Most hospitals aren't complying with price transparency rule | Hacker News Reader

Most hospitals aren't complying with price transparency rule

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327 pointsKoftaBob235 comments

I had really bad nausea and pain, went to my doctor, who said I likely had a kidney stone, and the next step was to get an MRI. I was between jobs with no insurance and few funds, so I asked what it cost. The doctor had someone in his office call the hospital and got a quote for $1,500. I got the MRI knowing only that.

A month later I got a bill for $3,500. I drove out to the hospital (2 hours) to ask wtf. They didn't help at all, wouldn't budge.

So I went home and wrote them a check for $1,500, marked as paid in full, with a cover letter explaining my side of it. It worked. They cashed the check and I never heard another word. I've done further business there with no problem. It's well worth pushing back.

stories like this clearly prove what a racket our health insurance/billing system is.

It always amazes me when I go to the vet with my dog, I get an itemized bill for medical services immediately. That really exposes the BS of figuring out prices once they’ve sent it to insurance, months go by, and then finally you get a final bill. It doesn’t have to be that way.

I'm glad it worked!

As I understand it, marking your check "paid in full" combined with the cover letter is what potentially worked for you. Simply writing "paid in full" on the check generally isn't sufficient.

More info form real attorneys (unlike me)

https://www.lawyers.com/legal-info/consumer-protection/banki...

That link doesn't support your interpretation at all:

> If you try this approach on a credit card debt, it’s unlikely to work. Why? Because you probably won’t be able to show that the amount owed is uncertain. You’ll be held responsible for the amount that you charged—a number that’s likely relatively simple to figure out. On the other hand, if you’re working with a contractor and you disagree about how many hours it took to finish a job or the supplies necessary to complete a project, you might be able to satisfy this requirement.

The article makes no mention of a cover letter. They stress two things:

1. The amount owed must be subject to dispute. The hospital obviously satisfies that requirement.

2. The phrase "paid in full" was visible in an obvious manner.

That's it.

The cover letter illustrates that the amount is in dispute in writing. It is likely important in order to satisfy 1.

No, the phrase "paid in full" illustrates that the amount _is_ in dispute.

What you need is for the amount to be subject to dispute. See how the example they give of an invalid attempt to do this is a credit card bill, specifically because the amount of the claim is fully objective?

The cover letter doesn't add anything there.

Isn't this fairly typical? I had an emergency visit when I visited the USA once and was flat out told that the insurance bill was about $3000, but they could take $600 if I paid right away. I had out of country insurance, so had to pay upfront anyway, so I chose the $600 option.

I was flat out offered the cheap cash settlement.

Typical doesn't mean we should accept it and move on. Which is why we should keep talking about this and keep the pressure up.

Yes it's typical. Our healthcare is basically the equivalent of Moroccan rug shopping. It's great.

I wonder if they recognized you were from out of country and so they’d have no way to collect if you just left, and that’s why they offered the cash deal up front.

Part of that is why HSA's are heavily promoted since you get pre-tax dollars to go toward an account you can use specifically for these reasons. So in essence, that "out of pocket" money would be coming from your HSA. In practice however, that's not really the norm.

Unfortunately, I've never been offered an HSA that's not "use it or lose it", meaning I have to know my medical expenses for the entire next year during the open enrollment period in the fall in order to properly benefit from it.

HSA is legally yours, and no one can make you lose it. What you are referring to is a health FSA, which have no reason to exist anymore.

Any employer that does not offer HSA eligible plans is shafting their employees. An HSA is a 401K, but better, since you can withdraw without penalty at any time for any healthcare expenses you had at any time in the past. And you can invest it into anything you want (just rollover your funds to a Fidelity HSA every year).

I mean, this was admittedly 10 years ago, but it was definitely described to me as an HSA at the time in all the literature I had access to.

This is great in theory, but HSAs are only offered with HDHPs, which means that every other year or so, despite contributing the IRS max, I spend out the entire account.

Assuming you have sufficient income, you should pay for expenses today with post tax dollars, and let the HSA money grow tax exempt as long as possible.

The premium difference and the deductible difference between HDHP and non HDHP plan cancels out, generally. You either pay more premiums on an ongoing basis, or more at one time for the expense.

Unfortunately, there is no getting around actually having a lot of healthcare expenses. But spending ~$6k out of pocket on healthcare every two years probably puts you a couple standard deviations above average spend category unless you are old.

Nothing too crazy. A kid one year, two minor surgeries in other years. Fortunately no ER visits.

It has indeed been my experience that the cost of a non-HDHP plan is approximately the same when all is said and done, but I’ve considered going back anyway. There’s “loopholes” in the system that you end up falling through.

For example:

- have a kid at the beginning of the year, meet your deductible and out of pocket, drain the HSA to do so, but hey, free medical care for the rest of the year and you can build the HSA up again, right? Nope, your division gets acquired, you’re laid off and rehired, and your “new” health insurance (same carrier and deductible as the old) has a brand new unmet deductible.

- providers demand prepayment. Fairly unusual, but it happens. Say you need a minor surgery. Well, the MD and hospital want prepayment. Both of them see you have 4K left on your deductible and want 4K each upfront. Don’t worry, you’ll be refunded / have a credit on your account by whoever files last whenever they file the insurance claim three or more months from now. Bonus: any doctor you visit in the meantime still sees your deductible unmet because the claims haven’t been processed.

- medical billing is awful. HDHPs expose you to more of it because more of your actual cash is in okay. Providers bill the wrong amounts, fail to realize you have credits on your account, file as out of network instead of in network resulting in a different discounted cash price, etc.

IME, any health problem requiring more than routine doctor visit plus xray or ultrasound is going to be many thousands of dollars. Who knows what the median is, but there’s a reason the total insurance premium for a family HDHP hovers around 20k.

And yeah, I see what you’re saying, but yeah, my cash flow is not sufficient for that. Or at least, it doesn’t seem worth it for a potential payoff decades from now.

Sorry to hear, but that is a rough set of circumstances to be in the current US healthcare system. The first situation is why employers should have been barred from offering any compensation other than money and time off.

That wasn't an HSA, that was an FSA (or an HRA or something else).

FSAs (other than LPFSAs) cannot be used with HDHPs, which are the plans that allow HSAs.

An actual HSA is your money. If you don't spend it on medical care, you can withdraw it when you are elderly as normal money.

and tax-free to boot.

I have an HSA, but I'm painfully aware of how it's just another boondoggle for the wealthy. I can dump cash into it on top of the limits for my 401k and IRAs, and pull it out tax-free with no limits once I turn 65.

Another good example of how an idea that sounds fairly good on paper turns out to be another benefit for the rich in real life.

If you aren't reimbursing medical expenses, the money is taxed, even when you are 65+. (It functions sort of like a Traditional IRA in that circumstance.)

The real trick is to save medical receipts for years/decades and reimburse only when you actually need the money, paying out of pocket until then.

What I mean is yes, indeed, it functions like an additional traditional IRA, gains are accumulated tax free, and the balance can be withdrawn in any way you want post-65.

Does that trick actually work?

> Does that trick actually work?

There is no time-boxing on reimbursement, so it should. HSAs are only about a decade old, so no one has done the extreme versions of it yet, but a decent number of folks are squirreling away receipts and letting the money grow.

Why wouldn't it? There's no time limit on using the funds and no time limit on reimbursing yourself for medical expenses.

Kinda like a backdoor Roth, no rules prevent it, so it works.

You're describing an FSA, not an HSA, HSAs are not use-it-or-lose-it.

FSAs and HSAs are different types of tax-advantaged accounts with different rules, but both can be used to pay medical expenses.

There's also HRAs too that's another different type of tax advantaged account and can also be used to pay for medical expenses.

This complexity is part of the problem.

A "normal" business doing this at scale would be investigated for fraud. Yet somehow it's normal when it's a hospital.

It's definitely not the hospitals fault. It's insurance companies getting involved since paying out of pocket is abnormal. So when you do pay out of pocket, you're paying what the insurance company pays and the hospital billing department is most likely very apathetic to that. Since they operate as non-profits, they often are willing to negotiate. Which is most likely why they can get away with this as opposed to a for profit entity.

There was no insurance company involved in the above story.

> So when you do pay out of pocket, you're paying what the insurance company pays and the hospital billing department is most likely very apathetic to that.

This has nothing to do with a health insurance company.

> Since they operate as non-profits, they often are willing to negotiate. Which is most likely why they can get away with this as opposed to a for profit entity.

This has nothing to do with non profit tax status. Car dealerships negotiate too.

I think your parent is saying that the quote was given ASSUMING insurance. So when the bill was formally given, it didn't match the quote because the quote was given under false-assumptions (about insurance).

That could be a possibility, which is still completely the hospital’s responsibility and does not involve an insurance company at all.

There is always an insurance company involved with the prices of medical procedures.

Hospitals set their prices above what most insurance companies will pay to make sure they get the maximum amount from the insurance company.

When you come in without insurance, you appear to get screwed because the prices are extra high just in case some new fancy insurance comes along willing to pay more. Luckily, in many cases it's not terribly difficult to negotiate a lower payment.

I'm not advocating for this system, I think it's terrible, but I understand how it came to be.

That characterization would make the word “involved” meaningless.

If a hospital wants to set their prices high to be able to price discriminate, that is the hospital’s choice.

No one is stopping the hospital from offering the same low flat price to everyone.

>Hospitals set their prices above what most insurance companies will pay to make sure they get the maximum amount from the insurance company

Tis is generally not as simple. There are two prices that matter to this conversation: the hospital chargemaster and the usual and customary rate (UCR). The two are not functionally intertwined. The chargemaster exists in the hospital back office as a legal fiction and has little to no relationship to anything the insurance companies do although yes, sometimes chargemasters may be used as part of the rate negotiation with insurers. UCR is governed by what it says on the tin, it is what the market is paying in the specific geography.

The shenanigans kick in when the hospital tries to do something with the fictional difference between their chargemaster and the UCR, or, worse, tries to charge the fictional price to uninsured and under-insured individuals.

I keep a short explainer here: https://jaz.co.uk/2015/10/15/hospital-retail-pricing-for-dum...

It's both the hospital and insurance provider's fault. In my opinion it's absurd that non-emergency care costs can be adjusted after the fact.

Imagine if a car repair shop could quote you $500 for a fix, then after the repair is done, you've paid, and you get your car back, they say "actually it's $5000, and we'll send you to collections if you don't pay." Non-emergency medical services should be required to follow a similar model, and none of the vague "you agree to pay far, far extra if we don't think to tell you about it ahead of time" bullshit that pretty much everyone has had to deal with.

How is a hospital not quoting the correct price to a person without insurance an insurance company’s fault in any way?

No, the insurance companies did not force the hospital to do this.

Insurance companies deserve plenty of criticism: cherry picking, lemon dropping, leveraging the low feedback coefficient of their industry to sell one thing and deliver another, a failure to control long term cost growth, the list goes on. But insurance companies do not deserve criticism for this. This one is on the hospital, plain and simple. Normally this hustle would have been checked by an insurance company, yes, but that doesn't excuse it in the slightest.

Right, and how exactly is it advantageous to the insurance company’s to pay a $3500 bill if it really was $1500 (or possibly lower). The racket on the insurance side is if the bill is truly 1500, which they payout to the hospital, but then still go ahead make back $3500 on the premium off the patients.

I don’t know who taught who to be dirty, but it seems like the hospitals and insurers are becoming one in the same (possibly the hospitals learnings from the insurance industry).

My hot take:

Insurers might be on the patients side simply because Americans are living longer, and maintaining the general level of sickness (diabetes, heart conditions, etc). Prices going up does not favor them when medical care is going up, so they are oddly on the average person’s side.

But for the hospitals and doctors, this is all a dream come true. Endless supply of patients, so charge whatever you want.

>but then still go ahead make back $3500 on the premium off the patients.

Insurance pricing is very competitive, and health insurers have single digit profit margins. Most less than 5%.

> I don’t know who taught who to be dirty, but it seems like the hospitals and insurers are becoming one in the same (possibly the hospitals learnings from the insurance industry).

The west coast has had a combination insurer/healthcare provider for a long time, Kaiser Permanente. It’s a very popular organization.

If the bill was $3500, the negotiated price for the insurance company was surely less than $1500. I had my appendix out, the bill was $20k, negotiated price picked up by insurance was $2000.

Price transparency doesn't go far enough. Regular purchasers need to be able to get the real prices, but here we are and we can't even find out what the real prices are, much less purchase at that price.

The insurance company’s profits are capped at a percentage of what they pay out, so (generally speaking) they are incentivized to maximize the amount they pay out so that they can maximize their capped percentage profit.

Aren’t they worried about costs? They just pass the cost on to the consumer via increased premiums.

That’s the racket.

Insurance companies are definitely not on the average person’s side when it comes to containing costs.

I read somewhere that insurers and umbrella entities are buying care entities.

That way they can circumvent the care % cap

>Prices going up does not favor them when medical care is going up, so they are oddly on the average person’s side.

But it does favor them.

If overall margins after operating cost are a small percentage of the money that changes hands then you want the most money to change hands.

The insured have to buy from someone. Price and quality discovery takes so long that reputations don't really matter.

Healthcare insurance companies and for-profit hospitals divert money from patient care. How is that supposed to improve patient outcomes?

Also, why would you side with insurance company and just assume their lower pricing is correct? You know they add overhead, and they are raking in premiums. The relationship between the payer and provider is adversarial, with the payer holding the stick.

If you are paying out of pocket you are likely being billed more than what an insurance company is paying with their negotiated rate.

A large number of hospitals are for profit and in many parts of the US a for profit hospital may be your only reasonably close choice. My experience has been that there is very little difference between how for profit and non-profit hospitals work as far as negotiation of billing.

When without dental insurance, my dentist office put me on a special "no insurance" price list where I got much better quoted prices, because they knew they weren't dealing with an insurance company with people dedicated to negotiating low rates for each specific procedure individually. They may not have been quite as low as insurance companies paid in some cases, but it was much cheaper overall.

It's not like this is impossible or hard, it just takes the hospital actually caring about their patients enough to not screw them over when they don't have insurance.

No, hospitals absolutely share a lot of the blame for problems like this. Even WITH insurance, I've been burned so many times that I ask a lot of questions in an attempt to prevent problems and surprises. I get asked to sign forms acknowledging I've seen papers that they can't show me because they don't have them. They will refuse to provide care without me signing the form. Eventually I sign - and will later see a copy of this paper when I contest a bill. I will ask them what something will cost me in the event that my insurance doesn't cover it, and they'll tell me "it depends on how it's coded", and it takes time for them to find out how it will be coded. They will tell me. And then they will code it differently when billing the insurance. I've had bills from doctors for services provided at a hospital that had no record of that doctor, yet the doctor had copies of all the forms I signed at that hospital. And insurance wouldn't cover it because the doctor was not part of my network, even though the hospital proper was.

Insurance companies are full of scum bags and I have my problems with them too, but there's plenty of blame above that really has nothing to do with my insurance company.

Hey, wtf are you doing? Scumbags do not deserved to be lumped in with insurance companies - it's insulting to the scumbags and doesn't accurately describe how despicable anyone involved in the insurance industry truly is.

Don't forget that "non profit" in american hospitals often means a lot of profit for administrators and politically connected people like construction companies, test labs and other providers who can charge outrageous prices without any oversight.

I’ve had my local university-associated hospital knowingly overcharge & double-dip and repeatedly refuse to back down even when shown the evidence. My insurance company stepped in and resolved the situation by reminding the hospital about which billing practices are not legal.

Unless they are Comcast. Then it’s ok to work on a sliding scale.

Or Oracle.

If you owned an auto shop in California and did that they would shut you down and criminally prosecute you.

So true! When my girlfriend had surgery a few years there were several occasions where the hospital sent a bill for things that never had happened. She called and every time they basically said "Oops. We'll take it off". And at least once they sent the same claim again a while later.

It's hard to imagine any other industry getting away with that behavior.

Another thing is the insane markups. The surgery my girlfriend was getting was about implanting a device my company is producing. I asked around in my company and after a while got told that our device costs usually around 30000. Looking at the bill the hospital charged 80000 and the insurance paid it.

American hospitals and health insurance are a ripoff and fraud on a gigantic scale and it's shocking that they are getting away with it. The whole system is so corrupt I don't think it can be salvaged.

In many areas, the local hospital system is the major, if not the only, source of high quality employment. Insurance companies are usually cast as the villain, but they’re the entities actually fighting to contain costs, and their profit margins are far thinner.

Consequently the local hospital is often protected by regional politicians and judges. Trying to take on a hospital network is about as likely to succeed as going after the favorite hometown sports team.

Its almost as if health care is not something that would ever be accepted by any stakeholder as a truly free market. So why does America pretend that it should be treated like one?

You talk as if haggling over prices during a medical emergency was normal and are proud you got a good deal.

That's what normalization of deviance looks like.

He didn't haggle over the price of the procedure.

He only asked how much it's going to be and was charged with over double what he was quoted.

In Britain you'd go to A&E with your kidney stone and just get the required treatment without haggling over prices.

And if you do insist on going private for a kidney MRI, a quick google shows prices are in the 200-400 pound range ($280-$560, roughly) for MRI of the abdomen.

Someone is ought to bring Europe up. Yeah, you’d get it for free in Belgium or Germany. The wait times though… could anything from couple weeks to half a year.

For a medical emergency? This is simply false.

I live in Canada, and I've seen people put on 6+ month waitlists for (a) MRI after a concussion to make sure there's no internal bleeding (which can kill in a single day), (b) MRI after a stroke to diagnose the root cause, (c) ACL replacement surgery.

Universal healthcare is great, but when you're in a 2-party system and one party undermines it whenever they're in power, the result is terrible.

I'm sorry to hear that, but it's not quite relevant to the point that the parent was making about Europe.

For what it's worth, I live in the UK which has similar woes to how you describe Canada's two-party system. However we do normally get seen quickly for things which are a threat to life---but elective operations can take much longer. Mental health issues are also dealt with sluggishly at best.

Describe emergency. Sure, you’ll get an MRI after a car crash. But you could be in this state where you’re not dying, but still very uncomfortable. The wait list is pretty long then.

Do you have studies on waiting times that you can cite here? Genuinely asking because I know they certainly exist for Canada[1] with breakdowns down to the Province [2] so I'm just assuming you have some proof that can be used to bolster your claim.

1. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7292524/

2. https://www.hqontario.ca/System-Performance/Wait-Times-for-D...

For an emergency MRI? Are you insane?

For reference, i got an MRI in two days for knee pain after i fell with a bike and the pain didn't go away after a few weeks ( so obviously nothing urgent).

And FYI, i paid for it, iirc 60-100 euros, repaid in full by my medical insurance.

The parent wasn’t saying whether it was an emergency or not.

So, yeah, there is a point on who considers what an emergency.

They were saying they had pain and nausea, the doctor suspected a kidney stone. Is this an "emergency"? I have had a kidney stone, it is intense pain. My mother had one, said it reminded her of childbirth.

But it won't kill you, probably. You could just be in intense pain for weeks or longer waiting to pass it.

Is that an emergency? I think in probably any sane medical system it is. In the USA? No idea.

what i've found/heard in germany is this:

you may struggle/it may take long to find certain things to get a diagnosis, but once you do, it's a ball that gets rolling insanely fast.

2 anecdotal examples:

colleague's young child was fainting, took them quite a while to get through the right set of doctors/specialists to find out it was a brain tumor - after that was found though, they were scheduled for surgery the next morning. Operation successful, child okay.

I had an appendectomy in the middle of covid: went to the ER unannounced at 7 p.m. - was on the table at 1 a.m. - i paid 50 euros (10 for each day i spent there (they kept me for 3-4 days "just in case")). This was quoted to me up front (the rate, but not the number of days) and i signed a document stating i understood that charge before i was in surgery.

That’s all correct. The point is it’s incredibly hard to get to the specialist at times. I was trying to get an appointment in Belgium, they could only offer April 2022.

Same is true in the US.

In Germany, in the vast majority of cases, you can simply go to any doctor's practice (including specialists, no referral required) during office hours and see the doctor the same day, if it's urgent. They'll squeeze you in.

For non-urgent appointments, yes, the wait time for specialists can sometimes be months.

I got an MRI in France a few years back, not an emergency. Booked an appointment for the next day. To be fair, 30 years ago when MRIs were kinda new and machines were extremely expensive, I remember there was not enough of them and patients and doctors complained of long wait times. That's not been an issue in a while.

I can get an whole body MRI in Poland for ~$250 via a private healthcare provider and wait less than a week for it at that.

Why is an MRI anywhere in the world $1500, or $3500 for that matter?

Similar price in London. One provider I checked indicated $560 for their "platinum service" which included lots of mostly pointless extras, but $280 for the basic service.

Private hospitals in London largely live off a split of offering cheap convenience or extracting money from foreign patients, but there are so many of them fighting for a small pool of patients given most people just go to the NHS that they have to compete hard.

There is one major healthcare provider in my region. When I arrived here, the wait time for a physical was more than two months. The shitty US system is not giving me at-will service.

That's very similar to wait times as in the US.

Fuck, a few years ago I had to switch dentists and I couldn't get even a teeth cleaning without waiting more than six months.

I would like the citation to specifically where and when someone had to wait half a year for a kidney stone to be diagnosed and treated in Europe.

In most of Europe you still have the option of going private if you want that, either with private insurance on a "top up" basis, or paying per appointment.

I don't know what the prices are in Germany, but in London an abdominal MRI is in the $280-$600 range. (EDIT: And you can usually get a same or next day appointment)

Prices in Germany are set by the government. If you check the Gebührenordnung für Ärzte you'll see that in private practice an abdominal MRI is EUR 256.46.

The US are a clear outlier.

Makes sense, given the prices I've seen for London and the prices someone quoted for Poland.

Makes the US pricing in this article even more bizarre - in "normal times" you could literally fly to Europe for an MRI and save money.

Correspondingly, senior SWEs at startups in Germany struggle to earn above €100k/y.

Even so, medical bankruptcies are not a thing in Germany.

What exactly is your point?

That it is worth it that people go bankrupt due to medical issues because it means that certain professions can earn 6 figures?

I’m really curious. What do you think you are saying? How do you think those two statements correspond? Do you genuinely believe that if the majority of Europe were to ditch its public health services that salaries would go up and that that would be a good thing?

My point is that even if you have to pay market rates for private healthcare insurance in the US (which are crazy high), the overall system in the US works better for many HN-types because while your expenses may be much higher, your income is disproportionately higher (as in 2-5x higher).

FWIW, I am a US person, resident in Germany.

So you are saying that HN-types got theirs (the huge salary), so they should not care about others? Or are you causing them of a "I got mine, fuck you" attitude? I am still not sure what you are trying to say. But the fact that you LEFT the US that has that kind of dynamic for Germany, where income inequality is smaller and many things -- including medicine -- are more widely accessible makes me scratch my head.

> So you are saying that HN-types got theirs (the huge salary), so they should not care about others? Or are you causing them of a "I got mine, fuck you" attitude?

Neither of those things, no. (Also, if you think of €100k as "a huge salary", you should recalibrate; in the industrialized world it is not.)

> I am still not sure what you are trying to say. But the fact that you LEFT the US that has that kind of dynamic for Germany, where income inequality is smaller and many things -- including medicine -- are more widely accessible makes me scratch my head.

The healthcare in Germany appears to be somewhat crap compared to the highest level of care available in the US. It's an order of magnitude cheaper, though.

I left the US because the US is a police state, not because best-in-the-world healthcare has highest-in-the-world prices.

My comment could best be summarized as "health care costs should not be a major concern in your life as a SWE because they will be cheap (to you) everywhere, so make your SWE life choices based on other things". You can inaccurately paraphrase this as a rejection of concern for social justice, income inequality, or a generalized "fuck you, got mine" at your own peril.

(FWIW, I think national boundaries are mostly irrelevant and unimportant, and drawing the boundary of your official-concern-for-the-wellbeing-of-others at an invisible line checkpoint to be somewhat closeminded. There are billions without meaningful modern healthcare access at all (or even clean water) so the selfrighteous indignation bit about the relative quality and expense of healthcare in two major industrialized western nations is sort of a silly nit to pick.)

So you believe that because you’re paying only for private healthcare you’re income is higher?

It wasn’t a medical emergency. He visited his Primary Care physician, who recommended an MRI, which was performed at a hospital.

In the U.S. it’s possible (but not widely known) that you can shop around for medical imaging like MRIs. (My wife has saved thousands of dollars doing this.) Hospitals often run these as profit centers so the markup is quite steep.

Yes. There are often entire offices that specialize in radiology and do only that.

Yup, good reminder that we're here in the US being like "We should be able to tell what absurd price we are going to be charged before we get the procedure so we can decide if we want to shop around and we can't even do that!", and still on "if only we could do that, it would be a victory!". Geesh, we're screwed.

I think this is part of why the system is so hard to change. Because of these informal workarounds, most well-educated, reasonably-savvy people can navigate it and get to an acceptable outcome. But people with less familiarity/sophistication/resources get screwed badly. So the system only fails the people who have no power to change it.

These stories are amazing to read as a Canadian. I recently went to my doctor for chronic foot pain and I was into the MRI within a week (albeit at 3AM) and didn't pay a cent.

I have received multiple offers to work in the US as a dev but the quality of life and safety nets here in Canada are more important to me than a higher salary.

I went to hospital and they assured me my procedure was covered by insurance and I wouldn't need to worry about that and in worst case scenario insurance would contact me. Couple of days later this hospital sent me $400 bill. It took me several phone calls to get them to acknowledge that they sent it by mistake.

Exactly same situation happened year later but with ~$800 bill.

Although doctors and medical staff themselves are ok, the US healthcare system as a whole is some incompetent clown mafia.

I get sent a deceptive bill every time I use the hospital. I think the idea is to show you what they are billing your insurance (not what insurance pays in the end), but it is always marked as "payment due" even though the insurance is going to foot the bill.

Yea and that's also part of the problem. Most of us ignore this stuff because we have insurance but this is why the racket keeps going. But ultimately, someone pays for it somewhere.

Incompetence isn't quite how I'd describe this.

There is nothing about the system that rewards competence on the financial side of healthcare.

Billing is based on what they can force people to pay. Not on what services actually cost. One downside of that is they have no control on how much things cost.

I wonder if there is any law here that protects consumers ? It is atrocious that a hospital/doctor/clinic can send you any absurd bill/amount and then it is on YOU to fight and prove that it was incorrect. I have done it many times myself.

I've had similar story, but this time with the IRS.

Right after my university I've started pursuing startup idea and of course I though that I will get investors coming through the door very quickly so first thing I did was to setup a Inc. company in Delaware. There is 2 ways to pay taxes there - on revenue or on shares (I might got it slightly wrong)...

After a year or so company staying dormant I was living in Europe already and received mail saying that I have to pay $150k in taxes :o

I tried to call ask why I got this bill, but it was Friday, already closed. I didn't have a job and experience back then so this was horrifying. I was running through scenarios of having to work years to pay this off because of some stupid mistake (or hiding from US government for life). So I called a laywer who asked for initial $5000. I've met another person who wanted to help me for cash $2000. I though it is a joke, because I was barely making a living.

Fortunatelly I didn't fall for that and waited until Monday. I called again and lady explained that they always send the bill for first option and we have to remember if it is correct or not. So at the end there was no tax to be payed. I immediately closed the company.

What can you do...

oh yeah, IRS, they still owe me $3k. Thanks for the reminder :)

The majority of Americans aren't in a position to cut a $1,500 check like that. That's one of the major issues here.

The majority of americans also don't know that there is a concept called "saving money." I mean I understand why it is some people are broke and it's not their fault and I get that. However, I've more than encountered people living above their means more than I have people in poverty beyond their control. This is speaking as someone whose worked in banking for about 5 years. Too many people with FOMO end up ruining their lives.

Note that the median net worth of an American household is ~120k.

Obviously $1500 is a lot of money and it's not easy to come up with for normal folks and obviously there are millions of poor people, but the US is one of the wealthiest nations on Earth, and it's sometimes overemphasized how broke the average American is. Other than a few small European countries, the US has the highest median household incomes in the world, higher than any other large country like Germany, France, the UK, Canada, Japan, or Australia.

> Note that the median net worth of an American household is ~120k

That sounds pretty decent, but the grouped by age/location/education level medians are show that there are still a lot ( as a percentage) of people with low net worths in certain groups. And even then, net worth doesn't mean money in the bank - most people wouldn't and shouldn't have to sell their house or car to be able to afford a medical emergency ( even though i agree that if you have a $120k net worth, you should be able to save money on the side, but i wouldn't be surprised if there are situations where that's hard ( e.g. house bought years ago, a household member without a job, friend/family/only remaining job are in the area)).

https://www.businessinsider.com/personal-finance/average-ame...

> That sounds pretty decent, but the grouped by age/location/education level median

The poster said "the majority of Americans", not "the majority of young Americans with less education" or something, so I talked about the median, explicitly acknowledging the presence of millions of people who are poor.

> most people wouldn't and shouldn't have to sell their house or car to be able to afford a medical emergency

If someone needs money from their house, they don't have to sell it.

The median non-primary-residence net worth in the US is 40k. I still think it's silly to pretend $1500 is unthinkable for the majority of Americans like it is for the minority of people in America who are poorer than most others.

> ( even though i agree that if you have a $120k net worth, you should be able to save money on the side, but i wouldn't be surprised if there are situations where that's hard ( e.g. house bought years ago, a household member without a job, friend/family/only remaining job are in the area)).

Paying large bills is hard, especially with all the stuff life throws at you. I didn't mean to imply otherwise.

> Just 39% of Americans could pay for a $1,000 emergency expense

> * Fewer than 4 in 10 people have enough savings to pay for an unexpected $1,000 expense in cash.

> * The rest would have to borrow, use a credit card or take out a personal loan.

> * While the pandemic has set back emergency savings, many people are optimistic their finances will improve in 2021.

https://www.cnbc.com/2021/01/11/just-39percent-of-americans-...

But sure, many of those could take on debt to do it, as the summary says, true.

Medical debt is a leading cause of bankruptcy in the US. (No, I'm not saying $1500 alone is going to cause a bankruptcy.)

The bankruptcy stat is that ~60% bankruptcies were contributed to by medical issues or debt. Here is the study it comes from: [0]. Many people misquote this as the bankruptcies having been caused by medical debt. For example, the 60% stat includes income loss due to illness (40% of bankruptcies involved this). Only for about 30% of bankruptcies did the debtor actually say medical bills were a reason for the bankruptcy.

This is not to say the healthcare system in the US has no flaws. But it bothers me that a stat which found “loss of income due to illness” was more common among bankruptcies than medical bills greater than $5k or 10% of pretax income (~35%), constantly gets construed as “medical debt is responsible for 60% of bankruptcies” when debt doesn’t even appear to be the largest factor of medical-related bankruptcies.

And this misconception is everywhere. This article [1] says “The same researchers' 2009 study claimed that 62.1% of all bankruptcies were caused by medical bills.” and was the top result on google when I searched “bankruptcies caused by medical debt”.

Even Bernie Sanders [2] doesn’t get it right, saying that “500,000 people go bankrupt every year because they cannot pay their outrageous medical bills.” 500,000 is a little over 60% of the 750,000 bankruptcies that happen every year, and his campaign said they were referencing this study. I think there’s a meaningful difference between losing income due to not working while you’re sick and not being able to pay your “insane medical bills”.

Also, other studies have found much lower numbers, but I guess they aren’t as fun to quote. This is mentioned in the washington post article I linked:

> “Based on our estimate of 4 percent of bankruptcy filings per year and the approximately 800,000 bankruptcy filings per year, our number would be much closer to something on the order of 30,000-50,000 bankruptcies caused by a hospitalization,” one of the co-authors of the NEJM study, economist Raymond Kluender of Harvard Business School, wrote in an email

> “This would lead us to be skeptical of the 500,000 medical bankruptcies statistic, but that very much depends on how one defines a medical bankruptcy. … An enormous share of households have some amount of medical debt, so any survey of individuals will report a high share of them have medical debt but this does not imply that the debt caused them to file for bankruptcy.”

Again, not saying any of this is fine, just that if we’re talking about solutions it’s probably wise to at least represent studies accurately.

[0]: https://www.amjmed.com/article/S0002-9343%2809%2900404-5/pdf

[1]: https://www.thebalance.com/medical-bankruptcy-statistics-415...

[2]: https://www.washingtonpost.com/politics/2019/08/28/sanderss-...

fair!

> "Only for about 30% of bankruptcies did the debtor actually say medical bills were a reason for the bankruptcy."

That would still be a lot!

> "“Based on our estimate of 4 percent of bankruptcy filings per year"

...but 4% is a much smaller number than 30%. Is it actually more like 4%? I guess statistics aren't simple....

> "An enormous share of households have some amount of medical debt, so any survey of individuals will report a high share of them have medical debt but this does not imply that the debt caused them to file for bankruptcy

I guess I'd be interested in the average medical debt numbers among those filing for bankruptcy vs the average medical debt numbers among those not filing for bankruptcy? To have a sense of what role medical debt may play?

I feel safe in continuing to think that medical debt is a significant burden for many people in the USA (and therefore that "most people can afford that bill by going into debt" is a terrible solution), but that's a much more vague statement, i respect your point about being accurate with statistics.

>And even then, net worth doesn't mean money in the bank

According to this[1] the median family has $5k in the bank.

[1] https://www.federalreserve.gov/econres/scf/dataviz/scf/chart...

Net worth is deceptive, because that's going to include illiquid assets such as housing. Are people supposed to take out a HELOC to pay their medical bills?

Median net worth in the US not including primary residence (an odd choice considering this is many folks' largest asset and is easily used to pay for things) is 40k.

It is silly to pretend like $1500 is not a possibility for "the majority of Americans". Certainly I do acknowledge explicitly in my post that there are millions of poor people in America.

Most of which is probably in a retirement account, or cash value insurance policy.

Also Germany, France, UK, Japan, Canada, or Australia doesn't have the medical/student debt so I don't know if its so easy to assume that just because americans earn more that they pocket more.

Student debt is often used also in Japan (but very low APR < 1%)

> Note that the median net worth of an American household is ~120k.

Having a net worth of $120K doesn't actually mean you can easily pay an unexpected $1500 bill. It might mean you have a house worth $100K and a car worth $10K and a retirement account with $10K in it, and just enough to cover your payments in the bank.

I know there are LOTS of Americans who can't easily pay an unexpected $1500 bill, but I don't know if it's more or less than than 50% of Americans, and median net worth doesn't really tell us.

And most of that is likely in home equity or a 401k, not something liquid that can be used to pay for an emergency.

The majority of Americans engage in lifestyle inflation. That's a major issue generally.

Yes, I've also heard that alternatively you can just wait for them to send it to a debt collector and they will happily negotiate with you as well.

If they've sold the debt to a debt collector, don't interact with them at all unless they literally sue you. There's really nothing to be gained by paying a debt collector.

The reason this works is that bad debt, sold off to collection companies, is worth about 3 cents on the dollar.

You can get much better discounts by talking to the hospital's business/billing office and demonstrating difficulty to pay.

Good luck getting a price like this in writing in advance. I have not been able to get doctors or hospitals to tell me what a procedure would cost in advance at all. "So you're telling the only way to find out how much it will cost is to get it done and then see the bill?" "Right".

An actually useful law might be:

Before an elective procedure, they need to give you the price in writing.

The actual price transparency law does not seem to have resulted in any price transparency.

Medical risks and unknowns are very high, and to make profit metrics, they need to push all risk onto the patient.

If only there was a financial instrument I or the hospital could purchase where to amortize that risk over a long period of time by paying a fixed cost at some interval.

And when everyone buys in, the costs and risks are well distributed. Makes sense for everyone, healthy or not.

After all, we are healthy, until we aren't.

You over paid even with the $1,500. You could have waited a few months and they would have been happy with $400.

As sad as this request may be, does anyone have a checklist or something of strategies to try with hospitals for bill negotiation?

Step 1: don't pay the bill Step 2: wait... Step 3: continue to not pay the bill step 4: when you've waited a very long time, offer a tiny amount of money

Contact them and have a discussion with their finance department.

Hospitals have incentives to have a high sticker price - it benefits everyone. The insurance companies negotiate to something closer to the "real" price. That makes them happy. Government through Medicaid/Medicare has a way of giving money to hospitals. Customers only care about the out of pocket cost - indeed if they happen to notice the sticker price it'll only be after they know what they're actually paying - so that will actually make them happy.

There's a very small group. 5% or so of people, those who don't have private insurance and aren't on the public insurances - edicare/Medicaid/VA - . Those people are actually in a position where they get to see the sticker price but might have to actually pay it.

Which sucks.

But I don't see how that changes. The people getting abused are - despite what you might hear - are small in number, typically healthy and not particularly poor or old. The ACA actually went after those people - that was what the mandate was about - and tried to get them to buy a lot of insurance. More insurance then they wanted - and the end result was that the mandate's been effectively gotten rid of.

Plus out of network emergency visits, which isn't uncommon https://www.kff.org/health-costs/press-release/about-1-in-6-...

Part of the issue is that Medicare and especially Medicaid pay providers below cost for services. That money needs to be made up somewhere. Private insurers pay above cost, but they have too much leverage to get squeezed by the hospitals. That leaves uninsured patients to hold the bag. They could try to cut costs, but that puts them at a competitive disadvantage because most patients don't actually care about how much their care costs, they only care about how much they have to pay.

If you're an uninsured patient who isn't in poverty then hospitals are going to squeeze you for as much as they can get away with. It's how they keep the lights on. None of this makes any real sense, but hospitals are just doing what they have to do to survive in the system we've created for them.

I ended up learning this accidentally and have used it ever since:

I knew that hospitals charge ridiculous prices at first and then insurance jumps in. At the time, the insurance that I was on seemed to have a policy of "first let the hospital bill the patient and see if he/she pays then we'll get in involved." My procedure was $3,000+. That was a joke, but it also wasn't wholly inexpensive. I figured I'd end up for my deductible at about $800 or so. Hospital sent me the bill for $3,500. I expected insurance to chime in, but didn't. A month went by, I got an other bill, only lower. I call the hospital why this wasn't being resolved, and they said "looks like we didn't mark the procedure correctly. Ignore the bill, we'll fix this." Another month goes by, another bill, still lower. The bills still come and they kept changing. Eventually, it gets coded correctly and insurance did their part, and I owed $600. I forget it about, though. I get a call on the phone with the hospital saying, "we're going to send you to collections unless we can get some level of payment on this." I ask what the bill is if I pay in full. She says, "Pay in full and it's $380." I said, "I can make that happen."

The U.S. is quite corrupt like any other "third-world" country. Just in different places. Our places are acceptable, though because "deregulation" or "gun rights" or "free speech".

You must be joking if you think U.S. healthcare is deregulated. It’s one of the most regulated sectors in the economy, which explains why it’s such nightmare to deal with.

americans really live in another dimension

Its not just heavily regulated, it's also one of the most indirect markets that exists. People often have no idea how much their health insurance actually costs in the first place, and they have no idea how much their insurance may or may not pay for any given procedure, or how much a procedure will be billed for, or even if a single procedure will result in 1-10+ different bills.

Since the people giving care often have to provide care irrespective of ability to pay, they have no idea what anything costs.

Since Insurance companies generally aren't paid by individual people that use their service, and have discretion in what they pay the process is as difficult as possible for providers and users of medical services to navigate.

"deregulation" needn't mean actual deregulation. It can be an excuse for corruption just as much as any other initiative.

Most emergency room bills can get 1/2 or more knocked off just by asking.

It's worth mentioning this is not a fraud deigned by the doctor per say.

They are removed from all of that, and don't care about prices. It's beyond them.

So they just give you a number.

Because there is this big 'goodwill' aspect to healthcare, the professions don't think about it as capitalist, but the hospital is actually pretty aggressive and take advantage of the goodwill aspect.

The US needs a massive overhaul there and it's not about socialism or capitalism, but about simple and hard regulations.

I wonder if you could’ve written a check for $350 (or any amount), marked as “paid in full,” and would have the same outcome. I bet either 1) no one actually looks at the checks or 2) $3,500 is not significant enough for them to fight for at all when a bunch of people are delinquent on $350,000 bills.

>>So I went home and wrote them a check for $1,500, marked as paid in full, with a cover letter explaining my side of it. It worked. They cashed the check and I never heard another word

I hope it ends as you say (think of collection agencies)

FYI, there are usually non-hospital businesses that do xrays and MRIs for substantially less than a hospital charges. They usually know their fees, expect payment at time of service for the uninsured, and have no surprises.

Example: https://priorityradiology.com/

Xrays were under $250 and MRI was $600 last time my family needed it.

Just read an entire book on the topic of how broken our medical system is: https://www.goodreads.com/book/show/42373033-the-price-we-pa...

A bit repetitive at times, but also some amazing stories. There’s a hospital in New Mexico that sends out hugely inflated bills to its uninsured patients then sues them and garnishes their wages when they can’t pay.

I did some research into this for my current employer and the challenges are pretty well laid out here: the penalties are minimal ($300 / day or $~110,000 per year), the data is kept in the invoice or billing systems, which are complex, and the hospitals do not want to share the truly groundbreaking data, which is the per-provider costs.

In addition, when you Google for competitors you don't find a lot of them, but once you start looking at hospital websites you find that quite a few of them (about 50% of the ones I looked at) have at least a partial solution, often provided by their analytics company as an add-on or footnote.

It does not appear there is a great market opportunity here unless the penalties increase (which the CMS has talked about vaguely, but hospitals are already asking for relief until after the pandemic).

I worked in health care IT (insurance / provider side) during ACA's implementation.

My takeaway is that Congress is technically ignorant of how ossified these backend systems are, but the enforcement agencies (e.g. CMS) are the grease between law and implementation.

F.ex. ACA language and guidance being tweaked right up until the supposed "must be compliant by" date.

Generally speaking, it works about as well as one might hope. All the stakeholders get together, hash out a reasonable schedule for actual implementation, and then everyone generally works towards that.

It helps that the relationships are generally interdependent, and there's enough money sloshing through the system to fund change. So all parties generally do a fair job at converging on the requested changes, quicker than they'd like, but slower than the government would prefer. And then the few trailing insincere implementers start getting beat with fine sticks once the majority of their peers have successfully implemented.

But agile, it ain't.

I agree with everything you said. We're in the ACA space, so this should been right up our alley (government puts new legislation in with penalties to force employers to do something they don't really want to), but the ACA had a much bigger stick and a much longer runway.

Starting January 2023, insurance companies and plan providers need to publish similar data, so to your point that might be the interdependency required for compliance.

Obligatory these views are my own, not my company's.

Based on what you know about the system and all parties, curious on any ideas you'd have to speed compliance (without bankrupting anyone).

Would increased fines do it? Compliance bonuses [0]? Something else?

[0] Showing a few of my cards, I was really impressed with the inner workings of the FEP program, from a management perspective. They seemed to have landed on an effective system of fine + incentive that strongly encouraged good behavior and positive results.

TBH I didn't dig all that deep. Once you look at the size of the market (~6000 US hospitals, most of them in groups [0]), annual subscription (would need to be some fraction of what they would pay in penalties), percentage of market share you could capture (say 25%), discounts for groups, level of support, investment and unknown source systems, etc., I didn't evaluate it as a viable / likely opportunity, especially outside of our existing market.

All of that said, if you knew the space and backend systems and could figure out a way to make it easy, one thing I did hear is that hospitals don't like to be non-compliant, so I think they want a solution (or this to just go away), it just needs to be a really minimal investment for them in cost and time to implement and maintain. The provider data coming into play in 2023 may be the main driver to "normalize" some of this being out in the open.

Usual disclaimers again: my views, not my company's.

[0] https://www.aha.org/statistics/fast-facts-us-hospitals

Edit: add source.

$110k per year seems like a no-brainer for the hospital to just pay rather than comply, assuming they are just purely acting in their own self interest and not for the common good.

My wife is trying to work on price transparency at her practice by offering bundled rates for the surgery she does. She has worked with all the various providers - anasthesia, pathology, the hospital etc to come up with a cash rate that she publishes on her website for the surgery. Most of the parties are very open to it but also extremely worried about outliers. Patients that end up costing 10x what was expected due to complications. For her this is a minuscule risk, but in her negotiations it has been their main worry.

What about patients that end up costing .1x?

There’s risk of expensive patients but that should be easier born by the practice than the individual.

I suggest she talk to anyone who runs a buffet restaurant since there are ways to plan around.

> What about patients that end up costing .1x?

I imagine X here is more of a lower bound than anything else - which is where the problem comes in with up-front pricing.

It's like up-front "how long will this feature take" quotes from developers. Doable, but very difficult to truly accurately estimate.

Doing this on historical data - where the range likely ends up more like .8x to 10x - would be the only sane way, vs trying to come up with it from first principles.

And for the same reason that software estimates suck.

The lower bound is quantifiable: if everything goes as expected, and this is all the work, then project time is the sum of each piece's time.

But the upper bound is unknowable. If a thing that we don't know about happens, how long will it take to solve, if a solution is possible? And what portion of the project will it involve?

But that's really a gripe about PMs not understanding compositions of multiple normal distributions.

I never got the impression that price differences are a function of billable hours but instead some vague notion of complexity. I don't think that 10x billed surgery consumed anything close to ten times the hours and materials.

This would be akin to developers saying "Yeah it only took me 40 hours but it was harder then I thought so pay me for 400."

My first guess for the cost of a 10x surgery is something like "they didn't recover smoothly so what could've been outpatient is now a 4 day hospital stay that involved a lot more people and resources."

I can't say for sure, though - I've always gotten very detailed itemized breakdowns of all the cost, hospital stay vs surgeon vs anesthesia vs... but I've never compared them against someone else's bill for the same procedure.

Setting aside the why of the additional expense, the car mechanic model is very similar: you get an estimate, then you get the phone call telling you the additional things they found out, and the new estimate, asking for permission to do or not do the additional things. Though in the case of a surgery where you're knocked out, getting "incremental permission" like that wouldn't really work. You would just have to know the range up front.

But what if the range is so wide to be somewhat useless?

A good mechanic will tell you "it's $800 to fix the transmission, if the rotors are bad it'll be $1300." and if he finds is estimate is way off, that's his fault so he will take that on the chin and do right by the customer. Same for contractors who work on your home, sometimes you accidentally bid under cost and learn a lesson for next time.

Hospital estimates in the rare case they are provided only seem to get revised in one direction, that seems like having cake and eating it too. If the high school drop out painter can live by his estimates, so can the national hospital chain full of Harvard Business School graduates.

Most providers have a pretty good idea what the lower bound will be, its the upper 5% they may have no idea about.

Pathology maybe usually $100 for a tissue exam, but I've seen a routine mole biopsy need $1,500+ (wholesale) exams after referral to an academic center because there was something off that required further workup. This happened 1 time in 10 years.

Anesthesia knows that a breast augmentation will usually be no less than $X, but if the patient has an anesthesia reaction and decompensates and needs 4 hours of one on one time with an MD its going to be a lot more. Very, very rare.

You get the idea, its often not possible to know until you do the procedure. Even more when surgery is involved because imaging is not 100% and you may wind up with a much more complex procedure than you bargained for once you cut someone open, or a complication like a perforated bowel during colonoscopy, etc.

Finally, most of these people don't talk to each other -- so the pathologist has no idea what the surgeon is charging and neither of them the hospital nor radiologist.

That makes sense that there’s variability, many products have this. Not every single transaction needs to be profitable, only the aggregate.

If pathology is normally $100 and yet some cost $1500 then factor that into the cost based on the probability. Or insure against it. Etc etc.

These aren’t novel problems to the medical space, it’s just that there aren’t normal pressures forcing them to handle it.

Apple charges $79 for an insurance claim to replace my iPhone whether it costs them $1 or $1000 to correct. Imagine if they had an asterisk that sometimes it cost lots more than $79.

Someone else linked to the Surgery Center of OK [0] that has “solved” this problem. There’s a great episode of econtalk with Keith Smith [1] where they talk about this. Including examples almost exactly like how you call out.

[0] https://surgerycenterok.com/

> Patients that end up costing 10x what was expected due to complications. For her this is a minuscule risk, but in her negotiations it has been their main worry.

And that's probably one of the biggest reason hospitals don't want to talk about actual costs. If you tell someone it's going to cost $X for removing their appendix, but they have a heart attack on the table it's not going to cost $X any more.

Doesn't make lack of transparency right, but in this scenario, I can sort of see why.

That is the entire purpose of insurance. One of the line items should be <procedure insurance>.

But a hospital doesn't do 1 surgery, they do thousands. So that one 10x doesn't really change the average cost very much. This is just an excuse by the hospital.

Exactly. Every other industry in existence is able to package up and manage the outlier risk, but somehow, here, it’s “different”.

That doesn't make much sense. You can have a price for whatever complication occurred. Does the insurance/billing code system not already have a method for listing emergency/ad-hoc complications & procedures? It must have that otherwise there would be no way to bill in those cases currently.

e.g an emergency during surgery would normal get XXXX billing code so just publish what you charge for that XXXX billing code.

It does genuinely make it hard to price something if it almost always costs $3000, and very rarely $1M.

That sounds like something an insurance company could fill the void. Other industries have insurance charged for each job based on what the job entails. Surgery should be no different.

The issue with US health insurance in general is that (a) it's not understood by the public as insurance, but rather as access to group rates, & (b) it's utility is proportional to the number of counterparties it covers (more doctors, more useful), which opens it up to a huge amount of abuse (doctor you've only done 3 transactions with over the past 5 years is vastly inflating fees on all).

What should probably happen is something akin to the housing market: backstop consumer insurance companies with re-insurers (semi-supported by the government) who buy and back compliant policies and providers.

Allowing consumer insurance companies to bound their risk and offer more reasonable rates.

I think ACA has a provision in there for catastrophic cases falling off the insurers' books onto someone else's, but it's been awhile since I read through it.

Yet, this is somehow not a problem in any other country. That amount of outlier cost is priced in, like many other businesses.

You might be interested in the below podcast if you haven't already heard it:

Entrepreneur and Anesthesiologist Keith Smith of the Surgery Center of Oklahoma talks with host Russ Roberts about what it's like to run a surgery center that posts prices on the internet and that does not take insurance. Along the way, he discusses the distortions in the market for health care and how a real market for health care might function if government took a smaller role.

https://www.econtalk.org/keith-smith-on-free-market-health-c...

https://surgerycenterok.com/blog/

ha! I just put a link this to further down thread. It was a great podcast, right?

It was and I've gone back and relistened to it because it is such an important topic--this whole thread is people opining on how things are bad and how this and that should change--that Oklahoma anesthesiologist is going out there and doing something about the problems he saw in the economic model of medicine.

Edit: anesthesiologist replaced surgeon

Also mentioned in an earlier post: https://news.ycombinator.com/item?id=27517126

Have the providers buy insurance to cover those rare 10x cases and add that insurance fee to the cost of the procedure.

The patient gets an "out the door" price and those most qualified (doctors and insurance companies) can argue about the actual cost.

Even if the costs ended up exactly the same, the patient would not be stressed by the "surprise" bills and out-of-network nonsense.

The leader in transparent pricing is the Surgery Center of Oklahoma.

Their price list: https://surgerycenterok.com/pricing/

That's really great, and their prices are very reasonable to be sure.

Is $90,000 for a lumbar fusion reasonable?

Yeah - I’d imagine if you needed that there are very few people that can do it. It’s a very difficult procedure to be sure. You could try and negotiate the price with the people that are doing the surgery and responsible for the aftercare.

As this whole discussion illustrates, it's near impossible to know with the current system.

There’s no incentive for hospitals to provide transparency, and less formal doctors to worry about it. For now everyone is getting paid, and the only way to fix the system will be to stop paying many of the middle people that exist just to raise costs. It’s like trying to change the car buying industry, there’s simply too much money for it to improve without significant regulatory change. I think The transparency idea is just not going to hold water and will eventually be ignored or diluted.

What regulations in particular would reduce the price of automobiles?

"Hospitals were more likely to make their charge data available and to offer a shoppable services tool than to post negotiated rates or cash prices.

The bottom line: "Compliance could be limited because the penalties for noncompliance are minimal (maximum $300 per day) and the costs of disclosure potentially great," the study's authors write."

The penalty for not complying needs to be waaaay higher than $300/day for hospitals to start complying.

Regulatory fines should all be additive, at a minimum. 300 the first day, then 600, 900, etc.

Ya, what ridiculousness is that. For those curious $300/day is $109,500, that's the cost to just shaft the IT department on a new employee and pay the fee and you'll come out ahead financially.

The fine is depressing and invalidates much of the benefit and work that went into passing the rule. Until the fine amount is increased (which I suspect may take quite some time if it ever happens) compliance will continue to be low without some other external pressure on the health systems. Are there any tools / organizations that are aggregating this data for consumers to use for comparison of service pricing? The pressure of consumers may be the best chance we have to drive compliance, but it also seems like a chicken / egg scenario where it will be hard to get enough consumer pressure without more than 25% of health systems releasing their pricing.

It should be illegal to render medical services without first declaring the precise amount of money it will cost the end user.

If I go to a doctor and they recommend a procedure, it should be on them (the service provider) to tell me the cost and I should pay it right then and there. Billing later should be strictly outlawed.

As mentioned elsewhere in the thread, how does this scale to the 10X problem?

What if you have a heart attack while under anaesthesia and the cost of your procedure suddenly jumps by a factor of 10?

This probably requires setting prices at a level that can absorb these less predictable costs. Would you rather be told you need to pay "somewhere between $2,000 and $30,000, and you'll find out in a couple months which one it is" or that you simply must pay $4,000? Most households would want the safer bet lest they go bankrupt and have the entire trajectory of their lives altered for the worse.

The far better solution is of course to have a government program cover these types of costs.

Any startups addressing this somehow?

Or is the regulatory framework waaaaay too favored towards incumbents to even fight?

This shit is beyond frustrating. Healthcare could actually be semi reasonable if prices were as transparent as other industries.

I’d be surprised to hear successful startups with all these regulations

Isn't it obvious that this cannot be solved by startups?

It's always obvious that something can't be solved by a startup until it is. That's what "disruption" and "innovation" are.

Some kind of Expedia for hospitals? Some company that somehow extracts the actual price information from the hospitals and lets you comparison shop?

Ultimately this is a technological solution to a political problem. It's going to be difficult to implement and face a lot of pushback from the entrenched incumbents.

Wait arent you willing to put your health on the hands of the people who brought us Theranos, pets.com, and a DRM-laden juice-squeezer?

"Unfortunately this transfusion cannot be given to you because there is a mismatch between its version and the versions approved in your database record. Please contact a representative or call our support line"

But it can be solved by startups: Procedure Insurance.

Ah yes. Let's "solve" the insurance mess by introducing more insurance middlemen.

https://turquoise.health/ is one notable example.

The hospitals and the insurance companies do not want this to happen. Some politicians may want this to happen but others don't so the regulations are not forcing this to happen.

It isn't something that software can fix.

Could software help identify hospitals and insurance companies who are engaging in this?

Probably, but who would pay for it? I don't know if it takes software, the OP did it fine on their own.

> Any startups addressing this somehow?

With the amount of money at stake, I’d imagine organizations and politicians would bury any startup before you say “Seed round”.

I would accept a life-saving medical intervention that drained my life savings if I were convinced that the price were competitive and fair.

But under our current system, this could not be further from the case.

It is a difficult problem because there is no one price to show. Almost every user might be shown a different price.

To my knowledge, at many orgs, insurance is actually funded directly by the employer; they do not contribute to a massive general pool along with other orgs. That individual employer helps set rates and coverage for their individual plan, and they might hire a big payer (insurance company) like Blue Cross Blue Shield to administer the plan that they created. This means that every single employer might have different payment rules and rates for a given procedure or item, and rates can also be hospital dependent or provider dependent. Additionally, many insurance companies require pre-approval (prior authorization AKA prior auth) for more expensive procedures or procedures / meds that are being prescribed outside of normal practice. This requires the provider (doctor) to call the payer (insurance provider), explain the situation, and see if a certain procedure will be covered. Before this is done, it is impossible to quote a price. Finally, we also have a class of people without insurance.

So can real time price quotes be done? Maybe, but it would be a lot of work. The big payers do have API endpoints you can hit to get coverage information for a given user and I believe pricing data for a given procedure for that user. There are also clearing houses of sorts which can help you route traffic to the right endpoint. You would still need to get pricing data from hospitals which largely aren't interconnected for users without insurance and also deal with the prior auth situation.

Like an Uber for hospitals?

Yes, actually -- aver.io. Their website is actually really bad at explaining it but their whole business is helping practices and insurance companies figure out how much procedures actually cost both for this and so they can switch to a "fee-for-outcome" model.

Dolt, a startup doing a version-controlled database, did a data bounty project and produced a huge dataset of prices for individual procedures at tons of hospitals: https://www.dolthub.com/blog/2021-03-03-hpt-bounty-review/

I wrote Hacking Healthcare, created clearhealth open source EMR, a decade plus managing hospitals and multi-practice groups. There are a couple of bad actors out there but for many of these organizations, though it may seem impossible to believe, they really haven't yet been able to coordinate all the entities involved to put together the list. People think of hospitals as monolithic entities but many are much more like medical malls than anything.

Further for many institutions there is a plain cost/benefit. The maximum penalty for non-compliance is $109,500 a year though as far as I know 0 fines have been assessed yet. If you are a large institution it can easily cost many times that to put together and maintain this list in a compliant manner.

Byzantine barely begins to describe the way medical procedures are billed, inpatient especially. It is not at all like a retail interaction. For a given patient on a given insurance program on a given period within a contractual cycle, the rate of charge and reimbursement may differ. Many contracts include a most-favored-nation type clause that mean when one program's reimbursements change then many other ones may need to be updated as well.

I'm not trying to defend any of this but just point out that there is a lot of behind the scenes complexity to the current system that is easy to gloss over when it is thought of in retail terms.

There's an episode of the Econtalk podcast that covers medical pricing. https://www.econtalk.org/keith-smith-on-free-market-health-c...

It is clearly coming from a ... more sympathetic to free markets side of the argument but I honestly believe it's interesting on it's own terms.

It includes an explanation of the delightful term "compensated uncompensated care"

I think a whole universe of content could be expanded from that episode and I wish that more of the people commenting here would listen to that episode.

While I admit I haven't listened to the podcast (yet) I'm not sure how you get around that issue that the free market value of medical services will defacto price in the value of your life and health, which is infinite.

US healthcare system is a joke. I have many examples but my recent one is pretty annoying.

My cost of PT with insurance $150 per visit, cash cost without insurance $69 per visit. Like wtf......I get why cash price is lower but this needs to stop. It is getting to a point where you are better off with a high deductible plan and paying cash for minor visits.

I don't know a single individual who used the US healthcare extensively and said "Wow, US healthcare is amazing".

In the US you go to the doctor and have no way of knowing if you will pay $50 or $1500. I've been lied to directly by both providers and insurance reps about what the cost to me would be. Then it's on to appeals, and second appeals and so on.

The entire situation is appalling, and it's even more appalling that people have accepted this nonsense for generations.

The price transparency rule was kind of useless already in the setting of most people being insured, it doesn’t really tell people how much they are going to end up paying.

I want to start a site that lets people submit their explanation of benefits from their insurance company and eventually lets people shop for insurance and/or hospital/clinic based on what they end up having to pay.

And where I'm from the state health organisation where everyone is insured sets the prices for all the procedures. If hostpitals want to get paid by them, then these are the prices they will be paid. It works, it's simple. Prices are adjusted based as time goes by, the hospitals make a small profit, but they are mostly non-profits run by the cities or universities.

This is how Medicare works in the United States. The group sets the price and that’s what Medicare pays.

I recall a few years ago hearing about a company that, instead of getting a health insurance plan, hired a law firm to counter-negotiate (through legal threats) all bills down to Medicare prices, which apparently saved money.

> the penalties for noncompliance are minimal (maximum $300 per day)

That's the problem right there.

Instead of having a slap-on-the-wrist fine, they should have put in a ceiling on what you can charge if you don't disclose.

Compliance will happen very quickly if non-compliant hospitals are only allowed to charge say $50 / visit for clinic, $200 / visit for outpatient procedure, $500 / visit if admitted, or $1000 / day for a hospital stay.

And if different providers are involved (e.g. your hospital stay involves a GP, specialist, anesthesiologist, and surgeon who all bill as different entities), they have to split your $1000 among themselves -- they don't each get to charge you $1000.

There are roughly 6,000 hospitals in the US - they sampled 100 and concluded 17% of those were fully compliant.

My question is, is that even CLOSE to enough of a sample size to make any meaningful statement?

Depends on what you consider "meaningful" I suppose...but yes, as long as the sample's representative. You can do a lot with n=100 - unless the authors cherry-picked it would be incredibly unlikely for them to find 83/100 non-compliant hospitals by chance if there are only, say, a few hundred non-compliant hospitals.

    $ R -q -e "binom.test(17, 100, p=0.9, conf.level=0.999)"
    > binom.test(17, 100, p=0.9, conf.level=0.999)
    
     Exact binomial test
    
    data:  17 and 100
    number of successes = 17, number of trials = 100, p-value < 2.2e-16
    alternative hypothesis: true probability of success is not equal to 0.9
    99.9 percent confidence interval:
     0.06925006 0.32125658
    sample estimates:
    probability of success
                      0.17

Of course, there would be potential for "not fully compliant" to be insignificant for practical purposes (e.g. if it included hospitals that just missed a couple of billing codes), but based on TFA that doesn't seem to be the case.

"Compliance could be limited because the penalties for noncompliance are minimal (maximum $300 per day) and the costs of disclosure potentially great"

Lol what a joke. $300/day is like a drop in the ocean for most hospitals/clinics. No wonder no one is complying. Let's add Prison time to executives and see how fast they comply. I absolutely hate dealing with incompetent/fraud billing systems of our healthcare system.

My steps to solve this:

1. Get rid of health insurance companies in EVERY process. If I want to visit my doctor for a basic checkup, let me pay cash. The cash price should be displayed/known in advance and I can shop around multiple doctors in my area.

2. With #1, get rid of crazy premiums , copays etc for most of these visits. Boom, u save shit ton. And no, don't argue with me that my employers provides great insurance. You don't want health insurance tied specifically to employers. You should be free of that.

3. Govt should subsidize the out of pocket costs for going to doctors . Increase a little bit of taxes for this. still a saving because you are saving SHIT TON of money when not paying crazy premiums etc. FOr those who argue otherwise, let me give you an example. For a family of 4, my total cost for an ok insurance is $2200/Month. This amount has to be paid regardless of whether I see a doctor or not. Then comes the copays, deductibles etc. Amounts can vary based on how "great" your plan is but the fact here is that shit tons of money is being paid to insurance companies for doing nothing and being a middleman. Get rid of this and you can add a small progressive tax instead. Will gladly pay that because I for sure wont pay $25,000 premiums per year and another $5000 in deductibles BEFORE i get a single penny from insurance companies. Oh and this keeps the price gouging racket going.

4. Let insurance companies stay in the market for "nice to have" procedures.

Imagine if Car insurance became like health insurance. Who wants to argue that prices won't go up for EVERYTHING including a basic oil change.

I agree that health insurance companies should go, but I don’t know how we could accomplish this. Health insurance is a Trillion dollar industry, and that means there are a lot of people making a lot of money that have a lot of incentive for everything to stay exactly as it is.

130 years of medical regulations by Physicians and it's broken.

Any solution is politically impossible because the medical cartels can lobby(read-bribe) politicians.

My only idea is for a tech company to use AI/Science to diagnose and treat. I imagine the physician cartel will attempt to ban competition, but as long as they are correct more often than physicians, writing is on the wall.

Reminder physicians created the opioid epidemic.

I would love to see a coordinated push by people simply refusing to pay hospitals' post facto billing nastygrams. AFAIK, medical "debt" doesn't even end up on your social credit report in the US.

Without any up front prices, there is no contract that obligates payment. Instead, hospitals collect under the idea of "unjust enrichment" - you needed help, they provided it, and so you should compensate them. But that still doesn't allow them to set arbitrary prices the way they do ($6 for a $0.02 aspirin!), but only to recoup their actual costs. A few form letters that billing department victims could use to assert their legal rights would go a long way.

You wouldn't pay a second post-facto bill from your grocery store based on some justification that "the cashier you went to didn't actually work for the grocery store", and we shouldn't accept similar nonsense from medical providers.

I totally agree with the sentiment here but is this actually true? My understanding is that health care providers have legislative power and influence and have used it to actually ensure that a legal obligation to pay is created in situations like these.

Is that not correct? Would they actually sue under an unjust enrichment cause of action, or is there statutory authority most of the time?

I would believe that could be the case, at least in some states. But on that front, all of these articles about terrible hospital bills are doing a grace disservice by failing to mention those laws, so that public support can build against them. If anyone were given the power to create legally valid debts out of thin air, they would of course abuse it. Preventing that is one of the main purposes of contract law.

> If anyone were given the power to create legally valid debts out of thin air, they would of course abuse it.

Which, incidentally, does exist in places. E.g., when CO mints a new transportation authority they give a private corporation oversight-free permission to set their own rates and penalties, enforceable by law. That's resulted in a long string of complaints about toll roads charging not just the toll, but for the first bill they never sent, an extra 1000% interest here and there, a fine because they had to "send a second bill," ....

A lot of people already do this, which is one of many reasons why hospitals charge $6 for an aspirin.

There are other approaches to profitability besides committing billing fraud.

I get better price transparency at the vet than I do at any facility for humans.

of course not -- price in-transparency and its affects on prices is economics 101.

There is a lot of misunderstanding in this thread. I have a significant expertise on the price transparency rule and hospitals' responses to it, and will try to shed some light.

Disclosure/source: I'm a former lawyer and the founder/owner of ClearCare[0], a price transparency compliance platform for hospitals that's purpose-built to help them solve exactly the requirements of this rule.

I'm actively seeking someone to take it over, as I recently got a once-in-a-lifetime opportunity to join a plant-based bacon company as a cofounder, and I'm taking it. I don't want to shut ClearCare down, but I don't have time to focus on it since the bacon company is growing so quickly.

I was actually pretty shocked to find so few HN-crowd startups tackling this. There's some competition in the market but it isn't very strong, and the distance to, at the minimum, a nice lifestyle-business that does a few hundred $k to a few million in ARR is pretty low. It took about a year to get ClearCare where it is today. The platform is written in React, uses Auth0 for auth, and is currently on Netlify. If you're interested in running with it, please reach out - jared.hansen [ at ] clearcare dot io.

Also one other disclaimer: the following is an oversimplification. Obviously.

----------------

Background

The Affordable Care Act[1] (aka "Obamacare"), passed by Congress and signed by Pres Obama in 2010, required hospitals to “make public... a list of the hospital’s standard charges for items and services provided by the hospital,” and to update this list annually. The standard way hospitals met this rule was, for many years, to simply post a link to their chargemasters[2] - which you can think of as, essentially, an almost aggressively user-hostile data dump of opaque billing codes and amounts that didn't actually mean anything for patients.

In June of 2019, Pres Trump signed an executive order[3] requiring the Dept of HHS to create new regulations that would more clearly codify the requirement. HHS' sub-agency CMS created a draft rule in September of 2019, which became final around 14 months later.

The AHA sued to block the rule but lost, and the compliance requirement has been live since January 1 of this year.

There are many reasons the Chargemaster rate bears little resemblance to the rate paid by any actual patients, medicare reimbursement rules chief among them. Too much to go into here.

So what does the rule actually require?

The Rule

In short, hospitals must post two things:

(1) a list of Standard Charges (i.e., the chargemaster), for everything. This has to include negotiated rates with each payer (E.g.: Blue Cross pays 7500 for a given kind of knee surgery; Aetna pays 562; United Health pays 812), and the cash discount rate, if any. One thing that's interesting about this list (and overlooked, frankly, by most of the providers in the space) is that it is described by CMS as a "machine-readable file" - and they give examples as CSV, JSON and XML. Historically, hospitals would post chargemasters often as PDF(!), sometimes XLS, txt, csv, god knows what all -- but CMS is trying to move toward a world where you can create an API on top of all of the data and build more of the "kayak for healthcare" tools that the industry has been trying (and failing) to build for so long.

(2) for 300 procedures designated as "shoppable services" (meaning: can be scheduled in advance, and patients might want to shop around), a "user-friendly", "searchable" and generally better-designed disclosure of prices and various other information about the services. CMS designated 70 of these, and hospitals choose the other 230.

*THAT'S IT.* Contrary to popular belief, especially elsewhere ITT, the rule does not require hospitals to provide the kind of price transparency you see elsewhere in life. You just have to post certain kinds of data in certain formats. It's not actually that hard, but it's pretty hard for hospital IT departments to do on their own -- especially IT departments that don't really exist, because they're at small hospitals with small budgets.

=======

Misunderstandings ITT

Myth: "The price transparency rule requires hospitals to explain what things cost for patients"

Reality: The price transparency rule requires hospitals to list the "standard", or "chargemaster" price, along with the "negotiated rate" the hospital has reached with each payer.

Myth: $300/day is nothing to hospitals

Reality: that's true for large hospital systems maybe, but there are >2k small, rural hospitals that the rule still applies to, regardless of their tiny budgets. For these hospitals, 109k/year is a lot of money (incidentally: this also means that spending say 10k/yr on price transparency saas is a lot more attractive than doing nothing and paying the fine). Moreover:

Myth: the fine is the only penalty for noncompliance

Reality: CMS has indicated stronger penalties will come if compliance does not increase, including impact on the medicare reimbursement rate, which is a core driver of hospital revenue. Hospitals do have good reason to try to comply, and many of the larger ones are already doing so. In fact, the data show that the larger hospitals are much more likely than smaller ones to be compliant at this time.

Myth: this is way too hard

Reality: If complying with the rule meant you had to figure out what every patient was going to pay in advance, then yeah, it would be largely impossible right now, for reasons adequately documented elsewhere in this thread. But that's not what it requires. You can comply by posting a very specific, pretty well-understood set of information, which consists largely of a transform on information that each hospital absolutely already has.

----

I started ClearCare basically the day I read the Trump executive order, because within an hour of hearing about it, it was obvious to me that either 6k+ hospitals would have to do a bunch of bespoke web design to comply, OR there would be a pretty straightforward SaaS platform that would do it for them, and that there was good opportunity in building that platform. I still believe this, and if I weren't busy taking orders for plant-based bacon I'd be recruiting instead of looking for someone to hand it off to. Call me if you want to talk.

---------

[0] https://www.clearcare.io -- and there's a corporate deck here: https://www.beautiful.ai/player/-McFhWCjOS_FBay_aAy3

[1] https://en.wikipedia.org/wiki/Affordable_Care_Act

[2] https://en.wikipedia.org/wiki/Chargemaster

[3] https://nationalhealthcouncil.org/blog/blog-president-trumps... - note the text of the order is no longer available on the whitehouse site, but this is a decent summary.

> for 300 procedures [...] CMS designated 73 of these, and hospitals choose the other 217.

217 + 73 = 290. Somewhere, there’s a mistake in these numbers.

Yep, fixed, it's 70 shoppable services and 230 they choose.

Thank goodness the NHS hasn't gone this route (yet).

Wait I'm sorry, I thought voting Biden was supposed to fix this?

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