The Cost of an ACL Injury

I am actually 4 months out from my own ACL surgery, tore mine skiing and one thing the OP forgets to mention is many insurance will never pay that $60k as they have pre-negotiated rated with the hospitals and doctors. My surgery was done in SF (not the cheapest city in the world..) and according to the bill came out to just over 100k, but, my insurance paid 17k. What happen to the rest? Well I assume it was just inflated costs that the hospitals adds to the bill so the insurance can negotiate down.

Is there any way to get data about how much insurance companies actually pay? I'm assuming it's different from amount billed.

To be fair, you're doing exceedingly delicate machine and test equipment manufacture. The machine shops I know will buy new tools as needed, but reuse them on large job runs--and throw them out once they lose tolerance.

Something like the $900 knife in the article is/could be a mass-produced stamped piece of metal, perhaps sharpened on-site or at the factory; unit cost for that should be easily less than $10.

The most useful aspect of this article is the pie charts and line-item comparisons. Ignore the dollar amounts themselves. Why? Because almost no one pays that. Why?

- In California, MediCal (state-wide health insurance safety net) pays about 20% of the cost (not price) of treatment for those without insurance. So if a surgery costs $10k, MediCal says "Here's your $2k. That's all you get."

- Nationwide, Medicare pays something closer to 90%. Much better, but still a loss to the hospitals.

- Insurance companies negotiate with hospitals, but (from what I've heard) generally pay 115-125% of the cost, giving hospitals a 15-25% margin. Certainly better, but not necessarily making up for the above.

- Some patients with no insurance, especially at major academic medical centers, are rich folks looking trying to get the best care in the world for something particularly complicated. UCSF in my neighborhood even has an in-house Saudi liaison for Saudi royals. These folks pay the full rate, which may represent an enormous markup, which does help subsidize the care of the top two categories.

For those without insurance, who don't have the money to pay the full fare (meaning you're not a foreign prince or similar), you're going to get freaked out by the bill, which is based on the last category. But in reality, the moment you ask a billing person about the costs, you'll almost always get knocked down into the insurance rate tier, just for asking. Show proof that you have next to nothing, and you could get well down into MediCal levels.

In order to get the ultra-rich to subsidize the patients that generate the loss, the price card needs to be high. Really high. So they give breaks to everyone else, since you can't do it the other way -- "Oh, you look rich, so we're going to charge you double the rate sheet."

This doesn't happen in community hospitals quite as dramatically, since they don't have the ability to handle the crazy conditions that will result in the high-revenue customers. So their rack rate for an ACL will be at the low end, while the academic medical centers that offer the $2MM neurosurgery will have rack rates for every procedure on the high end.

Is it messed up? Sure. But does it mean that normal people are paying $65k for this ACL procedure? Usually not.