It's not illegal price fixing or anything like that. The hospital charges $10K for simple procedure, and then the insurance company reduces it (per contract between them and the hospital) to the "reasonable and customary" $200. Presumably Canada does the same thing, and presumably in Canada there's no point to the hospital charging $10K when they know there's only one payer possible at $200.

It's all but impossible to see costs up front in the US. Hospitals insist on determining the charge at the point of billing.

>Hospitals insist on determining the charge at the point of billing.

Can I start a restaurant and make people pay at the point of billing? Like an upscale restaurant with no prices on the menu and then charge people differently based on what they clothes are wearing...

"Surprise! Your burger was $800 but we will work with you on a payment plan."

Someone behind you in the billing line says, "Oh, you should have signed up for Acme's Burger Protection Racket and paid $150 a month and that way you would only have to pay $1k deductible and then you'd only have to pay 20% co-insurance for most means at this Fatso's joint there after."

I don't know how I feel about this whole thing. I certainly don't have all the answers and things we do to make healthcare better could actually end up making it worse. :(

That's largely the problem. Hospitals can't charge (or even quote prices) until after providing the care in most cases - because it is time sensitive (and the "customer" may not even be conscious). I agree that it's a crazy situation, but the burger joint model is not a valid alternative.

You could have a restaurant like that if you could get the customers to agree up front to pay whatever you decide to charge after service is rendered, as hospitals do. It would probably work if there were only a few other food sources in the area, all doing the same shakedown of their customers.

The other critical element is you'd need to have a situation where a burger was something that really isn't optional, and going without it means you or your children are in pain. This definitely affects the calculus of the decision.

It gets worse.

The hospital is required to take Medicare, and Medicare tends to be unwilling to pay the true cost, which has to be made up elsewhere. After that you're stuck with different people paying different amounts for the same operation.

> The hospital is required to take Medicare, and Medicare tends to be unwilling to pay the true cost

This is actually the reverse: the reason why Medicare is so much more cost-effective is that they're more consistent about paying only the true cost and have the marketshare to negotiate that up front rather than haggling over every claim. The hospitals favor private insurance because the margins are higher and they don't face the penalties for over-charging the US government if they get caught inflating prices.

How do you know that it is true cost? Given the number of inner city hospitals with serious financial trouble, I strongly suspect that they've gone below true cost!

Hospital billing is crazy town, but these negotiations aren't illegal or even unknown. They are placed right on my bill for every doctor visit I have.

http://www.nytimes.com/2013/05/08/business/hospital-billing-...