Commercial insurance companies pay contracted pre-negotiated rates. Higher than medicare, but the billed amounts are still irrelevant.
The astronomical inflated billed amounts are a negotiating ploy principally with patients who are uninsured or getting emergency out-of-network care.
If you look at the data the median price paid by the uninsured is much less than the mean price which indicates that what is driving the average is not those who pay nothing but rather the few who actually pay list price. In the last time period in the study the median uninsured actually paid less than medicare.
This still says nothing about the indictment of the process that I laid out above.
Read my own experience that I laid out in post #14. After months of stress and eventually doing my own legal research I eventually discovered that I didn’t have to pay anything of a $175,000 bill that both the hospital and my insurer claimed or implied I was legally obligated to pay. And I’m a college graduate, I’m assertive, English is my first language.
Many uninsured people are threatened with a huge bill inflated to 3X-10X the fair price to intimidate them, put through months of incredible stress, sent to collections etc., never informed of their rights, not told what a likely and reasonable expected outcome might be. What you’ve said about the skewed distribution indicates that some of these people evidently never find out that they don’t have pay these billed prices, and just roll over and pay. And I’m highly skeptical that those are simply rich people who don’t care - wealthy people are more likely to hire an attorney to figure out what their rights are.
The system needs strong legislation to simply outlaw these abusive outrageously inflated “list price” bills that providers use to intimidate uninsured patients, many of whom are sick and vulnerable people.
It is what is called and implied at law contract. What Is an Implied Contract? | Nolo
The law creates a fiction whereby it determines that if you were dying on the sidewalk, you would consent to a contract for medical services. A further policy interest is that the medical providers gave you a valuable benefit and that they should not go without pay for doing so lest people be dying on sidewalks.
A court would then have to define what the reasonable value of the services you received were. The medical provider cannot get a judgment for anything it damn well pleases. It is sort of like when you go to a fancy restaurant with no prices on the menu. You understand that you have to pay something for the food, and by virtue of being a restaurant with no prices on the menu, it’s going to be damned expensive, but they cannot present you with a bill for $1 million.
This balance billing is new to me. I have never had it happen and for whatever reason I was talking to a doctor friend of mine a while back and he said hell no, he does not do this. He said that with every contract he enters into with any insurance company, one of the standard riders is that our policyholder shall be billed the agreed upon contractual rate, and nothing more.
I live in the UK.
Last year, I got chronic pain in my stomach / bowel region.
I had many diagnoses such as blood + urine tests, ultrasounds, MRIs and cameras up my front and back (if you see what I mean!)
After my first four day stay in hospital (following an ambulance trip), I was given the all-clear for bowel cancer. 
Instead the surgeon said I had gallstones and that he would remove them (plus my gall bladder) with keyhole surgery. 
That led to another 4 day stay in hospital (recuperating after the operation.)
Total cost to me: £0.
(I’m 65 and had paid 6% of my salary whilst I was working towards our wonderful NHS.)
As someone said earlier, the US system is fckd.
That’s great. I mean that. It is nice for you that you had all of that medical care and paid nothing out of pocket. I’m not being a smartass here.
But someone paid. You and your fellow UK citizens paid through taxes. Do you have any idea what that bill was? Could it have been cheaper with free market competition and price transparency?
And before you say that when you are sick, you don’t want to be haggling with people like you are in an open air market in the Bahamas, keep in mind that this price sensitivity doesn’t depend on our own individual actions. If I buy bananas in the grocery store at 59 cents per pound, that wasn’t because of my shrewd negotiation. That was already done through millions of people in the system and letting prices fall where they may.
Also before you say that the NHS pays far less for medical care than Americans do, that is largely because: 1) we are an imperfect mix of government and private care; contrary to popular opinion we do not have a free market healthcare system. We have Medicare and Medicaid as a large part of it anyways, and 2) you all get the benefit of reduced drug prices because these companies make their money here and sell it to you at a discount.
If government control of healthcare works so well, why wouldn’t it work equally as well in any other industry?
I think the important word there is contract. I’ve never heard of “balance billing” being an issue with in-network providers. But there are still policies with out-of-network coverage. And those out-of-network providers have not signed a contract with the insurance providers.
Although I myself have never encountered balance billing, my sense is that it’s commonly done not by individual doctors who see patients on a on-going basis ( so not the primary provider or the cardiologist ), but by physician groups that provide staff for certain hospital positions - for example , the group that provides ER physicians or anesthesiologists might balance bill. This is how you get those stories about “the surgeon and the hospital are in network but the anesthesiologist was not”
[quote=“UltraVires, post:46, topic:830032”]
That’s great. I mean that. It is nice for you that you had all of that medical care and paid nothing out of pocket. I’m not being a smartass here.
[quote]
I appreciate that.
Incidentally American friends of mine estimate that the approximate cost of my treatments in the US would be over $200,000. :eek:
I worked for nearly 40 years before retiring. All that time I paid 6% of my salary in contributions and my employers paid 9% towards the NHS.
The main reason that the US system is so expensive is that it’s run for profit.
Instead Europe, Canada, Australia etc all have UHC.
I certainly don’t want to call an ambulance and have to pay for the trip.
I certainly don’t want to have the hospital receptionist ask me how I’m going to pay whilst I’m groaning in agony.
The point of UHC is that millions of people all form a no-profit system and benefit from it.
Who funds the US army? 
The head of a hospital in NYC that I read about got $10M one year (including a bonus, so average salary quite a bit less.) IIRC he was just a bureaucrat, not a doctor. The head of a health authority - all medical services, doctor billing, hospital administration, etc. - for a city of just under 1M in Canada got about $C500,000 - so less than $400,000US. This sort of problem goes all through the system. Prescription prices are double or more in the USA, despite we Canadians get the exact same drugs; government/big pharma scare tactics will try to tell you they aren’t, but they are. We have one billing system per province, so no hassles or trying to figure what in or out of plan, what is covered, etc. for each patient, everyone is covered the same; one form to fill out, nobody trying to as many claims as possible to save money; the billing system is paid for by the government, not for profit.
There’s amazing savings to be made by getting rid of a lot of the crap that causes non-medical hassles in the for-pay system, but then the board of Blue Cross would not have Bentleys and hired drivers.
The problem in the USA is the disconnect between who pays and who benefits. You get treated, but the insurance company pays. they don’t care about the price, they can just raise rates. the employer doesn’t compare fee for value, he pays what the market bears, and gives you less of a raise. And as mentioned, when you are passed out on the sidewalk or moaning in the emergency room, you are not haggling about the cost; heck, you don’t know what you want or what it costs until the experts have spent time (and charged for it) poking and prodding you and taking Xrays.
That’s silly. Health insurers certainly care about price. Decreasing spending by a dollar is just as profitable as charging a dollar more in premiums.
No. The main reason the US system is so expensive is that it costs more to administer than to actually treat patients. For example, hospitals have to have billing staff who understand ~100 different reimbursement agreements spread over 10-30 different insurers. They have to have entirely separate departments to handle Medicare billing, which has many of its own requirements. Then they have to have billing staff who handle uninsured patients, and so on.
US per capita wasted health care administration spending is more than double the entire cost of UK health care administration.
Yes, this [the part in my bold] is certainly true, balance billing never happens if you go to an in-network provider. The problem with balance billing arises only for out-of-network treatment, i.e. where no contract exists between the provider and your insurer.
This can happen if you have elective surgery at an in-network hospital if one of the many people involved (perhaps an anesthetist) turns out to be out-of network. Many providers seem to take the attitude that it’s entirely up to the patient to figure this out beforehand, which it pretty outrageous.
However, the situation where you can get a huge balance bill (of the potentially bankrupting kind) is when you require major emergency treatment, and you are taken to an out-of-network hospital, as I described in post #14. There are as yet no federal protections for patients, and protection under state laws is a patchwork of inconsistency. Everyone should check their own state’s legislation carefully to know what protection they have, I linked to an article in that post that gives state-by-state details, although it may not be completely up to date.
Are you seriously arguing that the U.S. healthcare system would be better if we did away with Medicare, the only part that at least partially follows the model of providing universal care (at least for older people) through general taxation, and kept just the utterly dysfunctional private part?
Can you point to any example of a country that provides better and cheaper healthcare for its people with a private-only system? No you can’t, because there aren’t any.
Can I point to any example of a country that provides much better and much cheaper healthcare than the U.S. by having a backbone of public universal healthcare funded through general taxation, with or without supplementary private options? Yes I can - literally every other developed nation in the world.
It’s difficult to get into any healthcare topic without getting into the controversial problems with U.S. healthcare policy, but it does occur to me that we’re in GQ, and there’s some important factual information in this thread about balance billing and other matters.
So I think for me I’m going to step away from any further discussion of policy issues with UltraVires here and stick to commenting only on factual matters in this thread. There’s plenty of other healthcare threads in GD and the Pit where we can get into policy.
Interesting article from NPR:
Bill Of The Month
Cat Bites The Hand That Feeds; Hospital Bills $48,512
Summary: Hospital bills $48,512. Insurance pays $34618.50. Patient pays $4191.10.
The bill included $46,422 for rabies immune globulin.
The estimated cost of the immune globulin was $4,335.
But here is the really interesting part I did not know:
As of this January, this article says hospitals have to disclose their “chargemasters” to the public!
Hmmm… I came here to post this too. The NPR article says she got two shots in one visit, an immunoglobin shot (12ml) and the vaccine.
I remember when I was a kid, rabies shots were allegedly painful (not really, apparently just 2 weeks of needles) and they could be given by your local doctor. And did not cost anything close to $48,000. this bill apparently does not reflect anything close to reality - and that is the problem. For $48,000 one short hospital ER visit, they could have covered her in gold leaf at the same time.
Reimann is right. Every civilized country in the world has free (taxpayer funded) health care. the USA does not.
This is not correct. Most countries do not have “free”. For example France pays 70% of costs for most things. In Germany citizens are required to have health insurance either private or public and the plans generally have co-pays. In Sweden there are copays for every procedure. In Switzerland all plans have a deductible to be paid by the user. In Singapore costs are paid out of a mandatory healthcare savings account and every procedure has a copay. The same thing in South Korea.
Yes, the chargemaster is a the compilation of list charges, and while some are based on reality, most are totally made up. This is why getting your gallbladder out can cost between $4,000 and $16,000 in the same city. Since the prices are made up the often do not come close to each other. And this is because different administrators make up different things. The big upside of Medicare for all is how efficient the system is. 96% of their premiums are returned as payments for services. As opposed to 80% or less for private insurance. And do not believe for a second that medicare reimbursement is not profitable for the hospitals. Most of the prices for the medical services I provide are not bad at all.
Similar situation here. We were between insurance policies (didn’t know about enrollment periods at the time), had a bat in the house, and went to get rabies boosters (not the first bat). We could have waited a week and half until the new insurance kicked in, but our 6-year-old was quite panicky about the whole thing. We went to the ER and asked how much the boosters would cost. We were told “about $100 each.” We figured that heading off 10 days of nightmares was worth $300, so we got the shots. A couple of weeks later, we received a bill for $18,000 — $5,000 per shot and $3,000 in other expenses.
My wife tried to negotiate them down to something reasonable, but no luck. Finally we just said, “We’re not going to pay it.”
The hospital called us for a month or two; we just didn’t answer the phone when it came up on the Caller ID. Then a collection agency called us for maybe six months — again, we didn’t answer. And then it was over.
I’d assumed our credit rating took a hit, but based on your later post, maybe not.
Federal law limits the medical loss ratio to 80% for Individual and Small Group, and 85% for large group, so it’s not “80% or less” being spent as premiums. Some insurances have had to return money for exceeding that, but according to the CMS, the average MLR was 92.9% in the individual market, 86.1% in the small group market, and 90.3% in the large group market.
My understanding is that making a profit off of medicare reimbursement depends on whether you are looking at the average cost or marginal cost. Medicare reimbursement is usually enough to cover the marginal cost of the procedure but not enough to cover the average cost.