
Trump proposes forcing hospitals to disclose discount rates with insurers - forgingahead
https://www.wsj.com/articles/trump-proposes-forcing-hospitals-to-disclose-discount-rates-negotiated-with-insurers-11564431303?mod=rsswn
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colbyh
One of my favorite things about the US insurance market is that the lack of
transparency into pricing actually hurts both the insured and the institutions
providing care.

Small and medium size practices have very few guarantees about how much they
will get reimbursed for a procedure and the patient has no idea how much they
will pay. It's truly insane.

Is anyone honestly trying to solve those problems right now?

~~~
whydoineedthis
Hrmm...not sure most of what you said is true. Small and medium business may
lose claims, but they know the reimbursement for each procedure and if thier
claims are legit, they will get reimbursed. There's a requirement to share how
much a consumer needs to pay before procedures are done also. Unless your
talking about ER care specifically, that's a different beast where you are
somewhat correct.

~~~
red-indian
"they know the reimbursement for each procedure"

This is not true.

"There's a requirement to share how much a consumer needs to pay before
procedures are done"

This is not true.

~~~
buzzerbetrayed
Sounds like it is your word against his. Do either of you have any sources?

~~~
colbyh
I work in the industry. Fee schedules are an upper bound, but the lower bound
is very hard to get numbers on and often approaches 0.

If I go in for a procedure at a medium sized specialist clinic they are going
to take the fee schedule for this CPT, discount by my 20% expected
contribution (or whatever), and then hope that the insurer pays them > 50% of
the remainder.

A lot of the time my insurer will, but not always. Bigger systems negotiate
their own fees and many doctors at larger clinics only track RVUs for each
procedure (specifically because the clinics realize that paying based on
insurance payout isn't fair or scalable, in that way RVU allocations act as a
pool). But overall it's not a transparent system for the majority of people
working within in.

------
resters
This would improve the negotiating position of some parties and harm that of
others, but only slightly if at all.

Most likely it will make hospitals less likely to allow any single price to be
negotiated too low.

Consider that when negotiating a basket of goods, the buyer and seller may
agree on a low price for item A and a high price for item B based on their own
preferences, but this does not mean that they cared specifically about item A
or B since the negotiation was over the basket.

We see this all the time whenever products and services are bundled. The
negotiation may result in some prices being lowered, but overall the seller
has a lot of knobs to adjust to make the buyer happy.

So all this will do is modify the negotiation slightly and possibly provoke
some sensational headlines in the near term.

~~~
ma2rten
It would create transparency. Over the long-term that means that prices will
become more equal. The people who are paying the most (un-/underinsured) will
be the ones who benefit the most.

~~~
mc32
I think you’re right. I recall hearing about an exemplary case s few years
back before ACA, Some guy was shopping around for, I think it was, hip
surgery. It was opaque and took some effort but finally settled on some place
in the south, possibly AL. It ended up being like a fifth of what his state’s
hospitals would do if for.

So, the short is, yes, transparency would help.

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red-indian
I had to go to the corporate owned emergency room recently. They told me that
as an uninsured person my discount was 70%. They wouldn't tell me what the
_insured_ discount was even though I asked. For 5 minutes with the doctor and
there's nothing we can do today follow up with you GP doctor tomorrow or ASAP,
the bill was only $145.50, discounted from $485.

The follow up with my doctor during weekday hours was $70.

~~~
woofyman
I was badly bitten by a dog. The ambulance took me to a trauma center that was
out-of-network. The retail cost of my 6 hour stay was $11,800. This didn’t
include the ER doctor and radiologist.

My insurance covered only $2800 of the $11,800 (what they considered
reasonable). I have a $7900 deductible.

Since they were out-of-network, the hospital could have billed me for the
entire amount (balance billing).

Happily they reduced the charge to $1000.00

~~~
jilles
As someone who moved to the US from the Netherlands, this scares me.

~~~
chrisjc
Don't worry. It doesn't make any difference where you're from.

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tropo
This is wonderful, and so the medical industry would fight it with all their
might, except for one problem: the fine is only $300 a day. That is about the
cost of a nurse.

It'll matter for little urgent care shops staffed by a handful of people. City
hospitals will laugh at $109,572 per year.

Well, it's a step in the right direction.

~~~
credit_guy
While $300/day is indeed ridiculously little, these fines would be published
on a website, as per the factsheet [1]

"If the hospital fails to respond to CMS’ request to submit a corrective
action plan or comply with the requirements of a corrective action plan, CMS
may impose a civil monetary penalty on the hospital not in excess of $300 per
day, and publicize these penalties on a CMS website."

I guess a "name and shame" strategy could lead to increased public awareness,
and later to political pressure, which in time would translate into political
action. At least that's how democracy is supposed to work.

Separately, the public is asked for feedback on the proposed rule until
27-Sept-2019. Not sure how this works, but I guess a grassroots movement could
result in an increase in this diminutive fine.

[1][https://www.cms.gov/newsroom/fact-sheets/cy-2020-medicare-
ho...](https://www.cms.gov/newsroom/fact-sheets/cy-2020-medicare-hospital-
outpatient-prospective-payment-system-and-ambulatory-surgical-center)

~~~
mars4rp
you need name and shame if you are a civil activist not when you are
government!!!!!

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mgamache
At worst it will have no impact. But even if consumers can't negotiate the
discounted price themselves they know the premium they are paying for their
current plan. Right? This might encourage a single payer system (for good or
bad).

~~~
conductr
We need to stop focusing on single payor system as it’s too political.
Something everyone can get behind is a single price system. The government has
the ability to do that without becoming our insurance administrators.

At the least, healthcare companies could reduce a huge amount of labor tied up
in billing and insurance could do the same for labor tied up in fighting
claims

~~~
hkai
Would you say setting a single government-mandated price for goods, services
or currencies has worked very well in the past?

~~~
conductr
So, this is a simple idea not fully thought out. But you’re point is hollow.
Democracy has failed many places, do we give up our way of government?

In the context of healthcare, using the current Medicare system as a proxy.
Yes, it mostly works. CMS sets prices, generally based on what things should
cost with a reasonable margin, and in general Medicare patients are receiving
quality care.

Beyond that I don’t have much knowledge. I’m sure you’re referencing some
examples of fixed corn prices and how it resulted in shortages or something
like that. Which may be valid.

However, I think you could get creative and build some pricing models that
were much more effective than a fixed price. Or, the minimum government
involved way, would be to simply mandate that payors of all types are billed
and pay the same amount for same services. Then the market is responsible for
compliance.

Either way, the way to get ahold of healthcare is on price. The only reason
Medicare for all has any legs is because Medicare is known for controlling
price. But the downside is government becoming the administrator. I’m just
saying there’s other ways to focus on price and the government could help
through legislation.

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b_tterc_p
Is there any reason not to make discounted rates for insurers illegal?

~~~
pingpongchef
What reasons are there to make them illegal?

~~~
Retric
Cost shifting in healthcare is zero sum at significant economic cost. Aka, the
net result of these negotiations is higher healthcare costs even if they can
benefit the participants.

On the other hand healthcare providers competing on an open market with
transparent pricing would presumably actually reduce costs.

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sneak
I am pretty sure that not disclosing these figures makes the hospitals far
more than $300/day (the proposed fine for noncompliance with the disclosure
rule).

~~~
BonesJustice
Indeed. Raise the cap to $300,000/day per facility, and this might actually
have an effect. For most hospitals, a fine of $300 a day isn’t a fine at all,
and I assume that’s by design.

~~~
tropo
Whose design? My guess is that the agency can't go higher due to an outdated
law from when the agency was founded. Lots of laws have fixed dollar amounts
which eventually get absurd due to inflation.

From CNBC: "The public comment period will be open until the end of September.
If finalized, the rule would take effect in January."

So, leave a comment. Ask for something large, tied to inflation or to hospital
revenue.

------
tzs
I don't know if the WSJ article mentioned this, because I cannot read it, but
according the the NYT article on this [1] when asked where the legal authority
to force such disclose comes from the administration cites an ACA provision
that requires hospitals to make a public list of standard charges.

But this same administration is currently arguing in Federal court that the
entire ACA is invalid, which means that they are also arguing that this new
proposal has no legal basis.

[1] [https://www.nytimes.com/2019/07/29/health/hospital-rates-
ins...](https://www.nytimes.com/2019/07/29/health/hospital-rates-insurers-
trump.html)

------
CSactuary
Fixing the US healthcare system really is not that hard. Just low incentive
for the upper crust with plans that subsidize 90%+ of their healthcare through
their companies/employers.

How to fix it: 1\. Single payer - hard to maintain equality without it,
insurers are not incentivized to lower healthcare trend due to max MLR rules
2\. High OOP plans for all - force consumerism, sliding scale of ded/oopm
based on income so poor are inherently subsidized more than rich 3\. Easier
path to becoming MD - more docs, more competition 4\. Higher standards for
maintaining license to practice medicine - more pressure to provide high
quality care 5\. Transparent prices - ability to shop for healthcare like any
other good, prices will naturally hit an equilibrium due to consumerism and
increased competition 6\. Add a steerage layer to the system for all - call
med-help line or go to web/app for care - type in symptoms, it gives you
options with distance/prices etc to allow people to make more
informed/economical decisions 7\. Better Interoperability in EHRs - easily
share medical records with a new provider, reduce duplicative care and waste

Just these items would help bring trend back in line with CPI. I like this
solution because everyone gives a little - providers and consumers and the
insurers and brokers give a lot (but eliminating their costs alone would be a
boon). The biggest risk would be the ability of a public entity to implement
and enforce such a system and to keep incentives high for providers and
researchers

------
pkaye
I don't how much that will accomplish. Lots of people without insurance have
no means to even pay the discounted rates. I had a drug that until it was
available in generic form was $90 (so at 10% copay, I presume it cost the
pharmacy $900) But lets say that was a lie and it actually cost $200. Without
insurance it would still be too expensive to many people.

~~~
hk2001
What actually often happens is that drugs priced at $90 get marked up to $200
with the knowledge that insurers will get a $90 price. The rebate system
paradoxically creates an incentive system where it is insurers best interests
for list prices to increase dramatically and _then_ receive a discount than
for the products to be sold at the discounted price in the first place. It’s a
broken system and replacing it should help medicines be priced closer to what
real people can pay for.

~~~
pkaye
Yes, the $90 was my copay and I got a copay reimbursal from the drug company
so my net was $5. The drug company is trying to mask the cost of the drug from
the consumer so they can charge the insurer a higher price. The insurer is
charging a copay so the patient feels some of the cost.

However disclosing these practices is not enough. The end consumer has no
negotiating leverage particularly if they have no insurance. The government or
some big organization needs to negotiate the best price for them.

------
RickJWagner
Seems like a good move. It's hard to imagine how transparency can do harm.

~~~
tzs
I don't see how it could directly cause harm...but I'm also having trouble
seeing how it will help, and if it doesn't help it may cause indirect harm.

The indirect harm would be that by spending effort on something ineffective it
may make it harder to do things that would be effective, by taking some of the
heat off politicians on the health care cost issue.

------
themagician
This is a good first step.

The second step being setting caps on what health care providers can charge to
those who are uninsured, or for which a particular insurer won't cover.

Instead of some ridiculous number that no one actually pays, they should only
be able to charge the uninsured a maximum which is the average of what they
actually receive.

If they receive, on average, $850 for an MRI then that should be the most they
are legally allowed to charge someone who is uninsured. Clearly it's still
profitable for them to do so at this price point, and it doesn't bankrupt the
individual.

------
semerda
A small step but a good one towards price transparency. What industry apart
from healthcare do you know where you first get service and then find out the
price of it. lol

The sad part about all this is that the level of healthcare pricing
transparency we all need/want must come down from the top. Are there any
startups looking at this problem?

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hkai
I feel that Trump's administration has not considered the ways this will hurt
poorer people and especially minorities. Or maybe they did, and went ahead
anyway.

------
awinter-py
price transparency critical for markets. however we get this done, let's do
it. surgeon scorecards while we're at it.

~~~
OnlineCourage
> surgeon scorecards while we're at it.

Yelp reviews for cardiologists, I can see it now: "Well, I'm still alive, so
that's a plus, but he told me very rudly to cut down on salt! One star!"

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txru
"When a measure becomes a target, it ceases to be a good measure" [0]

[0]
[https://en.wikipedia.org/wiki/Goodhart%27s_law](https://en.wikipedia.org/wiki/Goodhart%27s_law)

~~~
ars
It's not a measure though, lower prices are the target.

That law only applies when the ultimate desired goal is different from the
target. When the target is the goal then using it as a measure works
perfectly.

------
mnm1
Ooh a whole $300 a day. Scary. That's $110k a year roughly. Pocket change for
either the hospital or the insurance companies should they wish to not
disclose these prices. That's if they even survive a court challenge and if
the drug price disclosure is anything to go by, they won't. This is just
bullshit the current administration is pushing to pretend like they are doing
something positive for healthcare when all they want is to take people's
healthcare away and let them die so that money can be used to line the pockets
of insurance and other companies.

