I know this will attract a lot of people who have suggestions for healthcare.
Let me add my big one: price transparency.
I had a simple test the other day. I could not get a price. I could not get a price with my insurance, or without it. I called at least 9 times. I got 5 call backs from people who asked me to schedule the procedure but no price.
On the 10th call, I finally got someone to tell me what the out-of-pocket price would be without insurance. She told me a range! It was $96-$115. This was close to the range that google says was about average for the procedure.
So this was not a case of over-charging, or unfair pricing. I really did not know if the test was $10,000 or $100 till this call.
If they just made the pricing transparent, I think a lot of the problems would evaporate.
(Although I think the profit centers would suddenly become the emergency medicine section of the hospital.)
I know this article focuses on fraud, but the non-fraud part of the healthcare is just as broken, and probably costs more.
An an anecdote: I've been on a high-deductible plan for nearly 13 years. I have been regularly met with shock and incredulity that I could possibly want to know the cost of a procedure. My wife and I have spent, collectively, hours on the telephone trying to get answers. It's particularly galling when we get "guilt trip" treatment for asking about costs for procedures for our young daughter. We have been met with both tacit and stated insinuations that we're placing a monetary value on her "health" by asking what procedures or drugs might cost.
I don't think price transparency will fix much, though. The average person I know has employer-provided insurance and doesn't think a bit about the costs of procedures. Price transparency combined with individuals having to pay for their healthcare expenses would help, but there's blame enough to go around for every player in the system, too.
For some of these you may have to resort to the "ludicrous claim" approach, because people will provide information to correct you when they would never provide it just because you asked - go look at old Usenet discussions if you don't believe me.
When they won't provide price information, act as if they've just told you that it's going to cost more than $100,000 and repeat that to them. If they then say "It's not going to cost that much!" "Oh, you mean you do have some information on how much it costs?" Then work them to more detail from there "Well, is it more than 50,000?"
You may also be running into a situation where the person thinks you want an exact price and doesn't have it, so be sure you tell them you're looking for a ballpark number - or if they've irritated you and you wish to unleash the snark, "Ma'am, I'm trying to find out whether I'm going to be feeding my family on rice and beans for a week, a month, a year, or until we lose the house and my child's getting meals at the women and children homeless shelter while I'm out on my own."
Edit: It doesn't quite have to be as ludicrous as I started - a simple "Oh man, I really can't afford $5,000 for that test right now." can also get the conversation started and information flowing.
I'm assuming you're ESL, ... in Polish you also call it literaly "black comedy". The proper term you're looking for is "dark comedy". In the US "black comedies" nowadays is a term referring to for/by African Americans; it's a whole sub genre.
At best in the US is a ambitious term and accepted colloquial term refers to comedy by/for AA audiences. At least places I live in the US (MI, CA, NY).
Anyways English is a fun, dynamic, and at the same terrible language. But I'll take your word for British flavor of the English language.
It would "help" in the sense that people would forgo care.
Sure you might shop around for a non-emergency specialist one-off procedure like an MRI, but the cost of MRIs is a drop in the bucket and wouldn't meaningfully impact overall healthcare costs if they were an order of magnitude more expensive. If you have "normal" insurance plan your insurance provider has presumably already shopped around and only providers willing to take the reduced rate are "in-network".
Don't get me wrong: you should be able to get a cost estimate up front and it is silly that it is so difficult.
Price transparency isn't the major problem in healthcare. The free market and profit are the major problems with healthcare. To set prices a free market requires price discrimination and the ability to price some people out of the market. That translates into debilitating illness (a deadweight loss to our economy overall) or death for serious medical issues. A free market in healthcare absolutely requires that some people be allowed to die of treatable diseases in order to maximize profit.
To put it another way: As a technical matter it is impossible to discover the maximally profitable price for a treatment without raising the price beyond at least some people's ability to pay.
The average person I know has employer-provided insurance and doesn't think a bit about the costs of procedures.
While that has been true for decades, in my experience, those employer-provided plans are beginning to transfer some of the cost to the consumer through higher deductibles and copays.
My last few visits to the doctor tend to support this, as in both cases, the doctor offered cost-saving options and advice.
Yep. And employer plans don't avoid the random bill in the mail from "lol you still have to pay the balance because we decided not to cover all of that even though you never had a chance to know the max downside".
And if you have major surgery even on a "platinum" level plan you are still on the hook for tens of thousands of dollars. Fuck the system, its calcified nonsense at every step.
My dental hygienist once told me to get 3 cleanings a year. I told her my insurance covered 2. She told me that it was like chemotherapy- you should do what's medically necessary whether or not your insurance covers it.
If your dental office is recommending 3-4 cleanings a year and you have dental insurance that covers two, there is a good chance that they may cover more. My Delta Dental (a popular dental plan in the US) lets you add a free* rider via the website to cover four cleanings a year. It has a menu of medical reasons for the extra coverage from which you choose one.
I'm told diabetes and maternity are the most common reasons people access the additional cleanings.
* I realize this is priced into the default premiums.
I have GERD but before diagnosis the acid from coughing was terrible on my teeth.
My dentist with many years experience diagnosed it. I went to the doctor who confirmed it was GERD.
I lost my job but when I was working the insurance paid for two cleaning per year. I chose to keep the insurance but it's a lesser plan that only covers one cleaning every nine months.
Twice per year was good for me since I got lazy about three or four months after visiting the dentist. I needed the twice yearly pep talk.
And I should also say that 75% of people who are diagnosed with IPF a fatal lung disease have GERD. My father has IPF and GERD I have GERD but I hope I don't develop IPF. My grandfather died of emphysema at 52 I really hope there's no connection! So yeah a dentist could point you in a direction that may help you more than you realize.
It all depends on you. If you develop plaque more quickly, you want to go more to prevent gum disease. Gum disease never goes away and always requires more intervention and more $$$.
The recommendation that you go twice a year literally originates from a toothpaste ad in the 1950s. It was an arbritary number intended to encourage you to get preventative care, aided by their toothpaste. (In those days dentists were mostly tooth pullers)
Or you could spend a fraction of that on decent floss, toothpaste, and a toothbrush. If you have decent home care, you really don't need to be getting cleanings three times a year.
That's part of the reason I ended up switching away from HD. It was a ton of work to get estimates, and there was such a delay if there were multiple invoices from different providers with my deductible that I ended up having to pay several thousand over my deductible and wait to be refunded after everything had processed through the system.
The core difference between the American health insurance model and the Japanese model (which costs half as much and has better outcomes) is fixed pricing. In Japan, a government commission sets prices for every medical product and procedure, tuning the prices to insure profitability, while preventing profiteering.
In America, price negotiation is done between providers and insurance carriers. This has a few obvious effects. First, it gives us the in-network/out-of-network distinction. Second, it introduces complexity in the math sense to pricing - providers aren't charging one price, they're charging a wide array of prices, although those prices don't really vary much.
The network thing also has the effect of reducing consumer choice in providers. I can use whatever doctors/facilities my insurance has in-network, unless I'm willing to cough up the difference out of my own pocket.
Of course, fixed prices would be that wicked socialist government control we're told is ruining everything.
I'm heading back from Japan today, and my family got a bunch of checkups and medical stuff done while we were here.
Even without insurance all our procedures cost total less than ~$100 apiece.
The most expensive thing I've ever had in japan was my full body workup last year for $500.
It included: stomach ultrasound, 5 blood tests, eye exam, MRI(brain) and barium scan. All without insurance.
By comparison, in the US I was charged $1200 to get my daughters arm cast changed (no xray, just a nurse changing the cast), and $800 for an ultrasound.
It is literally cheaper to fly to Japan and get treatment without insurance than to use my health insurance that I pay $1300/month for.
Also, as a bonus, because of the set prices of medical procedures in Japan, insurance is super cheap. For a family of 4 it was costing me around $500/month when I used to live here.
I'm in the middle of nowhere, so in my case I would need a smattering. However, almost all doctors can read/write English, even if they can't speak it. I've had 80 year old doctors proudly write down the word rheumatism, where I can barely get by with spellcheck.
In bigger cities, you'll definitely be able to find doctors who can speak English easily.
The United States will get single-payer before it gets government-set pricing for 15% of its economy. Both, by the way, are problematic solutions!
There are options for transparency that don't involve a government takeover of health care. But the brinksmanship in the politics of health care --- almost entirely the fault of the GOP --- is keeping us from exploring solutions.
It's not a government takeover of health care - only of pricing. The Japanese model is largely private providers, and private, employer-provided insurance.
Standardized pricing gets rid of the problem of charging different customers (slightly) different pricing, and having massive negotiations on a per-carrier basis. This sort of thing isn't a matter of "competition drives down cost". It's just stupid and inefficient.
Don't Medicare and Medicaid pay fixed prices? And aren't they generally below cost for the provider? So they have to "make up the difference" by charging private insurers and cash payers more?
It's lower than what the provider charges other insurers, that doesn't mean it's below the provider's cost. It's also commonplace for providers to bill insurers one amount but the insurer only pays a lesser amount, it's a little game they play. Pricing of medical goods and services in the U.S. are very divorced from the actual costs of providing them.
Also, Medicare and Medicaid can't negotiate drug prices.
I think so. My point is, government price ceilings on all health procedures are so noxious to half the polity that nobody will support it, and we'll get single payer by default.
They are generally less than what providers bill to others but Medicare doesn't pay below cost.
Medicaid varies because states have way more control and many states (especially Republican-leaning ones) have slashed their rates as part of a concerted effort to kill the program. Not that it matters - in Texas you generally can't qualify for Medicaid if you're childless or have a job. The income requirements are insanely low.
Yeah, based on my experience living here I don't think this kind of price control is ever going to happen in the U.S.
In the majority of the 1st world where the goverment and general population accepted the fact that healthcare is a special case outside normal economic rules. That's why get things like single payer, price controls.
That's not the prevailing belief in the US. The majority of people in power (not sure about general population) believe that healcare is like any other business subject to the same rules. Single payer is government interference into the market; price controls are definitely out of the question. Price controls might even be unconditional (if challenged, depending on context).
Also, the various lobby groups representing doctors are very powerful much like unions used to be. However unlike labor unions these groups have broader cross party relationships. These groups tent to oppose any kind of limits on pay that could directly impact their constituents.
When you put that in perspective it's obvious to understand why we end up which such convoluted solutions as the ACHA in order to expand/guarantee medical coverage to people.
Having recently had the opportunity to compare Tokyo's rail system to DC's, I'd trust the Japanese government to set prices. But here in the US I suspect prices wouldn't be set to "ensure profitability while preventing profitability." Instead, they'd go back and forth between untenable extremes.
You're not completely correct. Medicare has fixed prices that it will pay for visits, procedures etc. The prices depend on what region of the country you live in. Insurance companies then set their prices up or down from there. Independent physicians have little negotiating power and often get paid by private insurance companies less than the fixed government rate. Larger systems with more bargaining power can get significantly more.
But medicare's irrational price setting system is a big part of the problem.
It's the same thing, when it comes to the problem I'm pointing out, no matter how we describe it - medical providers charge different rates for the same products to different insurers, and insurers pay different rates for the same products to different providers. And the range of variation is not actually large, but we introduce tremendous complexity to the system in order to achieve it. It's not "competition" in the classical sense, and doesn't provide the benefits of competition to consumers, providers, or insurers.
Lack of price transparency bothers me as well and I wish we had it.
However, I don't know if there will ever be enough pressure to manifest this. Price transparency really only matters to the person paying the bill. Our society is very rapidly evolving to consider any healthcare cost of any kind to be an insurmountable burden that no normal person could ever be expected to pay. I suspect that the incomprehensible, ridiculous healthcare schemes that we are living through currently are just death spasms on the way to fully socialized medicine.
I'm sure there are rare people here and there that care how much a mile of highway costs to pave or how much a mile of city sewer line costs to install ... I would expect the same number of people to care about the cost of a medical procedure when their own cost is $0.
> I'm sure there are rare people here and there that care how much a mile of highway costs
No offense meant, but I find this attitude really odd. I'm not from US and only have an overall idea how things work there, but I wonder... Isn't that still your money, even if you pay $0 directly and the rest comes from the shared pool your insurance payments or taxes are also in?
I just tend to believe there ain't no such thing as a free lunch - someone has to pay for the medical services, highway pavement or sewer line installation. People can't be expected to work for free, right?
So I think anyone participating in a collective funding effort should have at least some rough ideas how the money they pay are used. If we don't care about how government or insurance company (or whatever entity we pay our share to) manages things - we would surely end up with insurmountable burdens called "things running out of control".
> I find this attitude really odd. (snip) I just tend to believe there ain't no such thing as a free lunch - someone has to pay for the medical services, highway pavement or sewer line installation. People can't be expected to work for free, right?
I think the issue is that most of these services are so cheap that the cost isn't ever a major factor. "No one cares" is probably more accurately stated as "no one is forced to care, because the general public can have confidence it's handled mostly responsibly".
In Michigan, for example, to completely tear down and rebuild new a lane-mile of freeway that is rated to last 20 years, cost roughly $2 million dollars in 2016. So, a brand new stretch of freeway, 4 lanes wide and 100 miles long, would cost about $400 million dollars. (That distance covers, just as an example, an entire trip from Chicago to Milwaukee)
That cost sounds insane at face value, and gets everyone worked up about "costs". Until you math that out and realize it comes out to 33 cents per citizen per month. At which point, freeways seem like a crazy good bargain. Even if you go crazy and build 20 times more freeway than that, the total cost is still cheaper than a Netflix subscription.
They're not all that low of course, but this tends generally holds true of many social services or utilities (water, sewer, electrical, firefighters, schools, police, etc). High upfront cost, high "sticker shock" value, but as a common good everyone can benefit from it becomes a pretty reasonable cost per person. Far lower than it would ever cost to do so any other way.
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The only thing that doesn't seem to work that way in the US is healthcare. And I don't know why, but I suspect it's because it's so privatized and unregulated (so lots of profit and overhead) and also so intentionally hidden in terms of cost (so there's no way to look up costs, the way you can with any normal social service).
"Isn't that still your money, even if you pay $0 directly and the rest comes from the shared pool your insurance payments or taxes are also in?"
Well, please do read the first sentence of my reply - I do care and I do wish that price transparency were extant.
Further, as a net tax payer, in California no less, I am quite interested in the actual costs of things like road paving and bridge building and subway tunneling.
But neither of those (net tax paying and interest in the pricing of social goods) are common traits.
> Our society is very rapidly evolving to consider any healthcare cost of any kind to be an insurmountable burden that no normal person could ever be expected to pay
On the other hand, if prices are not managed properly, premiums get higher and higher. So even if insurance pays, you should care that prices are reasonable.
Car insurance doesn't cover routine maintenance, for example. So the prices for things like oil changes are relatively reasonable. If we had to go through insurance for things like that, then I'm willing to bet that the price of the service would increase substantially and auto insurance premiums would go up quite a bit as well.
Thatv may be true but, for healthcare, there is an important difference in favor of you: a car is replaceable, a life isn't.
If you don't do routine maintenance, the engine breaks down and _you_ have to pay for it.
If you don't do routine checkups, you get sick and insurance has to pay---and also, if you die those sweet premiums stop coming to them. Insurance actually has a vested interest in paying for your checkups and screenings, just like in countries with socialized healthcare.
Colorado has this cool law which, as far as I can gather, requires hospitals to report prices for various conditions.
It results in tools like this: https://cha.fhsclearquote.com/ You put in your zip code, how far you want to go, find the condition, and it gives you a list of hospitals, average charge, case volume, and 5th and 95th percentile costs.
I'd love a more nuanced analysis that looked at outcomes, too. Still. It's a great tool for planning purposes ("If I have an emergency, take me to . . . ")
Hey, that's wonderful. Price transparency is always touted as the panacea for the relentless runaway growth in healthcare costs in the States. Here's the natural experiment. Has this law managed to rein in healthcare costs?
You'd think it hasn't, and the missing focus on outcomes gives it away.
Along with price transparency, everyone should leave a doctors office with a copy of their bill. Sure, it will probably also get sent to insurance, etc. But I have had doctors bills come to me 6 months after the fact, and it is extremely confusing to try to figure out what has been billed, what hasn't, etc.
I had a hospital decide to restart the entire billing process on me after it was all paid for. Only time I've ever been glad for the insurance company (car, not health). I dropped it in their lap, and 3 mo later got an "our mistake" from the hospital, didn't have to lift a finger to fight it.
One of the more surprising things for me, watching major medical events from a distance and relatively close-up in my family, has been that hospital billing departments are at least as inconsiderate, incompetent, out-to-get-you, and generally shitty as insurance companies. And considering how much trouble I've seen/had with insurance companies that's saying something.
The number of times I've seen a bill that made no sense and been told, "oh, yeah, you're not misreading it, it's a bill, but you can ignore it because [reasons]"... WTF are they doing? Seriously, no-one else gets away with being so entirely sloppy.
Then there's the wonderful "we sent you one bill for a trivial amount which you probably lost in the pile of 50 other damn bills from 20 different providers, many of which were bills but didn't actually need to be paid (see above), plus twice that many not-bills-but-still-kinda-look-like-them statements of benefits and whatnot, didn't send a followup or call you or anything, but now you're in collections for $90 or whatever and your credit's dinged, sucks to be you".
Then if there's a dispute with insurance the hospital/providers will harass you until it's over. And sometimes just try to bill you even though they know it's being disputed. I guess they think you're not already spending enough time on the phone fixing their screw-ups.
I'm not necessarily in favor of fully nationalized healthcare exactly (some form of universal health care, yes) but it'd almost be worth having the government directly take it all over just to drink up those sweet, sweet hospital billing/admin and insurance company CEO tears. I truly wish everyone involved all the worst.
I had a similar experience. My wife was hospitalized for several months when her liver failed and she got a transplant. I have no complaints about any of the care she received; everyone did their jobs very well except for the billing department. Overall the total cost was around $1.5 million, and my insurance company did a fantastic job weeding out all of the duplicate and invalid claims. Their numbers for amounts claimed, allowed, paid to the providers, owed by us (deductible, co-ins), paid to us to cover out-of-pocket expenses that exceeded our annual max, etc always added up. But when the hospital tried to bill us, the numbers didn't work. Their "itemized" bill included claims that were rejected, claims that were paid by insurance, was missing claims that went through the insurance, and had some things that didn't match up to insurance claims at all. Every month they'd resend the bill, and it'd have different items on it with a different total amount. We had money from the insurance company to use to pay for what we owed the hospital, but we refused to pay it until the hospital could produce a bill that matched what the insurance company said we owed. They never did. (I'm not sure what happened; my wife and I were separated before all of this, and the bills always went to her. I think they just stopped sending the bill.)
I've had this happen many times as well - a non-itemized invoice for services rendered six or more months ago. It's not my problem that they can't get their billing service sorted. When I worked in the oil industry, vendors were expected to bill promptly (within 30-60 days) or not get paid.
Pricing is not even nominally transparent. By law, you can get access to the chargemaster, which is the list price that nobody actually pays. If you try to get access to the negotiated price your insurance company will pay, you'll quickly discover that it's confidential up until the point where the provider actually issues a bill. Medicare pricing is a special case, but you can't get that price without being on Medicare. Also, many providers won't accept Medicare because reimbursement is meager and often unprofitable.
I wonder if there is a straightforward way to aggregate people's bills to estimate the cost of a procedure (eg appendectomy) at a given hospital. Eg pay people $1 to scan their bill. This would only work for common procedures I suppose.
De-identified data and data contributed by people (read, not Covered Entities) is not covered by HIPAA. Someone could build a database of procedure cost comprised of these data sets, but price transparency isn't so easy due to the nuances of the problem (See Castlight Health).
> Medicare pricing is a special case, but you can't get that price without being on Medicare.
As far as I recall, Medicare pricing is defined by law as a percentage of the lowest price the provider ever charges to anyone else. For the sake of this comment, call it 40%.
If Medicare pricing is public, you can look it up and try to negotiate for 250% or whatever of the Medicare price.
If you're uninsured and unable to pay you may be able to get the Medicare rate as a "I will pay you this amount to settle this in full, and I will pay it today" because that rate is still higher than they'd get from selling it to collections.
If it's massively complicated and obscure, then it's not transparent. Transparent means the information is available up front or for the asking, not that it's possible to obtain it if you have expert knowledge.
What you're sharing is great information and a fine foundation for people to build on. But pateients shouldn't have to go off and do a pile of research, they should be able to get a straight answer from their health provider when they ask for one.
If you have a pet and have to visit the vet, you already know they prefer to get paid up front. They'll generally tell you there's a fixed fee for the consultation/ Then depending on what's wrong with your animal they offer a treatment estimate, which is prepared within minutes and about which the administrative staff are generally competent to answer questions (eg why there might be variations in price for some items like anaesthetic). Animal medicine is at once less complex than human medicine (narrower range of treatment options, fewer administrative/legal considerations) and more complex (considerable variation among species).
I've been to good vets and bad vets, but the administrative aspects of both regular and emergency care have been painless and yes, transparent. Until we get universal healthcare, veterinary service would be an excellent model to imitate.
Yes, hence the "transparent" in quotes and the overt sarcasm (apparently harder to detect than I intended). Of course patients shouldn't need to download a dataset and figure it out on their own! But please see my other response to see why it is tricky.
Regarding pets, they are not beholden to hospital/insurance provider duality, and it follows that since it is out of pocket, you would not be able to afford a $60k set of procedure if your dog had a broken leg...so the prices stay affordable.
This is why the Dutch system is interesting. They have a two-tier model of private and public coverage. For short-term, low-cost care, the private market operates (under regulation) and for long-term care they have a state supplied universal coverage system.
Tbh if I broke my own leg I think I'd rather have the vet do it. Every time I have had to bring a friend or family member to hospital I'm just appalled by it all.
I suppose this would be helpful if they gave us the pricing before the decision of where (or, for many unfortunate people, if) to have the procedure or test done.
You seem to be talking about medicare and medicaid, and not about private hospital services. Is that correct?
Yes, also sorry for the insensitive sarcasm in the previous post. It's a chicken and egg problem. In many cases you don't know if you need a test unless you've already had it. In the case of a procedure, there may be things that come up while it's happening that may complicate things. The irony is that OPPS/IPPS (inpatient) and APC (ambulatory) are meant to simplify things. Doctors and nurses usually do their best to know ahead of time, but medical procedures are complicated.
Fraud does happen most often against medicare/medicaid (as covered in this article with one trick known as "upcoding"), but I believe these codes are used with insurance providers as well. If a hospital or doctor is in your provider network (HMO/PPO) then there is a pre-agreed cost between the two set on these fees. Out of network occurs when there is no agreement, so there is no "trust" between the two and the insurance provider offsets the cost to you because they are legally able to do so.
In my opinion - overbilling is really caused not by pricing complexity, but by the control of the hospital and insurance provider duality. If there was no such thing as a network, and you were covered everywhere, then shenanigans with certain hospitals and providers would be more difficult.
> In many cases you don't know if you need a test unless you've already had it. In the case of a procedure, there may be things that come up while it's happening that may complicate things.
If you're getting something like a chest x-ray (posterior and lateral views), or an abdominal ultrasound, or a lipid panel, you should be able to call around to various labs with the appropriate CPT code(s) and ask them what the price would be.
What's you're talking about would be something like if they order a test and based on the result of that test, they need to perform more tests to confirm or eliminate a possible diagnosis. But for each test, you should be able to get the price since each test has a couple of possible CPT codes that it would fall under for billing purposes.
This has been a concern for me as well. I've had doctors order things and call them one thing in person that sounds like what my insurance covers, but then they're billed as something different and I get stuck with the bill, when I really wasn't willing to pay for what it was.
So now when I'm signing the papers accepting responsibility for the financial obligations if my insurance doesn't, I ask what it's going to cost if my insurance doesn't cover it. The nurses have no idea. It has to get "coded" before it's billed, and then after the bill is declined the coding people can tell me what I owe them. It's ridiculous.
A few years ago my daughter needed a last-minute CT scan, the results of which would determine whether it was safe for my wife and I to go to a conference (long story). The hospital couldn't get authorization for the CT scan from Blue Cross, due to some glitch. "No problem", they said, "we'll just do the test tomorrow." Big problem for us, though; our flight out was the next day.
I ended up negotiating a price for the CT on the spot; none existed. They simply couldn't tell me how much the test cost. I had to extravagantly over pay in order to get the test done at all.
Price transparency is probably not feasible, most of the time. For the software developers, here's an analogy: asking your doctor how much it will cost to treat you is akin to a product manager asking you how long it will take to implement a feature. You might have a rough idea, but until you get into the requirements, do some design work, and dig into the details you can't even come up with a precise estimate. And you won't know the final time until you've actually completed the feature.
Doctors have a similar problem: too much uncertainty which can't be eliminated until the treatment is completed. They can't even tell you how much an office visit costs, because of the variability in how much time each patient needs, involvement of nurses and PAs, and any tests that must be performed.
Lab tests are a little better: they tend to take a predictable amount of time to perform, and the analysis is pretty standardized, but there's probably still some variability when the results are not routine. That explains the fairly narrow range you were eventually able to get.
I think we've got the wrong pricing model in mind for healthcare. Instead of itemizing every little action, test, and pill, we should be aggregating these costs. Pay medical professionals fixed salaries, fund institutions using budgets for fixed costs and consumables costs, and pay for it all via taxation as a common good, like public education, libraries, defense, etc.
Well, in some sense that's true of most businesses, right? Some customer interactions take up more overhead and resources than others. The trick is to aggregate that uncertainty over your customer base and come up with a price that incorporates your expected average costs. There are a lot of businesses that do this successfully because they have to in order to participate in the market. The reason health care providers don't seems to me because that are isolated from competition by heavy regulation. (I'm not saying the regulation in the health care space is necessarily a bad thing on balance, but it means that change can only come through additional regulation rather than depending on hamstrung market forces.)
Hang on. The comment you're replying to is complaining that they can't get a price for a single test, a discrete unit of health care. That's not like not being able to get a price for a completed Rails app; it's like not being able to get a price for a Macbook. I think you've moved the goalposts a little.
I did say that lab tests have less variability, which means they should be easier to price. My guess is that the reason the OP had so much trouble getting a price is because the lab simply doesn't work that way. It doesn't have a consumer price list; instead they do the work first, then determine which insurer to send the claim to, and then sometime later get paid whatever the insurer has set the standard reimbursement to be.
What the OP found on the 10th attempt to get a price was somebody who was willing to look up claims for other people who had the same test, determine what the reimbursements were, and let him know the cross-insurer range of those amounts. Or maybe the range was over the claims sent to the insurance companies, rather than the amounts the insurers actually paid. If that's the case, then the range reflects actually differences in the test processing rather than differences in the insurers.
I agree that the pricing model is wrong. Fee for service creates perverse incentives.
Having said that, though, unlike developing a new piece of software we have vast stores of data about procedures, complications, and outcomes from other patients who have already undergone the procedure. Surely there's a pricing model, if we are bound to fee for service, that could use this trove of existing data to provide more transparency.
I'd be happy with knowing pricing within half an order of magnitude.
A lot of that trove of existing data is locked up behind privacy law barriers, and there's no incentive for doing the work to strip out the PII and make it available for aggregate analysis. And since we're talking about the costs for performing medical treatments, the details that would need to be stripped out could be significant.
For example, if Procedure A tends to be more costly when the patient also needs Procedure B, that's significant. But if the aggregate information includes the fact that the same patient needed both A and B, that might be usable to identify the patient, and so the relationship can't be shared in the data.
The software development number is, arguably, almost completely unknowable. The healthcare pricing number is knowable (for some fuzzy value of knowable) if our society cared enough to do something about it. We don't, though.
> asking your doctor how much it will cost to treat you is akin to a product manager asking you how long it will take to implement a feature.
Not in all cases. If your doctor orders labs or procedures, then getting the price should be straightforward. The fact that it currently isn't is a problem.
That sounds fine on paper but does tends to cause overuse of the resource. People don’t value what they get cheaply or free. I belive NHS from UK is facing a similar problem.
"overuse" is a tricky word to use here. Are we concerned about patients getting too much "good healthcare" without being adequately grateful for it? Should we give them "adequate healthcare" instead? Or maybe "barely adequate", so that they know what they're missing?
You're probably thinking more along the lines of unnecessary tests being performed, or prescribing drugs "just in case". I have a dermatologist near me who I like and who is widely known, but every time I see her if she prescribes one drug for me, she prescribes 1 or 2 others as well for the exact same thing.
I believe that this sort of waste comes partly from a financial incentive (line items on insurance claims, or justification for them, and in my dermatologist's case kickbacks from drug companies), and partly from as a defense against being accused of malpractice. It could also be simple laziness too: order a test and let the lab try to figure out a diagnosis.
Any major overhaul of the healthcare system along the lines I proposed would need to deal with these issues as well. The financial and malpractice incentives could probably be eliminated. Maybe laziness too, assuming doctors had to get annual reviews for salary adjustments, just like everyone else.
Actually, one way to attack the problem is something Hacker News folk could help with:
Build "open source" coding, grouping and costing schemes and tools to maintain those schemes. It would look something like: 1) a software tool to maintain coding systems, grouping, and related costs (essentially a database front-end); 2) something like Wikipedia/GitHub that maintains version history and controls for coding, grouping and pricing schemes; 3) crowd-sourcing so healthcare professionals and organizations could help maintain the data; and 4) a non-profit, non-governmental organization (maybe something like the Mozilla or Apache foundations) that runs to help govern and provide structured releases of the open coding/grouping/costing data.
These are just my ideas, but having worked in this industry on the problem of health insurance/healthcare fraud and "healthcare cost" - there are a bunch of organizations making a small fortune controlling these schemes (ex. the AMA) - something ripe for disruption (I hate using this word, but it's the truth).
You need quality coding/grouping/costing schemes and systems for the industry to function, but it should be many, many times more open than it currently is.
Totally agree. If people in the US want to have markets for health care there should be price transparency. When I had a high deductible plan I always tried to compare prices but you almost never get a straight answer.
If the Republicans want to reform health care that's where they should be starting.
And yet, the idea that health care "consumers" would price-shop for the lowest-cost procedure is a dogmatic core of some American ideas about how to "fix" cost in health care.
It certainly wouldn't fix everything, but there are certain type situations it would help fix, yet the philosophy hasn't been tried (at least as long as employer-sponsored health cartels have been around). True price transparency requires that a given provider charge exactly the same amount, regardless of the customer - prohibit bespoke "negotiated" rates, hidden kickbacks, etc.
Just today I went to an major-hospital urgent care clinic that has an upfront $50 fee to "be seen". I normally avoid the system like the plague it is (hence not wanting to pay into its protection rackets), but my girlfriend had gone last week for the same week-long fever and had a good experience, so I figured I'd give it a shot.
The person working at the desk told me that there "could" be "extras" that would be beyond that fee. Okay, cool. The physician's assistant recommended a chest x-ray, added it was around $75, then confirmed it was $56, and I quickly agreed. My girlfriend was a bit miffed she had turned down the x-ray without knowing the actual price.
When it came time to settle up the bill, they had added on a $130 charge because the PA had added on some billable event for her seeing me, despite that this should have clearly been included in the "$50 to be seen".
This is textbook fraud, yet it is allowed to persist. I complained, and was met with the standard "it's nobody's fault" attitude, because these people are really just skinjobs on an opaque computer system. If I had been my normal self (currently dealing with some major life events), I would have only paid for the x-ray and told them to shove their unauthorized charge up their ass. Alas, they dropped the fraudulent charge to $80, but the bad taste remains.
If I had been told the higher charge up front, that would have been completely acceptable - and if I thought it too high I could have gone to a competitor, or simply not gone (never before in my adult life have I gone to the hospital for a fever).
And that doesn't even address the travesty of the only result coming out of this visit was receiving a prescription for the exact same antibiotic my girlfriend had received a week prior! It would have been much easier for her to buy two simultaneous doses from the pharmacy, but the cartel has that locked down as well.
Transparency would certainly help but it cant solve everything. But medical care isn't regular and predicable, so at best you can get better transparency about the routine costs.
My car was recently hit in the parking lot. The body shop said, here's the cost of the repair of the items we can see, but with the warning that it could go higher if we open things up, and find additional damage. Same with people.
The other thing is the you know with a car exactly what you will end up with in the end. And with simpler medical procedures that is true, but as they get more complex - the more you are navigating a mess of interlocking procedures, probabilities, and outcomes.
This strikes me as absolutely absurd. Here, as an example, dentistry is highly regulated and prices are listed in a book. If you want procedure X done it will cost $Y no matter which dentist you visit. This means it's easier to budget for such things, you never have to price shop, and the insurance companies can also easily predict what the costs will be given statistical trends.
This idea of medical procedures having random prices is the sort of thing you have to deal with at veterinarians where a simple procedure can cost anywhere from $75 to $500 depending on the place you're going to.
In the US dentists don't all charge the same thing in my experience although they're probably in the same general ballpark for a given procedure. A quick Google seems to confirm that. There is definitely more transparency in pricing because many/most people don't have insurance and insurance for semi-cosmetic procedures is somewhat limited. (And there are often treatment options that people will reasonably choose from based on price.)
Always thought their approach was quite clever and I think they did end up having some success though I'm not sure the overall impact has been as transformative as was originally hoped.
A lot of trades give you estimates but you don't know the actual cost until the work is complete. Auto repair, construction, plumbing, electrical, etc. There are plenty of fixed costs that can be accounted for easily but there are a lot of unknowns that can't be seen ahead of time. That's why quotes and shopping around so prevalent because it allows for competition in price.
However in healthcare that's not an option, there is no competition. The cost of fixed cost procedures (e.g. lab work) are unknown. You can't shop around for surgeries or doctors. Everything is wrapping in mystery even after the fact, there is no final bill. Even if you pay everything you're asked to, you might still get a bill 2 years down the road for reasons no one can suitably explain.
One difference with auto repair: I expect the garage to call me before they do any work that exceeds the estimate. And I may very well decide not to do it. They may tell me that I need a $1000 timing belt replacement when I ask for a $200 water pump replacement, and I may decide not to do it. I can even ask them to put everything back together and tow the car somewhere else for repairs. If they tell me I need a $3000 engine replacement, I may decide to just scrap the car.
The same is not true with healthcare - you may go in for a $20K stent, but have a serious complication that needs $200K open heart surgery -- you don't really have the option to say "put everything back together and I'll live with it".
One difference with auto repair: I expect the garage to call me before they do any work that exceeds the estimate.
It's not just an expectation, it's the law in many places. When I was a pro mechanic in Indiana, anything over original estimate + 10%, and authorization from the customer is required. Well, not required I guess, since if you show up and the bill is 20% over, you just pay the original estimate. (Yes, in the worst case you might have to sue to get your car back. Personally, I've never known that to have happened, because most shops aren't looking to rip you off.)
But, as you point out, me being in the middle of a top end job is a little different than a surgeon who's working on a running engine when it comes to needed extra work.
I've often thought this could be solved by requiring a doctor to carry "estimate" insurance. The patient's bill would be the quoted price and the doctor's insurance would cover any complications leading to additional costs. This would have the additional benefit of increasing the costs of doctors with frequent complications. This would only work for immediate complications from surgery (i.e., less likely to be impacted by patient compliance).
It might also lead to doctors "missing" complications to avoid insurance premium increases.
Complications during surgery aren't necessarily caused by the surgeon or known ahead of time. The same is true of other things like home renovation where "we won't know until we open her up" is a common enough phrase.
Case in point, we want to remodel a bathroom that has a 7ft ceiling and my wife wants the ceiling raised to match all of the others. Why is it 7ft instead of 8ft? Can it be raised? Without significant cost? We won't know until we get in there.
> The cost of fixed cost procedures (e.g. lab work) are unknown.
I don't think that's the case. For example, if you get a lipid panel, it's going to be coded under a given CPT. The billing department should be able to obtain the cash and insurance price. The problem is that they're not forthcoming with it (at least in my experience even when I had the CPT).
Related to 1 and 2, people on high deductible health plans are paying everything out of pocket until they hit their yearly cap (then insurance kicks in). It's not even whether you have insurance or the insurance company wanting to reward you, it's trying to save your own money like any other purchase.
High deductible health plans are becoming more and more common, from what I gather.
Mine's $5500. The monthly premiums are ~$300. It's an obscenity for someone who's healthy, runs, bikes, or swims pretty much every day. But it gets worse.
Recently I went to a doctor for a minor problem, but did not get pre-authorization. I knew exactly what it was going to cost for the visit, and knew it would not be covered by insurance. What I did not know is, due to lack of pre-authorization, it also would not be counted against my deductible! Dicks.
I think major medical (true insurance for unpredictable things like congenital disease or accidents) should be something everyone gets, and it's paid for with taxes. Done. And then for poor lifestyle choices like smoking and having a crappy diet, you should either die (seriously) or you should pay the system out of your own pocket to take care of you (start a gofundme, see if anyone cares about your problems).
There is no possible way to fix healthcare in the U.S. with the multilayered middle man, for-profit approach we have, where everyone touches it wants their cut.
What about them? They'll live longer automatically, that's one incentive.
Every state should probably require every food related corporation to be a benefit corporation, with clear phrasing that an equal motive to profit for that business is incentivizing customers to eat healthy. If the incentive is just profit, you get crazy things like government subsidized sugar farmers and boner pill pharma.
'High deductible' is so broad it's almost meaningless. At $1,300 single $2,600 family (2017) in the US many people hit every year making price shopping almost pointless.
https://en.wikipedia.org/wiki/High-deductible_health_plan now at the high end of that a $13,100 family plan does provide more incentive again unless there is something significant wrong when again the incentive to price shop suddenly goes away. Worse, medical spending tends to mostly be by a few very sick people vs. the healthy making high deducible plans have limited real impact.
Mine's $3000/6000, I've luckily been in good enough health to not hit it. It's been the right choice for me; the amount I've saved into my HSA vs employee contribution to our more expensive health insurance option will more than cover hitting the max for a year.
I was looking into sleep studies recently, a quick google suggests a cost range of $600 to $5000. I'd definitely shop that around, and if a place won't give me a price then I wouldn't consider doing it.
But like you said, I'm pretty small potatoes compared to sick people.
Anecdote: my mother-in-law was a smoker, felt dizzy one day, went to the ER and died five days later from a brain tumor. Got the Statement of Benefits (or similar): the cost was $140k; Medicare paid $40k...
I had an equal and opposite experience getting an MRI. I also have a high deductible plan. When I was told I needed an MRI I went on my insurance provider's website to find MRI locations that are in network nearby. I called the first 5 on the list. I found that some place that was basically MRI-R-US was several hundred dollars cheaper than going to the local mega-hospital.
Pricing isn't transparent because people usually aren't paying with money they perceive as their own. What do you care if your insurance company pays $200 or $2000 for that MRI? Eventually that difference shows up in the form of higher premiums, but that's far too complicated for people to respond to intelligently.
Let's go one step further and imagine a world in which we completely replaced Medicare with a catastrophic coverage system. If you have a heart attack or something we'll take care of you, but for your day to day healthcare we'll just cut you a check for however much the government was previously paying. You can choose to use that money on anything you want whether it's healthcare related or not. You want to see price transparency and the power of competition to lower prices? Boom, done.
This will result in many people choosing to spend nothing on 'day to day' healthcare. Subsequently, this 'deferred maintenance' will result in increasing rates of catastrophic events, which will drive up costs for that part of the system.
Giving cash (or cash equivalents) to people is probably not a good solution.
I am always dismayed when I get back "it depends". depends on what? I want a pure cash price. however it has been this way for decades having listened to my grandfather back in the nineties trying to by his wife a wheelchair only to be told he could not buy one and no they would not give him a price. so he did what anyone of his generation did, goodwill, salvation army, and finally found one at a garage sale. he just didn't think it right someone had to pay for what he needed for his wife but damn if the system stymies people at every turn.
the new billing fun I have is required visits for prescription refills on some medicines and that to me is just overbilling in a different form. I didn't need to visit other than to get permission to refill; no it does not necessarily need to be a controlled substance
Price transparency is not going to fix much, if anything. It may induce rage increased blood pressure on the front end (prior to receiving service), but ultimately health care is often a "must have."
Having a price list in hand doesn't suddenly make the price conscious consumer more of an expert regarding the necessity of various services estimated. Nor does it really encourage competition between competitors.
No, I'm not missing that. It doesn't make as much of a difference as you'd think. There are plenty of companies and organizations in this space who offer "price transparency" services to varying degrees of accuracy.
There is significant difference in the price different places charge for services. It's not necessarily deciding whether or not to do the treatment, but can also encompass consumers being cognizant of cost and choosing providers who are cheaper.
Here is a planet money podcast which goes through some examples of significant expenses being saved.
It is difficult because each insurance provider will have a different contract with the hospital or care provider. My wife works at a hospital that just upgraded from an all Dos based system to a windows based system. Her job is resolving provider disputes where the provider billed a rate that was different then their contract. Old systems + lots of different rates = confusion!
It sounds like you're talking about something more complicated than a blood test, but in case you didn't know, most blood tests can be purchased online (and completed at a local branch of a national testing service e.g. Quest Diagnostics) with complete price transparency from a variety of competing providers.
I would love something like census data on how much a healthcare provider paid, on top of what a procedure or medicine costs. Not just how much they paid for you or your walking cane, but how much every provider pays for a syringe.
at least in the US one has to remember that Medicaid pays less than Medicare for the same procedures with private insurance taking the price higher hits
Let me add my big one: price transparency.
I had a simple test the other day. I could not get a price. I could not get a price with my insurance, or without it. I called at least 9 times. I got 5 call backs from people who asked me to schedule the procedure but no price.
On the 10th call, I finally got someone to tell me what the out-of-pocket price would be without insurance. She told me a range! It was $96-$115. This was close to the range that google says was about average for the procedure.
So this was not a case of over-charging, or unfair pricing. I really did not know if the test was $10,000 or $100 till this call.
If they just made the pricing transparent, I think a lot of the problems would evaporate.
(Although I think the profit centers would suddenly become the emergency medicine section of the hospital.)
I know this article focuses on fraud, but the non-fraud part of the healthcare is just as broken, and probably costs more.