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Old 05-09-2019, 12:16 PM
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Can we talk Medicare pricing?


I'm a real noob on this stuff

Real Data: I went for a CT scan at the end of April and looking at the costs on the Medicare website I see the following

"Amount Charged" = $264
"Medicare Approved" = $91.42
"You May Be Billed" = $18.28

My understnding of these figures is that the doctor involved charged $264 and the government told him, "Nonsense, that procedure is only worth $91.42 and that's what you're gonna get". Is this correct or is there some other dynamic?

What about if he was charging Private Insurance? Would the same thing happen? Or is this one of the principal reasons that doctors prefer not to take on Medicare patients because they feel they will be stiffed by the Feds or that they will earn more from private insurers?
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Old 05-09-2019, 12:24 PM
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That first "amount charged" is a fictitious massively inflated number that is typically 2X - 10X the fair price. If the provider has stated that they accept Medicare, or if the provider is in-network with your private insurer, it is meaningless. The actual charges are the Medicare rates or the rates that your insurer has pre-negotiated with the provider for the specified service.

That fictitious wildly inflated price comes into play only if you have no insurance, of you inadvertently (or because of emergency) go to an out-of-network provider. Then it's the rip-off price that the provider will claim you must pay them. What you are actually liable to pay under these circumstances (when you have been treated without any pre-agreed price) is a complex question, but at the very least you are faced with a long and extremely stressful process trying to negotiate the bill down to something sensible, being threatened with collections, even bankruptcy.

Last edited by Riemann; 05-09-2019 at 12:26 PM.
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Old 05-09-2019, 12:30 PM
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Here's a prior thread on the issue. See my post #14 in particular.

http://boards.straightdope.com/sdmb/...d.php?t=871275
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Old 05-10-2019, 03:25 AM
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Using your example, there's another way to look at this that benefits the hospital. The hospital collects $109.70 on a $264.00 bill presenting them with a $154.30 "loss", at least on paper. Come tax time, this "loss" can be calculated against gross income thus offsetting their tax liability. Their accountants will likely massage these numbers in such a way to make them more palatable to the IRS.
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Old 05-10-2019, 03:28 AM
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Originally Posted by bardos View Post
I'm a real noob on this stuff

Real Data: I went for a CT scan at the end of April and looking at the costs on the Medicare website I see the following

"Amount Charged" = $264
"Medicare Approved" = $91.42
"You May Be Billed" = $18.28

My understnding of these figures is that the doctor involved charged $264 and the government told him, "Nonsense, that procedure is only worth $91.42 and that's what you're gonna get". Is this correct or is there some other dynamic?

What about if he was charging Private Insurance? Would the same thing happen? Or is this one of the principal reasons that doctors prefer not to take on Medicare patients because they feel they will be stiffed by the Feds or that they will earn more from private insurers?
I agree with prior posters that the $264 is a massively inflated price that exists as an opening negotiating point for those without insurance.

However, the Medicare pay rate is likewise massively underinflated. But doctors will accept Medicare payments because it is a large and steady source of income. They make their money from private insurance and can supplement that from these lower forms of payment like Medicare.

I know this is GQ, but I think it is well settled that if we went to "Medicare for all" at these same low rates, doctors could not pay employees with that low reimbursement rate.
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Old 05-10-2019, 04:57 AM
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I know this is GQ, but I think it is well settled that if we went to "Medicare for all" at these same low rates, doctors could not pay employees with that low reimbursement rate.
Cite for being "well settled"?

I ask for a cite specifically because doctors and the medical provider industry manage quite well in systems that have less than half of US reimbursement rates. Cite.

It may be true that "doctors could not pay employees with that low reimbursement rate", but most of those employees are there only to deal with insurance companies.
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Old 05-10-2019, 05:16 AM
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Using your example, there's another way to look at this that benefits the hospital. The hospital collects $109.70 on a $264.00 bill presenting them with a $154.30 "loss", at least on paper. Come tax time, this "loss" can be calculated against gross income thus offsetting their tax liability. Their accountants will likely massage these numbers in such a way to make them more palatable to the IRS.
Do you have a cite for this? It seems highly implausible that it's possible to generate a tax loss this way. If it were, few businesses in the U.S. would ever pay any tax.
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Old 05-10-2019, 07:13 AM
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Originally Posted by Dereknocue67 View Post
Using your example, there's another way to look at this that benefits the hospital. The hospital collects $109.70 on a $264.00 bill presenting them with a $154.30 "loss", at least on paper. Come tax time, this "loss" can be calculated against gross income thus offsetting their tax liability. Their accountants will likely massage these numbers in such a way to make them more palatable to the IRS.
Uncollectible amounts are ultimately written off as an expense so the net long term effect on the books is that revenue = what you can collect.
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Old 05-10-2019, 07:21 AM
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Last edited by Riemann; 05-10-2019 at 07:25 AM.
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Old 05-10-2019, 08:13 AM
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It may be true that "doctors could not pay employees with that low reimbursement rate", but most of those employees are there only to deal with insurance companies.
On average, doctors lose money on their Medicare patients. In return, could you provide a cite that "most" of the employees of the average doctor are there only to deal with insurance companies? Not to deal with Medicare/Medicaid billing - private insurance companies. TIA.

Regards,
Shodan
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Old 05-10-2019, 08:31 AM
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This applies directly to the OP though not specifically to the list price he showed.
This may be behind a paywall, but just in case it isn't:

https://www.nytimes.com/2019/05/09/h...sultPosition=1

The summary of the report is that RAND collected 4 million private insurance hospital claims from employers and analyzed them to see what was actually paid. The typical payments were 2-4 times that which Medicare paid for the same service. There are cases where private insurance paid 10 times the Medicare cost and a few times where private insurance paid slightly less than Medicare. As you can imagine the prices varied wildly even within a state or region. It was pointed out that typical process of a company being self-insured means that the insurance company that actually negotiates with the hospital for a given rate is literally spending someone else's money. It doesn't cost the insurance company anything to agree to a higher rate. Indeed since their fees are often set by how much is spent higher costs mean larger fees. Of course the hospitals say that they will go out of business if they are forced to live on what Medicare pays. Which I am sure is true. At least they will have to stop expanding. Small hospitals are struggling.
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Old 05-10-2019, 09:48 AM
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Originally Posted by Dereknocue67 View Post
Using your example, there's another way to look at this that benefits the hospital. The hospital collects $109.70 on a $264.00 bill presenting them with a $154.30 "loss", at least on paper. Come tax time, this "loss" can be calculated against gross income thus offsetting their tax liability. Their accountants will likely massage these numbers in such a way to make them more palatable to the IRS.
Red Wiggler already addressed how this actually works but when I hear people misunderstand write-offs, I always think of this scene from Seinfeld.
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Old 05-10-2019, 12:42 PM
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However, the Medicare pay rate is likewise massively underinflated. But doctors will accept Medicare payments because it is a large and steady source of income. They make their money from private insurance and can supplement that from these lower forms of payment like Medicare.
Why don't private insurers similarly make a deal to only pay the Medicare rates?
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Old 05-10-2019, 05:24 PM
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Why don't private insurers similarly make a deal to only pay the Medicare rates?
The NY Times article quoted above goes into this. In a lot of areas there has been a massive consolidation of health care. If an insurer tried to hold out for this, its customers could get blocked from a substantial number of practices in their area, including the ones the insurer's customers already go to. So the health care facilities have a lot of power.
The article also noted that hospitals are hardly efficient, giving an example of a hospital system with 60% of beds filled buying up more capacity.
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Old 05-10-2019, 05:41 PM
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Medicare Part B pays 80% of out-patient procedures. You pay the remaining 20% UNLESS you have Medicare Supplement Insurance aka Medigap.
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Old 05-10-2019, 07:00 PM
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On average, doctors lose money on their Medicare patients. In return, could you provide a cite that "most" of the employees of the average doctor are there only to deal with insurance companies? Not to deal with Medicare/Medicaid billing - private insurance companies. TIA.

Regards,
Shodan
The Harvard Business Review article was great. However, if you'd read the whole thing, you'd know that it says the loss of money is due to hospitals' inefficiency, poor planning, and wasteful practices:

Quote:
Medicare’s legacy payment system places a premium on controlling labor and supply expenses and eliminating wasted or low-value imaging procedures and laboratory tests as well as minimizing operating-room time, intensive-care stays, and a host of other expensive services.Hospitals are also penalized by Medicare if quality problems such as adverse drug reactions lengthen the patient’s stay or otherwise require additional treatment. Recent changes in the program also place hospitals at financial risk if they experience excessive readmissions, hospital-acquired infections, and other quality problems.
Medicare forces hospitals and doctors to function in the efficient way they should be doing anyway, and it penalizes them for sloppiness in patient treatment. That's better for all patients, whether they're covered by Medicare or private insurance.
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Old 05-10-2019, 08:04 PM
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Medicare Part B pays 80% of out-patient procedures. You pay the remaining 20% UNLESS you have Medicare Supplement Insurance aka Medigap.
+1

Also important to know that without MediGap, there is no 'out of pocket maximum' typical in employer plans. Get a $100,000 dollar bill, pay $20,000.

Although, Medicare Advantage plans can lessen the impact of this, you usually have co-pays and usually end up in a narrow network of providers, need pre-approval for specialists & procedures etc.
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Old 05-10-2019, 09:37 PM
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The NY Times article quoted above goes into this. In a lot of areas there has been a massive consolidation of health care. If an insurer tried to hold out for this, its customers could get blocked from a substantial number of practices in their area, including the ones the insurer's customers already go to. So the health care facilities have a lot of power.
But isn't there an association of health insurance companies? Why don't they ALL vote to only pay the Medicare rate together?
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Old 05-10-2019, 10:45 PM
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But isn't there an association of health insurance companies? Why don't they ALL vote to only pay the Medicare rate together?
I once worked for what was then a major employer. Like most major employers, they were self-insured and used a health insurance company to provide administrative services. At an "Ask the CEO" meeting the topic of health costs came up. The CEO said that they could pressure most of their suppliers to lower costs, but the health care industry held firm. He even tried to form an alliance with other CEOs, but the health care people called their bluff.

My speculation: They knew that union contracts required them to provide health insurance to the hourly employees and they wouldn't really drop coverage for their management/professional staff.
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Old 05-11-2019, 12:13 AM
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But isn't there an association of health insurance companies? Why don't they ALL vote to only pay the Medicare rate together?
Antitrust for one. But the article also notes that especially with self-insured companies the insurer collects a percentage of the premiums. While the insurers will try to lower costs - and convince their customers they want to lower costs - their hearts might not really be in it.
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Old 05-11-2019, 05:45 AM
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But isn't there an association of health insurance companies? Why don't they ALL vote to only pay the Medicare rate together?
In addition to violating monopoly and price fixing laws, it misunderstands the nature of quantity discounts. If I sell widgets, I can offer my best customers a quantity discount, making less marginal profit on each product because I am guaranteed a large amount of business from the good customer and make it up from the one off customers.

This breaks down if all of the customers band together and demand the same quantity discount because they are all now part of one large group. No business can have every single customer getting a reduced rate.

It would be like an argument for lowering taxes by pointing to a group of poor people and saying that since they pay no income tax, there is no reason why rich people should pay any income tax. I mean, it works for poor people, why not the rich?
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Old 05-11-2019, 07:50 AM
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In addition to violating monopoly and price fixing laws, it misunderstands the nature of quantity discounts.
How is it price fixing? The insurance companies aren't the ones setting the price, the health providers are.

The insurance companies just get together and say "None of us are paying more than the Medicare rate" I'm pretty sure the government says "We are only paying this rate for these services". Why don't the insurance companies do the same?
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Old 05-11-2019, 09:10 AM
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Isn't this what happens in the commercial world? There are several organisations in the UK that sign up independent grocery stores to a group contract deal. This can give them almost the same purchasing power as the big supermarkets while remaining [almost] independent.

Last edited by bob++; 05-11-2019 at 09:11 AM.
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Old 05-11-2019, 09:56 AM
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Old 05-12-2019, 02:13 AM
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How is it price fixing? The insurance companies aren't the ones setting the price, the health providers are.

The insurance companies just get together and say "None of us are paying more than the Medicare rate" I'm pretty sure the government says "We are only paying this rate for these services". Why don't the insurance companies do the same?
Price fixing, collusion, and monopoly don't only apply to the end supplier in the chain; they apply to anyone who acts in concert with another who will impose an anticompetitive force in the market which acts to set an end price.

The insurance companies are not the consumers. That is an important distinction.
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Old 05-12-2019, 07:49 AM
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The BBC has an article on price fixing by drug companies. I have quoted it in full, because I tink that the BBC is behind a paywall for some.


MODERATOR NOTE: Removed excessive quote.

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Last edited by Colibri; 05-14-2019 at 03:00 PM.
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Old 05-12-2019, 09:34 AM
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The BBC has an article on price fixing by drug companies. I have quoted it in full, because I tink that the BBC is behind a paywall for some.


Within that piece was a link to this:
One of the saddest posts ever
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Old 05-12-2019, 10:08 AM
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That first "amount charged" is a fictitious massively inflated number that is typically 2X - 10X the fair price. If the provider has stated that they accept Medicare, or if the provider is in-network with your private insurer, it is meaningless. The actual charges are the Medicare rates or the rates that your insurer has pre-negotiated with the provider for the specified service.

That fictitious wildly inflated price comes into play only if you have no insurance, of you inadvertently (or because of emergency) go to an out-of-network provider. Then it's the rip-off price that the provider will claim you must pay them. What you are actually liable to pay under these circumstances (when you have been treated without any pre-agreed price) is a complex question, but at the very least you are faced with a long and extremely stressful process trying to negotiate the bill down to something sensible, being threatened with collections, even bankruptcy.
The massively inflated charge isn't primarily an effort to soak the uninsured, it's a crude negotiating tactic with insurers:

http://truecostofhealthcare.org/outpatient_charges/
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Old 05-12-2019, 04:52 PM
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It works the same in theory with private insurers, except if Medicare approved $91.42, it probably costs the hospital in the neighborhood of $100-$125 to provide, and the allowed amount from private insurance is $150 or so.
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Old 05-12-2019, 06:37 PM
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It works the same in theory with private insurers, except if Medicare approved $91.42, it probably costs the hospital in the neighborhood of $100-$125 to provide, and the allowed amount from private insurance is $150 or so.
Given the wide range of charges across hospitals, it may cost one $100 and another, more efficient one, $80.
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Old 05-13-2019, 07:30 AM
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The Harvard Business Review article was great. However, if you'd read the whole thing, you'd know that it says the loss of money is due to hospitals' inefficiency, poor planning, and wasteful practices:



Medicare forces hospitals and doctors to function in the efficient way they should be doing anyway, and it penalizes them for sloppiness in patient treatment. That's better for all patients, whether they're covered by Medicare or private insurance.
This is true if the definition of "efficient" means "losing money overall."

Regards,
Shodan
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Old 05-13-2019, 01:11 PM
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This is true if the definition of "efficient" means "losing money overall."

Regards,
Shodan
So, you've never worked in a place that could be more efficient?
There are tons of reasons hospitals are not efficient. The managers probably want shiny new toys to advertise and to make sure they don't lose patients. They want shiny new buildings. The power of many managers is a function of the size of their organizations, so they tend to want to expand even if it is not necessary.
These things are not exclusive to medicine.
Pricing pressure forces companies to eliminate waste.
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Old 05-14-2019, 08:43 AM
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Yes, I've worked in places that could be more efficient. The ones that lost money, I didn't work at for long.
Quote:
Pricing pressure forces companies to eliminate waste.
Okay, let's cut property taxes so the school systems become more efficient, and wages so people work harder.

Regards,
Shodan
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Old 05-14-2019, 12:24 PM
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Yes, I've worked in places that could be more efficient. The ones that lost money, I didn't work at for long.Okay, let's cut property taxes so the school systems become more efficient, and wages so people work harder.

Regards,
Shodan
Already done in lots of places. I don't see lots of waste when I volunteer in our school system. I do see parents being asked to send supplies that the school paid for when I was a kid.

And do you really think people work harder when their pay gets cut? Ask the WalMart employees hiding out in the stock rooms about that. Ask the high tech employees who started coming in later and leaving earlier when the company decided to forgo raises about that.
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Old 05-14-2019, 02:33 PM
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And do you really think people work harder when their pay gets cut? Ask the WalMart employees hiding out in the stock rooms about that. Ask the high tech employees who started coming in later and leaving earlier when the company decided to forgo raises about that.
My point is that is what is being expected under Medicare for All.

Doctors lose money treating Medicare patients, and make up the difference with patients with private insurance. Doctors being reimbursed only under Medicare pricing don't have any other patients to make up the difference. So even if they apply these efficiencies of Medicare, they will still lose money. Because they lose money treating Medicare patients already. So, either a pay cut, or some other un-named efficiencies that they aren't already applying to their patients. Keeping in mind that the projections for Medicare for All already assume significant reductions in administration costs, and even so, doctors will still lose money under the plan as proposed.

Suppose a given procedure is reimbursed at $91. It costs $100 to deliver - $50 to the doctor, $20 to the nurse, and $31 for supplies. Where does the $9 come from? Unless you can spend $9 less on supplies (and heating and air conditioning and parking and the lease on the building and electricity and magazines in the waiting room and managing the medical records and janitorial services and certification and IT services and etc. etc.) somebody is going to be making less money.

And as I think we agree, paying less is not the way to get more out of your doctors and nurses and X-ray techs and pharmacists and supply-chain managers and schedulers and the guy who cleans up the fluids.

Regards,
Shodan
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Old 05-14-2019, 03:03 PM
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The BBC has an article on price fixing by drug companies. I have quoted it in full, because I tink that the BBC is behind a paywall for some.


MODERATOR NOTE: Removed excessive quote.

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Moderator Note

I have removed very extensive quoted material form another source. Do not repost extensive material, ESPECIALLY IF IT IS BEHIND A PAYWALL.

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  #37  
Old 05-14-2019, 06:02 PM
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My point is that is what is being expected under Medicare for All.

Doctors lose money treating Medicare patients, and make up the difference with patients with private insurance. Doctors being reimbursed only under Medicare pricing don't have any other patients to make up the difference. So even if they apply these efficiencies of Medicare, they will still lose money. Because they lose money treating Medicare patients already. So, either a pay cut, or some other un-named efficiencies that they aren't already applying to their patients. Keeping in mind that the projections for Medicare for All already assume significant reductions in administration costs, and even so, doctors will still lose money under the plan as proposed.

Suppose a given procedure is reimbursed at $91. It costs $100 to deliver - $50 to the doctor, $20 to the nurse, and $31 for supplies. Where does the $9 come from? Unless you can spend $9 less on supplies (and heating and air conditioning and parking and the lease on the building and electricity and magazines in the waiting room and managing the medical records and janitorial services and certification and IT services and etc. etc.) somebody is going to be making less money.

And as I think we agree, paying less is not the way to get more out of your doctors and nurses and X-ray techs and pharmacists and supply-chain managers and schedulers and the guy who cleans up the fluids.

Regards,
Shodan
You must never have gone through the process of becoming more efficient. The large difference in costs between medical facilities in the same city that has been found in studies shows that either not all facilities are on the razor's edge or that some are very inefficient at supplying the services that others do for less.
My center at Bell Labs became a lot more cost effective without lowering anyone's salary. People did get laid off who weren't essential. If you had said that some fat would go I'd agree with you.
It is possible that surgeons would be bumped to the top 2% from the top 1%, which would be a tragedy of course, but more likely newer doctors would have to expect a bit less.
My former step-brother - a psychiatrist who complained about Medicare reimbursement - did his continuing education at ski resorts. You are invited to not cry for him.

A practice with a single doctor might be mostly salary based, but the big costs come from hospitals and big clinics. I'm getting an MRI tomorrow and I'm driving to the nifty new MRI machine, and not using the older (and cheaper) MRI machine in my local clinic. I mentioned places with 61% bed occupation buying up new capacity. That's where the saving is going to come from, not cutting doctors salaries.
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Old 05-14-2019, 07:09 PM
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Suppose a given procedure is reimbursed at $91. It costs $100 to deliver - $50 to the doctor, $20 to the nurse, and $31 for supplies. Where does the $9 come from? Unless you can spend $9 less on supplies (and heating and air conditioning and parking and the lease on the building and electricity and magazines in the waiting room and managing the medical records and janitorial services and certification and IT services and etc. etc.) somebody is going to be making less money.
But "making less money" does not mean "losing money". In your example, the doctor only gets $40 instead.
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Old 05-14-2019, 07:11 PM
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Price fixing, collusion, and monopoly don't only apply to the end supplier in the chain; they apply to anyone who acts in concert with another who will impose an anticompetitive force in the market which acts to set an end price.

The insurance companies are not the consumers. That is an important distinction.
I actually want to understand this. So, when Walmart says "We are not paying more than $2 for that widget" it's okay. But if they got together with Target and agreed that both of them would only pay $2 for that widget, that's illegal?
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Old 05-15-2019, 12:38 AM
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Originally Posted by manson1972 View Post
But "making less money" does not mean "losing money". In your example, the doctor only gets $40 instead.
Which could be a reduction in money if the doctor sees the same number of patients. If the clinic becomes more efficient, and the doctor has less down time, the doctor could see more patients and thus make as much or more money with lower individual fees.
The place I go to has all its records on line, so the specialist I saw for the first time had all my information easily available without having to sort through any paper.
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Old 05-15-2019, 09:05 AM
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You must never have gone through the process of becoming more efficient. The large difference in costs between medical facilities in the same city that has been found in studies shows that either not all facilities are on the razor's edge or that some are very inefficient at supplying the services that others do for less.
Overall, health care providers lose money on 80% of their Medicare patients. So apparently most health care providers are being "efficient" in the sense being used.
Quote:
It is possible that surgeons would be bumped to the top 2% from the top 1%, which would be a tragedy of course, but more likely newer doctors would have to expect a bit less.
Earlier you said that people were not going to be more productive while paying them less, but now you are saying they will.

:shrugs:

Regards,
Shodan

Last edited by Shodan; 05-15-2019 at 09:06 AM.
  #42  
Old 05-15-2019, 09:47 AM
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I actually want to understand this. So, when Walmart says "We are not paying more than $2 for that widget" it's okay. But if they got together with Target and agreed that both of them would only pay $2 for that widget, that's illegal?
That is correct.
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Old 05-15-2019, 02:31 PM
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Originally Posted by Shodan View Post
Overall, health care providers lose money on 80% of their Medicare patients. So apparently most health care providers are being "efficient" in the sense being used.Earlier you said that people were not going to be more productive while paying them less, but now you are saying they will.

:shrugs:

Regards,
Shodan
Huh and huh. That they are losing money now doesn't say much about efficiency. How do you know they wouldn't be making money with efficiency improvements.
How much something costs is not so easy to calculate. First, hospitals pushing for higher Medicare reimbursements are going to tend to structure the numbers to make it seem they are losing money. But if there were no Medicare patients, what would happen to the allocation to fixed costs that Medicare patients pay. For instance, Medicare might not pay as much for my MRI as a private insurer, but if I were not going to it it would be sitting empty, which would increase the costs fora all others.
I worked on cost allocation for the much simpler problem of electronics manufacturing, and it isn't easy.

Do you really think a doctor falling from the 1% to the 2% is going to be that much less efficient? You must believe that paying a CEO $25 million rather than $50 million is going to ruin his work ethic. When pay causes hardships, that's one thing, but it is hardly the case here. We could talk about fairness also, but that would be a distraction.
We all agree that health care costs are skyrocketing. If physician pay was the major factor in costs, we'd expect surgeon pay to be skyrocketing also.


However, here is an article on physician's salaries.
Quote:
The total amount Americans pay their physicians, as Reinhardt reminds us, represents only about 20 percent of total national health spending. Of this total, close to half (editor’s note: higher now), is absorbed by physician practice expenses, including “malpractice premiums, but excluding the amortization of college and medical school debt. These debt figures become all that more important when one considers that in many countries – but not in the U.S. – medical education is free. And consider,” he adds, “that doctors in the U.S. train longer as well with four years of college, four years of medical school, three to seven years spent in residencies and even followed by an additional three years in fellowships.” Even if all physicians took a pay cut of 20 percent, the savings would amount to a minuscule two percent of our health bill.
My point in mentioning the 1% was that even if surgeons took a pay cut (which I was not advocating) they wouldn't suffer too much. And it looks like it would not help very much. So, it looks like we have to find efficiency someplace else. Like better utilization of facilities and less duplication across competitive hospitals.
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Old 05-15-2019, 08:29 PM
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Originally Posted by Voyager View Post

...snipped...

I'm getting an MRI tomorrow and I'm driving to the nifty new MRI machine, and not using the older (and cheaper) MRI machine in my local clinic. I mentioned places with 61% bed occupation buying up new capacity. That's where the saving is going to come from, not cutting doctors salaries.

This is an example of behavior that causes hospitals to respond in ways that decrease overall efficiency. That new MRI machine is exactly an example of one of those “shiny new toys” mentioned up thread that increases costs of medical care. So if you will do this, do not be surprised if administrators buy things that attract patients (bigger fish tanks, new machines) and skimp on areas with lower profile.

I’m not saying that you can’t make the choices that you need to. I’m just saying that the system that is as efficient as you want is not what you are used to.
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Old 05-15-2019, 09:04 PM
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That is correct.
So the anti-trust laws not only cover companies banding together to set prices they will sell things at, but also companies banding together to set prices they will buy things at?
  #46  
Old 05-16-2019, 09:15 AM
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So the anti-trust laws not only cover companies banding together to set prices they will sell things at, but also companies banding together to set prices they will buy things at?
Anti trust laws prohibit any two distinct enterprises from acting together to harm a third party economically. This includes colluding to sell at higher prices or buy at lower prices.

Tacit collusion is a different case and is not always illegal. So Walmart could announce that they are buying widgets at $X from a buyer and then Target could then insist on the same price. For obvious reasons this is almost never done about wholesale purchases but is sometimes done about retail prices.
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Old 05-16-2019, 12:04 PM
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Originally Posted by Blue Blistering Barnacle View Post
This is an example of behavior that causes hospitals to respond in ways that decrease overall efficiency. That new MRI machine is exactly an example of one of those “shiny new toys” mentioned up thread that increases costs of medical care. So if you will do this, do not be surprised if administrators buy things that attract patients (bigger fish tanks, new machines) and skimp on areas with lower profile.

I’m not saying that you can’t make the choices that you need to. I’m just saying that the system that is as efficient as you want is not what you are used to.
Exactly my point. Now, I had good reason to avoid a cheaper in-office test with somewhat nasty side effects (which are TMI) and if you I am going to do this I might as well go with the machine which will give the best results, but the MRI section was not crowded, and there was one machine that was idle when I was there.
The system as a whole would have been served better if I had used one closer to home in another facility, but our competitive system is not set up to do that. In fact, my clinic is owned by a monster company which owns lots of hospitals, so I should have been able to go to one of them, but the components of the company are somewhat competitive too.
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Old 05-17-2019, 09:28 AM
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So, you've never worked in a place that could be more efficient?

There are tons of reasons hospitals are not efficient. The managers probably want shiny new toys to advertise and to make sure they don't lose patients. They want shiny new buildings. The power of many managers is a function of the size of their organizations, so they tend to want to expand even if it is not necessary.

These things are not exclusive to medicine.

Pricing pressure forces companies to eliminate waste.


Quote:
Originally Posted by Voyager View Post

...snipped...

I'm getting an MRI tomorrow and I'm driving to the nifty new MRI machine, and not using the older (and cheaper) MRI machine in my local clinic. I mentioned places with 61% bed occupation buying up new capacity. That's where the saving is going to come from, not cutting doctors salaries.


It still seems to me that your behavior in the second post belies the opinion expressed in the first post.

The forces that would lead to greater efficiency would prevent patients “shopping around” for the “shiniest toys”. If it did not, there would still be incentive for “managers ...[to]... want shiny new toys to advertise”.

How do you propose squaring that circle?
  #49  
Old 05-17-2019, 02:18 PM
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It still seems to me that your behavior in the second post belies the opinion expressed in the first post.

The forces that would lead to greater efficiency would prevent patients “shopping around” for the “shiniest toys”. If it did not, there would still be incentive for “managers ...[to]... want shiny new toys to advertise”.

How do you propose squaring that circle?
To defend myself some, I wasn't shopping. My specialist outlined the options, and the one I chose was a clear winner. And I'm not opposed to shiny new toys that do better, I'm opposed to lots of copies of toys with low usage rates.
The way to solve that is to optimize across all providers, and not work in the silos we have now.
When I was on private insurance the closest hospital to me was not covered. (Not a problem, I wasn't thrilled with their numbers.) Patients can't do much about this.
I'm not in favor of government running the system, but I am in favor of putting pricing pressures on medical providers to make them solve the problems themselves. It works - as a veteran of the Bell System I saw it work.
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Old 05-17-2019, 05:10 PM
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I’m not blaming you for seeking out your best opportunities for best care.

I will point out that your specialist “shopped” for you, to some degree.

And I still think it’s not right to complain about managers getting the latest equipment when you yourself will travel sone distance to avail yourself of it.
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