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?
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?
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.
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.
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.
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.
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.
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.
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.
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.
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?
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.