The anatomy of a ripoff
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The anatomy of a ripoff
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Re: The anatomy of a ripoff
#2[deleted]
Re: The anatomy of a ripoff
#3My 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.
Re: The anatomy of a ripoff
#4[deleted]
Re: The anatomy of a ripoff
#5As 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.
Re: The anatomy of a ripoff
#6My 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 ch…
> 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?
Re: The anatomy of a ripoff
#7Sorry, but isn't it just outright fraud to charge > 400$ for a medication, which has a "retail price" of a few $?
Re: The anatomy of a ripoff
#8Bottom 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/2010/07/01/128243987/medical-...
http://www.npr.org/blogs/money/2009/11/podcast_paying_doctor...
http://www.npr.org/blogs/money/2009/08/the_wild_wild_west_of...
Re: The anatomy of a ripoff
#9Wow , I'm glad I don't have to expend mental energy on stuff like this.
Universal Healthcare, get it.
It's really good. Honest.
Re: The anatomy of a ripoff
#10This 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...