In fact, they know two exact prices: (1) the price they will bill your particular insurance company & (2) the lowest price in actual total they can accept

Unfortunately, there's no benefit to them to tell you (2). And without verifying your exact insurance coverage (i.e. submitting a claim) they have no idea how (1) relates to your eventual out-of-pocket costs (and they're disincentivized from telling you the billed rate in case you're actually another insurer trying to negotiate lower rates).

Actually, as pmorici notes, there are three relevant prices. Without insurance, you will be charged the "cash price", which is always far greater (maybe 3-4 times) the price that they have negotiated with your insurance company. For large insurance companies, that price can be close to the lowest price that they will accept.

Even if you have insurance, they may be able to bill you for the difference between the cash and negotiated prices. It depends on relevant law and terms negotiated with your insurance provider. It's prudent to ask. Also, providers will sometimes "accidentally" bill you for that difference, even if they're not permitted to.

> Also, providers will sometimes "accidentally" bill you for that difference, even if they're not permitted to.

It's been my observation that hospital billing departments do many things "accidentally". Strangely, these never involve under-billing. A lot of bad things would have to happen to them (and insurance) before I'd start to feel even a little bad about it.

when something involves lots of process, mistakes are inevitable. sometimes by mistake, sometimes maliciously.

It's worse than that, because there's adverse selection. The hospitals that make errors in the client's favor or that don't make errors at all are more likely to go out of business than the ones that make errors in their own favor. So guess which ones are still around when you need a hospital.

In other words, just because the errors are accidental, it doesn't mean they happen at random.

(This argument applies to any shady business practice that "looks" like an accident, for example dark patterns on websites, or having great customer service for taking your money but terrible customer service for refunding it.)

When the same agency is the one influencing, if not directly creating and enforcing, the process, my sympathy tends asymptotically to zero. Especially when said processes are largely driven by a motivation for profit, if not merely to exist as a middleman.

it's actually a little more nuanced than that. Hospitals/providers have what they call charge master. it is probably the cash price you are mentioning.

Even uninsured can end up negotiating the bill, albeit after the fact.

Sometimes, insurance might negotiate lower prices than what a certain procedure/treatment costs, i believe that's not uncommon. They make up for it from other procedures in general.

1. The lack of health care cost transparency reduces price competition. 2. people not asking for price in advance, or not caring because the are already past their 1. deductible 2. out of pocket maximum makes healthcare expensive[a]. Similar to reference pricing, high-deductible health plans (with added HSA benefit) makes people think twice before going to doctors. I also felt a lot of people are not price conscious about healthcare - just yesterday a friend mentioned "i picked the most expensive plan so i don't have to think about it". Completely reasonable, but one reason why prices get higher each year.

[a: reference pricing] http://www.nytimes.com/2016/08/09/upshot/how-common-procedur...

> Even uninsured can end up negotiating the bill, albeit after the fact.

Yes. One could say something like "I know that you're billing me three times what you get from insurance companies, and I know that you'd pay at least 50% to a collection agency, so will you accept 40% now?"

> Sometimes, insurance might negotiate lower prices than what a certain procedure/treatment costs, i believe that's not uncommon. They make up for it from other procedures in general.

True. Also from payers with less negotiating strength.

"Yes. One could say something like "I know that you're billing me three times what you get from insurance companies, and I know that you'd pay at least 50% to a collection agency, so will you accept 40% now?""

Unfortunately, this misses another pertinent point, that the provider/facility will be able to charge off and deduct as a loss either that 50% of the original amount they're going to charge you, as well as getting 50% from collections, or 100% if they're... 'creative'. This can often reduce incentive to negotiate.

Maybe so. But wouldn't that increase the incentive to negotiate?

that's still a hassle, though. there is a point, but it probably works better with individual practices than large hospitals.

How practical would it be to recreate the charge master through crowd sourcing? If everyone scanned their invoices and submitted the hospital name and insurer, a picture would very quickly emerge that might allow consumers to get a reasonably accurate view of what line items are typically in a certain procedure and what it all costs.

There's nothing which prevents the sharing of this information, is there?

Anecdote: My son broke his arm when I was between jobs and had no insurance.

The doctor had an x-ray machine on premise, but he admitted to me that his costs for it were high and that I could get a better price at the imaging place across the street.

Once there, when I explained my lack of insurance, I was told that not paying up front adds $75 because billing is a PITA.

Even though an insurer might be able to negotiate a good rate, they can't beat cash on the barrel head because cash pay doesn't require nearly as much work.

I'm actually not sure that they know (2), as I've read a number of articles and posts which say that almost no healthcare organization uses cost accounting.

I can confirm that, at least for an N of 1. Contracts with individual insurers are typically negotiated to be set to a percentage of (known) Medicare reimbursement for a given procedure. As it is with any negotiations, more powerful insurers get better rates. The costs are usually monitored at a macro accounting level, since what really matters is staying in the black.

As an aside, in addition to other confounding factors, cost accounting would likely affect physician compensation since it would shine a light on their actual effort. Expect that to Just Not Happen in an organization with more than one provider. They enjoy their compensation, and they will fight to keep it.

Edit: perhaps the physician compensation scheme I am familiar with is wildly atypical. Hence the N=1 disclaimer.

> Contracts with individual insurers are typically negotiated to be set to a percentage of (known) Medicare reimbursement for a given procedure

It's usually pegged at multiples of what Medicare reimburses (ie, "300% of Medicare rates")

> Expect that to Just Not Happen in an organization with more than one provider. They enjoy their compensation, and they will fight to keep it.

It has nothing to do with physician compensation, because most are salaried now anyway, and they make a lot less than people think. The problem is that they literally do not know what the reimbursement rates are.

Given that the median salary for a physician (not specialist) is $180K, I'm not sure what you think people think they make if they think it's a "lot more" than that.

By law, nobody can be charged less than Medicare.

I think you guys are getting screwed.

1) unless this is the first time they've done it, they'll at least have a range and an explanation for the difference.

2) They're motivated to not tell you. By staying quiet, they prevent you from shopping around. They maintain the ability to decide charges rather than having to negotiate. Telling you only once you owe them is something other businesses would love.

Is there a doc in the house who can give us their perspective? What's up with this pricing?

Not a doctor, but I have spent ~10 years working with data on the reimbursement side of a large hospital. Please see my comment above.

If they can send you a bill with a figure on it, they can produce a quote.

That's not true, due to price discrimination. They can't precisely tell how much they can get paid for something until they submit invoices to insurers.

If you opt to submit the claim to your insurance company yourself, this is not an issue.

Same. I spent 20 minutes on the phone with someone, got frustrated, and asked flat out, "are you telling me there's no way to know how much I will pay for this procedure until after it's done?". The answer was "yes".

Part of that is because of insurance companies. They don't know exactly what your coverage is in all cases so they know what they'll send to the company but how much they pay will vary a lot from person to person often by a lot.

I wonder if someone has made a video of this - asking for a price and getting a response like "we can't tell you" or "we don't know." It shows how absurd the system is.

Why yes: https://www.youtube.com/watch?v=Tct38KwROdw

Tell them you want to know the "cash" price.

Sometimes they need a little prodding. Tell them you're getting a price from [name of competitor].