid=1VlO_qd-
JvxWE_HF7jFDyScvpMQV0AZArZL4y1us)

------
yoster
Not surprising at all considering healthcare in the states is just "big
business" as usual.

