Why healthcare is so expensive

[MillCreek]

http://vitals.lifehacker.com/why-health-care-is-so-expensive-1775781692?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+lifehacker%2Ffull+%28Lifehacker%29

Not a bad article, in my view.  I would add only that for many aspects of healthcare, it is virtually impossible to shop around by getting a price or cost estimate.

[Firethorn]

Not a bad article, in my view.  I would add only that for many aspects of healthcare, it is virtually impossible to shop around by getting a price or cost estimate.

My brother, who was without healthcare insurance for a while, discovered that there's something of a 'darknet' when it comes to healthcare in his area.  You find a doctor willing to see you without having insurance for cash up front, and he has contact lists of the labs and specialists which will take cash up front, etc...

My brother was able to routinely negotiate cash up front payments ranging from 50-70% less than what the insurance companies would have to pay.  90% discounts happened, but were rare.  He rarely had to match the insurance cost. 

To me, that represents a massive opportunity to cut costs.

[Brad Johnson]

Locally we've had a rash of franchise ERs pop up. At least five within a mile of my house. People are suddenly realizing that they are most definitely NOT your average neighborhood BooBoo Stop. How? The bill.

They are medically classified as an emergency room. As such they bill at ER prices even though they give the appearance and treatment options of your garden variety minor emergency clinic. It's become such an issue for unsuspecting patients that the whole industry is getting a major stinkeye from state.gov types. It's one of the few times I'm actually gonna encourage it as most physicians buying into the franchise do it with full knowledge of the intentional deception. Locations are designed and located to give the appearance of a run-of-the-mill walk in clinic, luring unsuspecting customers into what could easily result in an untenable financial situation.

Brad

[Kingcreek]

Healthcare has become hugely expensive and ever more difficult to navigate.
Currently fighting a claim with doctor in network, hospital in network, anesthesiologist (had no control over that aspect of care) OUT OF NETWORK $3600 for a 40 minute procedure!

[Brad Johnson]

My brother was able to routinely negotiate cash up front payments ranging from 50-70% less than what the insurance companies would have to pay.  90% discounts happened, but were rare.  He rarely had to match the insurance cost. 

In-full cash discount is common but paying less than the insurance billing amount is not, so much so that I'm wondering if your brother is confusing insurance-pay amounts with patient-billed amounts. By that I mean maybe he thinks the insurer pays what patient billing reflects, not knowing that insurance billing is significantly less than patient billing? The 50-70% discount is kinda telling as that's roughly the discount range insurance providers get. They get it because they've negotiated a lower price based on the healthcare provider's surety of payment recevied versus the "maybe" that is patient account receivables. It would be easy for the unaware to confuse things.

Brad

[Brad Johnson]

Healthcare has become hugely expensive and ever more difficult to navigate.
Currently fighting a claim with doctor in network, hospital in network, anesthesiologist (had no control over that aspect of care) OUT OF NETWORK $3600 for a 40 minute procedure!

Have you contacted your state insurance and healthcare regulatory agencies? If the healthcare provider didn't verify the anesthesiologist was covered under your policy, or gotten your consent to use an out-of-network provider as part of an in-network covered procedure, I could see the state board of insurance and/or healthcare taking a interest as that seems a huge ethics violation. They usually take those quite seriously. Keep in mind this is predicated on you having presented your insurance to the healthcare provider in advance of the procedure.

Brad

[MillCreek]

^^^It is common for radiologists, anesthesiologists, and emergency medicine physicians to be very selective about the insurance plans they take, and thus they are 'out of network'.  The typical patient has no way of finding out about this or even being able to select the provider, and then they get hit with a massive bill.

If you are admitted through the ED with crippling abdominal pain for emergency surgery, are you going to ascertain if the ED doc and the anesthesiologist are 'in network' and do you plan to transfer yourself to another hospital if they are not?  This is not practical for most.

[Mannlicher]

two biggest reasons for the high cost of health care is the enforced lack of competition, and the cost component of the legal community.

[Firethorn]

two biggest reasons for the high cost of health care is the enforced lack of competition, and the cost component of the legal community.

The prior more than the latter, I think.

A bigger one than legal would be the insurance companies themselves. 

From what I've heard about my brother, he can often get things cheaper than even the insurance companies because cash up front is faster and safer than insurance, where they might have to settle for less and have it take 6 months to get even that.

That being said, after that I'd tend to say that regulations, whether good or bad, would take place #3.  Legal stuff would take #4 even with noting 'defensive medicine' costs far more than just looking at a doctor's insurance premiums.

In-full cash discount is common but paying less than the insurance billing amount is not, so much so that I'm wondering if your brother is confusing insurance-pay amounts with patient-billed amounts.

What do you think it is when he sees a doctor for less than the common insurance copays?

[Kingcreek]

Apparently, ObamaCare (aka the unaffordable and we don't care act) didn't fix anything.

[Firethorn]

Apparently, ObamaCare (aka the unaffordable and we don't care act) didn't fix anything.

sure it fixed something!  The ability for our healthcare plan companies to make even bigger gobs of money!

[lee n. field]

Apparently, ObamaCare (aka the unaffordable and we don't care act) didn't fix anything.

Not.  One.  Damn.  Thing.

Every time I see my primary care dr., he ends up ranting about the whole situation.

[grampster]

two biggest reasons for the high cost of health care is the enforced lack of competition, and the cost component of the legal community.

Add to that the horrendously expensive Taj Mahal buildings put up by the hospitals.  Where do you suppose that $ comes from.  Yeah, some rich folks endow some of the money to get their name on the building but that only amounts to a small portion of the cost.  I'm 72 years old and one of the primary hospitals here in Grand Rapids has been under continuous construction since I was 18 years old and dated the daughter of the then CEO of the hospital.

[Scout26]

Add to that the horrendously expensive Taj Mahal buildings put up by the hospitals.  Where do you suppose that $ comes from.  Yeah, some rich folks endow some of the money to get their name on the building but that only amounts to a small portion of the cost.  I'm 72 years old and one of the primary hospitals here in Grand Rapids has been under continuous construction since I was 18 years old and dated the daughter of the then CEO of the hospital.

Yeah, this.  A the Cancer Center where I had chemo (and still go to see my oncologist), they are in Phase 3 or 4 of a re-design of the building that' only 6 or 7 years old.

Seems no one bothered to ask the Chemo Nurses and techs how they wanted the rooms for each patient setup, nor would it appear that they did any measurements of the chairs they use.   Oh, don't misunderstand, the building is all artsy-fartsy, art-deco, meets post-modern, with some Frank Lloyd Wright on Acid thrown in for good measure.  I'm sure it probably won some fancy Architectural or Design Major Award.   However, the rooms are not laid out to be nurse or patient friendly/ergonomic.

And they keep tearing it up to fix it.

[Northwoods]

Yeah, this.  A the Cancer Center where I had chemo (and still go to see my oncologist), they are in Phase 3 or 4 of a re-design of the building that' only 6 or 7 years old.

Seems no one bothered to ask the Chemo Nurses and techs how they wanted the rooms for each patient setup, nor would it appear that they did any measurements of the chairs they use.   Oh, don't misunderstand, the building is all artsy-fartsy, art-deco, meets post-modern, with some Frank Lloyd Wright on Acid thrown in for good measure.  I'm sure it probably won some fancy Architectural or Design Major Award.   However, the rooms are not laid out to be nurse or patient friendly/ergonomic.

And they keep tearing it up to fix it.

But do they have the machine that goes "Bing!"?

[Scout26]

Yes.  But there's no space in the patient rooms for them.  (IV pumps). 

[Ron]

The answer to the stated question is

Bureaucracy

[tokugawa]

Open pricing and competition would cure it.
 When you cannot get a price for a procedure, you are buying an unknown. When a third party (the insurance co) is interjected, it is even harder. Is there any other product where you have to pay an unknown price?

 Why is it illegal to legally purchase a legal  drug outside the country for 1/10th the cost here, and import it for your own use? That indicates a cartel type behavior. 

 But even a criminal cartel would agree on price and terms before concluding a deal.

 I had a simple chest x ray -the lady could not tell me what is was going to cost. How many times a year do they do this- 500? 5000? 50,000? To not be able to show a fixed price is BS. 

 The medical profession is filled with many good people. But the financial aspect is run in a way that should have the companies involved all run up on RICO and antitrust charges.

[makattak]

Why is it illegal to legally purchase a legal  drug outside the country for 1/10th the cost here, and import it for your own use? That indicates a cartel type behavior.  

Because other countries are ignoring patents (or threatening to do so) to get prices that low?

So, yes, it is protection going on. The kind actually encouraged by our constitution.

(There are also FDA issues, but that's not the main reason for price disparities, but rather for absence of drugs that are available in other countries.)

[lupinus]

^^^It is common for radiologists, anesthesiologists, and emergency medicine physicians to be very selective about the insurance plans they take, and thus they are 'out of network'.  The typical patient has no way of finding out about this or even being able to select the provider, and then they get hit with a massive bill.

If you are admitted through the ED with crippling abdominal pain for emergency surgery, are you going to ascertain if the ED doc and the anesthesiologist are 'in network' and do you plan to transfer yourself to another hospital if they are not?  This is not practical for most.

I've offended wondered why, when in the hospital, one can't just get a bill from the dang hospital instead of everyone and their brother. Pay the hospital. The hospital pays employees. Call it a friggin day. Maybe the surgeon when your his patient and just using the hospital.

[lupinus]

Open pricing and competition would cure it.
 When you cannot get a price for a procedure, you are buying an unknown. When a third party (the insurance co) is interjected, it is even harder. Is there any other product where you have to pay an unknown price?

 Why is it illegal to legally purchase a legal  drug outside the country for 1/10th the cost here, and import it for your own use? That indicates a cartel type behavior. 

 But even a criminal cartel would agree on price and terms before concluding a deal.

 I had a simple chest x ray -the lady could not tell me what is was going to cost. How many times a year do they do this- 500? 5000? 50,000? To not be able to show a fixed price is BS. 

 The medical profession is filled with many good people. But the financial aspect is run in a way that should have the companies involved all run up on RICO and antitrust charges.

That's the funny bit.

Providers not relying on insurance often do exactly that. There's a large number of docs in my area going to the "pay a fixed monthly fee and make an appointment when you need me" model. Short of a big procedure or something no additional cost. They've even got negotiated cash prices with the local medical imaging places and what not, with up front pricing. And a lot of the imaging places and stuff have a fixed cash price as well, and often advertise certain screenings with a clear advertised price.

It's funny how simplified the price gets when you simplify the paying/billing aspects and kick the bureaucracy aside.

[Firethorn]

Because other countries are ignoring patents (or threatening to do so) to get prices that low?

You mean like Canada, where I think roughly 90% of the drugs come from?  I think Mexico is the remaining 9% or so.

Not many are getting drugs all the way from Africa and India - which are the places ignoring patents.

No, what it is is that Canada, Mexico, and such negotiate prices, and get much better ones than we do because, in extremis, they're willing to simply not buy the drug.  I'll note that given recent history with new drugs, that sticking with the older ones probably saves lives, on average.

I've offended wondered why, when in the hospital, one can't just get a bill from the dang hospital instead of everyone and their brother. Pay the hospital. The hospital pays employees. Call it a friggin day. Maybe the surgeon when your his patient and just using the hospital.

I agree.  I turn my truck in to the dealer to get work, I don't get separate bills from the dealership, the engine mechanic, the body mechanic, and the dude who washes it off and vacuums the interior for me.  I get A bill.

It's funny how simplified the price gets when you simplify the paying/billing aspects and kick the bureaucracy aside.

And it's even cheaper most of the time.  Doctor's offices today often employ as many people in billing as they do in actually providing healthcare.  Shed insurance, go to cash up front, shed all those people, and the prices you can charge and still make a reasonable profit drop drastically.

Hell, there were articles about doctors doing this back in the '90s.  Where doctors found that without all the rigamarole required by insurance companies, that they could charge prices below that of the co-pays and still make money.  People WITH insurance would come see them because they could be seen the same day and that $40 charge was $10 cheaper than their $50 copay.

[makattak]

You mean like Canada, where I think roughly 90% of the drugs come from?  I think Mexico is the remaining 9% or so.

http://thehill.com/policy/finance/199090-pharmaceutical-companies-express-concerns-about-canada-revoking

No, what it is is that Canada, Mexico, and such negotiate prices, and get much better ones than we do because, in extremis, they're willing to simply not buy the drug.  I'll note that given recent history with new drugs, that sticking with the older ones probably saves lives, on average.

Survival rates in the U.S. versus Canada don't support your assertion.

I will agree that people are more willing to purchase expensive drugs in the U.S. because they are insulated from the full cost. We have a horrid system in this country that is neither a free market nor a authoritarian one. We have government bureaucracy upon private bureaucracy upon government bureaucracy upon government dictates upon private dictates.

What we have is horribly inefficient. There are any number of ways to improve, but in all, someone's ox will get gored and, likely, we would end up with a worse outcome from "fixing" it.

For example, the VA is our likely model for "single payer."