Many Hospitals Charge Double or Even Triple What Medicare Would Pay

https://www.nytimes.com/2019/05/09/health/hospitals-prices-medicare.html

by pseudolus • 7 years ago

42 58 7 years ago

et2o• 7 years ago

This is not news, I'm surprised it's in the NYT. Medicare and Medicaid reimbursement rates are very low and hospitals lose money on these patients. All hospitals depend upon private insurers paying higher rates in order to stay in business. They call this the payor mix (private/medicare/Medicaid).

a13n2• 7 years ago

It's important to raise awareness for issues like this. I'm glad NYT wrote it.

bensonn• 7 years ago

Based on how they framed it, I am not too surprised it is in the NYT.

Headline: Many Hospitals Charge Double or Even Triple What Medicare Would Pay

You have to get about 80% of the way through to read a more accurate version of the truth: "Medicare payment rates, which reimburse below the cost of care, should not be held as a standard benchmark for hospital prices”

excoder• 7 years ago

If you’re going to quote the article, I think it’s important to include context. So let’s broaden your article quote (that is, the article is quoting someone else) just a smidge:

“Medicare payment rates, which reimburse below the cost of care, should not be held as a standard benchmark for hospital prices,” said Melinda Hatton, general counsel for the American Hospital Association, AN INDUSTRY TRADE GROUP, in an emailed statement. [emphasis mine]

You claim that the quoted statement is more accurate / truthful than the statement that private insurers pay more than the Medicare rate, and seem to imply that the Times’ reporting is biased. Did I get that right?

Would you like to furnish some support for those claims?

throwayEngineer2• 7 years ago

The article implies that Medicare is the correct rate.

If anyone has Medicare, or has worked at a clinic that accepts Medicare, or has filled out Medicare paperwork- you know Medicare isn't a gold, silver or bronze standard.

It's dollar store quality.

Things take longer, are often riddled with wrong denials, and him major limitations for patients.

hurryskurry2• 7 years ago

Medicare rate and the reality of using Medicare are separate issues though

For me the issue is that if you had something like a hernia it would essentially cost less to fly to Europe, have the surgery, and stay a couple of weeks than to pay out of pocket in the US. And many European healthcare systems tend to rank better than the US.

So it seems that the procedure can be done for less, maybe even for less than Medicare costs; the "dollar store quality" doesn't seem to come from the inexpensiveness.

throwayEngineer2• 7 years ago

Then your issue is likely with the extraordinary wages of Physicians in the United States.

The American Medical Association is the 3rd biggest lobby in the United States.

Physicians/surgeons in Europe do not make 300k/year.

erentz• 7 years ago

you know Medicare isn't a gold, silver or bronze standard. It's dollar store quality.

Source? This doesn’t jive with how popular Medicare is.

Things take longer, are often riddled with wrong denials, and him major limitations for patients

Source?

conanbatt9• 7 years ago

Source? This doesn’t jive with how popular Medicare is.

One of the great trickeries of using Medicare's "popularity" is that people that have it pay 150$ a month, while the cost is 1000$. If medicare charged its patients what it cost, "popular sentiment" will rapidly change.

sjg007• 7 years ago

Medicare is standard of care.

a13n2• 7 years ago

Hospitals are one of those things that just shouldn't be run like a for-profit business. There should be regulated set amounts for how much various services cost, and those amounts should be equal (or at least close) to what the government/insurance programs cover.

It's bonkers to me how much resources and technology we have as a species, and how we decide to not let people access it because money/capitalism.

Obviously the US is notably worse at this than other countries, and it doesn't feel like we're on a path to fixing it.

gbacon• 7 years ago

Economics 101: Price controls create shortages.

Note that I’m not defending the broken U.S. system, but attempting to fix it with price controls will exacerbate its problems.

2trill2spill3• 7 years ago

Sure, but US hospitals are also known to charge up to 1000% more then a procedure actually costs[1]. That should be illegal.

[1] https://www.washingtonpost.com/national/health-science/why-s...

TazeTSchnitzel3• 7 years ago

Healthcare is not your typical market.

mrosett• 7 years ago

There’s no evidence that non-profit hospitals perform better (or worse) than for-profit hospitals.

maxxxxx5• 7 years ago

Non profit hospitals are for-profit for administrators and their friends who run a construction company or similar. A lot of them are very corrupt.

chrisgd2• 7 years ago

Hospitals negotiate for the rate with the insurance companies, including Medicare. They don’t have to accept Medicare payments at all. It is the right price because that is what the group with the most bargaining power says it is. That doesn’t mean Humana should pay less, but should work harder to add people. Maybe there is a way for one entity to have all the people?

tomohawk4• 7 years ago

Medicare processes and payments have very little basis in reality. The payments are so low that doctors and hospitals often factor in the lost money into non-medicare bills to make up the difference.

So, the real story is that these doctors and hospitals are so committed to providing care, that they're willing to figure out ways to provide it despite medicare.

55555• 7 years ago

The mean salary of a doctor in the United States is $294,000/year [Medscape]

So, so committed to providing care... they're practically working for free. Maybe they're even losing money.

Side note: Google is bizarre. You can tell what words Google thinks are effectively synonyms by typing one word and then seeing which words are bolded in the results; I searched "median earnings of a doctor in the usa" and it bolds "mean" and "average"...

Mbioguy• 7 years ago

Note: if you want a meaningful discussion about physician salaries, you need to be discussing lifetime income after tax and after debt repayment, and compare this metric to other professions. Comparing the yearly salary of a vascular surgeon with 10-15 years of post-high school education, training, and compounding debt interest to the yearly salary of a junior developer ignores the very different lifetime shape of the careers.

Any substantial change to the pay structure for physicians needs to address the cost of education and training, and not screw over a large cohort of physicians saddled with debt who see a massive pay cut. They will significantly oppose any attempted changes that don't address these two things.

Doctors in Europe are paid a good bit less than here in the US, but their education is paid for (and then some) by the state.

maxxxxx5• 7 years ago

The US health system is full of stories like "Medicare payments are below cost therefore we have to charge other patients more", "International drug prices are too low, therefore we have to charge US prices more", "There are a lot of uninsured patients treated for free therefore we need to charge others more".

I tend to call BS on all of them. None of them explains why especially hospitals tend to charge almost random prices for the same thing, make constant billing mistakes and haunt the patient for years with changes that already have been settled with the insurance. It doesn't explain why the medical device my company sells for 30k gets charged 140k by the hospital (happened to my girlfriend). Or why for the same 1 hour surgery one hospital anesthesiologist charges 12k while somewhere else the charge is 3k.

The whole system is totally corrupt, opaque and highly profitable for doctors, administrators and middlemen. Each of them blames the other while never providing any real accounting with hard numbers.

tomohawk4• 7 years ago

Not disagreeing on the fact that the system is broken.

However, if cost is important, why are prices not transparent, and the same for all treatments (hint: medicare is a big reason)?

Why do states have laws that prohibit competition? In many states, you can only build a new hospital if existing hospitals OK it.

In our state, why is there a shortage of general practitioners? (hint: after paying malpractice insurance and student loans, its almost impossible to make a living). So, GPs are moving to other states.

Mis-regulation has created an environment where market forces are prohibited from operating, predatory lawyers make a killing, cronies are comfortable - with predictable results.

gremlinsinc• 7 years ago

Agreed, maybe medicare is too low -- but then single payer MINUS insurers could beef up medicare too something like 2x what it now, but as a nation we'd still pay less total on medical (if hospitals mark up insurance 4x and the insurer marks up 2x the cost or more, that's 6x the cost that we're all paying for... Cut off 4x and tell the hospitals to be happy and downsize their operations, and get costs under control. Medicines should only be charged at cost for delivery, charging $40 for a single ibuprofen tablet is INSANE! It takes a nurse 5 minutes to deliver pills, say she makes $50/hour, that's like $5 labor + 30 cents for an ibuprofen, so 5.30 even doubled to $10 is much fairer than $40 for a single pill, or hell make some sort of automated delivery system that pops out medicine by hydraulics as needed and cut the cost even more.

With single payer the government could also put together some emergency grants/funds for hospitals that can't cope -- as long as they accept auditing from the government of all their processes/administration salaries/etc.. and follow guidelines take pay cuts to recommended averages, etc...

TLDR; Medicare for all will solve this issue, it will need to set the low-end higher obviously to compensate for where hospitals make the bulk of their money, but it'll need to hold hospitals accountable for better money management, and pay structures, and price gouging. Not to mention one of the largest cost savings : single-bulk-payer for drug purchases.

AtomicOrbital• 7 years ago

I consider it institutionalized corruption when we allow healthcare providers to charge X to uninsured patients yet a tiny fraction of X to patients with insurance ... this distortion should be highly illegal ... this is how the insurance industry forces people to get insured ... healthcare providers cost of services to the patient should be independent of the patients level of insurance coverage

tehlike• 7 years ago

I also have seen opposite. 20x if paid through insurance, X if self pay.

Total corruption.

tcbawo• 7 years ago

This usually happens when you pay upfront. If they bill an uninsured person retroactively, they try to capture as much cost as possible expecting that they will not get the entire amount. It's an awful system.

phkahler• 7 years ago

They should be required to charge the same to everyone. If an insurer doesn't want to pay that price, the patient will have to cover the rest and insurance companies will have to compete. If there were to be an exception, it should be the provider giving the patient a break on their portion.

This would be putting people first, and it's exactly opposite of what we have.

riahi• 7 years ago

This is called balance billing and many states have banned it.

TazeTSchnitzel3• 7 years ago

Hospitals don't have to accept Medicare or Medicaid patients. If they are truly losing money on them, then why do they accept them?

razakel• 7 years ago

Hospitals don't have to accept Medicare or Medicaid patients.

An emergency room has to treat anyone until they're stable, regardless of their means to pay. You don't exactly have time to shop around for an affordable doctor if you've just had a heart attack.

Why do you think medical debt is a key reason for 2/3rds of US bankruptcies?

chrisgd2• 7 years ago

Turning away patients and accepting payment are two different things

mercutio22• 7 years ago

While I’m philosophically aligned with the medical-expenses-lead-to-bankruptcies narrative, it’s worth noting that the 2/3 number is based on a drastic overcounting of people’s reported expenses.

If I mention a $500 hospital bill, but put $50,000 on credit cards for run of the mill spending beyond my means, I get counted in that 2/3rds.

conanbatt9• 7 years ago

They have to. Lots of federal funding and rules are placed so that happens.

coredog642• 7 years ago

Completely missing context from the story: If a healthcare provider accepts Medicare patients, legally they cannot charge anyone a lower price than they give Medicare. The Medicare price is the price floor, not the average price. Once you understand that, the charge rates make more sense. However, I suppose adding that context wouldn’t gin up the correct amount of outrage...

merpnderp• 7 years ago

I used to see a doctor who had an angry note in his front office stating he would charge less if he could but his group had negotiated a price with Medicare and it was against the law for him to charge less. In lieu, he took donations to pay for the needy and I strongly suspect laundered his own profits into that pot effectively circumventing Medicare’s insane rules. I suspect this because lots of people used the donations but he would never accept any from me.

ensignavenger• 7 years ago

A lot of comments on here about Medicare not paying enough compared to private insurance- so here is one from a very recent personal experience with private insurance. My wife had surgery followed by 6 days in the hospital for recovery. (This is I think her 9th surgery in the 8 years of our marriage, and every time the billing is similiar.) I just received the explanation fo benefits from my private insurance from the hospital. They billed $245,000! The negotiated amount with the insurance company was $36,000. They billed for 6.8X what they actually got from private insurance. The amount that the hospital bills is completely made-up gibberish.

Many Hospitals Charge Double or Even Triple What Medicare Would Pay

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