Quote:
Originally Posted by TheLongshot
Funny, but we talked about this a lot over the weekend with my family.
One aspect that is ignored here is the the "full freight" price is also inflated. The people who are making money hand-over-fist are the insurance companies, medical supply companies and drug companies. All of those players are gaming the system to net the most profit.
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Interesting. I observe that a number of the largest medical insurance "companies" in the country are the various "Blues" (for example Blue Cross and Blue Shield of PA) -- which are non-profit organizations! If they're making money hand-over-fist, then something is
seriously wrong. (And I'm certainly open to considering that possibility. It's just that making money is not supposed to be part of their
raison de etre [add your own ^%$&^%$C accents!]).
Other than that, I simply note that the price I was describing as "full freight" is the "reasonable-and-customary" amount set by the government. One can always argue about whether they correctly figured out what the R&C price should be, but that's a different issue. As to whether or not the R&C price is inflated...
of course it is! We'll take my general practitioner's office, for one example. The R&C price computed by Medi* (I'll just call it UncleSam from here on) for lab work on blood samples just nicely covers what the lab charges them. At least, it would... if Uncle Sam actually paid the entire R&C price. Since they pay far less than that, my GP takes a hit on every blood test done for a Medi* patient. Since the doctors and nurses can't survive on air, the money must be made up somewhere. That somewhere is the R&C prices of the procedures they perform in-house.
The economist I referred to earlier (whose name I
still can't recall, darn it!) computed that the market equilibrium price for these various procedures would fall between the R&C price and the much lower amount Uncle Sam actually pays -- but a good deal closer to what Uncle Sam pays than to the R&C number.
Quote:
Originally Posted by TheLongshot
Talking with my brother-in-law, who has worked in various places in the medical industry, most health providers are fine with Medicare and Medicade since they pay semi-reasonable prices and pay on time. I've seen many complaints about dealing with different insurance companies and that it seems like every company does it differently and getting their money in a timely fashion is often a complex process. Both my father and my brother-in-law think that the future of heath care coverage in this country is going to be through a single source provider, whether it is government run or not. My brother-in-law has already seen signs of it, with the local health care conglomerate near him buying out local practices and surgery centers.
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Interesting. The providers I talk to here in Pittsburgh tell me that Medi* pays well below their actual costs. They also say that payments are slow-ish, ranging from a few days quicker than promised (I forget the official time-frame) to about 3 weeks late. By comparison, the better insurance companies pay R&C prices with prompt payment. The average ones pay R&C prices on a schedule that's modestly quicker than Medi*. The
dregs of the insurance companies take up the vast bulk of the time and effort these providers spend dealing with insurance. The lousy insurers pull things like denying payment repeatedly until the provider bills the patient and the patient screams at the insurance company. Then the insurer sends the check to the wrong provider, thus delaying payment another 60 days! There are other paths, but this is a typically hideous example. The companies at the bottom appear to be really
really sleazy!
Finally, on the topic of gaming the system to make the most profit, my experience is that most people try to do the best they can within the rules of the game. When the game has rules that are arbitrary, baroque, and impenetrable, people appear to have no compunction about taking advantage of odd combinations of rules to get maximum benefit. And I am not sure that these individuals and companies are doing the wrong thing! (But the sleaze I described in the previous paragraph is clearly wrong...) Rather, I suspect that it's a symptom of a system that is at least partly broken and could use some fixing. Of course, I rather suspect that
my idea of the right fixes diverges substantially from (say) Moejoe's -- and likely from most of our other European members as well.
Xenophon