Re:Why Doctors Hate Their Computers (2018)
by yholio on Tuesday September 01, 2020 @08:45AM
(#24341168)
The problem here seems to be that UCR prices are not correctly calculated, as the net prices that are actually paid, not label price. If UCR would be defined as the median of net prices charged in the last 24 months, inflation would halt. As for the correct way to infer net prices, it's a problem related to transfer pricing, for which good accounting practices exist, that would take into consideration exotic arrangements for paying back the discount, in stock, other contracts etc.
Re:Why Doctors Hate Their Computers (2018)
by refurb on Tuesday September 01, 2020 @11:23AM
(#24342787)
If UCR would be defined as the median of net prices charged in the last 24 months, inflation would halt.
They do something similar with drug prices for Medicare called Average Selling Price (ASP). That system gets gamed as well. In fact, it actually causes prices to rise.
Medicare requires hospitals to report pricing, so they have a decent sense as to what actual costs are. You could create a law saying you have to be within 20% of that price. It wouldn’t be perfect, but it might help.
Re:Why Doctors Hate Their Computers (2018)
by yholio on Wednesday September 02, 2020 @06:39AM
(#24351854)
Thanks for the specifics. The drug prices problem has a quite direct solution for single buyer systems: competitive tenders for generics, and QALY price ceilings for patent drugs. If a producer asks for a too high price compared to the health outcome of their drug, the total budget is reassigned among existing drugs, thus forcing all pharmaceutic companies to compete to deliver the best overall healthcare outcome for a given budget.
Too bad the politics in USA prevent this and dismiss it as "death panels", and people are led to believe the hard trade-offs in healthcare can somehow magically go away.
The history is fascinating - in order to promote more transparency in the cost of healthcare, the gov't passed a law that defines "usual, customary and reasonable (UCR)" prices. This was because insurers used to just pay the bill, no questions asked (50+ years ago). Then they realized that the price for the same procedure varied a lot. So the law said that one could only charge the "usual and customary" price.
Sounds good right? Who wouldn't want to know the typical price?
Well, a part of that law was that the UCR price was the maximum that could be charged. There was no law about charging less.
So insurers start to negotiate discounts. Some insurers would get a discount, otherwise they pay UCR. That creates a huge incentive to push UCR as high as you can, otherwise you're potentially leaving money on the table if you get a random insurer willing to pay UCR.
So fast forward a few decades and the UCR prices have undergone astronomical inflation. No insurer pays U&C any more. In fact, they might pay 20-30% of U&C. It's nowhere close to "usual, customary and reasonable".
It wouldn't be a disaster if everyone had insurance because nobody pays it. But we do have uninsured and that's the price they're quoted now. $15,000 for an MRI that an insurer would pay $1500.
As they say, the road to hell is paved with good intentions.
https://en.wikipedia.org/wiki/Usual,_customary_and_reasonabl...