There are some offices where it is the provider and one receptionist (such as a spouse). These offices outsource billing to a third party such as their health record software developers, usually the cut is 15-30% of all revenue for such extensive service.
Whereas hiring a third party to process claims only, as I have described with a high list price for everyone and letting the insurers look up their own rates, usually stays in the single digit. (5-7% or maybe 3-10%)
~Max
No menu. No list prices. No certainty of what is being bought. Yet we expect the only person in the room with no training in medicine, no training in insurance, and no training in medical billing to be the one responsible for managing the cost of care.
Having recently interacted with the insurance and healthcare world when having a baby, I will say this part is the worst. I got my explanation of benefits back from my main hospital bills for the stay I had when I was actually giving birth. Attached to it was some helpful tips on how to reduce costs next time. Some made sense, like making sure to use an in-network hospital. Some didn’t make sense, like maybe I should use urgent care next time.
Like, sure, major insurance company, I’ll just show up at the urgent care next time I’m birthing a baby. That will definitely work and definitely be cheaper.
Many hospitals perhaps, but not all. From Martin_Hyde’s link,
The hospital’s hard-nosed approach pays off. Although it is officially a nonprofit unit of the University of Texas, MD Anderson has revenue that exceeds the cost of the world-class care it provides by so much that its operating profit for the fiscal year 2010, the most recent annual report it filed with the U.S. Department of Health and Human Services, was $531 million. That’s a profit margin of 26% on revenue of $2.05 billion, an astounding result for such a service-intensive enterprise.
~Max
Also from Martin_Hyde’s link,
Hospital finance people argue vehemently that Medicare doesn’t pay enough and that they lose as much as 10% on an average Medicare patient. But even if the Medicare price should be, say, 10% higher, it’s a long way from $11.02 plus 10% to $157.61.
Pretend the actual cost of a service is say, $12.25. Therefore the breakeven charges for ten patients would be $122.50. Now let’s say four out of ten patients are on Medicare and thus can only be charged $11.02. Furthermore one patient is on Medicaid and can only be charged $8.62. Another patient is insolvent and cannot be charged at all. We have a shortfall of $20.80 to spread among the remaining four patients with private coverage; each of them must pay $17.45, some 142% of the cost of care.
This is actually in-line with the 30-50%-above-Medicare rates the article says private payors and hospitals usually agree to. That self-pay patients - the one out of ten written off as insolvent - have to pay the “list” price is, I think, very wrong, but not a significant source of health care expenditures nationwide, or hospital revenue.
~Max
Every company on the planet charges more for their product than it costs them to provide it. Not just a profit margin but to cover litigation costs, returns, theft, price fluctuations and so on.
They spread those costs among everyone and that is fine.
What is not fine is them charging person-A $15 and charging person-B $300 (assuming both absolutely HAD to get that product/service or they would die…this is not a coffee maker).
In a Capitalist society, who would you suggest be the one if not the consumer? I didn’t create the system.
The same people who manage the cost of:
the fire department
the police department
roads
schools
or…
The same people who manage these costs in other Capitalist societies, who manage it WAY BETTER than the American Public has done for the last 50 years.
Neither did I, but I can recognize that the system sucks, and I can see more effective systems in other places.
The cost I quoted is supposed to include all of that.
And charging person A $15 and person B $300 is a natural consequence of private contracts where person A is part of a large collective that negotiated down the price, and person B is on their own. There is a moral argument about medical care being necessary but that is not a consideration for hospitals or insurance or any medical practice when setting rates. There is a law that hospitals cannot turn you away for nonpayment in life threatening situations, but only immediate, such as the guy standing in the lobby with a knife in his chest. A blood test or CT is usually preventative care, ETA: although in this case the CBC was ordered to follow-up a negative echocardiogram during an ER visit for suspected heart attack (?)… not sure what that counts as.
~Max
The problem is, person-B has limited to no ability to compare prices. Especially if they are brought to the hospital unconscious. Heck, even conscious I believe an ambulance MUST take you to the nearest hospital.
Further, the person has little to no control over what care they get. When I was in the hospital I was never given a choice to forgo some tests or have less blood taken or decide if I wanted to pay $30 for some aspirin. Never, ever, ever was I given a price list and any choice in what I was willing to pay for much less a chance to call other hospitals and price-compare for the best rate.
Nevermind the absurdity of trying to do all of that when you are desperately ill in the hospital.
The comparison, if made at all, would be made when choosing the insurer and plan.
~Max
There are plenty of uninsured/under-insured people out there.
Further, most people are in no way expert enough to truly assess the costs and weigh the benefits. If you are young and healthy and poor then under-insuring yourself may make sense. But shit happens and if it does then you are screwed.
That does not seem a good system to me.
All three points granted.
~Max
Something many people may not realize, is that doctors are forbidden (by contract) to advise their patients on what health insurance is good and what insurance sucks. We get asked a lot, especially as people become Medicare age and want recommendations as to supplements or advantage plans.
~Max
I’m on the fence on this one.
Some doctors may be very honest and forthcoming. Others may be getting some kickbacks. I’d like to think most doctors would be honest with their patients but there are always some bad apples and it does not take many to spoil the bunch.
Well not only the doctors, but the ancillary staff too. I think most people like their doctor(s), especially as you get older and have specialists for chronic conditions. The person you call for billing questions probably knows all about insurance companies screwing over their customers. Kickbacks from insurers are illegal but there are some group practices where the group is basically the insurance company; in those cases the question is sort of moot, right?
~Max
The original question was what to do about it, and my thought, before reading all these replies was “just start a whole new network of field medicine providers in vans” and people would start flocking to that instead. In other words, Doctors Without Borders. Like a third world country.
Then, there’s the perennial question (which insurance company does your physician think is ‘good?’): good for whom ?
I’ll say what I’ve always said: perverse incentive. The patient wants to be healthy. Everybody else wants to make money – generally, as much money as possible.
It’s broken from the get-go.
There’s no money in healthy people.
There’s no money in dead people.
All the money is in the middle.
Yeah. Totally broken. If I get more time, maybe I’ll contribute a ‘proper’ post to this thread. Meanwhile … pith … no charge (unless you’re cash pay, in which case … say … a thousand even 
)
There is plenty of money in healthy people paying premiums / taxes, and probably a good deal of money in preventative care to keep people healthy. A doctor can save on malpractice premiums if his/her patients are all healthy.
~Max
I remember seeing a group went to Los Angeles a few years ago to provide free dental care ala Dentists Without Borders. It was no small thing. Numerous trucks and dentists and ancillary staff.
The number of people who showed up was completely overwhelming. You’d have thought it was a third-world country.