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The anatomy of a ripoff

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Re: The anatomy of a ripoff

#121

Post by CWuestefeld »

adolph wrote: post #109
dbcfd wrote: post #22

Earlier quoted context omitted.

Nope, that's capitalism. Someone (the insurance) is willing to pay that price. It'd only be fraud if the government was paying for it. [Edit]Some hate against my comment. For those that fail to understand... It isn't fraud if you go to a gas station that is charging $0.10 more a gallon, and fill up there. It's fraud if you pay for that gas, and its water. The insurance is still buying the same drug, they have just ch…

Taking advantage of the predicament of others is not capitalism; it is price gouging. It would be one thing if the consumer were able to compare prices and other aspects of the product and make a choice based on the consumer's values (of which price may not be the most important thing). This is a bit more like a gas station charging 10x more during a hurricane evacuation.

Real world example:

Scenario 1: A gas station with bags of ice sells out their inventory of ice and beer to a local fraternity, so they can keep their beer cold while they're on the road.. Then a diabetic guy comes in, looking for a way to keep his insulin supply cold. Too bad for him, the ice is gone.

Scenario 2: That gas station jacks up the price to $100/bag during the evacuation. The frat guys aren't willing to pay that much for cold beer, so they grumble and just buy some bottled water instead, since that doesn't need to be cold to drink it. The diabetic guy comes in looking for ice. He too grumbles at having to pay $100, but his insulin supply will now stay fresh.

This is a little contrived, but I think it illustrates that even in extreme cases, the system of pricing in a free market allows each participant in the market to communicate his priorities and his ability to substitute other goods. My example shows how the frat guys want beer, but not enough to pay that huge amount -- which leaves the way open for the diabetic to show that the ice is really, really important to him.

Re: The anatomy of a ripoff

#122

Post by turar »

I could never understand why there's such a huge financial difference in the way emergencies that threaten human lives are dealt with in the US. You never expect a huge bill from the fire department or the police department should you require their urgent help. How is ER different?

Re: The anatomy of a ripoff

#123

Post by [deleted] »

turar wrote: post #122

I could never understand why there's such a huge financial difference in the way emergencies that threaten human lives are dealt with in the US. You never expect a huge bill from the fire department or the police department should you require their urgent help. How is ER different?

[deleted]

Re: The anatomy of a ripoff

#124

Post by jerf »

adolph wrote: post #109
dbcfd wrote: post #22

Earlier quoted context omitted.

Nope, that's capitalism. Someone (the insurance) is willing to pay that price. It'd only be fraud if the government was paying for it. [Edit]Some hate against my comment. For those that fail to understand... It isn't fraud if you go to a gas station that is charging $0.10 more a gallon, and fill up there. It's fraud if you pay for that gas, and its water. The insurance is still buying the same drug, they have just ch…

Taking advantage of the predicament of others is not capitalism; it is price gouging. It would be one thing if the consumer were able to compare prices and other aspects of the product and make a choice based on the consumer's values (of which price may not be the most important thing). This is a bit more like a gas station charging 10x more during a hurricane evacuation.

The itemized bill is basically a convenient fiction; you can't really compare items between hospitals, only totals. It's between the hospital and the insurance and it's all but an accident that you even receive it.

The same effect explains the semi-mythical $75,000 toilets in government procurements; yes, the government may often over pay, even somewhat obscenely, but typically those sorts of stories are because of accounting doing things like dividing the bill evenly according to every item. Yes, you got a $75,000 toilet, but you got a $75,000 MRI machine on the "same bill".

Re: The anatomy of a ripoff

#125

Post by brianbreslin »

mcherm wrote: post #97
brianbreslin wrote: post #61

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

If you read the full article, he explains that there was an underlying medical cause and that the second hospital found it.

Ah I didn't see that part. Now I do seem like an ass.

Re: The anatomy of a ripoff

#126

Post by afterburner »

tomjen3 wrote: post #94
afterburner wrote: post #54

Earlier quoted context omitted.

"Too bad"? You like thinking about a $5000 bill when you're headed to the OR, perhaps straight from the ER? You think this is feasible for the vast majority of people?

Yes, because you have that amount in HSA. That is the entire point of the high deductible.

Sounds like it's still your money being spent. Do poor Americans typically have HSAs? Could people afford multiple hits? Where does the money come from after the HSA has run out?

Re: The anatomy of a ripoff

#127

Post by [deleted] »

skurry wrote: post #118
yummyfajitas wrote: post #42

Earlier quoted context omitted.

First dollar coverage of many things is mandated by the ACA. It's not clear yet which things (HHS and other agencies need to first "recommend" the required services), but first dollar coverage is mandated. http://www.healthcare.gov/law/resources/regulations/preventi... The fact that high deductible coverage may be possible for the non-"recommended" chunk of services is a good thing, however. (I say "may be possible"…

Currently, every plan I've come across also covers preventive care (immunizations, cancer screenings etc.), because insurance companies realize that this saves them money in the long run. The ACA just standardizes and regulates this. This is actually in the interest of the consumer, because every plan has to have a common set of preventive care services it has to provide for free, which makes plans much easier to com…

[deleted]

Re: The anatomy of a ripoff

#128

Post by dredmorbius »

sethg wrote: post #44
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.…

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…

Moreso than that: there's a fundamental break from free market assumptions in that use decisions and cost decisions are divorced. Health care recipients (patients) and primary providers (doctors/medical personnel, though to a lesser extent facilities which are more aware of costs) don't bear and/or often don't know the costs associated with a given therapy or intervention. Instead, these are born by and/or negotiated by insurance providers. Even at a given facility, compensation rates for a given therapy can vary widely by insurance carrier, or even by plan within a given carrier.

More broadly, this is a problem at other areas of what we consider to be "free market" economies. Healthcare and defense are classic instances, but many group-negotiated services (utility contracts, broadcast media, "free" online services, even Microsoft's software sales channel (mostly OEMs and corporate site licenses, not individual end-users) violate base assumptions of free market economics.

While microeconomics is hugely useful describing behaviors in which it applies, I'm increasingly coming to believe that only a small fraction of what we consider to be free market activity in fact meets the core assumptions.

But yes: US healthcare is hugely inefficient.

Re: The anatomy of a ripoff

#129

Post by rskar »

tldr; (exactly from the article): "The driving force behind all this, according to Aetna, is the way hospitals and the government do business. The rates that insurance companies pay are negotiated based on what they believe a hospital’s true costs are. But then those rates are jacked up an average of 30% to 50% to make up for money that hospitals lose in treating patients who don’t have private insurance - which is the majority of them. So to make up the difference, they overcharge patients who are insured. This practice is called cost-shifting. In a typical hospital, upward of half the patients are covered by Medicare and Medicaid - neither of which pays the full cost of treatment. Another 10% to 15% of patients are uninsured; maybe they can afford to pay, but more likely they’re broke and can’t cover their bills either. Any profit the hospital makes must come out of the remaining 40% - patients with private insurance."

----

Considering that the per capita medical costs in the US are about twice that of the other OECD countries, clearly there's more than just cost-shifting going on.

Whatever your views, as a matter of law (well before "ObamaCare") we are still going to subsidize medical care for the old, poor, children, and the irresponsible through our taxes and direct payments.

Re: The anatomy of a ripoff

#130

Post by joezydeco »

tomjen3 wrote: post #94
afterburner wrote: post #54

Earlier quoted context omitted.

"Too bad"? You like thinking about a $5000 bill when you're headed to the OR, perhaps straight from the ER? You think this is feasible for the vast majority of people?

Yes, because you have that amount in HSA. That is the entire point of the high deductible.

I wonder what % of HSA policyholders actually have that amount sitting in savings at the ready. How many took the HSA policy because it was cheapest, not knowing the obligation at the other end of the day?

And even if you did, one incident would wipe that account and you would need to replenish it ASAP.

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