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Fed Up with Drug Companies, Hospitals Decide to Start Their Own

nytimes.com

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Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#11

Post by ejstronge »

chimeracoder wrote: post #4
programmingpol wrote: post #3

Earlier quoted context omitted.

Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive. The problem with our healthcare system is that too much money goes to drug companies, medical device makers, and insurance companies and not enough makes it to the people actually providing the care. Its a bit…

> Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive. To clarify: Medicare reimburses rates that are below COGS, so hospitals have to increase the amount they charge private insurers in order to make up the loss.

The grandparent is describing a separate issue - note that not all hospitals will serve Medicare-receiving patients beyond their federal requirements.

Insurers negotiate reimbursement rates with hospitals, with both parties being able to leverage their size/social cachet to extract favorable terms. This contributes to the availability of certain hospital chains in the preferred networks vs. the non-preferred networks of particular insurers.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#12

Post by Thriptic »

reaperducer wrote: post #10
programmingpol wrote: post #3

Earlier quoted context omitted.

Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive. The problem with our healthcare system is that too much money goes to drug companies, medical device makers, and insurance companies and not enough makes it to the people actually providing the care. Its a bit…

> The insurance companies only pay x% of any given item, The hospitals negotiate those rates. If they're not happy with them, they need better negotiators.

Depends on what the market conditions are. If there is a lot of competition from hospitals then the payer may just refuse to include the hospital in network if they aren't willing to play ball, meaning they lose all the prospective business.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#13

Post by mywittyname »

programmingpol wrote: post #3
maxxxxx wrote: post #2

I am not sure if patients will see any of the savings though. I view hospitals as fundamentally dishonest organizations after a few experiences. Their medical treatment is fine but their financial practices are borderline fraudulent.

Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive. The problem with our healthcare system is that too much money goes to drug companies, medical device makers, and insurance companies and not enough makes it to the people actually providing the care. Its a bit…

Health insurance companies have taken to denying almost every claim that hospitals file. This overtaxes the hospitals claims denial departments and costs hospitals millions in lost revenue because they don't have the staff to properly review and resubmit every claim (which has to be done by a clinical specialist).

It's like taking your car to a mechanic, and once it's fixed, refusing to pay, claiming car didn't need THAT repair in the first place. Then getting away with it because you have an arbitration agreement in place with the shop. So the shop needs to employ an entire separate department of ASE certified mechanics that are dedicated to documenting that the repairs performed on customer cars were necessary. But the kicker is, YOU GET TO DECIDE IF YOU'RE CONVINCED THE REPAIR WAS NECESSARY.

Hospitals used to have small (1 person per 10k beds) claims denial departments and use outsourcing firms if case loads increased. Now they are acquiring all the outsourcing firms and increasing their staff to like 100 people per 10k beds. It's insane.

I like to retell a particularly awful denial my partner had to deal with, which was a patient had their open heart surgery claim denied by the insurance company because they determined that the patient's condition only warranted observational care (that's right, the insurance company determines what care you need/get). The hospital eventually won that claim, but they routinely lose $100k+ claims and have to eat the cost.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#14

Post by Thriptic »

eatbitseveryday wrote: post #8
reaperducer wrote: post #7

Coincidentally, some insurance companies that are fed up with hospitals are starting their own.

Any source, example, etc.? Your comment reads like one of those click-bait advertisements.

HMOs. Direct employment of physicians by payers used to be a popular thing until people realized that the incentive structures were conflicting. More money for providers means less for the parent payer etc.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#15

Post by maxxxxx »

programmingpol wrote: post #3
maxxxxx wrote: post #2

I am not sure if patients will see any of the savings though. I view hospitals as fundamentally dishonest organizations after a few experiences. Their medical treatment is fine but their financial practices are borderline fraudulent.

Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive. The problem with our healthcare system is that too much money goes to drug companies, medical device makers, and insurance companies and not enough makes it to the people actually providing the care. Its a bit…

"The problem with our healthcare system is that too much money goes to drug companies, medical device makers, and insurance companies and not enough makes it to the people actually providing the care. "

The surgeons I see through work have very nice houses and 100k+ cars so they are part of this.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#16

Post by nradov »

eatbitseveryday wrote: post #8
reaperducer wrote: post #7

Coincidentally, some insurance companies that are fed up with hospitals are starting their own.

Any source, example, etc.? Your comment reads like one of those click-bait advertisements.

It's really not click bait. Kaiser Permanente already operates under that model with a single organization acting as an insurer and owning hospitals. Other payers are moving in the same direction by acquiring or creating provider organizations. In some markets all of the major providers have merged together in order to gain more negotiating power so the only way payers can get some leverage back is by having providers as employees instead of vendors.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#18

Post by Thriptic »

programmingpol wrote: post #3
maxxxxx wrote: post #2

I am not sure if patients will see any of the savings though. I view hospitals as fundamentally dishonest organizations after a few experiences. Their medical treatment is fine but their financial practices are borderline fraudulent.

Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive. The problem with our healthcare system is that too much money goes to drug companies, medical device makers, and insurance companies and not enough makes it to the people actually providing the care. Its a bit…

The real root problems with the system are that a tiny minority of very sick patients account for an overwhelming majority of treatment costs; that it's difficult to prevent this from happening; and that the current care structures make it hard to take early action to incentivize these patients to improve.

It also is almost impossible to have a real discussion about this fact because it makes people uncomfortable.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#19

Post by derefr »

maxxxxx wrote: post #2

I am not sure if patients will see any of the savings though. I view hospitals as fundamentally dishonest organizations after a few experiences. Their medical treatment is fine but their financial practices are borderline fraudulent.

Savings, no. But benefit, surely: patients might actually be able to be prescribed melatonin (http://slatestarcodex.com/2013/09/28/sleep-now-by-prescripti...) if there was a hospital-demand-driven drug-lab producing and bottling it to clinical standards.

The entire market for drugs like Ramelteon—drugs that only exist because doctors can't prescribe the generic, because hospital and pharmacy suppliers don't carry the generic, because no drug lab finds it profitable to sell the generic, despite FDA approval—would collapse overnight.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#20

Post by mywittyname »

nradov wrote: post #16
eatbitseveryday wrote: post #8

Earlier quoted context omitted.

Any source, example, etc.? Your comment reads like one of those click-bait advertisements.

It's really not click bait. Kaiser Permanente already operates under that model with a single organization acting as an insurer and owning hospitals. Other payers are moving in the same direction by acquiring or creating provider organizations. In some markets all of the major providers have merged together in order to gain more negotiating power so the only way payers can get some leverage back is by having provider…

Also, a lot of hospitals self-insure anymore.
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