Now contrast that with going to a hospital for a procedure where you have time to shop around. Can you get a price? No. Can you easily get appointments with doctors to get their opinions on your case? Maybe. Can you get other patient references? Unlikely (but maybe).
What’s the difference? One insurance covers (thus the patients is cut out of price conversations) and one insurance doesn’t cover (this patient is the end payer). The big problem is more and more costs are being shifted to patients as deductibles and co-insurance, but hospitals treat it like it was 1990 and the patient pays some token amount so “who cares”?
And sure, an emergency doesn’t leave you much time to shop around, but something like 80% of healthcare procedures aren’t emergent.
The difference is that one is completely optional and you can spend as much time as you want comparing options, while the other you're forced to do on a whim at whatever place is closest. You can't shop around when you're bleeding out, as in the article. And such emergency health care constitutes most of these surprise bill situations.
Health "insurance" companies are incentivized to raise the cost of care. Why? Their profits are capped to a percentage of the cost of care. The only way for them to make more money is to have more revenue -- which they do by increasing the cost of care!
The difference is that if a bakery tries to charge you a ridiculous price, you can politely decline tu buy, or buy and promise never to return.
The buyer gets to say they negotiated. The baker doesn't have to look you in the eye when they gouge you.
It gets a little more complicated,though. Instead of just paying $400 for the loaf of bread, the buyer bundles the cost of all the purchases together, and then charges a monthly fee, based on the previous year's overall revenue. They then tack on 20%. So, it turns out, with that extra 20% you're actually paying almost $500 for the loaf of bread anyways.
Is it a scam?
Yes, it's a scam.
What did you think the farmer who was charged $6,589.77 for 6 stitches might have to say about that proposition?
> any healthcare procedure that is not typically covered by insurance
Which I (not American) assume stitches in the emergency room are.
Why do you think this discrepancy occurs?
> who was charged $6,589.77 for 6 stitches
is relevant when OP was talking about procedures NOT covered by insurance.
In my opinion, getting away from the fee for service model is one of the routes we ought to be taking to address healthcare spending in the US (if you're charging per service, you're incentivized to perform as many services as possible in a given encounter).
Contractors, many of whom are small businesses or individuals, do this all the time. They also give estimates like "If we find mold behind the wall, it will be an extra ten thousand".
Medicine is also odd in that you have to pay for the doctors mistake. If the doctor prescribes a less effective drug, it has no effect and then after doing your own research find a better drug and get the doctor to prescribe that instead. You still have to pay for the first visit. If a plumber decides to go from plastic to copper pipe mid job, he doesn't get paid for the work he ripped out.
Multi billion dollar hospital groups, full of highly educated professionals apparently can't pull this off but the guy who poops in a bucket on the job site can.
You don't have better equipment nor doctors in US compared to biggest hospitals in Switzerland for example. Yet we have fraction of the costs as patients, and its not due to low doctors/staff salaries. Equipment is also top notch everywhere, new machines in all departments.
A&E can't turn you away. It gave her a few days of waiting in hospital (she was not a high risk patient, but they did want her available and under observation), but it gave her a leading specialist on hand surgery. And we walked out with no bill.
(and you're right - there'd still be the private options too, but in this case the NHS option had some of the best surgeons in the country in that field anyway)
In the US getting wealthy seems to be almost implicitly well respected, no matter how you got there. At least if it's not obviously illegal. You found a tweak to squeeze more money from health insurances? Good for you, let them suffer for their apparent weakness. There's apparently still a threshold of where even success cannot vindicate the way to get there (that Oxycotin family comes to mind) but that threshold is super high. I believe that this threshold is much lower almost everywhere else on earth and that this has an influence on individual decisions on all levels. It doesn't even remotely make people elsewhere angels or something like that, but it's a little bit of friction in every decision towards "take what you can"
Countries like Finland (4.2k) and New Zealand ($4.1k) show Switzerland could be doing way better.
Maybe the pot shouldn’t call the kettle black?
Changing any one of them isn’t going to fix pricing. We really need to change several pieces at the same time and the industry really doesn’t want lower prices as that reduces their income.
The 24/7 comment was in comparison to dentistry. It’s tempting to compare getting stitches to getting a filling but inherent overheads are associated with an ER which must be added to the bill.
Also, while $/CPT code can go down, you can see more patients/day or alter your staffing ratios and other operating metrics to more than compensate.
Healthcare has some of the most "woo woo" hand wave-ey financial metrics around. Do a private equity quality asseatment on quality of earnings on "gross earnings" in most health care settings. Other than the Enron consolidations there can't be a more bullshit financial metric (heck entire area) under US GAAP than gross earnings. With that level of obfuscation (purposefull or not) it's no wonder you have almost full opacity into the cost chain.
Healthcare is rarely a good example of the free market. Medical decisions aren’t made by comparing costs between providers. And if you’re in rural America, you’re lucky if you have any provider. Price transparency would be nice, but maybe not as helpful as you’d like. Let’s say you’re in the middle of a rural area and the ER says you need stitches — but they cost $6000. What are you going to do about it? Are you really in a position to negotiate? Your choices might just be 1) get the treatment, or 2) go without.
Many things in rural areas cost more than they should. Usually on this forum we talk about the high cost of internet access and the lack of options, but medical is very similar in that regard. Services are hard to find, providers are covering a very large geographic area, and many costs are higher.
It’s not a good example of how a well functioning free market would work.
It’s hard to even call this a market, let alone a free market. According to the Wikipedia entry on markets, “the usage of the price mechanism to convey information is the defining feature of the market”. It’s notable that in The American healthcare market, the price of your treatment is usually discovered after you’ve agreed to purchase the treatment (or it’s been administered without your consent). In fact, often it’s impossible to figure out what you will pay until after the fact due to how complicated answering that question is.
And even if it were a free market it’s debatable we wouldn’t want to keep it that way. In a commodity free-market of peas for example, a mismatch of supply price and demand price means that some people will pay a suboptimal price for peas while others will be priced out of the market entirely, and they will have to go without peas.
In a healthcare market, when someone is priced out they go without healthcare, which means worse and more expensive outcomes down the line. The old adage about how an irrational market can stay irrational longer than you can stay solvent comes to mind — a healthcare system motivated to maximize profit will price you out of the market longer than you can stay alive.
It's exactly what any rational person would expect from a corporate free-for-all designed for maximum extraction potential based on maximising political power differentials.
Good state-owned care smooths out the inequalities, so farmers in the middle of rural area will at least have affordable access to basic care, and more advanced care will be within easy travelling distance.
This ends up being far cheaper for everyone who needs medical care - which is basically everyone.
The only losers are profiteering shareholders.
Of course you still pay for it, but you don't pay as much. And you won't be bankrupted by bills for which you either have no cover at all, or limited insurance cover which still leaves you with a huge sum.
I don't understand why they can't limit price.
To name a few with healthcare:
Information Asymmetry. It should be expected that a patient does not know what a Level IV emergency is and the complete ins and outs of how they are going to be charged. I'd argue that the industry has intentionally amplified this market failure. Furthermore, patients are often left with the final decision, but who is going to disagree with a trained professional on their required treatment? It's like going to a mechanic when you have no idea what's wrong with your car. You kind of are trusting the mechanic isn't taking advantage of you (and that is regulated). Or you have to reduce the asymmetry by learning about the basics of cars.
Medical research has the attributes of a public good: Non-excludability and non-rivalrous - when something is discovered it's generally known to everyone without dropping in supply and the information is available to everyone (yes the product which results is rivalrous and excludable in the same country, hence it works as a private good - but then that product has non-competitive markets).
Non-competitive markets with respect to rural areas are also mentioned in the article. Much like the issue with utility companies and broadband providers (the latter of which was shown to be a partial public good in the US with the infrastructure bill).
And then there's the Medicaid reimbursement rates, decided by a committee using the labor theory of value rather than something sensible like cost benefit analysis and negotiation. And since it's illegal to charge someone else less than you charge Medicaid these tend to have a cascade effect.
Our healthcare system is a huge sequence of "make it so complicated that there are no obvious deficiencies" legal systems with layers of ad hoc patches its amazing it works as well as it does.
Normally I'm in favor of free markets but if nationalization is what it takes to clean up the current mess of a system we have then so be it.
Now the NHS is an aberration and under severe pressure, but it is a good indication of just how inefficient Medicare and Medicaid are - and it's not that they can't do better, it's that they're legally prevented from using their market power.
Additionally, I remember that many supplies come from... the United States? So what regulations are you talking about?
Maybe you meant monopolies?
The Certificate reduces competition because they impose geographical exclusivity. If you want to buy a MRI machine for your clinic, you cannot if the state determines if your area already has enough of them. And if you file a Certificate with the state intending to buy one, your nearby competitors are likely to place objections to your purchase. This is because the machines are expensive and the other clinics want to ensure their investment gets paid for. But this process also ensures they're expensive because the machines aren't able to be built in volumes large enough to result in a cost reduction.
The supply contracts make things easier for the hospital, as they only have to deal with one supplier for an item or class of item. The price is known up front for the duration of the contract. But this also means that the hospital cannot change suppliers if another one has a lower price for the same item midway through the contract period, reducing competition. They also restrict choice by the doctors at the hospital - doctors have strong preferences for items like gloves because of sizing & fit, and the way they transmit feeling through them (thinness, texture, etc). If a hospital changes suppliers to one that doesn't carry their favorite glove, they aren't able to perform as well. And they can't bring their own into the operating room because of liability.
I don't know how many advertisements you see in Chile for medicine, but here in the US I would guess that a quarter of advertisements on TV are for them. All those ads cost a lot of money, and they're not being targeted at doctors, but patients: "Ask your doctor if {brand} is right for you"
I was very surprised the first time I watched an open-tv US Channel seeing thousand of ads for prescription medicine. Which I believe are forbidden the countries I have lived in (CL, ES, DE)
The American culture is one of rugged individualist pioneering cowboys who won't be told what to do, even if you're warning them that if they take another step they'll fall off a cliff.
Honestly when I read the headline my first thought was “six stitches? Crazy glue is cheaper…”
Unless you live across the street from the hospital it's just less hassle to do it that way. Any injury not worthy of an ambulance can be cleaned, glued and taped in the time it would take to sit in the waiting room while they serve all the people who are dying faster.
Regulatory is there to prevent e.g. killing patients in a Therac-25 like events. When you have a too weak reg, you end up with things like 737-max situations.
Now maybe regulatory can also go too far in some niches, but the correct solution is not to blindly go in the other direction.
And anyway, absurd prices in cases of e.g. ER are most of the time explained not by the cost of medical supplies but by random attempts to purely extorts the patients: 6 stiches and a shot do not imply thousands of dollar of BOM, nor are physicians paid hundreds per minute. Look at the cost of covid vaccines if you want to know more realistic costs.
When talking about regulations people usually mean regulating pricing and/or service quality but what actually needs to be tackled are the factors that limit competition, like: - process for opening new clinics/hospitals should have little to none restrictions - requirements for doctors (no doctors from outside can work in the US unless they complete $400k degree) - Drugs from outside countries should be allowed to be imported without FDA's approval
and so on
BTW, I come from from a European country with universal healthcare and have been living in US for almost a decade and the feeling of someone making money of your health is at least weird. If I ever have some severe health issue no doubt I will go to treat myself to my country of origin.
EDIT: Also tired to hear about the problems of universal health care, specially with wait times. It is true that less important treatments could take some extra time but I have never seen a case where a fast intervention was needed and did not happen. I would say that common sense is something that works for universal healthcare. At least where I come from.
Almost all countries with universal care also have private options (Norway used to be an exception where offering private options for services available from the public healthcare system used to be practically impossible, but even Norway has relented on this though). Often the private options are also cheaper than the US.
E.g. for elective surgeries Americans might want to check London hospitals - many world-leading private hospitals for various conditions that are used to targeting foreign patients - especially wealthy ones - but still often charging much lower prices.
It's also not that unusual for those of us in the UK who can afford to go private to do so when we have some condition that the NHS certainly will treat but where there's a waiting list because it's not important.
And there are plenty of private insurers - only because the NHS offers a baseline, they're far cheaper than most US plans because almost all of them rely on the NHS as a first line and instead of picking up the bill for everything they only pick up the bill to accelerate care whenever there's a wait to see certain NHS specialists.
People need to consider the universal care to be the baseline. How much people are prepared to pay for the baseline over taxes will affect how fancy the baseline is, so if you want something better you'll need to pay. But at least it ensures everyone gets the baseline.
Your opinion sounds nuanced and, therefore, possibly interesting.
> “The Administration’s recently proposed regulation to begin implementing the law does not uphold Congressional intent and could incentivize insurance companies to set artificially low payment rates, which would narrow provider networks and potentially force small practices to close thus limiting patients access to care,” Rep. Larry Bucshon (R-Ind.), who is a doctor and helped spearhead a letter of complaint this month, said in a statement to KHN.
https://khn.org/news/article/surprise-medical-bills-policy-c...
This shit makes my blood boil. Various vested interests, but mostly doctors, have stymied virtually all legislation (the ACA, Medicare and Medicaid being the notable exceptions) for a century.
https://pnhp.org/a-brief-history-universal-health-care-effor...
"When the arbitration process is wide open, no boundaries, at the end of the day health care costs go up, not down," Becerra says of the methods doctors prefer. "We want costs to go down. And so we want to set up a system that helps provide the guideposts to keep us efficient, transparent and cost-effective."
The system chosen by the Biden administration is expected to push insurance premiums down by 0.5% to 1%, the Congressional Budget Office estimates.
https://www.npr.org/sections/health-shots/2021/11/22/1057985...
The third party payment system of medicine is both directly paid for by the government and subsidized by tax writeoffs for the private insurance industry (which is tied to employment).
And meanwhile during a pandemic majority of Americans supported Medicare for all. Yet the corporate politicians are against it. The performative art of the "squad" was at full display when they had a chance to force the "Medicare for all" vote and passed on it.
https://www.opindia.com/2020/12/jimmy-dore-vs-cenk-uygur-dem...
https://www.businessinsider.com/aoc-rejects-left-wing-calls-...
https://thehill.com/hilltv/what-americas-thinking/412545-70-...
We deserve what we vote for.
Even I avoid the ER because of costs.
The medical industry is highly regulated. I can't just go open up a practice giving people stiches. I would need a whole slew of certifications in order to do so. That's why this situation in the US is so absurd. The market is regulated to limit the competition at the expense of the consumer.
In the U.S. the "free market" is mostly a myth.
Imagine how expensive a software dev team would be with 24/7 work, and full cycle scrum sprints every 72 hours to allow for constant pivoting, with injects from one to a bus load of product owners.
A doctor has more training and a lot higher infrastructure costs and overhead, and thus a higher hourly fee.
I spent a couple hours on YouTube and now I can solder my own copper pipes, install a new toilet and anything else I need.
Even being a software engineer I couldn’t compete with the hourly rate of a plumber so it makes financial sense for me to do the work myself.
Plumbers have to deal with the aftermath of butts MUCH more often and they don't have the luxury of someone's insurance they can just throw arbitrarily high charges to.
There’s also the whole ‘all your clients are sick, some are contagious’ thing.
I’m not saying america isn’t insane, but to try and pretend plumbers have it far worse isn’t quite accurate.
You pay nothing for ER, 10eur/day for the hospital and a few eur for medication - but nothing even in the range for 50% or 80%
dental is also covered to a large degree but if you want state of the art you have to pay the difference yourself - but you can also add a private insureance for that for 100 to 300eur/year to have everything covered.
you can still fall through if you can't pay the monthly fee - but emergencies are also free even if you don't pay.
private insurance can be expensive but should usally cover also everything.
I'm public insured in Germany and no, dental is not really covered, I had to pay my routine treatment last time at the praxis, and it was not cheap.
Do you know that if you don't have insurance (which is however mandatory in Germany) you get an actual bill for the medical services?
You do not need to pay extra for dental if you choose the most basic treatment. Most people like their dental work to look like their natural teeth which does not count as most basic. That is why you had to pay, but only the price difference to the basic treatment.
And, of course, the doc likes to sell you some extra treatment (say "professional tooth cleaning") which will make her/him some extra money.
Same for glasses. The most basic option is free. If you don't like the coke bottle bottoms then you will have to cover the difference yourself.
For the dentist: They often bill you for stuff that is covered but it lucrative to add something to the bill.
It’s not like you’re taking up a hospital bed. It’s a sew up and show you the door operation.
People like you think the government should solve a problem that they themselves created.
In theory, but in practice there are many markets where that simply doesn't work, mostly due to natural monopolies, such as any type of infrastructure, healthcare or education, where competition is impractical or impossible, equal access for everyone is extremely important, and costs are high.
Still, nothing really stops competing methods and prices for teaching to competing levels.
By what fraction will the new set of tweaks have to shrink costs to pay for the last 30 years of the private health care market's failure to deliver on its "more efficient" promise? Remember, it has to cut them by 50% just to break even, and it'll have to go further to make this experiment worthwhile. A lot further.
Spoiler alert: it won't even get to 50%. It won't even get close to 50%.
I might be wrong. Maybe price transparency will lead to a 50% reduction in prices in the next few years. I doubt it, though.
A few years back I broke my wrist while bicycling across England. I was patched up and casted a few hours later, I think the bill was about $200, as a foreign tourist. It wasn't even enough to cover my travel insurance deductible. This would have cost me about $5k in the USA.
I agree that the free market works fine, for those who run the market.
All you have to do is ask a doctor "Please don't put any of this in a file until I have insurance next week". It doesn't mean anything to him to add the dates later. It's in his best interest, otherwise he won't get the cheddar.
This is the kind of things that show how inviable is a market-led economy without proper regulation. Let the powerful profit from the weak and you'll see this kind of thing every time.
If you compare life expectancy in Chile and some other Latin-American countries with universal care[1], they are higher than in the US, despite being a more unequal and/or poorer.
[1] https://ourworldindata.org/grapher/life-expectancy?tab=chart...
Edit: Many commenters miss the point. The US leads the way in too many areas and at least I expect them to be an example of the benefits of free market economy. Some have mentioned that regulation is indeed the problem. I would say, that we need the right regulation so the right incentives are put in place, in benefit of the market and competition. So at best it would be better not to have the industry dictate the regulation.