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Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

healthcaredive.com

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Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#451

Earlier quoted context omitted.

> Medicare reimbursement levels are sufficient to support most medical practices. Big Nope. Most practices have fairly fixed costs: Medical malpractice Facilities rent, or mortgage Front office IT & EMR Privileging/Credentialing Practice CME/required education The only highly variable cost is physician compensation, and considering the limited availability, this will merely cause the retirements and limited access to…

> there is a limited supply of physicians If the AMA isn't going to fix the physician and residency pipeline, could we not offer visas to physician immigrants who meet first world medical credentialing standards to deepen the supply and therefore support demand? If supply is the issue, we should fix the supple, not destroy necessary demand.

> could we not offer visas to physician immigrants who meet first world medical credentialing standards

Basically, you are saying American trained doctors only then, as American doctors are much better trained.

Because my experience is that a physician immigrant has to do the following:

Receive ECFMG verification

Complete missing medical education requirements

Study a boatload!

Pass US medical licensing exams 1 & 2

Find a residency (matching)

Go through Residency again

Obtain certification from ECFMG

start practicing, or

Complete Fellowship, then start practicing

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#452

Earlier quoted context omitted.

> there is a limited supply of physicians If the AMA isn't going to fix the physician and residency pipeline, could we not offer visas to physician immigrants who meet first world medical credentialing standards to deepen the supply and therefore support demand? If supply is the issue, we should fix the supple, not destroy necessary demand.

> could we not offer visas to physician immigrants who meet first world medical credentialing standards Basically, you are saying American trained doctors only then, as American doctors are much better trained. Because my experience is that a physician immigrant has to do the following: Receive ECFMG verification Complete missing medical education requirements Study a boatload! Pass US medical licensing exams 1 & 2 F…

> Basically, you are saying American trained doctors only then, as American doctors are much better trained.

Considering how much healthcare costs in the US and the quality of care received [1], I assert American doctors are not better trained, simply that they are more expensive and there are less of them per capita than other OECD countries [2] [3] [4]. I'm suggesting bypassing the undersized US doctor development pipeline until it is fully funded to produce enough doctors to meet demand and drive down costs.

https://www.ajmc.com/view/the-quality-of-us-healthcare-compa... ("A 2014 report from the Commonwealth Fund revealed continued trends that were along the same lines—despite the implementation of the Affordable Care Act (ACA) in the interim. In the report, the US “ranked last overall among 11 industrialized countries on measures of health system quality, efficiency, access to care, equity and healthy lives.” Significantly, the US was noted to have the highest costs while also displaying the lowest performance.")

[2] https://data.worldbank.org/indicator/SH.MED.PHYS.ZS?most_rec...

[3] https://www.fiercehealthcare.com/practices/how-u-s-stacks-up... ("When it comes to practicing physicians, there are only two physicians for every 1,000 Americans, nearly half the ratio of countries with nationalized public healthcare. Countries with nationalized systems saw the greatest increase in the number of physicians relative to their population.")

[4] https://www.medicaresupplement.com/content/global-healthcare...

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#453

Earlier quoted context omitted.

And this can really cause issues for people who are insured because if an insurance company decides not to cover something (very very common, even in-network) then the inflated price is what you end up getting billed for. That is until you call the hospital and find out there's all sorts of "sliding" prices etc... I had a procedure billed for one of these drastically larger "insured" codes which got denied based on t…

"I realized was that hospitals are largely subsidizing the cost of the uninsured by over-billing the insured folk's insurance companies." 1. You have to back up claims like this. 2. I imagine for-profit Insurance companies would love to blame their prices on the uninsured. 3. Many poor people actually have insurance in the USA. Even if they don't apply for it, insurance can be applied for after the fact. 4. The wealt…

1. All you have to do is look at the chargemaster flat files that have been coming out. There are literally two different columns for insured and non-insured procedure cost and for every hospital I've obtained a chargemaster flatfile for this is the case. Other comments in this thread have backed this up, and have even claimed their hospital's chargemaster had the non-insured pricing column hidden potentially in bad faith.

2. I mean, I have no idea but for-profit insurance companies aren't out there really blaming anyone as they're just a faceless corporate entity. I've only heard hospital staff and normal people blame the uninsured.

3/4... no - poor people don't have insurance. I've grown up around people who were not economically privileged/who were struggling and this is just 100% untrue that poor people can get insurance as you posit. I've had private insurance and it's just not something someone can afford if poor. And, if you're referring to things like "Christian Healthcare Ministries" they're straight-up scams. Outside of that, there is no way American restaurant owners, retail franchises, etc will cover an unskilled laborer's health insurance - that just does not happen here.

---

> I still don't *believe our healthcare costs are due to the uninsured.

When it comes to hospital billing - yeah. It is a huge thing that's baked into their SOP. See item #1 above.

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#454

Local hospital released this as an Excel spreadsheet (Chargemaster). They have a column called "Uninsured cash price." These prices are And, no, I don't think this was by accident as they have updated this Excel spreadsheet several times and only that one column is always set to 0 size.

And this can really cause issues for people who are insured because if an insurance company decides not to cover something (very very common, even in-network) then the inflated price is what you end up getting billed for. That is until you call the hospital and find out there's all sorts of "sliding" prices etc... I had a procedure billed for one of these drastically larger "insured" codes which got denied based on t…

Underpayment is a few percent of hospital revenues. It's a component of costs for sure, but only a small one.

https://www.aha.org/factsheet/2019-01-02-uncompensated-hospi...

My understanding is that you would usually pay the price set by the agreement your insurance has, even if they deny coverage of it.

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#455
post #402

Earlier quoted context omitted.

You've set up a nice little fallacy for yourself in the form of declaring people you don't care about as "edge cases." I'm glad you're acknowledging that your original claim of the problem of allocating heathcare for people is not "solved" though. Let me cut to the chase: a better system is probably one where competitive market forces are leveraged to drive down (actual) costs and drive up innovation where it is an o…

> You've set up a nice little fallacy for yourself in the form of declaring people you don't care about as "edge cases." I never said I don't care about anyone. This is a pretty simple trolley problem. One track has 1 million people tied up, one track has ten. I value the lives of everyone equally. > I took issue with your claim that universal systems are a panacea that solve all relevant problems I never said that.…

> Other countries have solved these problems.

> There is no silver bullet.

> On the contrary,

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#456

Earlier quoted context omitted.

Trade secrets don't prevent someone else from independently developing the same thing, or reverse-engineering the solution. Very few things can be successfully kept as trade secrets for an extended time. Moreover, patents do not preclude trade secrets and in most cases can only make things worse: If one expects to be able to maintain a trade secret for at least the duration of a patent, without independent rediscover…

Of course patents are preferable to trade secrets in the vast majority of cases. That's why I said trade secrets have many of the same the same problems, not that they are equivalent. The problem is that when patents are no longer an option trade secrets (or public funding) become essentially the only viable option to pay for the majority of drug research. If a drug is unique and desirable, forcing doctors, suppliers…

> Of course patents are preferable to trade secrets in the vast majority of cases.

At least we agree on that much. My point is that when the patent is preferable (in the vast majority of cases, as you say) it implies that a trade secret would not have been expected to last as long as the patent—which makes the patent strictly worse from the public's point of view. We've granted a 20-year monopoly in exchange for revealing information which would have otherwise become public, without restrictions, in less than 20 years.

Maintaining tight control over the distribution of the drug only gets you so far, especially when the underlying research is already public knowledge. Trade secrets, unlike patents, don't block independent discovery, and only the rarest and most expensive drugs would warrant complete control over the supply chain.

As for the incentive to perform the research, that ultimately comes from the patients desiring treatment, not the pharmaceutical companies. Eliminating the monopolies would not reduce the demand for treatments, though it would reduce the profitability of individual pharmaceutical companies.

> You can easily construct a counter example where a drug has a greater than 50% chance of remaining secret during the length of the patent, yet taking the patent has a greater expected value.

Yes, if you are not confident that you can keep a trade secret then the patent becomes the better option. (Isn't that what I said before?) "Greater than 50% chance" is not what I would call "confident". It doesn't change the fact that patents only have a positive net expected value to the recipient in the situations where the public is expected to lose by granting a patent rather than having the knowledge kept as a trade secret for a time. The interests of the applicant and the public are diametrically opposed; if the patent applicant wins, the public loses.

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#457

Earlier quoted context omitted.

> The kinds of easy issues you're talking about don't need to happen in a hospital. You can already go to an outpatient imaging clinic for an x-ray, a dermatologist's office to have a mole removed, or an urgent care to suture a laceration. Even better: clearly the market has proven that it's possible to offer these services with transparent pricing. Why can't hospitals keep pace? This also raises the question why pre…

>Even better: clearly the market has proven that it's possible to offer these services with transparent pricing. Why can't hospitals keep pace? 1. You shouldn't be admitted to a hospital for those minor clear-cut procedures. 2. Hospitals receive public funds to offset the costs of some services. 3. Hospitals are required to provide certain services regardless of the customer's ability to pay. >Lawyers have a predicta…

> 1. You shouldn't be admitted to a hospital for those minor clear-cut procedures. 2. Hospitals receive public funds to offset the costs of some services. 3. Hospitals are required to provide certain services regardless of the customer's ability to pay.

1. All of these simple procedures are part of hospital visits. If your leg is broken, you're going to get an x-ray. Most surgeries are scheduled, and those scheduled procedures also don't clear this bar. And again, we get into the question of why preventative care suffers from the same problems. Your position seems to be that once any part of the procedure becomes variably priced, there's no point in trying to price any other part of the procedure. That's a pretty big leap to me, that's not how other industries work. And hospitals don't even work that way, because they itemize their eventual bills to insurance companies.

And I guarantee that insurance companies are not saying "who cares about the individual procedures you performed or what a technician's hourly rate is, the whole thing is variable anyway so there's no point in justifying any of it, just charge us what you think is fair."

2/3. I'm not asking them to tell me what their rebates will be or what discounts they might give me, I'm asking them to tell me what the maximum amount is they want for a standardized procedure. Possible rebates or lower prices that they can't predict are fine. I want a max price for that specific item.

> For more complex services their estimates have enormous error bars.

And hospitals still can't even clear this bar, they can't even tell me what a procedure's price is including error bars.

If hospitals could price their services as well as lawyers, we probably wouldn't be having this conversation right now.

> Yes but do you have actual data that the benefits are worth the cost? Has it actually driven down health prices in the US overall? Was the additional complexity actually worth it?

To those people, to the people who reduced their bills, yes. Is your assertion that we should only be looking at aggregate benefits? Community health pools and charity drives haven't reduced health care costs overall, but they have helped individuals avoid bankruptcy, and I suspect those individuals are grateful they exist.

I'm also confused at what you mean by additional complexity. Are hospitals giving itemized bills to insurance companies or not? It's really not a big ask for consumers to want to be CC'd into that conversation that should already be happening.

> It's not a free market, and unless we are willing to make drastic changes to society, it never will be.

Then socialize it. If you want to argue that the free market isn't a good fit for health care, fine. But that's not really an argument for keeping prices secret, it's an argument for socializing health care and taking it off the free market.

Which, incidentally, if your position is that health care should be socialized, line-item pricing also helps with that because it makes it obvious that the pricing is screwed up. You're upset that line-item pricing doesn't solve everyone's problems, but you can't solve a problem until it's obvious that it exists. At the very, very least, itemized bills and transparent pricing show that a problem exists.

That, on its own, even if nothing else mattered, would make these regulations worthwhile. No entrenched system in the world ever changes unless you put pressure on it.

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#458

Earlier quoted context omitted.

Of course patents are preferable to trade secrets in the vast majority of cases. That's why I said trade secrets have many of the same the same problems, not that they are equivalent. The problem is that when patents are no longer an option trade secrets (or public funding) become essentially the only viable option to pay for the majority of drug research. If a drug is unique and desirable, forcing doctors, suppliers…

> Of course patents are preferable to trade secrets in the vast majority of cases. At least we agree on that much. My point is that when the patent is preferable (in the vast majority of cases, as you say) it implies that a trade secret would not have been expected to last as long as the patent—which makes the patent strictly worse from the public's point of view. We've granted a 20-year monopoly in exchange for reve…

>Yes, if you are not confident that you can keep a trade secret then the patent becomes the better option. (Isn't that what I said before?) "Greater than 50% chance" is not what I would call "confident".

Change it to any arbitrary likelihood below 1. The expected value of a drug during the length of the patent maybe arbitrarily greater than the expected value of a drug after that time period due to reasons other than duplication (alternative unrelated treatments etc..). If it is expected that drug will make nearly all of its total value during the length of the patent, then even a 1% chance of duplication means that the expected value of taking a patent is higher.

Such an extreme disparity between expected value during the patent length and after isn't even necessary when you factor in the additional costs of attempting to maintain a trade secret.

>It doesn't change the fact that patents only have a positive net expected value to the recipient in the situations where the public is expected to lose by granting a patent rather than having the knowledge kept as a trade secret for a time. The interests of the applicant and the public are diametrically opposed; if the patent applicant wins, the public loses.

This is wrong because it ignores the additional costs (both direct and indirect) of maintaining the trade secret.

>We've granted a 20-year monopoly

Minor point--most drug patents have an effective date of about 10 years because of the time it takes to bring a drug to market.

>Maintaining tight control over the distribution of the drug only gets you so far, especially when the underlying research is already public knowledge.

Without the potential benefit of patent protection, we'd almost certainly see research become less open to begin with.

>Trade secrets, unlike patents, don't block independent discovery, and only the rarest and most expensive drugs would warrant complete control over the supply chain.

Probably, but those drugs would become immensely more expensive, or the reward available to an individual company for developing them would go down. Every novel drug would likely warrant some extra level of control (and expense).

>though it would reduce the profitability of individual pharmaceutical companies.

The direct cost of maintaining trade secrets would effectively act as a tax on all pharmaceutical companies doing novel drug development. As would the direct cost caused by duplication of drugs during what would have been the patent protection period. Add in the indirect cost of decreased openness, and the only way to maintain the exact same level of drug research we have today without patents would be to increase public funding for drug development.

I think that's probably a better system to be honest.

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#459
post #356

Earlier quoted context omitted.

Not internal paperwork. Think in terms of industry wide collusion not a single insurance company. If lobbing or an industry group can drive up healthcare costs via say paperwork or regulations then every health insurance company is “forced” to raise premiums and as the maximum profit per premium ratio is fixed that also increases the total possible industry wide profit. Of course insurance companies are also in compe…

I think even in terms of industry-wide collusion, the push of an MLR cap would be to decrease (money spent on) paperwork. With R = revenue, P = profit, A = administrative expenses, and M = medical expenses, we have: R = P + A + M which we can rearrange a little bit to get P = R - M - A From the point of view of an individual company, clearly increasing our own expenses means less profit: P₂ = R - M - (A + δ) = P - δ…

[deleted]

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#460

Earlier quoted context omitted.

>Even better: clearly the market has proven that it's possible to offer these services with transparent pricing. Why can't hospitals keep pace? 1. You shouldn't be admitted to a hospital for those minor clear-cut procedures. 2. Hospitals receive public funds to offset the costs of some services. 3. Hospitals are required to provide certain services regardless of the customer's ability to pay. >Lawyers have a predicta…

> 1. You shouldn't be admitted to a hospital for those minor clear-cut procedures. 2. Hospitals receive public funds to offset the costs of some services. 3. Hospitals are required to provide certain services regardless of the customer's ability to pay. 1. All of these simple procedures are part of hospital visits. If your leg is broken, you're going to get an x-ray. Most surgeries are scheduled, and those scheduled…

>And hospitals don't even work that way, because they itemize their eventual bills to insurance companies. >Are hospitals giving itemized bills to insurance companies or not?

Hospitals can provide an itemized bill after the fact. Not before. They also go back and forth with insurance companies multiple times. It's not actually based on the costs to the hospital. The final itemized bill is the end result of complex negotiation. It isn't actually based on cost.

>"who cares about the individual procedures you performed or what a technician's hourly rate is"

Insurance companies don't care what a technician's hourly rate is.

>I'm asking them to tell me what the maximum amount is they want for a standardized procedure. Possible rebates or lower prices that they can't predict are fine. I want a max price for that specific item.

No surgery is standardized. If you literally want the max price, it's going to be so high you'll never be able to pay it. It won't help you. The individual items don't matter--they're fiction.

>Then socialize it. If you want to argue that the free market isn't a good fit for health care, fine. But that's not really an argument for keeping prices secret, it's an argument for socializing health care and taking it off the free market.

It's not. And it should be public. As long as it's not a free market, none of the normally price discovery mechanisms work at any level in the supply chain. There's no way to provide prices upfront. Any attempt to will fail is just a colossal waste of time. Any list of prices you see is going to be an elaborate piece of fiction.

>To those people, to the people who reduced their bills, yes.

Those people didn't actually reduce their bills because of itemized pricing. They would likely have been able to reduce them regardless. They negotiated with the hospital successfully after the fact the same way an insurance company would.

Hospitals are usually willing to negotiate a bill because they'd rather have some money than none. Whether that's knocking off a line item for $500 aspirin, or nocking 10% off off an opaque $5,000 bill makes no difference.

>Which, incidentally, if your position is that health care should be socialized, line-item pricing also helps with that because it makes it obvious that the pricing is screwed up.

Average prices for procedures can be calculated after the fact. They can be useful in the aggregate. For non commoditized services the averages aren't remotely useful for an individual.

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