The insane costs of health care (Page 2)

And what do you think happens to the quality and timeliness of care when hospital and providers lose money because insurance cuts what it will pay, and the poor get free care anyway? Remember, unlike an actual restaurant, a hospital can't refuse service based on ability to pay.

Oh I agree, and as health care is more and more politicized, it will now become the currency of vote buying just like housing and college loans have been, things will only get worse.

Here's the numbers from the bill I got from the Philadelphia Fire Dept. for the ambulance ride that the Park Rangers essentially forced me to take. I refused several time when they offered to call the ambulance but they insisted. Maybe they should pay. Anyway...

BLS Emergency Base rate                                   $950.00
BLS Emergency Mileage                                      $40.00
Payment to EMS - Primary Insurance                  $352.91
Adjustment/Assignment - Primary Insurance      $597.88

Amount Due                                                         $39.21 

WTF???? If the charge is $990.00 to transport me to the hospital, and the insurance company pays 352.91, then the biller "adjusts" the balance another ~$600, why didn't they just throw in my $39.21 too?? That's the part that really effing ridiculous.

So that's about what I can expect to pay, too, since I also went in a PFD ambulance.

It's worth it, they transported my bike and made sure it was secured at the hospital

They told me they'd take my bike but it would have to be left outside at the hospital. Temple Hospital. In North Philly. No thanks. The Rangers took it for me and kept it safe. I suppose that was worth $40.

That is the worst part of the whole thing. It's almost criminal.

 Being raised in 2 countries with I guess what people call a "socialized?" healthcare system (New Zealand/Canada) I won't venture in to the USA system as I have no clue how it really works. 

But the only thing I do know that in my opinion if one child dies because their family couldn't/was scared to get care then that is one child too many...........maybe all kids are covered?

(PS: yes I know we pay for our system through our higher taxes etc. everyone I know is okay with that)

You have a 10% co-insurance or co-pay on ambulance services. Contractually (with your insurance carrier), the provider cannot write off that co-pay without attempting to collect. Be happy they have an agreement with your carrier - otherwise they could balance bill you for $39.21 plus the contractual adjustment of $597.88.

Now come on....that's just ridiculous.  The people who don't pay now won't pay under any circumstance, or coverage.  

How do you get money from people who don't have any of their own? How is it that they magically become part of "we all"?

ETA - understand that I am of the belief that we will ALWAYS pay for a segment of society that can't, or refuses, to pay.  You can either pay with entitlements, or you can pay as they steal from and rob those that have what they need. It is what it is. Just don't try to tell me that any program of reform includes "we all pay".....that's a lie.

You miss the point of universal single payer (or even the individual mandate) approach. Yes, there will be people with so little income that they cannot afford any sort of coverage. But there are plenty of uncovered people now who are uncovered because they either have made a conscious decision to spend the money elsewhere, or are priced out of the market because when you go to get insurance as an individual (instead of a group like a company's employees), the price is insanely higher. Put EVERYONE in the risk pool, and the per-covered life for an individual seeking insurance drops significantly. Yes, the cheapest plans now cost a bit more, and the cheapest plans will still cover the least. But overall, society is better off providing care to everyone.

We're still paying for the people who can't pay......and I'm not convinced that under Obamacare the quality of my health care won't go down. 

I have alot of friends in Canada......the wait lists to get good health care are crazy.  Two of my friends have cancer and come to the U.S. for care....they are both well of financially, and USED to be able to afford great health care.  Now they still pay, but the quality of their care has been reduced. Sure, everyone gets care, but the entire system has been dragged down.

On your last point.....our society has been providing care for everyone long before Obamacare.

Obamacare = Higher costs, via taxes, for shared mediocrity, administered by bureaucrats, in the name of "fairness".

And that is where your train goes off the rail.... you are talking health care, not health insurance, which we now pay for. Insurance is risk management. Healthcare is a service. People used to provide their own healthcare, and they would go to the doctor when they needed. Health insurance was a way to mange the risk of a serious injury or catastrophic illness. For year preventative medicine has joined in and we have this convoluted system going on largely due to government regulations.

Debating over the merits of coving those that will not or can not pay for their medical care is one thing, but don't tell me we will all pay less if everyone is in the risk pool. If you want to talk risk pools, then those that are obese, smoke, and expect to be treated in an emergency room for the sniffles... basically abusing the system for convenience not for need... those people would be paying the most in a insurance risk pool, yet in a government ran health care system... the large majority of those people will be the ones paying the most. All those young people the individual mandate that basically doe snot need health care are the ones that will be footing the bill by tapping a new revenue stream.

If a person lives on a low income, and is shot, or gets cancer.... then yes, care can't be refused, they will be cared for, and that cost is born by all due to the care givers passing it on as the cost of them doing business and those that are paying for their service are the ones paying the bills. That isn't really a problem. People that do not care for themselves that use emergency rooms as their person doctors office... that's a problem. Instituting a program for the rest of us to pay for that does not fix the problem.

Let me get this straight.........

You were billed over $9,000 and had to come out of pocket for $100

AND

You have to see a physical therapist and it is going to cost you $25 each visit.

Sounds like a pretty freakin good deal to me

And you want to change the system??????????

"Write off" - the difference between what the provider charges and what insurance covers. 

I've always wondered why the provider doesn't just charge what the insurance covers - why this write off business? I should ask my Dad, he runs a medical billing company...

because if they do this, the insurance will then begin paying even less.

Here is how hospital finances and pricing work.  During the budget process, operating expenses are estimated along with a targeted profit margin.  This determines how much cash needs to come in the door.

At that point, gross and net revenue are estimated/calculated.  Gross revenue is the volume of each chargable item or service times its price or charge.  Net revenue is the gross revenue less "deductions from revenue" which are contractual allowances, administrative allowances, charity, and bad debt.  Contractual allowances are the difference between what the charge is on the bill and that portion of the bill that is payable based on Federal regulations for Medicare, mostly State for Medicaid, and negotiated contract terms with insurance providers.  Basically what the third party is obligated to pay plus patient financial liability (deductibles and coinsurance).  Administrative allowances are writeoffs for things that are basically the providers fault like they waited too long before sending out a bill (there are time limits) or a coinsurance amount is too small to justify sending out a bill (like less than $5).

So, net revenue is figured by modeling the total estimated payments from each payor source.  For example, Medicare is 50% of total gross revenue and they pay what works out to 50% of gross charges.  I estimate gross revenue to be $100,000,000 so Medicare will bring in $25,000,000.  Medicare pays on a very complicated set of regulations based on different designations and conditional provisions.  Way too complicated to get into.  Medicaid is 10% of total gross revenue and pays what works out to about 20% of charges so they bring in $2,000,000.  Contracted commercial insurance companies make up 30% and bring in 90% of charges or $27,000,000.  There are other payors like workers comp, native health, military, etc. and the uninsured which is actually a pretty small number.  So, in this example, the hospital collects about 55% of billed charges.

Prices are adjusted to meet profit margin target.  Since most Medicare and Medicaid payments are fixed by statute and are not affected by the charge on the bill those payors that pay on a percentage of charges are looked to to make up the difference.  In the above example, if I raise rates 5%, it will increase gross revenue $5 million but net revenue will only go up about $1.35 million.  This is the root of escalating hospital charges.  Over time, the prices go up much faster than the cost because the cost increase is shouldered by a small percentge of the funding pool.  Medicare and until recently Medicaid increased payments about 2-3% per year but that falls short of the higher cost of drugs and technology.  This is commonly referred to as cost shifting.

The above examples are much simplified and percentages I use are what I generally see in the industry but can vary dramatically from one facility to the next or one part of the country to the next.  

One other note, the uninsured are not a significant source of income to hospitals.  They make up a small percentage of patients and the collection rate for self pay or private pay is about 5-10% with about half of that being written off to charity and half to bad debt.  Prices increases hurt a very small minority of uninsured people because very, very few have the means to pay.  Pricing strategies are not aimed at the uninsured.

How does that happen in the real world? In the real world goods and services are generally set by supply and demand... OK... well not in the real world because price is set by government regulation, subsidies, and tax breaks.... but my mechanic does not charge $10,000 dollars for a new engine because he knows I will only pay $2000. The body shop does not charge $10,000 to put on a new bumper from a mt fender bender because they know the insurance company will only pay $1000.

It's all make believe BS is why they do it. Tylenol does not cost $30 a tablet, but that is what the hospital will bill you. Nothing but a shell game. It has nothing to do with how many they are giving away for free so they have to charge you. Just charge what it is. You will get what you get, you write off what you write off at the end of the year. I do not know a single person, insured or not, that actually winds up paying every penny charged by a hospital.

I realize this, but it is also repeated time after time that people without health insurance use the ER as their doctors office for the sniffles because they know they won't get turned away. That runs up the cost because the ER is not the appropriate place... here's a great idea, how about turning away people from the ER that do not have a legitimate reason to be in the ER. I'm not talking about refusing health care. My MIL is on Medicaid. She has to wait for weeks to see a doctor. Getting things covered is tough. It usually is a big hassle, but she gets what she needs, and most importantly, she does not side step all that and go the the ER when she has a cold.

I understand that health care can't be refused. But again, we get stuck in the difference between insurance and care... your evil insurance company above wants to deny a claim because once the money is in the bank, it is theirs. But they are in the business of covering risk, and if they say it is not there, they win.

The problem you just mentioned was cause by government interference in the first place. Health care used to be anchored in the free market... Doctors and hospitals provided services and goods based on something attached to reality. And there were still those that took care of those that could not pay, or they took it as a loss. If prices had to be raised to cover those losses then so be it.

Government regulation is what tied HC to employment and the use of HMOs and what not. What you talk about with Insurance companies doing what they do is what it has turned out to be after decades of Government trying to "fix" something that was not necessarily broken.

Now Obama care or what ever Care that is being pushed says the system is so messed up and out of control that the only thing that can fix it is the very thing that broke it in the first place... Government. That is crazy. Putting a band aid over what we have, and mandating everyone pays so every one can be cover does nothing to fix the problem.

If the industry is not tied to a free market of some sort, then there is no mechanism to control pricing. Just setting a limit from the government of what you can charge does not control costs...it just controls a price that has nothing to do with what it takes to provide that service.

And no I am not talking about complete deregulation, but what we have is silly. From all this debate I can get on board with everyone being covered and having access to HC. I can understand the need to have those costs handled above board and budgeted properly. But it still needs to be rooted in a free market. The HC industry we have today is the direct result of government interfering with that.