WHY health care needed reform

[Bern80]

No. I'm saying in many cases the same sercive would actually cost LESS if you offered to pay for it yourself instead of having it billed through an insurance company,

Hmmm... I was not aware of this. Every case I have seen in my 25+ years of medicine shows that ins co's have contracted prices. They get a deal based on quantity of people vs. an individual.

Think of it this way. You go to the hospital and have your appendix removed. The hospital will likely bill your ins co around $50K. But after the ins co goes through the bill and their contract with that hospital it's typically around $12-$15K and the rest is written off. Then the insured pays their deductable/co pays in line with what ins paid. A self pay with no negotiations would pay $50K. Cut a deal with the hospital (even after the fact, many times) and you pay what an average ins co will pay.

With that said, many people are not aware that due to these contracted prices with ins co's if they are self pay they can usually request a discount and more times than not, this is granted.

I work in this industry for a living. I send people from Mexico to the US for (paid) medical care. Sometimes they have great ins that covers US care as well as MX and sometimes they have a lot of money and are merely self pay. I have ALWAYS been able to get my self pay people ins co contracted prices which is a fraction of what a self pay would usually be.

But, those are merely my experiences.

I am looking at this from the perspective of what the hospital bills for a service. You mentioned 50k billed to insurance above. I have heard of several cases where if that same procedure were billed directly to the customer they would be charged less. It's not less than what they would be with insurance coverage but the point is more how much is charged for the service based on who is being charged.

 

[Bern80]

I'm not sure I am understanding you. Are you saying that ins co's pay the same as a private individual paying cash for the same service?

No. I'm saying in many cases the same sercive would actually cost LESS if you offered to pay for it yourself instead of having it billed through an insurance company,

FALSE!

Have you ever been on Cobra? Insurance companies pay much less for healthcare than individual patients

Actually yes I have. I think you're misunderstanding what I'm saying.

 

[AnnieInMexico]

I am looking at this from the perspective of what the hospital bills for a service. You mentioned 50k billed to insurance above. I have heard of several cases where if that same procedure were billed directly to the customer they would be charged less. It's not less than what they would be with insurance coverage but the point is more how much is charged for the service based on who is being charged.

I don't know, I've been in medicine for a lot of years and I've not seen this once, not without prior (or post) negotiations.

Ins co's are not stupid. They are not going to pay one more penny than they have to and you often times have to fight them to pay what they are supposed to pay.

I have a hunch the issues you have heard about are negotiated fees. The computer doesn't care who is paying, they spit out the same fees regardless of the person. AFTER ins pays then it is refigured with contractual limits.

 

[bill5]

Your trying to dodge around the obvious point bill, but being more specific, if health insurance was used less, more people would have to pay providers directly for certain services. Because the cost of service is now being felt directly by the consumer, human nature suggests the consumer is going to look for the best deal at the best price. That will create competition for customers by providers which would make services that cost one thing when billed through insurance cost less when billed directly to the customer.

My point is that your point, while logical sounding on the surface, is simply and patently incorrect. Ask people in the biz if you don't believe me.

You also ignored my point that even if true, people often simply cannot afford health care on their own anyway, esp for anything serious, requiring hosp. stays etc etc.

How and when exactly. When has a provider charged less for service you received when charged to someone other than you as opposed to a service charged directly to you?

Sorry I'm not in the habit of giving out personal data on myself. Besides, how does that matter? It happened. It's fine if you don't believe me, was just letting you know I've experienced it first-hand. Besides, how would you know I didn't just make it up?

It is relevent because if you don't care you have no incentive to research costs. If you have no incentive to research costs, the provider has no incentive to make the information available to the public.

That makes no sense whatsoever. The provider has no incentive to make the information available to the public, period. And how are you going to "research the costs" without them giving you that data anyway?

If the public does not have the information they can not make informed decisions on quality or price thus there is no incentive to 'shop' for providers.

This also makes no sense but there's no incentive anyway because most people have insurance that covers most if not all costs.

 

[Bern80]

My point is that your point, while logical sounding on the surface, is simply and patently incorrect. Ask people in the biz if you don't believe me.

No it isn't incorrect. What is patently false is the notion that health care is the one service that can somehow inexplicably react differently than any other good or service to basic economic laws. I have asked you repeatedly why it won't work and you refuse to answer.

You also ignored my point that even if true, people often simply cannot afford health care on their own anyway, esp for anything serious, requiring hosp. stays etc etc.

Who says they have to pay their bill all at once? I have worked out payment plans for my bills on numerous occasions.

Sorry I'm not in the habit of giving out personal data on myself. Besides, how does that matter? It happened. It's fine if you don't believe me, was just letting you know I've experienced it first-hand. Besides, how would you know I didn't just make it up?

I'm not asking for personal data. I think it would matter to most economists to know about transactions that violate fundamental theories of economics. I'm sure they would be quite interested to hear a scenario where a market group that was less price sensitive was charged less for the same service than a market group that is more price sensitive.

It is relevent because if you don't care you have no incentive to research costs. If you have no incentive to research costs, the provider has no incentive to make the information available to the public. That makes no sense whatsoever. The provider has no incentive to make the information available to the public, period. And how are you going to "research the costs" without them giving you that data anyway?

This also makes no sense but there's no incentive anyway because most people have insurance that covers most if not all costs.

If they want to compete directly for customers, yes they do have incentive to make them aware of the cost of doing business with them. If you can't research the costs of a service you need then you typically aren't going to do business with that company. If you you are choosing to buy a car and have a choice between dealerships are going to spend a lot of time with the dealership that won't even tell you how much the car is going to cost? Makes no sense? This is as common sense as it gets, bill. If you can't figure this out no wonder you don't have clue one how to fix this. If people are not doing business with a company that won't advertise their prices and are going somewhere else that will, That company will either die or react positively by doing what customer's want in order to get them back in the door. I don't get what doesn't make sense to you. If people have no incentive to shop because either insurance covers everything thus providers have no incentive to make consumers aware of the cost of services, then you give consumers an incentive to shop so providers have the incentive to lower prices. What that means as far as medicine is the consumer taking a greater role in paying for services directly and using insurance for fewer things.

 

[Bern80]

I am looking at this from the perspective of what the hospital bills for a service. You mentioned 50k billed to insurance above. I have heard of several cases where if that same procedure were billed directly to the customer they would be charged less. It's not less than what they would be with insurance coverage but the point is more how much is charged for the service based on who is being charged.

I don't know, I've been in medicine for a lot of years and I've not seen this once, not without prior (or post) negotiations.

Ins co's are not stupid. They are not going to pay one more penny than they have to and you often times have to fight them to pay what they are supposed to pay.

I have a hunch the issues you have heard about are negotiated fees. The computer doesn't care who is paying, they spit out the same fees regardless of the person. AFTER ins pays then it is refigured with contractual limits.

So fees are negotiated. So what? That's kind of the idea here. That consumers negotiate directly with providers for the best price.

 

[bill5]

No it isn't incorrect. What is patently false is the notion that health care is the one service that can somehow inexplicably react differently than any other good or service to basic economic laws. I have asked you repeatedly why it won't work and you refuse to answer.

It is not "inexplicable" and I have not refused to answer. It has been explained to you above by me and others, but you continue to ignore it. If you don't want to accept those answers, fine; do some research, talk to those in the biz, etc and you will find out for yourself.

And you again ignore my other points eg that health care is and would often remains too expensive for people to afford without insurance. We NEED health care insurance. The idea of doing away with it and people paying as they go is utterly unworkable.

Who says they have to pay their bill all at once.

? The hospitals, doctors, etc. They aren't about to suddenly start accepting "payment plans."

If they want to compete directly for customers, yes they do have incentive to make them aware of the cost of doing business with them.

Really? Then why don't they?

If you you are choosing to buy a car and have a choice between dealerships are going to spend a lot of time with the dealership that won't even tell you how much the car is going to cost? Makes no sense? This is as common sense as it gets, bill.

...in regards to buying a car, yes. Not health care. That is not common sense. That is apples and oranges. You are taking an overly simplistic view here without looking at all the factors in play (granted not hard to do regarding something this complex).

If you can't figure this out no wonder you don't have clue one how to fix this.

I don't. Nor do you. The diff is I admit it and don't suggest unworkable plans to do so.

PS: I wish things worked how you suggest. Boy do I wish that were true. Unfortunately, they simply do not.

 

[bill5]

So fees are negotiated. So what? That's kind of the idea here. That consumers negotiate directly with providers for the best price.

So you again missed the point, that's so what. Fees are negotiated BY THE INSURANCE COMPANIES. Who are able to do so - unlike consumers - for reasons already explained.

 

[Greenbeard]

I hate to interrupt a great discussion, but it's worth posting a recent news story pertinent to the original post. Now that healthcare.gov is collecting information on insurer denial rates we can get a good look at how many people get turned away. Though it varies widely from market to market, more than one in five people get denied in the individual market at present.

The federal website contains denial rates in all 50 states, the District of Columbia and U.S. territories, and is updated periodically. The most current information is for the first three months of 2011. The data show that denial rates routinely exceed 20 percent and often are much higher, according to a KHN review of 20 of the most populous states and the District of Columbia. The data reflect applications that are turned down for any reason.

 

[Bern80]

I hate to interrupt a great discussion, but it's worth posting a recent news story pertinent to the original post. Now that healthcare.gov is collecting information on insurer denial rates we can get a good look at how many people get turned away. Though it varies widely from market to market, more than one in five people get denied in the individual market at present.

The federal website contains denial rates in all 50 states, the District of Columbia and U.S. territories, and is updated periodically. The most current information is for the first three months of 2011. The data show that denial rates routinely exceed 20 percent and often are much higher, according to a KHN review of 20 of the most populous states and the District of Columbia. The data reflect applications that are turned down for any reason.

That is important, but also important is WHY they are being denied. Again I think part of the issue is because people tend to not take a lot of time to actually understand what their plan covers, they think an insurance plan basically covers everything. And again, that simply isn't so. It says the insurance company will cover x costs under x conditions. If your issue does not fall under those parameters you really have no business griping to the insurance company about not covering something they aren't obligated to cover in the first place and you can't tell that at least some of those 20% of denials aren't things insurance companies have no obligation to cover.

On the opposite side if they are denying things they really ought to be covering perhaps some more regulation would be in order in strictly enforcing these contracts.

 

[Bern80]

So fees are negotiated. So what? That's kind of the idea here. That consumers negotiate directly with providers for the best price.

So you again missed the point, that's so what. Fees are negotiated BY THE INSURANCE COMPANIES. Who are able to do so - unlike consumers - for reasons already explained.

I am aware fees are negotiated by insurance companies. I'm not missing anything bill. You are. What you apparently missed is econ class in high school. And no you never did explain why it is simply not possible for a person to negotiate the cost of treating a broken arm rather than an insurance company or why it simply isn't possible for an individual to shop for the best quality of care at the best price for said injury. You get more bazar by the minute bill. You have a problem with an insurance model but are basically advocating FOR them, by totally rulling out any other type of model that involves accountability on the part of the consumer.

 

[AnnieInMexico]

I am aware fees are negotiated by insurance companies. I'm not missing anything bill. You are. What you apparently missed is econ class in high school. And no you never did explain why it is simply not possible for a person to negotiate the cost of treating a broken arm rather than an insurance company or why it simply isn't possible for an individual to shop for the best quality of care at the best price for said injury. You get more bazar by the minute bill. You have a problem with an insurance model but are basically advocating FOR them, by totally rulling out any other type of model that involves accountability on the part of the consumer.

But it is possible to negotiate the cost of medical care when paid for by a private citizen. I do it for a living on behalf of my patients. If it involves ins then no, you are correct. We cannot negotiate and over ride a contract between a medical provider and the ins co.

 

[bill5]

The data show that denial rates routinely exceed 20 percent and often are much higher,

They are actually all over the map depending on a variety of circumstances/locations, which is what the article ends up actually saying more than anything.

That is important, but also important is WHY they are being denied. Again I think part of the issue is because people tend to not take a lot of time to actually understand what their plan covers, they think an insurance plan basically covers everything. And again, that simply isn't so. It says the insurance company will cover x costs under x conditions. If your issue does not fall under those parameters you really have no business griping to the insurance company about not covering something they aren't obligated to cover in the first place and you can't tell that at least some of those 20% of denials aren't things insurance companies have no obligation to cover.

On the opposite side if they are denying things they really ought to be covering perhaps some more regulation would be in order in strictly enforcing these contracts.

All good points, but you misunderstood: the article discusses people denied coverage at all, ie 20% getting denied a policy, not 20% of their claims being denied.

 

[Bern80]

It is not "inexplicable" and I have not refused to answer. It has been explained to you above by me and others, but you continue to ignore it. If you don't want to accept those answers, fine; do some research, talk to those in the biz, etc and you will find out for yourself.

Then you will have to spell it out for me. What specific variables make it so much more difficult for an individual to find the best service at the best price to have a broken arm treated, than say repairs on your car for your most recent fender bender. Why is it not possible for the consumer to use the same decision making process in getting their car repaired (i.e. who has the best reputation, who has the best price, etc.) as it is treating a broken bone)

And you again ignore my other points eg that health care is and would often remains too expensive for people to afford without insurance. We NEED health care insurance. The idea of doing away with it and people paying as they go is utterly unworkable.

I haven't ignored anything and have actually answered this several times myself. I never said there is no need for insurance at all. If you grasp the bigger theme I'm talking about here I'm saying it's overused, which is causing services to cost more than they should be. It is not unworkable. Take a second. Forget what you think you know and humor me.

Really? Then why don't they?

And why exactly did you ignore the second part of that where I stated do and I have?

in regards to buying a car, yes. Not health care. That is not common sense. That is apples and oranges. You are taking an overly simplistic view here without looking at all the factors in play (granted not hard to do regarding something this complex).

I don't. Nor do you. The diff is I admit it and don't suggest unworkable plans to do so.

PS: I wish things worked how you suggest. Boy do I wish that were true. Unfortunately, they simply do not.

In the words of one wiser than me. 'NO, it is no different. Only different in your mind". Take a step back. Stop insisting that it is different rather then objectively thinking about what makes them different and why they must be treated so differently. The one difference you've come up with so far is the cost of one vs. the other. I am saying that perhaps if we treated health care more akin to auto car the costs of health care just might go down.

 

[Bern80]

I am aware fees are negotiated by insurance companies. I'm not missing anything bill. You are. What you apparently missed is econ class in high school. And no you never did explain why it is simply not possible for a person to negotiate the cost of treating a broken arm rather than an insurance company or why it simply isn't possible for an individual to shop for the best quality of care at the best price for said injury. You get more bazar by the minute bill. You have a problem with an insurance model but are basically advocating FOR them, by totally rulling out any other type of model that involves accountability on the part of the consumer.

But it is possible to negotiate the cost of medical care when paid for by a private citizen. I do it for a living on behalf of my patients. If it involves ins then no, you are correct. We cannot negotiate and over ride a contract between a medical provider and the ins co.

Then here is the million dollar final question. Can an individual negotiate a better price with a provider than an insurance company for the same service?

 

[AnnieInMexico]

Then here is the million dollar final question. Can an individual negotiate a better price with a provider than an insurance company for the same service?

I'm not sure. I know they can negotiate for the same price as an ins co, I guess for the sake of TODAY (vs. future) one thing they can do is see what Aetna pays for a broken arm, that might be 10% more than what BC/BS pays for the same services, contractually speaking.

I rarely get fees negotiated down below what ins pays and when I do it is for highly specialized drugs or treatments that even ins won't pay for.

Example, I used to work for the county hospital in Phoenix. There are 'designer' chemo drugs that cost 10s of thousands of dollars per dose. Medicaid doesn't cover them, private ins doesn't cover them. The two groups of people that can afford them are wealthy who will self pay and quite frankly, illegals. There is a list of drugs an ins co will pay for and each ins co has a different list of drugs they will honor. Illegals have no formulary, they have no limits.

This means your kid could be in the hospital with an illegal kid and they both have some horrific form of cancer. Your kid has ins that denies the claim for 'x' drug. The illegal kid has no insurance so they are covered and get the drug.

In rare cases such as this I can get negotiated fees because so few people can afford the drug it often times expires before it's used and wasted. The hospital would prefer to take less money for the drug and get something out of it vs. returning it to the manufacturer to be destroyed. BTW, county hospitals gets these designer drugs for free from the manufacturer. Doesn't cost them a penny. Should they take $1K for it vs. the $10K they are charging ins co's? Or just pitch the thousand and return the drug?

In cases like that you can negotiate for less than the ins co but other than that, I personally haven't seen this scenario happen.

 

[bill5]

I am aware fees are negotiated by insurance companies. I'm not missing anything bill.

Yes, actually, you are: reality. For the last time: economic theory does not equate to reality and you ignore other factors in play.

What you apparently missed is econ class in high school.

This is not econ class. Again, this is reality. Life and the business world make their own rules and don't necessarily give a flip about following textbooks FYI.

And no you never did explain why it is simply not possible for a person to negotiate the cost of treating a broken arm rather than an insurance company or why it simply isn't possible for an individual to shop for the best quality of care at the best price for said injury.

Give that a try and let us know how it works out. There may be instances where it's feasible, but I assure you they are in the extreme minority.

You get more bazar by the minute bill.

"bizarre" is the word I think you were reaching for, but it still doesn't apply or even make sense. Disagreeing with you does not equate to being bizarre; sorry.

You have a problem with an insurance model

Define "have a problem with an insurance model." If by that you mean I think it is flawed, certainly. If you mean I think it should or can be scrapped (or something close to it) as you have, I have been saying quite the opposite.

 

[Bern80]

The data show that denial rates routinely exceed 20 percent and often are much higher,

They are actually all over the map depending on a variety of circumstances/locations, which is what the article ends up actually saying more than anything.

That is important, but also important is WHY they are being denied. Again I think part of the issue is because people tend to not take a lot of time to actually understand what their plan covers, they think an insurance plan basically covers everything. And again, that simply isn't so. It says the insurance company will cover x costs under x conditions. If your issue does not fall under those parameters you really have no business griping to the insurance company about not covering something they aren't obligated to cover in the first place and you can't tell that at least some of those 20% of denials aren't things insurance companies have no obligation to cover.

On the opposite side if they are denying things they really ought to be covering perhaps some more regulation would be in order in strictly enforcing these contracts.

All good points, but you misunderstood: the article discusses people denied coverage at all, ie 20% getting denied a policy, not 20% of their claims being denied.

I agree that is harder one to solve. But it somewhat relates to my idea to fix social security. I think the social services we do have should go to those that really need them. Meaning I would modify social security and medicare such that instead of automatically getting them at a certain age (let's face it, Bill Gates, Warren Buffett, etc. don't really need to collect SS) you need to show a need for them. That would ensure that those that need it get the service and should also lower everyone elses tax burden. So if 20% of the population can't get insurance anywhere maybe we need to consider expanding medicare to those people.

 

[bill5]

Then you will have to spell it out for me.

I and others have already tried; frankly you have shown that to be pointless.

I haven't ignored anything and have actually answered this several times myself. I never said there is no need for insurance at all.

Then pardon my misinterpretation. When you said "how about you the consumer just pay for the services he provides you" initially, ie a blanket proposal, that's what it sounded like to me.

If you grasp the bigger theme I'm talking about here I'm saying it's overused, which is causing services to cost more than they should be. It is not unworkable. Take a second. Forget what you think you know and humor me.

It is quite unworkable, again for reasons explained (multiple times). As for humouring you, sorry, I've had enough of that.

In the words of one wiser than me. 'NO, it is no different. Only different in your mind".

It is different in this thing we call the real world. Cars are not people and health care is not buying auto parts or services, in a wide variety of ways.

 

[Bern80]

Give that a try and let us know how it works out. There may be instances where it's feasible, but I assure you they are in the extreme minority.

Now you're just being difficult. You're really going to try and pretend that is not possible for me to call a hospital, tell them my arm is broken and want to pay for all of it out of pocket and ask them what it will cost, then call another hospital and another and ask them what it will cost? And you're going to insist it's not possible for me to find someone who would give recommendations for good physicians at some of these hospitals?

EVERY good or service responds to beasic economic forces. Health care is not immune to it. The reason it doesn't react the same way is not because of some anomoly of the servce of health care. If some good or service doesn't react as economic theory suggests it is because some other variable is present overriding that economic principle.