Comment by c3534l | Hacker News Reader

Comment by c3534l | Hacker News Reader

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> They introduce a massive bureaucracy and massive costs and provide very little value.

I very much disagree. When I didn't have medical insurance, doctors charged me twice what they charged the insurance companies. Insurance companies have a vested interest in reducing the costs of medical care, while doctors have a vested interest in increasing them. Screwing patients out of payments is not an aligned business model, but it only becomes worse when you don't have someone there fighting to reduce costs on your behalf, willing and knowledgeable enough to know when a medical test is superfluous, or over-priced.

Doctors are still prescribing name-brand drugs when equivalent generics are available. That's some really basic stuff that we're still struggling with. Forget it when a doctor asks for a test that you don't even know enough about to say what it does, let alone if you're getting fleeced for money. Insurance companies get to be the bad guy in the middle who both doctors and patients can blame for not paying for things the patient shouldn't have to pay for in the first place.

But remove that stop-gap and you're relying on the blind trust of the doctor to do the work of appropriately minimizing costs for patients in the face business pressure to do otherwise. And if there's anything I know about human nature, is that we're capable of doing what's best for us, while honestly and truly thinking that isn't the true motivation. I've had mechanics try to sell me on nonsense that more knowledgeable friends of mine recognized as a scam. You don't want that when it comes to what is already one of the biggest expenses in a person's life.

> When I didn't have medical insurance, doctors charged me twice what they charged the insurance companies.

You've identified the symptom but misattributed the cause. You ran afoul of the charge master system of billing, which is a byproduct of our insurance-based healthcare system and the laws which uphold it. In short, providers are "forced" to set their base rates high in the knowledge that insurance companies (their most significant revenue source) will negotiate a fraction of the posted rate. Meanwhile, federal law enforces (under very stiff penalty) that individuals cannot negotiate nor be given a discount from the base rate.

You are also correct to identify the inherent information imbalance in the doctor/patient economic exchange: you as the patient will never know for certain if the recommended course of treatment is appropriate. Realistically only a doctor has enough information to tackle that question. In a cash-based system you are indeed susceptible to abuses.

(In fact, this is one of the main arguments against concierge or "executive" medicine: they will frequently throw in wasteful and dangerous tests like full body scans which have absolutely no justification in medical science.)

But by the same token, insurance company incentives aren't aligned in your interest either, so there are even more abuses on that side.

I believe a single-payer system is the best compromise -- the government's incentives are best aligned to improve the health of the populace (securing a healthy workforce) at the least cost. ("Least cost?!", I can hear the scoffs as I type.) Only government systems have enough scope and lifetime to realize the long-horizon payoffs of preventive healthcare, and cannot so easily escape their failures (the way insurance companies could with lifetime caps). Many people are surprised to learn that Medicare is at least on par in terms of efficiency and above par in terms of patient outcomes and satisfaction.

My last visit to the dermatologist was over $1000 for an office visit that involved a skin tag clip with a scissors and two squirts of LN. Medicare negotiated that down 70% to their preapproved rate and paid about $300, of which I paid 20%. Medicare is just another insurance payer, not a health provider.

If you are talking about the US, we have several times in the past negotiated our bills down as much as 20%. It does not appear to me that there is anything illegal about that.

But it does gall that they try to charge someone without insurance and with no bargaining power the full rate, well knowing it’s a fake rate.

> Medicare is just another insurance payer

I should have been more careful with my terminology. I used "insurance" as a shortcut for private, for-profit insurance, excluding government insurers like Medicare.

”Meanwhile, federal law enforces (under very stiff penalty) that individuals cannot negotiate nor be given a discount from the base rate.” I negotiated a discount for an operation a few years ago. Is this law you’re speaking of relatively new?

Good question. My understanding of this was based on discussions with doctors. I had a bit of trouble finding a citation, so it's possible this isn't as cut and dry as I represented. I did run across this memo from DHHS in 2004 that might shed some light (although I'm not sure this still reflects current law).

https://oig.hhs.gov/fraud/docs/alertsandbulletins/2004/fa021...

It points out a pair of laws -- the Federal Anti-Kickback Statute, and the Social Security Act -- which may have caused some confusion about discounts and waivers. Hospitals, the memo assures, are free to offer discounted services under a specific set of conditions such as methodically established patient financial need, an inability to collect on bills, and given that the waiver does not in any way entice business (i.e., you can't advertise it).

But the implication is that you can't give discounts willy-nilly, as a provider, or risk federal audit.

A separate but related issue is that under-billing may be considered fraud by CMS. A doctor cannot provide a service which they do not bill for, nor bill for a code which is lesser in magnitude than the actual service provided. I can't say if anyone has ever been investigated for under-billing.

In any case it's worth adding that aside from legalities, there are severe ethical ramifications of offering discounts to certain patients and not others unless that decision is made by some impartial measure. You could imagine all kinds of kickbacks, favors, enticement, coercion, biases, and so forth rearing their ugly head if doctors are given the freedom to bill whatever they choose (less or more).

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