Important Changes in Healthcare Billing and Price Transparency

by James C. Sherlock

A lot happened right before the New Year to change the rules for healthcare billing and pricing.

Balance Billing

In one of the events, new federal law buried in the end of year, 5,600-page $900 billion COVID-19 federal relief legislation bans balance billing to patients.

“Surprise” billing for the balance due after an insurance company pays its contracted providers occurs when patients are presented with unexpected bills from out-of-network providers who practice in in-network hospitals.

ER physicians in particular have been very active in forming practices that contract with hospitals, effectively reducing the supply of ER physicians available to work as hospital employees.

I personally don’t have any problem with ER doctors doing that as long as they do not violate anti-trust laws. They should receive what their labor is worth. A key problem is that anti-trust law enforcement in the business of healthcare is non-existent in Virginia.

In the absence of anti-trust violations by the physician practices, it is my view that the hospitals, not the insurance companies, need to bring them under contract. If a hospital is in-network, it is logically up to the hospital to ensure all of the services provided by the hospital are in-network and negotiate with insurers for the package of delivered care, not parts of it. Any other approach guarantees chaos.

The Kaiser Family Foundation has reported that more than one-sixth of in-network hospital stays result in surprise bills. Many patients cannot pay them and they go into collection.

The new law will prevent those bills from being presented to patients. It instead requires providers and insurers to negotiate a settlement in back room deals. The costs of the negotiations and settlements will be reflected in increased consumer insurance costs.

Industry lobbyists from both insurers and providers had inserted into the law a provision that prohibited arbitrators from considering Medicare reimbursement rates when determining a price compromise.

So, while that law will eliminate lump sum surprises for patients, it will do nothing to actually lower the cost of healthcare.

There is nothing in federal law that prevents Virginia passing legislation that requires hospitals to ensure all services provided in their facilities are in-network as a pre-condition for negotiating with insurers.

Such a law would eliminate balance billing entirely, eliminating the costs associated with the new balance billing negotiating regime.

It won’t happen, because the Attorney General will not enforce the Virginia Antitrust Act against either the physicians’ practices or the hospitals and most of the GA won’t cast a vote that goes against hospital wishes.

Price transparency

In the other end-of-year development, the United States Court of Appeals for the District of Columbia upheld on 30 December a District Court ruling that allowed implementation of major healthcare price transparency rules published by the Department of Health and Human Services. The judges ruled firmly against the hospital industry’s every argument in affirming the district court’s decision.

That ruling is a really big deal if adequately enforced.

The key provision of the regulation that was upheld requires all hospitals to publish their actual rates, not the “retail” prices they report to Medicare. They will be forced to reveal for each procedure the actual cash prices they received from cash payers and their reimbursements from each insurance company including Medicare and Medicaid.

This data will enable consumers to shop for the best price in their region or calculate how much they might save by traveling to another region of the state for an elective procedure. In its raw form, the data will be too extensive and complex for 95% + of consumers to use.

However, the regulation also requires hospitals to publish it in machine readable format, so that third party companies can aggregate it and present it to consumers the same way we can now price shop online for nearly anything.

It will also permit companies that are large enough to shop hospitals in locations they have significant numbers of employees (think Amazon in Northern Virginia) and cut cash deals for their employees for selected procedures for which the company will pay cash. Some of the largest companies including Walmart are doing this already.

There are also major implications for vertically integrated healthcare companies that own both hospitals and insurers, including my personal favorite, Sentara. Those companies will have to reveal what their insurance arms such as Sentara’s Optima Health are paying to their own hospitals as well as to competing hospitals for the same procedures. I can’t wait.

It will also show how much size matters in price negotiations.

The dominant hospital systems in a region get higher payments from commercial insurers than smaller competitors. The insurers with the largest patient populations in a region get lower prices from hospitals.

Makes sense, but it is the scale of those discounts or premiums that will amaze the regular citizen.

You will see in a real example that I will provide that those differences in prices paid can approach 100%. A small insurer can pay twice as much to a large hospital system as a large insurer for the same procedure. An independent hospital or small chain can get half the reimbursement as a large, regionally dominant hospital system from the same insurer.

Then there is clash of titans — the biggest regional hospital system negotiating rates with the biggest regional insurer. Finally, there is the question posed above of how hospitals and insurers under the same management share the money. All of that must now be revealed.

This too can be simplified by the General Assembly.

Virginia already collects all of the required price transparency information in its all-payer claims database (APCD). Virginia law currently restricts that information from being revealed by the state’s data manager, vhi.org. A change in the law would let the state collect and publish the data centrally with no additional effort by the hospitals other than a link to the state data on their websites.

The Department of Health could ask for a waiver from HHS to publish the data centrally, relieving each hospital of the responsibility and saving very large amounts of money in individual IT investments and ensuring coherence of the presentation of the data to the public and to aggregators.

Next

I will lay out the provisions of that newly upheld price transparency regulation, a Virginia example of compliance and its implications for cost containment in my next column.

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74 responses to “Important Changes in Healthcare Billing and Price Transparency

  1. I had to have a “procedure” done recently – and I was influenced by what I’ve been reading lately including from Sherlock.

    I asked for an up-front estimate of the procedure and there was shock and surprise, the lady said ” Almost no one does that if they have insurance”!

    Then I asked if there were things like the anethesiologist , that were not covered. They did not know…would try to find out for sure but said they would not balance bill me. They WERE AWARE of that issue.

    There are stories of Hospital systems that are gobbilng up as many local physcians and medical providers they can to be associates in their system as a way to limit/reduce competition from independent providers.

    Interesting article: ” How a hospital system grew to gain market power and drove up California health care costs
    Sutter Health is in the midst of a lawsuit for business practices that drove up health care prices for Californians.”

    https://www.cbsnews.com/news/california-sutter-health-hospital-chain-high-prices-lawsuit-60-minutes-2020-12-13/

    So I have to ask, is the solution to this to have government decide prices? And beyond that, we expect government to decide what is or is not a proper competitive market ? This would be the very same government that is railed about in BR for incompetence and bucreacratic idiocy?

    • Good questions, Larry.

      First, antitrust.

      Yes the hospitals are gobbling up physicians practices, but much of that is to control referrals, not to make money on the physicians practices themselves.

      As for the war between independent physicians trying to maintain their independence (see the ER physicians’ revolt) and the hospitals’ attempts to thwart that attempt, it is absolutely the government’s responsibility to determine what is a “proper competitive market”.

      You are right to ask, because Virginia’s Attorney General has seldom taken on that responsibility, even though we have a Virginia Antitrust Act that is supposed to govern anticompetitive activity.

      This represents the long-standing problem of the dominant influence of the hospital lobby in Richmond. The Commonwealth, through the hospital-dominated administration of Certificate of Public Need law, has build regional hospital dukedoms in nearly every MSA in Virginia except Richmond. COPN is the single most valuable special interest law in the history of the Commonwealth. Nothing else is close.

      As a secondary effect of COPN, the dukes rule. They control with political power and donations not only the Governor and a majority of the General Assembly, but also the Attorney General. The chances of the current AG enforcing that law in the healthcare industry are exactly zero.

      As far as the government – state or federal – controlling prices, we have massive examples of that. The federal government controls Medicare prices paid and the state government control Medicaid prices paid.

      That government systemic its current form and at its current costs depends entirely on private insurance picking up the price shortfalls of the government programs to maintain a health system. Those that think “Medicare for All” will result in Medicare prices simply do not understand that fact.

      I understand that there will be a large reduction in overhead in a single payer system, but much of the cost of administration of our current complex payments system has been automated. Which is precisely why HHS can ask the hospitals to produce such fine-grained datasets.

      So no, I don’t think the solution to this is for the government to decide prices, but rather, as reflected in the HHS rule, to provide transparency – sunlight as a disinfectant.

      We’ll know in a year or two if the rule works if it escapes repeal by the Biden administration. In the meantime, we can enjoy the new information from those who provide it. It is my prediction that Sentara will decide to pay the fines rather than open its books.

      • “That government system i[n] its current form and at its current costs depends entirely on private insurance picking up the price shortfalls of the government programs to maintain a health system. Those that think “Medicare for All” will result in Medicare prices simply do not understand that fact.” Yep! That is what scares me. Medicare pricing only works thanks to bureaucracy overlaid by a private ‘market priced’ healthcare network that redistributes the shortfall. Expand the portion that’s Medicare priced and you shrink the portion that is ‘market priced’ and the amount to be redistributed gets bigger and gets spread over a smaller payee base — among other problems. Medicare pricing reform is a huge problem that we are way, way overdue to tackle. IMHO this is one of the great failings of the Republican Party — given the past decade to come up with alternatives to the ACA (which is far more than an insurance scheme), the GOP has chosen instead to go down the political rabbit-hole of repeal, i.e., opposition for opposition’s sake, a posture that’s unquestionably an obstacle to practical bipartisan solutions to anything.

        • “Medicare for ALL” seems to work just fine in most all other developed countries, no?

          We have a problem in that proposed solutions in this country are always characterized as taking something away from others.

          If someone things that is true then they really don’t believe there are other valid ways to control costs – everything that helps one “takes” from others.

          • You are correct: that “zero-sum,” transactional view of how to fix difficult social problems cannot contemplate anything good coming from “win-win,” centrist, consensus politics. When it’s all about power, the powerless among us suffer.

          • Who among us would deny what we have to someone else if we did not earn it ourselves but claim others deserve it less?

    • “So I have to ask, is the solution to this to have government decide prices? And beyond that, we expect government to decide what is or is not a proper competitive market ? This would be the very same government that is railed about in BR for incompetence and bucreacratic idiocy?”

      Larry, you always go to a “government deciding” pricing proposal. The Sutter Health article is really about government’s failure to act to maintain competition so there are market pressures on pricing. The two factors there are 1) allowing misuse of the not for profit advantages to stifle competition and 2) failure to act to prevent market consolidation and development of local monopolies.

      Some recent analysis showed that independent systems acquired by systems raise prices by about 18% after the merger on average and even higher than that when acquired by larger systems like Sutter. Even adjacent systems not involved in the merger raise prices by about 8%.

      • Izzo – it was a question I asked, right?

        😉

        ” The two factors there are 1) allowing misuse of the not for profit advantages to stifle competition and 2) failure to act to prevent market consolidation and development of local monopolies.”

        and so I ask again – this is something we trust the government to do competently, the same government we also say is incompetent?

        😉

        Is there some kind of accepted standard – agreed to by companies and economists with regard to what “misuse of non-profit status” is and what is the “correct” – “market consolidation”?

        It just seems like the way the market “works” is pretty complex and evolves and the government is often 2 steps behind market innovation.

        I wonder if the government actions actually might muck things up.

        It’s not like way back when – when Standard Oil was doing it’s thing – it was a whole lot simplier and easier to understand what was going on.

        Now business and corporations are more like shape-shifters…

        Does the government have in-house the level of expertise it needs to really understand modern markets?

        • The day-to-day work of antitrust enforcement like any other type of law enforcement is a government job. There is no private source for antitrust enforcement other than private suits for recovery of damages.

          Private suits, like government suits, have to navigate the fact that the Commonwealth of Virginia established our regional provider monopolies and allowed them to run health insurance operations under the same management.

          Monopolists have to be convicted of illegal use of these monopolies to control the market, not just the existence of the monopolies themselves.

          It can be done, but it is the job of the federal and state governments to do it. For the federal government to sue for antitrust violations in Virginia, they have to discount the fact that the state is on the side of the monopolies. Our AG could and should sue under state antitrust law, but he won’t. The last AG to do that was Bob McDonnell when he sued to block the expansion of INOVA.

        • Larry, your conclusion is a non sequitur. The Sutter 60 Minute piece you cited was about an antitrust lawsuit. You then ask if the government should set prices. The government’s responsibility to maintain fair competition. It hasn’t been doing that.

          • Let me explain. Over time, more folks, especially Conservatives have argued that Government is not competent in doing things like public education and health care, interfers too much in markets with regulation, and some argued that the concept of anti-trust was becoming obsolete.

            The 60-minute program did a good job of laying out how a hospital sysetem was able to build provider a provider network that made them the only providers of some specialities in their region. That, in turn, gave them the upper hand in negotiating prices and insurance reimbursements.

            The government now seeks to impose it’s own rules and regulations on that market.

            Isn’t that counter to Conservatives views that the government is incompetent and a failure when it gets involved in markets and regulation for things like pollution?

            Why is the govt considered competent in this area when we say they are not in other areas?

  2. You can’t wait? My tongue was hanging out when I read the first sentance before I even got to Sentara. As a vocal supporter of Chesapeake Regional, and the smaller NC hospitals near the region, I’m happier than a pig in mud at this point.

    “There are also major implications for vertically integrated healthcare companies that own both hospitals and insurers, including my personal favorite, Sentara. Those companies will have to reveal what their insurance arms such as Sentara’s Optima Health are paying to their own hospitals as well as to competing hospitals for the same procedures. I can’t wait.”

    • Read my note above. Sentara is currently in violation of the rule. It is my prediction that Sentara will decide to pay the fines rather than open its books. It and the other powerhouses will try to get the Biden administration to revoke the rule. We’ll see how that goes.

      • Perhaps the law needs to change to increase the fines to the point that it is not “profitable” to simply pay them and still refuse to open their books.

  3. For years I had a good dentist. He was always straight with me. Then, his practice was bought by a group but he stayed on. I needed an expensive procedure not covered by insurance. I explained this and he gave me a good price. I went through it and started to pay. Then the practice billed me for nearly $500 that had never been discussed. “That’s the way insurance works,” I was told.

  4. This is a war between elephants and we poor patients are just the goo between their toes….Watch from a safe distance. I won’t be surprised if Biden’s people do not reverse some of what Trump’s team was trying to accomplish with those orders just backed up in the court. Larry is right that government can make it worse quite easily. I do think full transparency would really help, which is why they resist.

  5. “The new law will prevent those bills from being presented to patients. It instead requires providers and insurers to negotiate a settlement in back room deals.”

    What does that mean? Won’t the in-plan insurers cave telling the patients that the hospital used out of plan providers? Unless the insurer is going to cover the out-of-plan providers’ costs, what motivation do they have to negotiate?

    Am I missing something or is this as useless as it sounds?

    • All that the new law ensures is that the bill is not presented directly to the patient. While that is good, it does not deal with the problem, which is lack of competitive markets due to lack of anti-trust oversight. If the hospitals, the physicians practices and the insurers were all under an anti-trust microscope, they would work it out with some consideration for the consumer.

      In the absence of anti-trust oversight, I think they will all tire of the government-mandated back room negotiations and work out an arrangement where everyone wins but the rate payers.

      • Sorry to be dense. So, I used to get a bill from the out-of-plan provider. Instead, I’ll get a bill from my insurer with a huge copay / uncovered amount. Why is this any better?

        • You are not dense.

          The bill you used to get will be shared by provider and insurers in some ratio to be negotiated among them.

          The costs of that will be socialized – reflected in increased premiums, co-pays and deductibles, not in one-time surprise bills.

    • re: ” This is a war between elephants and we poor patients are just the goo between their toes.”

      Indeed. 🙂

      re: ” Am I missing something or is this as useless as it sounds?”

      And agree.. This is a law designed for elected to get credit but in actuality not a thing actually changes much.

  6. I applaud Capt. Sherlock’s relentless pursuit of these issues. However, the problem in Virginia is the unlimited campaign contributions made by special interests. The few honest efforts to rein in this abomination by state politicians like Chap Petersen have been quickly shot down in bi-partisan manner. Maybe it’s time for the deeply underdog Republican Party in Virginia to adopt campaign contribution limits as a policy plank. I, for one, would love to watch Terry McAuliffe squirm when asked why he supports continued unlimited campaign donations.

    • I in turn applaud your idea. There are at least 10 core ideas that Republicans could adopt in Virginia that would make the party’s candidates competitive, but the way that party selects candidates in conventions rather than in primaries ensures that the candidates that play to the right wing of the party, which is who shows up at conventions, is nominated and loses. I have never been sure how to turn that around.

      • If the hospitals have influence in Richmond like Dominion does, we’re all flapping our gums…

        • They have more influence that Dominion. Dominion is forced to adjust to new state policies, like green energy. The hospitals prevent new state policies from interfering with their business. No adjustments necessary. These are federal laws and policies of which I wrote, not those of the Commonwealth.

    • You mispelled “prank” as “plank”

      > Maybe it’s time for the deeply underdog Republican Party in Virginia to adopt campaign contribution limits as a policy plank

  7. I don’t remember and probably didn’t know all the details, but early 2000s, my secretary’s son broke his leg. It was rather a severe break requiring pins and all manner of stuff.

    The first night, a doctor walks in to the room, picks up the chart, scans it and asks, “Do you have any pain?” Then leaves.

    He was “out-of-network” and hit them with a $1200 bill. When my secretary complained to the insurance company they decided to check this doctor out. He had admitting privileges but was not in ANY insurance network. Going to Sentara and visiting random patients was how he made his money.

    Actually, just for the fun of it, I’ll call her and ask whatever came of the event.

    • If only we had an Attorney General in Virginia to sue such persons out of business or, if they ever discussed that scheme with anyone, add conspiracy and turn it over to the feds. Pretty much would eliminate the scheme.

  8. If you REALLY understood how the hospitals, doctors, and insurace companies fleece the public, there’d be a contract executed on you within an hour.

  9. Virginia has its own version of legislation eliminating surprise billing. The 2020 Session enacted it last year–HB 1251. https://lis.virginia.gov/cgi-bin/legp604.exe?201+sum+HB1251&201+sum+HB1251

    I don’t know enough about this subject to determine which is best–the Virginia law or the new federal law. I suspect the Virginia law is better for the consumer.

    As for pricing transparency, I have my doubts about how much benefit that is going to be. If one is in a car wreck and is being rushed to hospital in an ambulance, one is not in any shape or mood to compare ER prices of the various hospitals in the region. One goes to where the ambulance takes one. And that assumes there is a choice. In most regions of the Commonwealth, residents are lucky to have one hospital nearby, much less a choice of hospitals. For example, if a resident in Halifax County wants to have a colonoscopy, he either gets it done in the hospital in South Boston (Sentara-related, by the way) or he has to travel to Danville, Lynchburg, Richmond, or Durham. Speaking of colonoscopies, I need to have one soon. If my regular GI doctor, whom I really like, only does these procedures at St. Mary’s, I don’t have much choice. Furthermore, if my insurance covers everything above the co-pay, why should I care if I go to St. Mary’s or Chippenham or some other hospital which may be cheaper? Finally, hospital pricing is so opaque with all the deals with multiple insurance companies and various items that could show up on a bill ($15 for a bandage) that the consumer will find it exceedingly hard to price-shop.

    • So Dick is on to the issue. For elective procedures, one might be able to “shop” but even then it’s not easy. As I had related earlier, on my elective procedure, I actually asked them for an up-front price and they said it would be “hard” because even with an elective procedure – different things might occur depending on what they found during the procedure.

      They pretty much said there was no way they could give an exact number and even a range would take some time to calculate.

      Even if they could or would, then what would you do? Go to other hospitals and try to get what – a comparative bill?

      And even then, at that point, it’s all about price – not quality or competence, etc…

      you’re basically “shopping” as a fairly ignorant consumer…. not an informed one.

      • Third party price aggregators will create online services to help consumers shop for both insurance and hospitals for electives. That will come fairly soon as a market response to the new information.

        It will be like shopping online for tires at that point.

    • Pricing transparency is for two things:
      1. so the consumer can shop for elective procedures and health insurance
      2. so that pricing behavior is exposed, subjecting it to public scrutiny.

      Both should bring prices down or slow their rise.

      • If you don’t know what exactly you are going to buy – even if you know prices…

        How many people could go down a list of things associated with a medical procedure and understand what they are and how much they should cost?

        The average person will not have a clue what most things are on an itemized medical bill..

        This is a little like looking at two car models and the radio in one cost $100 and in the other $150 and the answer is they’re “different”?

        And would one item on an itemized list send you to another provider that charges less while something else is more?

        It’s a quagmire.

        Only a doctor could look at such lists and make informed choices.

        If a procedure is to take a look-see and do nothing or the look-see shows a growth that has to be removed?

        The theory just doesn’t work in the real world for a lot of things. It might work for simple things like root canals or removing a wart or whatever but so many other procedures generate multiple pages of itemized charges.

        • Example. My doctor told me I needed a hip replacement. That is a very expensive procedure. If I had commercial insurance with a co-pay, I would find perhaps $10,000 difference in the DRG (diagnosis related group – all of the things that go with the procedure – which continue to concern you) package price between hospital A and hospital B in my area for my insurance. If I had a 20% co-pay, that would be a consideration. If I had a big deductible, I would make an even bigger difference. That less expensive hospital would be glad to recommend a surgeon for my procedure if mine does not practice there.

          The biggest effect might be in my selection of an insurer. If my current insurer paid higher prices across the board for procedures in my local hospitals (and you will find very large differences in those prices), I might switch insurers to the one that paid less even he charged me the same monthly rate and % co-pay because if I was admitted to the hospital – emergency or not – there would be a smaller co-pay dollar cost for me.

          And the aggregator services will do the same thing that travel aggregator services like Expedia do. Aggregate all the possibilities, work with the customer to choose one, and bill the charge for the service to the seller.

          • I’m trying to “listen” but I’m also trying to think about it in terms of my own recent experience and trying to figure out how transparency helps me if I have no idea what most of the itemized things are.

            I actually did try to get an itemized list and was told that such a list is usually not provided and even if it were – it would not be guaranteed to not change depending on how the procedure went. I specifically warned them that I would not go through with the procedure if they did not guarantee there would not be any surprise (balance) billing. They did pay attention to that.

            Even then, I had no idea what professionals would conduct the operation beyond the practice doctor who turned out to not be the doctor I went to prior to the procedure. The guy that did it, I asked him how many he did and he said hundreds… thousands…I asked what kinds of things could happen different than planned…

            I did meet the anethesiologist but no idea who the pathologist was used or cost…

            There seemed little opportunity to look at and understand the itemized list nor prices.

            It basically was a “DO” or “NOT DO”.

            Maybe I’m not “listening” but from a practical perspective.

            Has anyone else faced this kind of situation? Do others see
            a better way?

  10. Re overall transparency versus side deals negotiated directly with health providers by large employers, what does the demise of the Bezos-Buffet-Dimon joint venture, “Haven,” tell us about this? Are we simply left waiting for comprehensive reform, or political rebellion, to do the job on behalf of the small medical consumer?

    • The small medical consumer depends upon his elective representatives to represent him. I believe the price transparency regulations put in place by HHS at President Trump’s directive and validated by the Court of Appeals will make it clear to the small healthcare consumer which insurance company to use and which hospital.

      They didn’t have that information on 30 December 2020. Some of the hospitals had it posted on Jan 1. 2021.

      What the small healthcare consumer is waiting for is third party price aggregators to create online services to help them shop for both insurance and hospitals. That will come fairly soon as a market response to the new information.

      • I hope so. The direct need is clearly there for aggregation services; but mostly I hope the hospitals and medical providers and drug manufacturers who already have seats at the [opaque pricing] table are joined by someone speaking from the consumer point of view with a sufficiently strong voice to be heard.

  11. It dismays me that your solution to a problem created by government is more government. The bigger the hen house, the more opportunities for foxes

    • This is a problem of market dysfunction that our State government, unfortunately, has helped foster by shielding these market partipants from transparency and hence from scrutiny, let alone meaningful competition. Government should not displace the competitive marketplace, but good government ensures that the market works efficiently and transparently. Any conservative who’s in favor of free market competition must also be in favor of price transparency and antitrust laws to keep the market functioning. That’s what JS is tackling here — the near-total absence of both of those restraints when it comes to hospital pricing, And that’s because of their unmitigated political power in the GA.

      • Not sure that I disagree with any point you make, including that this is a government enabled problem.

        Sometime folks complain that gas stations must be in collusion because the prices sometimes appear to move in lock step. Yet, unlike most retailers, they post prices on a road sign for all drivers-by to see. This not required by law. If colluding, perhaps with government approval (“oversight”), why bother?

        But to your point, if we only had good government…

        • Of course , we also rely on “government” to make sure that service station is selling gas with the right octane and delivering a gallon when they say they are… What would happen without government?

          • Yea, that dispenser gets checked once a year which is probably more often than your Doctor.

            But more importantly, you might be surprised how flighty consumers are if they feel the retailer cheated them out of a little gas or their engine knocks. Or, worse yet, are charged a penny over.

            One of my favorite incidents was watching a store manager refund a customer the difference in total gas cost with a nearby competitor who had just dropped their price; After the customer made a scene, the manager explained the math and handed her a dime. Most retailers are more concerned with their customer’s perceptions than the occasional inspector, by which I mean that the reason the dispenser typically passes inspection is because the customer keeps the retailer in check every day, not the occasional random inspector.

            Trust me, I agree something needs to be done about the government-medical-insurance complex. Just a few weeks ago I spent half a day trying to get a price on a medical product. It was absolutely ludicrous. At one point, I was told I had to place the order to find-out the price (pretty sure she said her name was Nancy Pelosi). Unfortunately, I couldn’t buy it off of BHPhoto or go to Best Buy or Target

  12. Healthcare insurance was corrupt from the git-go and by design. There is no reason for the provider and the insurer to keep the costs down just for you.

    Go downtown.
    Find a homeless person.
    Hand him $100, and tell him, “That’s for lunch for the two of us. I want a steak, and you can have a hamburger, but I don’t want to see the bill. You negotiate the cost with the waiter, pay him what the two of you decide is fair, and give me back the change.”

    How much change do you expect?

  13. A big part of the problem with medicare care costs is actually related to employer-provided health insurance – which is heavily subsidized by the government and people want insurance that covers everything such that they have no skin in the price of services.

    None other than the Conservative Heritage Foundation holds this view:

    [exscerpts – read the whole article]

    ” Employer-Based Health Insurance: Why Congress Should Cap Tax Benefits Consistently

    Too many Americans do not fully understand how the health insurance they receive through their employer is financed. Health insurance is, of course, a “fringe” benefit. Formal premium payments to health insurance companies are made by employers, just as employers pay for other fringe benefits, such as paid vacation, child care, education and training, or retirement plans.
    …………
    Thus, the current congressional tax policy has a two-fold effect: First, because the tax break for employment-based health insurance itself is unlim­ited, it is a powerful factor driving up health care costs; and, second, precisely because the unlimited tax break is narrowly confined to the place of work, it undercuts portability of coverage and thus directly contributes to non-insurance among mil­lions of Americans. Not surprisingly, health care expenditures have skyrocketed at alarming and dis­proportionately heightened rates compared to other benefits, while large numbers of Americans who lose coverage remain uninsured.

    A More Rational Policy. Congress and the Administration should pursue a more rational pol­icy. The right policy would be to replace the existing health care tax policy with a universal health care tax credit. If Congress and the Administration insist, however, on retaining an exclusively favorable tax break for employment-based health insurance, at the very least they should place a cap on tax-free health benefits.”

    https://www.heritage.org/health-care-reform/report/employer-based-health-insurance-why-congress-should-cap-tax-benefits

    • I see that I have to change my model…
      So your employer gives the homeless person $100 and takes $20 from your pay. He tells the homeless person, “take my employee out to lunch and pay the bill.”

      The difference? You get the hamburger, the homeless guy gets the steak.

      • Perhaps! 😉

        Auto and Fire insurance is more like “real” insurance.

        There is no govt subsidy.

        The insurance companies set price based on experience, the cost of what is insured, and the risk , i.e. young driver or house not near a hydrant, etc.

        Even Obamacare is priced by age and cigarette use unlike most Employer-provided where everyone is guaranteed to insurance if it is offered, and although they can set premiums by age, many do not, including the Federal Govt – so everyone, regardless of their age or physical condition, or prex-existing conditions pay the same premium. The premiums are set according to the payout for that group plus profit. If you are young and healthy – you often pay the same premium as a 50 year old with diabetes.

        That’s not really “insurance” and though insurance companies negotiate with “networks”, in doing so, they actually do limit choice for the insured – who get better prices if they only pick from “in-network”.

        And as we see, now the hospitals are getting involved in the networks themselves but who says the insurance companies should have created networks in the first place – who did that help?

        Would it be better if the government outlawed the networks themselves instead of just playing whack-a-mole with one thing – surprise/balance billing?

        Mandate price transparency and require up-front co-pays for everything that then incentivize the insured to “shop”?

        • Well, I deliberately left both ends of the model open. You *could* select your homeless guy based on his reputation for returning change, and/or you *could* go to lunch by yourself — the “free market” solution.

          EXCEPT, the restaurants and grocery stores have all ban together and declared, “if you don’t have a homeless person, the cost of a lunch is $500.” That’s one end.

          AND, some of the homeless guys have banned together and lobbied the State to be the only homeless guys who can pay for lunch.

          And the model goes on…

          • 🙂

            the “model” being what the govt decides?

          • No, what the restaurnts and homeless guys can enforce.

            If you don’t break their stranglehold, you get what you get.

        • Fire, auto, flood (sort of) are insurance. They make their money by reducing event risk. They study best materials, fireproofing, seatbelts, bumpers, levying, etc.

          Healthcare insurance is a payment plan.

          • Catastrophic health insurance is actual event risk insurance. Because of the extraordinary cost of ACA individual marketplace insurance with its sky high premiums, co-pays and deductibles, that turns out to be event risk insurance in all but name. The costs of ACA individual marketplace insurance, however, are driven by the coverage mandates of the ACA and government-awarded licenses to sell it. See Albemarle county’s highest ACA costs in the nation courtesy of Optima when Anthem pulled out for a year. Commercial market catastrophic insurance is not subject to ACA mandates.

            Both have cash deductible payments until the catastrophic threshold is crossed and then insurance payments kick in for specified risks. The higher the threshold, the lower the cost of the insurance. Risk adjusted premiums. Just like auto and home insurance.

            Large group employer-provided insurance has more government-like thresholds, but still employee contributions and co-pays. Small group is a crapshoot on costs.

            The left hates catastrophic health insurance and mounts major campaigns to defeat it politically. They can’t stand any model that the government doesn’t control with mandates, as the lower costs of that insurance will spoil their story.

          • Sky high as opposed to stratospheric without it.

            Catastrophic insurance is certainly a way to reduce costs for yhe under 65 crowd,but it comes at a price — increased bankruptcies.

            Where I used to work, we shared building space witha Bankruptcy law firm. Two years after the ACA, their business took a severe hit. Drastic reduction in medically induced bankruptcies.

          • you say ACA’s extrordinary costs – but don’t those costs reflect the actual cost of the insurance? Profits are limited under the ACA plans.

            Also, the ACA offers catastrophic plans:

            What is the ACA’s catastrophic plan and who is eligible?

            ACA’s catastrophic plan is available to people under age 30 – or people 30 and older who qualify for a hardship exemption from the ACA’s individual mandate – but enrollment is low because many people don’t know they’re eligible.

            https://www.healthinsurance.org/faqs/what-is-the-acas-catastrophic-plan-and-who-is-eligible/

            The problem with Conservatives and the ACA is that they only look at some things not all of them and from that construct a false narrative about it.

            THe ACA actually IS a competitive framework for insurance.
            And the prices actually reflect the true cost of providing health insurance.

            Also, the ACA – DOES affect other insurance. Some of it applies to most health insurance – like the restrictions against denial for pre-existing conditions.

          • The ACA was the best possible chewing gum and bailing wires patch to a broken system the Heritage Foundation could devise.

          • re: medical bankruptcies – yup – and then those folks can and do get taxpayer-funded Medicaid for their insurance.

            Compare to Canada or Europe Zero bankruptcies from medical?

          • The “mostly true” is true. He’s the ACA-HF relationship equivalent of a climate change denier. Consensus of such articles draws the similarities as incontrovertible.

          • Let’s put it this way. If Obama had sought a patent for the ACA, it would have been rejected under 35 U.S.C. 103

  14. Medicare does reduce costs – two -fold:

    1. It sets lower reimbursements and while private insurance pays more, they use the Medicare reimbursements as benchmarks.

    2. Original Medicare requires a hefty 20% co-pay (which is also true of many Obamacare policies).

    Medicare Advantage offers to also pay the 20% but requires enrollment in managed care – group practices that share one medical record so that things like duplicate tests and procedures are reduced and standards for elective surgery are tougher.

    Every other developed country on earth does some version of this – AND have direct roles in setting prices. People in those countries pay 1/2 what we do for health care AND have higher life expectancies.

    The big “hit” on those countries is that they “ration” health care.

    ALL countries, including the US and private insurers “ration”. Private insurers cannot pay out more in benefits that they receive in premiums so they do limit reimburements, increase co-pays, will not pay for some procedures, etc.

    Some in this country believe that “free markets” will reduce health care costs – BUT – they want the Govt to involve itself in that market.

    They want government to literally pick winners and losers.

    That’s not really a “free market” at that point.

    • Old people get the steak, and it only costs $50. If you can get by on $100 hamburgers for your working life, you eventually get the steak for only 2x its cost.

    • Where did you get the concept that any insurer or provider uses Medicare payments as benchmarks in price negotiations? It simply is not true.

      As far as government picking winners and losers, if you hadn’t noticed, Virginia has run the COPN program to pick winners and losers for nearly 50 years. It is the most successful rent-seeking effort in Virginia history.

      Conservatives think that program is wrong and have wanted it repealed.

      The Democrats in Richmond in my experience don’t support COPN for policy reasons, but rather trade their votes for the political and financial support of the regional hospital monopolies and their Richmond lobbyists. Enough Republicans have done the same that COPN, repealed in 1989, was brought back to life before its legal expiration date in 1991. That represented the purest form of corruption of government you will ever see.

      So we in Virginia mostly have, by government design, no effective competition in healthcare delivery. By government inaction on the antitrust front, the hospital monopolies have been able to not only drive up prices at will but sell health insurance as well. If you think that is a way to consumer paradise, I have a bridge to sell you.

      You keep asking why conservatives want the government to act to maintain competition but not to set prices. Can you really not understand the difference?

      The hospital monopolies today are no different than Standard Oil or the steel and railroad monopolies in the late 19th century or Ma Bell in the middle of the 20th century. Progressives, led by the Republican Teddy Roosevelt, broke up the trusts. Enforcement of progressive-sponsored antitrust laws brought the breakup of AT&T. Those actions brought competition, which brought down prices.

      Virginia hospitals by their political and business behavior have richly earned government antitrust actions. Yet Virginia’s Attorney’s General have not effectively moved to control the actions of the state-created monopolies.

      Progressives today actually favor healthcare monopolies because they are easier to control than lots of smaller units. They plan takeovers of the healthcare providers disguised as single payer, so the bigger the better.

      If it happens, and I suspect it eventually will, the hospitals will have richly earned their fate.

  15. Speaking of bodily functions, with lots of pushing and blood, it looks like the Senate just passed the bezoar named Mitch.

  16. Pingback: Anyone think they understand hospital pricing? | Bacon's Rebellion

  17. Price transparency could be achieved almost overnight, with two rather simple pro-consumer laws:

    1. For scheduled procedures, no disclosure means no required payment. The provider could not collect any amount which was not disclosed prior to care.

    2. For unscheduled procedures, the Medicare fee schedule plus 25% applies in all cases. Providers cannot collect more than that.

    With these laws, hospitals and doctors would change their ways in about a month.

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