A "normal" business doing this at scale would be investigated for fraud. Yet somehow it's normal when it's a hospital.
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.
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.
> 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.
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.
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.
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...
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.
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.
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.
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.
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.
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.
That way they can circumvent the care % cap
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.
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.
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.
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.
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.