Wouldn’t the public option, assuming it’s genuinely cheaper, simply be able to undercut the former monopolistic provider?
Yes, out in … the 'po … health care systems are monopolies covering multiple counties. If you get really lucky, you get a choice of two systems. I think I have 2 locally for most stuff; in our prior location, we also had 2 but not the same 2.
What do insurers do? Great question. From what I’ve ever seen, control costs isn’t really one of them. Even ignoring that the billed cost of a normal office visit has gone from $95 to $273 over the last 10 years, my insurer’s payment has gone from $48 to $127 in the same time. The billed cost of an MRI has doubled in the last 5 years; my insurer’s payments has “only” gone up 60%.
Isn’t cost control one of the benefits of Medicare, which providers scream about incessantly because they can’t wring lots of money from the cash cow? I thought that was one of the benefits of single-payer, not just “hooray, everyone gets free health care!”
Don’t even get me started on the misguided notion that health care providers offer “financial counseling” and will “assist people who can’t pay their bill.” They don’t, haven’t for a while, and have zero incentive to do so in the current legal environment - and that’s a huge incentive for them to raise costs.
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What amazes me is for those who have the insurance with the higher negotiated rate, their deductible and copays are larger as well.
If the hospital has a negotiated rate of 1200 and your deductible is 2000 with an 80/20 after then you pay 1200 and still have 800 left on your deductible. While if you have the insurance that negotiated 4000 for the same procedure they you pay your 2000 deductible plus 400 coins.
That sucks bigtime. And of course, neither you nor your company knows before hand or after for that matter, what you as the consumer will be paying.
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Is “your company” your insurer or your employer (who is subsidizing this). It seems like the insurer knows both the negotiated rate and the deductible.
The point of this rule is to start moving toward better price information.
The surprising thing in the examples the NYT piece highlights is that the insurers negotiated rates aren’t necessarily lower than the hospital’s cash rates.
Yep, that seems to be the assumption, but is that necessary? If the gov’t can decide how much hospitals charge Medicare, can’t it also decide how much those hospitals charge private pay patients?
I also live in the 'po. I’d like to sort out how many different providers we have, and how many are just different names for the same holding company. And, I’d like a convenient way to compare prices.
Depends on what you mean by “single payer” and “public option”.
Yes, Medicare dictates prices, that’s how it deals with monopolies. I think the gov’t could dictate prices charged to private payers, if it wanted to.
I’d like to see some deeper analysis on this. What I’ve seen so far (NYT) compared a handful of procedures. I wonder if (for example) Aetna is paying more uniformly, or if there is massive variance from one procedure to the next. I used to do some managed care analytics and, generally speaking, the big concern is how the contract performs as a whole with little regard to any individual CPT or DRG or what-have-you.
I suspect payers will scrape the data and try to figure out where they have room to negotiate lower rates. It’s still mostly a matter of who has more leverage in the negotiation, but this could be compelling data for a payer to bring to the table. There’s a lot more ROI in payers doing this than individual patients.
It would be interesting how many of the icd’s had an extremely small range of negotiated rates. Obviously and unsurprisingly, they are showing many of those that have significant ranges.
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I was wondering the exact same thing.
Everything I’ve ever seen on this suggests there’s a spread of rates between providers for a given services, and a spread of prices that insurers will pay for a given service. Whether it qualifies as large depends somewhat on personal interpretation, but the spread from low to high is generally over 100%. Frequently it’s (well) over 200%. There’s no consistency in either, and no one wants to stand up and say “wait a minute, something’s wrong, we should know better, we’re going to make this right and look out for individuals.”
I will say that I’m stunned the article mentions there are providers who offer a cash rate lower than what they bill insurance. (Whether that’s lower than what insurance pays, I don’t know.) Everything I’ve ever seen, save the chiropractor we use that we pay $36 cash for (vs. $82 billed to insurance, who’d kick it down to $55), is that the cash price is whatever the provider would bill insurance and they’ll offer at most a “modest” 15-20% discount - again, has to be paid in full which is sometimes unrealistic - which still ends up being higher than what the insurer would pay.
Will we ever see providers publish rates as a whole? Hell no. Until the punishment is incredibly harsh, they’ll ignore the mandate and pay whatever fine is assesed like it’s a tax, and pass that on as an additional cost.
I guess I’m even more confused by this since when I get my bill from my doctor or hospital it usually shows a billed amount, a provider discount, a provider payment and an amount I am responsible for. I can usually get this identified by service, if not directly from the bill, then from the bill combined with the EOB I get from the insurance company.
I’m trying to figure out if the billed amount varies by payor. I would expect that the billed amount would be invariable and they would then apply discounts based on the contract they have with the payor. And then they might offer some discount for cash which they may or may not display on the bill.
The billed amount typically does not vary, it’s usually determined by something called the ‘chargemaster.’ You can think of it as a table showing all of the procedures performed, drugs dispensed, and so on - everything that a hospital bills for - and the corresponding billed amount for each.
Then there is the allowed amount. That’s the payment amount negotiated by your insurance company - the amount that the hospital will actually get paid. Billed amounts are often 2-3x the allowed amounts (will tell you why if anyone cares). I assume these allowed amounts are what are being disclosed here but I didn’t see that called out (was reading fast, might have missed it).
The allowed amount is broken out into what the insurer pays and what you pay out-of-pocket. Which varies with your coverage, of course.
So then I’m surprised that the billed amount is not the Cash amount. So are you saying no one pays the Billed Amount and the hospital never expects to collect that amount?
Yeah, now you can explain a little about why the Billed Amount is often 2-3X the allowed amounts. Quick and dirty explanation is fine.
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They may try to make cash pts pay the billed rate but would negotiate it.
Chargemaster is high because, in most cases, if they should happen to bill less than the allowed amount, then the insurer would pay the billed rate. We agreed on $100 but you send me a bill for $80? Cool, I will just pay $80. So it’s a buffer.
There is also workman’s comp. For that, at least in some states, docs get full boat rates. I think the idea is it’s punitive, keep job sites safe or pay through the nose. I don’t think this is a ton of $$$.
I’ve also heard someone say that for uncompensated care, the hospital can write off the charged amount, but I’m not sure if that’s true.
There might be a bit more to it, I’ve never worked on setting chargemaster rates. Try to keep my nose out of accounting and revenue cycle when I can.
Yep.
The official rule might be “give consumers information”, but in practice it will mostly be
“give insurers information on what this provider has negotiated with other insurers” and also
“give providers information on what this insurer has negotiated with other providers”.
I expect the result will be lower variance.
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The hospital data isn’t very good yet because compliance hasn’t been high. There are startups already aggregating this data, but as long as the penalties for non-compliance remain only a few hundred thousand dollars per year, there will be huge gaps in the data because providers will eat the penalty rather than comply.
CMS is discussing increasing the penalty for non-compliance to scale with the number of beds up to $2M a year, but new rule has not been finalized yet.
Related thread:
Do I think the potential is there for prices to come down as disclosure increases? Perhaps. Am I optimistic? No, because it will require work and corporations are generally lazy when they don’t have incentives to control costs. As long as they can still increase premiums largely carte blanche, those incentives won’t exist.
That incentive to push down costs sure as hell won’t come from individuals. They typically rely on insurance to cover costs in some fashion, and in semi-emergency scenarios they’re not going to shop for the best price; they’re going to look for the closest provider that will treat the critical condition that exists.
A $2 million a year fine? That’s still a slap on the wrist. Make it mid-8 digits, and you’ll get someone’s attention. Make it 9 digits and you’ll have providers hiring people to fill out whatever forms are needed to provide that information.
The transparency rule doesn’t cover all medical procedures. It only forces transparency on “shoppable services” which are procedures that can be scheduled in advance.
I don’t work in this market so I’m not up on the pushing and pulling.
I assumed that insurer’s sell CEOs partially on the basis of low premiums. If there is real competition at the sale-to-employer level, then insurers have an incentive to get the lowest price. If they see other insurers getting better deals, they will have reason to push for lower charges.
Generally in all liability cases hospital bills are non-negotiable for the responsible party. In a past life I was an adjuster for Allstate. I would recommend that people that had been in accidents file their claims with their insurer. Basically we had to offer settlement for the full price of the hospital bill so any breaks they got from their insurer they would keep the difference. The insurer would then subrogate us for the amount they paid out.
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