The anatomy of a ripoff • Hacker News Board

Re: The anatomy of a ripoff

#71

Post by CWuestefeld » Tue, Jan 10, 2012, 4:42 PM UTC

jbooth wrote: post #55

CWuestefeld wrote: post #50

Earlier quoted context omitted.

I'll be honest. I don't get why hospitals continue to play the game. If I were running the place, I'd just pull out of Medicare. It seems that they're afraid of the millions of dollars of lost revenue, without considering the greater sum of expenses that they'd free up.

I sincerely doubt that the bean-counters at hospital are losing a ton of money on medicare but are too confused by the large 'revenue' figure to subtract a larger 'expenses' figure and realize they're making a loss. As a matter of fact, I can't recall ever reading an op/ed or anything by a hospital administrator complaining that they're being fleeced by medicare and losing a bunch of money on it. But I've seen a bill…

And I'm telling you that my wife is that bean counter. Her job is (a) budgeting, and (b) getting reimbursement from Medicare and Medicaid. As well as anyone in the organization (which is to say, not too well, because of the deficiencies with cost accounting that I mentioned), she knows those numbers.

I don't think a month goes by when I don't ask her this question. Something always comes up, where she's saying "Medicare just denied another $500K payment" or somesuch. And I'll say to her "you live by the sword, you die by the sword".

She admits that the net profit via Medicare is negative. But the decisions makers don't want to consider it. In this case, it's possible that they consider it their mission because they are a Catholic hospital. I can't see any answer in the general case.

Re: The anatomy of a ripoff

#72

Post by _delirium » Tue, Jan 10, 2012, 4:43 PM UTC

yummyfajitas wrote: post #47

yardie wrote: post #38

Earlier quoted context omitted.

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.

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.

"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

Re: The anatomy of a ripoff

#73

Post by calloc » Tue, Jan 10, 2012, 4:43 PM UTC

yardie wrote: post #38

yummyfajitas wrote: post #28

Earlier quoted context omitted.

This is why high deductible insurance offers the best hope for cost control. Too bad it becomes illegal in 2014.

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.

I keep a savings account around with a minimum balance of $5000. The only reason I have that money sitting there and I am not using it as a down payment for a car I so desperately need is because I need it for my high deductible plan. I also have an HSA (health savings account) that I am slowly adding money to every month, which at the moment is mainly used to pay for prescriptions and the like.

Now, one could suggest that I change my plan to a non-high deductible one so that I don't have to keep that money sitting around in savings, but then my costs per month would go up $300, whereas my high deductible plan is entirely paid for by the company I work for. I don't go to the doctors nearly enough to that the extra money I spend per month would counter-act the amount I am paying out of pocket now because I never reach my deductible.

Re: The anatomy of a ripoff

#74

Post by tankenmate » Tue, Jan 10, 2012, 4:43 PM UTC

dsplittgerber wrote: post #43

furyg3 wrote: post #26

Earlier quoted context omitted.

> 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. This is a pretty big logical jump. I'm American, but have been living in the Netherlands for a while. Health care is probably more regulated here than in the US, yet in all of the ER visits I've experienced (myself or friends/family) I've never seen bills like that.…

I'm from Germany and you do realize that over here (don't know about the exact differences) privately-insured patients (who opted out off the 'mandatory' insurance scheme) basically pay a LOT more for any given medical service just so that patients covered under the mandatory insurance can get treated at all? It's like a giant (inefficient) money redistribution scheme, in all the worst ways imaginable. Regulation doe…

Actually I think you'll find that billing like the kind you see in the US doesn't happen in Germany. The US spends nearly twice as much per capita than Germany for a comparable level of service[1]; this is hard to judge but life expectancy is a reasonable proxy, people in Germany on average live about the same.

The UK with near mandatory, see below, universal healthcare the cost of per capita is lower still [1 ibid]. In the UK if you opt out of public healthcare you can't mix and match services beyond the GP level, this may change in the future.

Obviously with a mandatory universal care the overall cost to the public at large stands a high chance of being lower; efficiencies of scale. The downside is that at the individual level you may be subject to "postcode lottery" healthcare. In many countries this leads to individualism raising the costs of healthcare for everyone.

Everyone wants to be treated the best; the problem is that regardless of the system you chose this is impossible.

[1] http://en.wikipedia.org/wiki/List_of_countries_by_total_heal...

Re: The anatomy of a ripoff

#75

Post by lizzard » Tue, Jan 10, 2012, 4:43 PM UTC

brianbreslin wrote: post #61

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

Did you finish reading the article? The kid choked twice in two weeks because he had an inflammation or infection of the esophagus, which the second hospital diagnosed and treated.

Re: The anatomy of a ripoff

#76

Post by llimllib » Tue, Jan 10, 2012, 4:44 PM UTC

CWuestefeld wrote: post #50

jbooth wrote: post #46

Earlier quoted context omitted.

Hang on, so medicare told the hospitals and insurance companies to run their businesses that way? The transaction described in the article was entirely between private business entities. I get that they set their prices in a way that distorts the market to some extent but it seems that that distortion is far less than what the really-smart-guys-in-suits have been able to manage all by themselves. I understand the imp…

I'll be honest. I don't get why hospitals continue to play the game. If I were running the place, I'd just pull out of Medicare. It seems that they're afraid of the millions of dollars of lost revenue, without considering the greater sum of expenses that they'd free up.

> I'd just pull out of Medicare.

Many hospitals do; many don't because they feel it's a moral obligation to provide care to Medicare patients. Here's an example of that attitude: http://www.kevinmd.com/blog/2011/12/dropping-medicare-break-...

In order to stay in Medicare/Medicaid (which, as I said, many see as a moral requirement), hospitals are often required to lay off staff. Here's an example of 100 layoffs at Dartmouth Hitchcock hospital: http://www.unionleader.com/article/20111109/NEWS02/711099983

Re: The anatomy of a ripoff

#77

Post by lizzard » Tue, Jan 10, 2012, 4:45 PM UTC

js2 wrote: post #29

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/

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

Re: The anatomy of a ripoff

#78

Post by cstross » Tue, Jan 10, 2012, 4:45 PM UTC

sp332 wrote: post #45

lflux wrote: post #34

Earlier quoted context omitted.

Far from. In Stockholm, for a child she would have paid 120 SEK (~17 USD) for an ER visit. That is assuming she was a resident or in possesion of an EU/EEC insurance card. Going price for an ER visit without EU insurance would be 1650 SEK (~240 USD). So not close even there.

How do the doctors get paid if the patient is only paying $17 per visit?

The fixed cost per visit is not a payment for treatment, but a tax; it's notionally there to stop people using the system excessively.

(See also the prescription tax in England, although there the average cost of a prescribed medicine <= the prescription tax. Here in Scotland we abolished the NHS prescription tax a year ago; the system didn't subsequently collapse under the weight of freeloaders asking for prescriptions for stuff they could buy over the counter. Draw your own conclusions as to whether such taxes make sense ...)

Re: The anatomy of a ripoff

#79

Post by jbooth » Tue, Jan 10, 2012, 4:45 PM UTC

yummyfajitas wrote: post #63

sethg wrote: post #44

Earlier quoted context omitted.

The American health-care system thrives in the uncanny valley between the government and the free market. There are all sorts of laws and regulations that prevent normal market procedures from working (for example, emergency rooms can’t turn someone away because they can’t pay), but at the same time, American anxiety over “socialism” has prevented Congress from letting the government take a more active role in actual…

...when you measure things like life expectancy, Britons are as healthy as Americans. That gives you an idea of how much money is going down the tubes due to administrative inefficiency. It's hardly clear the money is going down the tubes due to administrative inefficiency. It might just be spent on unnecessary medicine, and costs might be higher in the US. According to one fairly decent source, administrative ineffi…

A couple things, first off, if costs are higher in the US, they shouldn't be, we're not living in a radically different reality in the UK. Market forces should be lowering those costs, but they're not, because the actual cost centers are completely insulated from any market whatsoever by the insurance system.

RE: administrative inefficiency, from my limited experience (laying off teachers in local gov't back in 2004 because healthcare premiums were going up by 15-18% a year), the administrative overhead in actually managing the insurance is pretty small as a % of the costs paid to hospitals.

But then you step back and think, well what the hell, why are the costs paid to the hospitals so high? Because the whole system's broken. So if you try to measure administrative overhead, it looks small, but the general administrative system is creating this environment where the costs themselves are through the roof. Some is unnecessary medicine, a lot seems to be the completely arbitrary price structure. In the linked article, one hospital charged 6 bucks for a treatment, another charged several thousand. That's not a market.

Re: The anatomy of a ripoff

#80

Post by llimllib » Tue, Jan 10, 2012, 4:45 PM UTC

yummyfajitas wrote: post #63

sethg wrote: post #44

Earlier quoted context omitted.

The American health-care system thrives in the uncanny valley between the government and the free market. There are all sorts of laws and regulations that prevent normal market procedures from working (for example, emergency rooms can’t turn someone away because they can’t pay), but at the same time, American anxiety over “socialism” has prevented Congress from letting the government take a more active role in actual…

...when you measure things like life expectancy, Britons are as healthy as Americans. That gives you an idea of how much money is going down the tubes due to administrative inefficiency. It's hardly clear the money is going down the tubes due to administrative inefficiency. It might just be spent on unnecessary medicine, and costs might be higher in the US. According to one fairly decent source, administrative ineffi…

I'm also certain that much of the unnecessary medicine is provided because of the legal climate in the US; doctors practice under the assumption that they will be sued if they don't provide unnecessary medicine.