My wife owns and operates a private medical practice (she's an audiologist), and it's insane the way she has to do billing and accounts receivable.

When a patient asks about prices she quotes them her standard price for the necessary services and calls their insurance company to confirm that the patient is covered and check what kind of copay the patient needs to pay. Assuming the patient is satisfied with the results of that call she provides the services, bills the patient for their copay, and files a claim with their insurance company.

Several months later (and no real way to predict when), the insurance company will provide an "offer" for probably somewhere around 60% of the quoted price (though this varies dramatically as well). She can accept the offer, in which case she's inevitably required by the terms to eat the difference instead of attempting to collect the balance from the patient. Or she can reject it and attempt to collect from the patient, in which case they will likely be very confused and angry as to why their insurance isn't being accepted, despite her explicitly confirming that it would be covered before they purchased her services.

To be clear, none of this is negotiated or agreed upon in any meaningful sense. She doesn't have any special relationship with any insurance provider. Instead, the providers use their massive power differential to dictate terms. She wouldn't be able to stay in business if she didn't accept at least some insurance, but they'd be quite happy to never write her another check.

She knows what her price schedule for everything is, but it doesn't end up mattering that much since she doesn't know when or how much she'll ultimately be reimbursed except in an extremely broad aggregate sense. The worst part is that she has to dramatically overprice her services so that she can ultimately get adequately reimbursed to keep the lights on, which just ends up hurting the patients who don't have insurance.

In a world of pre-1990s, high-deductible, 80/20 insurance, this would happen less as the insurance company might not do the 800lb gorilla thing until the patient maxes their deductibles, and high deductibles give the consumer a strong incentive to negotiate directly with the provider.

It's insane more people haven't realized this. All you need to do to fix our healthcare system is bring transparency to prices and have insurance actually be insurance again instead of health plans. I have multiple anecdotes from my own life where I didn't care about the cost of something due to my insurance paying for it (and in some instances not being able to be informed of the price beforehand). When you have a whole country like that it's easy to see how things have gotten to this point.

The only downside is I don't see how it would fly politically...which is a big downside.

Piecemeal. First require more price transparency. Then stop incentivizing the HMO/PPO type of insurance.

The counterexample is Medicare and Medicaid, which (CMS particularly) are exhaustively transparent (to provider and patient alike) regarding what they cover, pricing schedules, etc. Having architected revenue cycle platforms, I can say that Medicare was almost ridiculously easy to work compared to private carriers.

It should be sustainable for patients to directly pay for the provider for the services directly for most medical care.

Yes, but that would require lower costs (prices). That we could get if pricing were more transparent. I believe that will require moving back to high-deductible 80/20 style insurance.

I think its the opposite. If you made people pay for it, they wouldnt consume it, and demand would drop, and prices follow.

You cant have your cake and eat it too. If you want prices to go down you have to say there are things you wont do anymore.