How much health insurers pay for almost everything is about to go public | Hacker News Reader

How much health insurers pay for almost everything is about to go public

khn.org

766 pointsnojito359 comments

I'm one of the co-founders of Turquoise Health, mentioned in the article here. We've been downloading and parsing this data all day. It's a really big deal in the industry that the prices that insurance companies pay doctors are now being shared publicly. It will have all sorts of positive impacts over time, hopefully making rate negotiations more consistent and fair between different insurance plans. Right now, 10x differences in prices paid for the same healthcare service from the same doctor between insurance plans is not uncommon.

My dentist dropped my insurer (Delta Dental) because they claim they did not cover things as reliably as they should. When I saw a comparison bill of what it would be in and out of network for a recent service it looked like the 60% increase in price was purely because my dentist billed more, which they then claimed is due to the discount The insurer provides.

None of this makes sense to me. How can I leverage this new data access to my advantage?

People keep complaining government is too complicated and too expensive and bafoonish, yet they don't see how corporations are no different except their priority is maximizing profit not providing cost-efficient quality.

The point (in theory) is that in efficient markets you can choose between different companies offering a product/service and that competition drives down prices / costs. The healthcare market in the US is very much not a competitive market (in part due to transparency issues which this is trying to address, in part because of the perverse incentives in the health insurance system).

It's not so easy to have a competitive marketplace for government services (though I would not be surprised if the US saw the emergence of private police forces now, for those parents who actually want police officers that have a duty to protect their kids...)

But that doesn't happen in a free market because when money and power gets consolidated, monopolies and oligopolies can do whatever they want to dominate that market.

We have regulatory capture, legislation is written by think tanks like ALECS at the behest of corporations to benefit corporations thereby compounding the problem.

We need actual regulation or a reorganization of corporation ownership. Reorganizing corporations to be owned by the people who work for them rather than shareholders would shift incentives.

> When I saw a comparison bill of what it would be in and out of network for a recent service it looked like the 60% increase in price was purely because my dentist billed more, which they then claimed is due to the discount The insurer provides.

Well, rebates kinda DO end up working like that. https://www.youtube.com/watch?v=uPa-RHVh97k https://www.youtube.com/watch?v=_4_WNFPnmO8

I appreciate what you all are doing. We need people to try and really fix our Healthcare Industry. However, I do have a question. Are you trying to get rid of Insurance mafia at all for at least some things like basic preventive care etc because I am sure that drives costs up a lot if Insurance companies are always between a doctor and a patient. I really hope something can be done where I can just go to a doctor/hospital, ask how much and pay for it out of pocket instead of crazy premiums and all the other BS we have to go through everytime.

Most healthcare providers are happy to accept cash payments from patients. You can sometimes even negotiate a discount.

If you have a medical plan subject to the Affordable Care Act then most preventive care is already fully covered at no cost to the patient.

https://www.healthcare.gov/coverage/preventive-care-benefits...

> most preventive care is already fully covered at no cost to the patient.

Sigh. Someone has to pay and that someone is all of us.

Health insurance plays on the fallacy most individuals have that they will somehow beat the system and receive more services than they pay for.

So, it becomes a race to use as much as possible. Over prescribed meds for the sexy new illness you think you might have after seeing that commercial, unnecessary office visits, bloated testing.

Combine that with Drs who are scared shitless of being sued so they do whatever the patient wants, you have a the reasons for what we have today which is extreme over use of medical services. And that is precisely why insurance and care is so expensive.

I don't totally disagree with your broader point, but there's a decent case to be made that basic preventative care reduces costs by catching issues before they become expensive, chronic conditions (or worse.) The 'preventative care' that is 'free' is usually pretty basic: yearly physical, scheduled vaccines, and basic blood tests and cancer screenings at certain ages.

I'd also question what health insurance plans still encourage 'using as much as possible'. Most are high-deductible plans, where you are paying $100-$150 for an office visit until you hit your deductible or OOP max. The days of $20 copay doctor visits are gone for most of us, unless you are on Congress' health plan.

I doubt any preventative care can compete with a society that is approaching 50% obesity.

I don't agree that this is "precisely" why insurance and care is so expensive. Other countries do this just fine. The main reason that it's so expensive in the US is because we have for-profit insurance companies whos interests are diametrically opposed to the interests of the patient. They want to make as much money as possible, and patients want to pay as little as possible.

> Most healthcare providers are happy to accept cash payments from patients. You can sometimes even negotiate a discount.

Actually, if you don't have insurance, you get the special cash price of $Maximum. /been there //tried that.

I have also been there and tried that, extensively. That's the opposite experience of what I encountered in paying by cash for more than a decade. Typically I'd pay around half price via cash for healthcare services (routine doctor visits, scans, et al.) versus what they charged if you had insurance. I never ran into a situation where they wouldn't negotiate steep discounts for paying by cash.

I can never get them to tell me what it would cost if insurance were to cover it. Either pay a definitive amount of cash today, or insurance will cover some unknown arbitrary portion of a similarly arbitray and unknown amount tomorrow, and pay the difference.

Yes, it works for routine stuff, but don't try to pay cash for abdominal surgery. You will get a very terrible, high price. After all, it's agree to our low price or die of appendicitis.

Sorry, low effort post on my part: This is silly, so now we are expected to negotiate and haggle medical costs like we do at a car dealership? No thank you. Rather we all pay the same price, and if we have insurance, charge the insurance more.

I just wanted to clarify what OP meant by $Maximum. I'm not sure if that was intentional use of maximum or not, but it's pretty accurate and I'll explain why.

A couple of terms I need to define up front:

Provider = Anyone or anything rendering healthcare services.

Payor = We'll just define this as a health insurance company.

Charge Amount = This is the "sticker" price, many of you have heard of it. This is something defined by the provider, essentially all providers maintain a chargemaster which is a list of all services (procedure codes) and their respective charge amount (more on this later). Almost always they just have one chargemaster.

Allowed Amount = This is the negotiated price for a service between a provider and a payor.

So, say I'm getting a knee replacement at Man's 4th Best Hospital. The knee replacement is procedure code 27445. The hospital looks at their chargemaster and the charge amount is $10,000. If you want to self pay, they will often offer you a discount based on the charge amount. Often times around 80%, but it's very variable. Many people ask "well what would it be if I used my insurance so I can compare price". To which you get response of "we don't know, or we don't share that info, etc". Almost always they honestly don't know and it's actually really really hard for them to find out. I can talk about why this is so hard if there's interest.

Anyway, back to the example. A common myth is that the charge amount is just a made up number. This isn't really true, it is based on something. In virtually every contract there is a clause the insurance company puts in that says "we (the insurer) will pay the lessor of the charge amount and allowed amount". In other words if the allowed amount is less than the charge amount then the insurer pays the allowed amount, if the charge amount is less than the allowed amount then the insurer pays the charge amount.

So, we get our knee replacement at Man's 4th Best Hospital, the billing department submits a claim for procedure code 27445 and includes the charge amount of $10,000 on the claim. They send it off to Man's 4th Best Insurance Company. Side note, the claim would be much more complicated than this. Also happy to explain more about why that is if there is interest.

Now say the Hospital and the Insurance Company had negotiated an allowed amount of $5,000 for this procedure code. This means that Insurance Company will pay the Hospital $5,000. What if the billing department submitted the same claim with a charge amount of $4,000. Well then the Insurance Company would only pay them $4,000, it doesn't matter that they had in fact negotiated a higher rate of $5,000. So you can see how the burden is on the provider to ensure they submit the claim with a charge amount that is greater than the negotiated allowed amount otherwise they will get underpaid.

Alright, now back to OPs use of the word "$Maximum" for self pay. Remember how I said providers maintain one chargemaster. Because providers have many many contracts with many different payors, and across all these contracts the allowed amount can vary quite a bit, they need to set their charge amount as the highest allowed amount across all their negotiated contracts. If not they will sometimes get underpaid when submitting a claim. This is in large part what the charge amount is based on. It is the highest allowed amount across all their contracts with payors.

You may be thinking, hold up I thought you said they don't know what their negotiated allowed amounts are so how do they know how to set their charge amount at the highest allowed amount across all contracts. One way they can figure out the charge amount is by looking at how historical claims were paid out.

Okay okay sure, makes sense I guess, but why don't they just set the charge amount as $1,000,000 for everything. They could maybe, perhaps there's some rule against this, but regardless it wouldn't be very helpful. The chargemaster is a useful negotiating tool as it tells you your highest negotiated rate for a given procedure code. It's also useful for forecasting your financials. For example, you can look at last years claims for a given payor mix, and determine what percent of your chargemaster they paid out. Then you can use that to forecast revenue for next year. This is a really dumbed down example but I hope you get the idea.

So long story short you now understand the "why" behind the self pay cash price being a discount on their highest negotiated allowed amount, aka $Maximum as OP put it. That doesn't mean you're getting price gouged necessarily. Their chargemaster charge amount may be less than medicare rates if they have bad contracts (little negotiating power), or it could be super high if they have good contracts (lots of negotiating power).

My background is in the healthcare tech world on "both sides" (for providers and payors) for about 5 years doing analytics/data science/engineering stuff. I just mention this because as a long time lurker of hackernews anytime I see big healthcare threads like this I see a lot of questionable information that at least in my experience isn't accurate. There are some high ranked threads in this post that are not accurate in my opinion.

So all this to say, I empathize with OP's "/been there //tried that", it's a very frustrating experience. If there's one thing I've learned in my short time in the weeds of the US healthcare system, it's that the overwhelming majority of clinicians are honestly trying their best and are just as frustrated as patients (sometimes for different reasons but a lot of times the same reasons). The most exploitive behaviors are taking place multiple levels beyond the clinician you see at the clinic and are acting like puppeteers, where the puppets are clinicians and patients. The puppet strings are so long and so tangled that we can't even really tell what's causing all our anguish, so we just get upset at the only thing we can see.

You could but without insurance, you are taking a big risk. The point is that I cannot just buy insurance that covers catastrophic stuff. It is binary. Either I buy insurance (crazy premiums) and then I might as well use it everywhere or I don't. If I don't buy insurance, good luck.

The point is that Insurance should be offered for catastrophic issues with caps and out of pocket limits and premiums should be much lower because the insurance should not cover basic stuff and for those, we should use cash thereby have price transparency AND market competition b/w various providers.

High deductible health plans (HDHP) are widely available with relatively low premiums. Those do what you're asking for.

https://www.healthcare.gov/high-deductible-health-plan/hdhp-...

Where is the - if it exists - list of locations where different entities have published their machine-readable files?

We really need to move to reference based pricing. We can cut so much waste out of the current system including brokers. Reference based pricing also get rids of the loopholes for things like anesthesiologists being "out of network" at a hospital/facility that is "in network". It also gets rid of the situation where if you offer cash you get one price but if you submit for the same code, it could be 3x or 10x or even more.

Or we can have one network every doctor is in, and the state pays for everything. All doctors are independent contractors to the state. Everything is paid for. There's one price for everything. Everyone is covered. All this garbage just disappears.

Then there's one nice fee schedule like this, with all the prices on it, but it doesn't even matter, unless you're a physician doing your billing. [1]

[edit] As you can see from the PDF, a dermatology consult (A025) is $72CAD.

[1] https://www.health.gov.on.ca/en/pro/programs/ohip/sob/physse...

I suspect we could do decently by requiring insurance to purely reimburse the patient (possibly without the patient needing to pay first). If an insurer pays up to $1k for an MRI, and a hospital charges $15k but an outpatient imaging center charges $700, there will be a strong incentive for patients to stop using the hospital’s MRI.

Combining this with an auto-service requirement for a binding estimate before services are rendered would be amazing.

(Dealing with actual emergencies in this model may be hard.)

Most people can't afford $500 in America.

You don’t need to have the state pay. Make them charge the same price to all customers. Then you can have insurances compete. My body shop doesn’t charge one insurance $10/hr and another insurance $100/hr for the same work.

> My body shop doesn’t charge one insurance $10/hr and another insurance $100/hr for the same work.

Do you know that for a fact?

In my experience auto insurers assess damage and award $X for repairs. You can either go to their contracted body shop or pick your own. If you pick your own, they typically take the $X as payment.

So many don't realize that this is entirely because Medicaid pays less than the cost of treatment. So hospitals make it up by charging other customers more.

If you actually wanted this then your taxes would go up because Medicaid expenses go up dramatically.

Maybe it's worth it - but at least be aware of what you are asking for.

"So many don't realize that this is entirely because Medicaid pays less than the cost of treatment. So hospitals make it up by charging other customers more."

I would like see an accounting of that. I bet they charge way more than they have to if they want to make up for Medicaid.

I'd be interested in reading more about this. A lot of the cost of medicine is overhead interfacing with insurance providers and all the layers of profit therein, but I don't know exactly how much.

The how would all the hospitals afford to build all those fancy new buildings? Think of the architects!

What's reference-based pricing?

It's basically price-controls.

A regulatory body looks at how much something "should" cost based on its history of reimbursement and the cost of its inputs and then sets a cap of say, cost + 20%.

The problem is having an independent body that is free of influence of health insurance companies and hospitals, both of which have perverse incentives to continue profiteering.

Not to mention the fact that it will eventually cause a supply shortage.

The sibling is right but in this case we'd probably do something like Medicare + 20%, which is actually close to what most insurers do for some of the codes already. It just removes the cost of negotiation, brokers, out of network, etc. and actually lets you know the cost up front for most appointments. We also need to get rid of service levels for most appointments. It is just used as an excuse to up charge by having patients fill out pointless paperwork. We also need to reimagine our service provider models. We have already move to CMAs to take blood pressure, etc. We also need to move to PA or LPN instead of a Dr for most cases. Ear infections, colds, flus, etc. are a majority of family appointments and can be handled by lower levels. The Dr can then review cases and deal with the more complicated cases where her expertise is most needed.

The whole premise of a doctor visit is you don’t know what is going on and you need someone to differentiate everything that’s happened to you to figure out if it’s gas pain or cancer. When you see a Doctor, they are trained for years more than any mid-level provider and they carry massive legal risks if they are wrong or negligent. When you see a PA or LPN they have far less training, and are judged by “nurses standard”, so when they miss your child’s cancer, or kill you by administering the wrong dose, you don’t have repercussions.

In reality, the legal costs in healthcare should be the next big trim on the cutting block - a single judgment for the $100 million against a provider somewhere in South Carolina makes insurers raise malpractice rates for all doctors everyone by huge percentages. Those costs put doctors out of business and all of a sudden you have far less providers in many rural areas and people die of preventative stuff. The stress of dealing with malpractice is so high (60% of all doctors are sued for almost entirely frivolous reasons, every single year nowadays) that doctors are now directing their kids to become nurses - higher guaranteed pay, you don’t lose your 20s to medical training, and no stress of career ending lawsuits.

If you go to a hospital for a longer illness and have to be taken care of by team of rotating health professionals, every lawsuit can name every single professional, whether they have anything to do with your damage or were just on the note for admitting you to the hospital. All of those providers then have to pay 100k to a lawyer to defend themselves, even though it’s obvious to a kid, they shouldn’t have to.

I’ll admit I haven’t thought of all of the potential consequences, but this seemed like a good idea.

Medicare collects cost data from hospitals and uses it to set their DRG payments. They have the data.

You could make some law saying providers can’t charge more than X% of what Medicare rates are. You could even make it 200% (lots of room for higher reimbursement) and it would be a massive change. You won’t have one hospital charging $2000 for an MRI and another $15,000 (actual numbers I’ve seen - the payment insurers made!).

That would force hospitals and insurers to at least keep price somewhat closer to reality and they’d need to stop the game of “ill take an insurance payment below cost for X-rays but make it up in MRI reimbursment” which is what a lot of hospital do - they look at line of service finances not procedure costs (so they don’t care if X loses money if they make it up on Y).

Problem is, most hospitals have no clue what things cost (a friend worked at a major hospital and said they’ve never calculated what it costs, all in, for say an MRI).

It would be massively disruptive for a while but eventually contracts would be renegotiated and you’d end up with bills that are at least in the ballpark of actual costs.

> in this case we'd probably do something like Medicare + 20%, which is actually close to what most insurers do for some of the codes already.

But this is how Medicare sets its own prices - they pay a percentage of the minimum price you charge anybody else. You can't then have the non-Medicare parties charging a percentage of Medicare; that's a circular reference that could result in absolutely any price.

A few times I’ve seen a 10x price decrease when I asked to pay cash before.

Sometimes the co-pay alone is more then cash for procedure.

Weekly injections and MRIs is the worst offenders I’ve seen.

Sorry, but the only thing that will help is Medicare for all. We need to get rid of insurance companies completely.

Non-American here: your healthcare system is so abysmal that you could stop short of implementing Medicare for all and still have a significantly improved system. You should obviously have Medicare for all, but let’s not kid ourselves about how far from that you are.

Lots of countries have great systems that aren't single payer.

Should Europe get rid of their insurers too?

as european i am not entirely convinced that it makes sense to have hundreds of companies providing the same heavily regulated service.

if there were too few of those i would probably also object.

idk about the situation where there are no private companies involved at all and the government takes over healthcare top to bottom because on the one hand i see a massive problem with for profit healtcare as it is and on the other hand i can see how incentives would wither away if there is no drive for efficiency at all.

“Right now, 10x differences in prices paid for the same healthcare service from the same doctor between insurance plans is not uncommon.”

Makes me wonder how things got to this point. How can a business perform any planning if they sell their services with such big differences between prices charged to customers?

The honest answer is because that’s what insurer negotiation had led to with hospitals having using their negotiating position.

If you’re a hospital in an area with standalone MRI clinics the negotiation pressure is high, insurers can say “ill send patients elsewhere”, so you give on price, maybe below cost.

But that same hospital is the only cath lab in 100 miles. Great! We’ll just tell the insurer “we’re charging 300% the normal cost of a cath procedure, take it or leave it”. So the insurer takes it because how can you offer insurance and tell customer they have to drive 100 miles for a heart procedure?

Hospital is happy because they’re profitable overall. Insurer just lives with paying 3x for cath procedures in that area.

Hospitals don't let you obtain imaging elsewhere. They force you to use their imaging services--full stop.

Pretty sure that's not legal, but yeah, you'll basically be told that.

Over time the higher paying ones subsidize the lower ones. Due to this we'll see some people's insurance premiums increase, some decrease, and some insurance providers probably go out of business (all good IMO).

Short answer is: because they can.

And they can because there's a lack of transparency that makes people believe this is OK.

What do you serve to gain from scraping all of this information?

Our industry-focused products are based on knowing how much every service costs at every healthcare provider. It's the underpinning of our products.

We also post a lot of the rates publicly in a consumer-friendly searchable format, but we don't charge any money for that. But this data will let us greatly expand the scope of that free service.

The information on their landing page was immediately relevant to me

https://turquoise.health/

I hope they have a good business plan and manage to stick around!

Thanks! So far, so good. We don't sell anything to consumers. Our products are aimed at the healthcare industry which lets us post information for consumers for free and we have pretty good product-market fit.

Obligatory "if anyone is interested in joining a fast growing, series A company doing impactful work, hit up our careers page!"

Interesting, I'm curious since you're in the industry, why do you think medical tourism has never taken off in a big way in the U.S.? I feel like I saw more people willing to go to Poland or Ukraine for things like dental work when I lived in Europe than people in the U.S. willing to go to Mexico or some other destination.

How does the healthcare industry use this data typically?

I was guessing it was this bit at the bottom of their landing page:

> Are you a transparent provider or payer? > There is a market for transparency. Let patients find you by claiming > your provider page and listing your services. It only takes 10 minutes.

But following through that link says it is a free program.

We build products that help healthcare providers and insurance companies broker contracts between themselves based on actual market information instead of guessing at prices. The goal is to drive down prices by making the market more efficient.

Part of that is assuming that prices will be public, so we encourage them to claim their own page and take control of the rates listed there.

How well will their data be audited and enforced? For example if they charge one price and yet their public data purports another price? More so will they cut the drug prices internally and shift the difference onto an administration fee? That is one aspect I'm very mindful of.

Very cool work!

The article mentions that yall are working on hospital data. Is insurer data beginning to roll in?

Where are health providers hosting these data? Could you give an example? Thank you.

Another proof that more transparency decreases corruption and improves efficiency?

Once it's been shown to work it may be proof.

The track record of healthcare reforms intended to cut costs is rather abysmal.

That may be true but the first prerequisite for functioning markets is price transparency for participants. Without that it will never work. There may be other problems but you absolutely need to know prices.

Does it really need to be proved?

I'd argue that it's a mathematical/logical truth in principle, and that the only thing that requires proof is whether this particular implementation is successful at what it aims to do.

Could this backfire - similarly to how publicly traded companies' CEOs disclosing their pay caused their pay to skyrocket?

This is a good question and the answer is absolutely yes.

It could raise prices. Consumers have some incentive to care how much they are spending on health care, but they aren't generally the claimant on savings they realize for their insurance plans. (Obviously the incentives for uninsured or self-insured patients (to the extent that there's anyone in the latter category) are quite different, but those populations are small.)

On the other hand, every hospital has a strong, strong incentive to care a lot about how much their competitors are getting for the same procedures. (Much more than consumers, for example.)

It's possible that these disclosures lead to prices falling as hospitals seek to undercut each other. However, most US hospital markets feature a small number of competing hospital systems in an oligopoly. The price-cutting pressures in such markets are much, much weaker. There is a "mutually assured destruction" aspect to price competition in such markets which may keep prices from falling.

The latter incentive can raise prices too. IF you know your competitors across town are getting an extra $5,000 for a knee replacement and you know that the two of you are the only game in town for hospitals, you may raise your prices rather than lowering them.

On balance I think this is the right policy, in part because I want this data myself as a researcher. But it is not unambiguous that this will lead to price reductions.

Source: am a health economist.

That's an odd way to look at it, as a "backfire."

We're introducing more information into the market. If some prices went up as a result, isn't that an indication that the lack of pricing information was being used to artificially depress prices?

If so.. this isn't a "backfire" so much as an "obvious and necessary correction?"

Based off some of the other comments, here is the idea I’m picking up on:

If a particular market isn’t that competitive and has oligopolistic aspects, more transparency may increase the “effectiveness” of the oligopoly. Instead of hospitals that were charging more lowering prices to compete, we could see hospitals that were charging less raises prices because they know the competitive pressures are weak and they don’t want to leave money on the table.

Seems plausible to me, depending on how oligopolistic most hospital markets are.

The cynic in me thinks this is what you get when you have a very weak correlation between price to outcome, but the perception is that you have a very high correlation between price and outcome. Boards think paying more gets them more, but if it doesn't maybe that just means the price keeps going up as boards attempt to pay more for better outcomes.

I could see something similar happening in healthcare in select locations to some degree, if some hospitals continue to charge more for a specific procedure because the communities they are in are less price conscious and if there's not good information on outcomes to link to the cost. There are plenty of other products out there which cost a premium based on name alone, and there are quite a few very famous hospitals. Usually they are famous for expertise, but that doesn't mean their fame in one area won't lead people to believe they are equally as good or above average in others where they aren't, even if they charge more.

Medical care is not the kind of good that you can just say 'oh the market will correct it', because most of the assumptions you make about 'the market' don't apply to essential services.

Does that apply to labor prices in the given markets, though? We can't force people to work there just because they are essential.

Can you support that claim? I couldn't find when CEO pay went public but it sounds very likely like one of those causes were correlation definitely doesn't imply causation.

It makes sense to me. Transparency benefits the party that is more free to go elsewhere. Lots of companies, fewer good ceos, means that the ceos can leverage this better than the company can.

To put another way - at work, if you knew how much every employee made at work, it would probably be helpful in salary negotiations. Dont see why it would be different for ceos

This[1] Wikipedia article talks about it some, and links to this[2] paper.

[1]https://en.m.wikipedia.org/wiki/Executive_compensation_in_th...

[2]https://www.degruyter.com/document/doi/10.2202/1535-167X.120...

Edit: adding an additional paper on the topic https://www.princeton.edu/~amas/papers/CEODisclosureMandate....

All CEO pay for public companies is exposed in the 10Ks.

What I suspect the person was referring to is the change where compensation became more tied to equity valuation.

CEO pay wasn't always public and the compensation is only mostly equity because it has a tax advantage [1].

[1]: https://americansfortaxfairness.org/tax-fairness-briefing-bo...

Are you guys hiring?

Look like it

https://turquoise.health/careers

How do you account for case-based charges?

For anyone looking to download the data, here are a few links:

Empire Blue (Anthem): https://www.empireblue.com/machine-readable-file/search/

United Healthcare: https://transparency-in-coverage.uhc.com/

Aetna (Seems like the right page, but I don't see any download links — possibly because they haven't been posted yet): https://health1.aetna.com/app/public/#/one/insurerCode=AETNA...

Search keywords: https://www.google.com/search?q=machine+readable+files+trans...

Thank you thank you thank you!

Here's Cigna: https://www.cigna.com/legal/compliance/machine-readable-file...

UCLA Health keeps theirs: https://uclahealth.s3-us-west-1.amazonaws.com/price-transpar...

But sadly, still can't find my insurance company's download links.

I can't wait to lose a weekend doing something with this data, it's a dream dataset and a perfect example of a very narrow type of project I love doing.

Is there a canonical list of the major insurance companies?

Cigna posted a single 570GB gzipped JSON that barely qualifies as machine-readable

Blue Cross https://www.bcbsil.com/member/policy-forms/machine-readable-...

So are there programs I can use to parse this? It looks like a json file with links to more gziped json files...

> It looks like a json file with links to more gziped json files

Yup! Should be pretty easy to whip up a parser, it's just JSON and HTTP, you could do it in shell if you cared to. The challenge is what are you parsing it _to_. That is to say, what's your data model. I'd choose that first, then worry about parsing.

...it is unfortunately.

If you know a language you could run through it. Otherwise ypu might be able to find something like a json to csv converter online

Hey has anybody created and open API or just downloaded it all to a single source?

> “What we’re learning from the hospital data is that insurers are really bad at negotiating”

Do the insurers have any incentive to negotiate well? Since their customers are not very price-sensitive (since they aren't marketing directly to patients or doctors), I would imagine they don't have a huge incentive to do anything but apply a markup to whatever prices the hospital tells them it costs.

Insurers are incentivized to pay higher prices for claims. The Affordable Care Act enforced that insurance companies must have at least an 80% "medical loss ratio." Meaning that insurance companies must make at least 80% of their total spend on actually paying out medical claims. This law was put into place because insurance companies would spend huge amounts of money on advertising and giving execs bonuses, all paid for by patient premiums. Some only paid out 50% of their spend on medical claims.

The Affordable Care Act introduced the newer perverse incentive of insurance companies tolerating higher prices. Because if you can only pay your execs bonuses based on 20% of your total spend, insurance companies can pay execs more if the underlying claims they're paying cost more. 20% of a $1,000 MRI isn't as juicy to your C levels as 20% of a $10,000 MRI.

All insurance companies, all of them are corrupt. The whole system needs to be burnt down. PPOs are the worst, I wish HMOs were the norm, but that won't fix everything.

Further reading: https://www.investopedia.com/terms/m/medical-cost-ratio.asp

>The Affordable Care Act introduced the newer perverse incentive of insurance companies tolerating higher prices. Because if you can only pay your execs bonuses based on 20% of your total spend, insurance companies can pay execs more if the underlying claims they're paying cost more. 20% of a $1,000 MRI isn't as juicy to your C levels as 20% of a $10,000 MRI.

If this perverse incentive were true, then you would expect the medical care costs to rapidly increase after the passage of ACA, but medical trend has actually slowed down since then[0] [1].

You can also look at the total dollar spend on hospital and medical expenses for the entire health insurance industry [2]. After the passage of ACA, there was a large increase in medical spend as more people obtained insurance coverage, but the increase in medical expenses year over year has settled back into the 5% range, which doesn't seem that perverse.

[0]https://www.statista.com/statistics/720767/medical-cost-tren...

[1]https://www.pwc.com/us/en/industries/health-industries/libra...

[2]https://content.naic.org/sites/default/files/2021-Annual-Hea...

Having no idea what the real trend is, couldn't any other factors counteract the perverse effect, making both parent's and your observations true at the same time ?

For instance rhe sustained efforts that lead to ACA peobably didn't stop there, and more effort surely were made to reduce healthcare cost from there. If ACA could be passed in the first place, it wouldn't be surprising if other effective actions were also passed as well ?

>Having no idea what the real trend is, couldn't any other factors counteract the perverse effect, making both parent's and your observations true at the same time ?

Absolutely. There could be other factors that are counteracting the effect, including those within the ACA itself since the bill contains many changes to healthcare, not just the restriction on medical loss ratios.

From your second link, except in the last year, healthcare spend has been outpacing inflation by more than 2 to 1. The economics of scale are backwards in healthcare, I find that perverse.

UnitedHealth total comp have been rising for C levels, except the CEO who recently left, who stayed around 17mil. https://www.salary.com/tools/executive-compensation-calculat...

I think we can agree that something will need to change as medical trend cannot outpace inflation forever. I don't think the issue is with executive compensation, because even if insurance companies magically could perform all their services for free, you would only reduce premiums by less than 20%.

Kind of but not really.

Insurers compete for customers, typically corporations buying group plans.

My employer switched insurers all the time to get the same or better coverage at a lower price.

Competition is scarce. Hospitals and providers don't take all insurances, based on backroom shady deals. Depending on location, there often isn't much choice for insurers. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1450072/

Insurance policies have dozens of knobs they can turn to charge your more while claiming it's a lower price. Premiums, copays, coinsurance, deductibles, out of pocket maximums, in network benefits, out of network benefits, and all of that for individual vs family. It's all a scam.

It’s not regular person negotiating 50,000 employee health plans that cost $500,000,000 per year.

I’m pretty sure a lower premium with higher deductible isn’t going to fool them.

Private Healthcare is the Classic Agency Problem.

Well, if they can negotiate a particular incident down then they pay less for it, but in the long run big picture you're exactly right. So long as they can inject noise into the plan shopping channel and so long as they aren't doing worse than their competitors by that noise margin, they'll do fine. Which in practice means that they just pass along the costs.

Health insurance customers are price sensitive

Not really? I'm pretty sure the vast majority of health insurance customers are part of group plans from their employer and so the individual customers have very little influence or choice in the matter, and basically just have to put up with whatever bullshit the insurance companies throw at them since the alternative is seeking individual coverage separate from their employer and paying double or even triple in premiums alone.

Exactly. Employers, especially large ones, have big sway over insurance companies. They can change their benefits and shift a lot of business to a competitor. It’s happened at several places I’ve worked. Definitely a hassle for employees but a save employers a lot.

All they really need to care about is the average amount paid.

Ten $100 brain surgeries and $2,000,000 for 1000 routine neurological screenings is a fine outcome. (Or would be, if not for price transparency)

If insurers’ customers were not price sensitive, then they would have higher profit margins than 5%.

There’s no universal %margin on turnover that applies across all sectors that tells you whether a market is efficient or not. If I supply you widgets for $1000/ea and take a $50 management fee that we assume is fair for the work involved, then if there’s a shortage of widget materials that pushes the price up to $10000/ea, it’s no extra work for me so the fair management fee is still $50. If I charge $500 to keep the % the same I’m adding no extra value for that extra $450.

Building contractors are an example of an industry that runs on razor thin profit margins in % turnover terms, because all they’re doing is passing on the cost of labour and materials from their suppliers and subcontractors onto their clients and just making their profit adding value in a thin management layer. Which sounds a lot more analogous to insurers than industries that earn 5% profit on their turnover.

There are legions of people working at UHC/Anthen/CVS/Cigna/Humana/Molina/Centene trying to price insurance as competitively as possible to win as much business as possible. If they could price it lower and win more business, it is safe to assume they would be.

If they could price it higher, then why would they choose to only earn low single digit profit margins?

You have 7 huge publicly traded companies competing with each other, and unless there is proof of collusion, it is probably safe to conclude that they are running their businesses as well as they could be.

If you think otherwise, then you have discovered an arbitrage opportunity, which would be worth quite a bit so you should be able to pitch it to someone who wants to invest.

The accusation here isn't that they are skimming a disproportionate amount, it's that they aren't doing their job, which is to put downwards pressure on provider prices.

The fact that there are at least 5 large insurers competing nationwide and all have 5% or less profit margins means there is lots of competition, and if they are not providing the best prices, their customers will go elsewhere.

See pharmacy forums as an example for all the pharmacists complaining about how independent pharmacies are so tough to operate due to ever smaller payments from insurance companies for the past 10 years.

> if they are not providing the best prices, their customers will go elsewhere

Nope. Not if they can inject enough noise into the comparison process to hide the differences. There's a reason they threw so much money at getting bronze/silver/gold standards killed. They knew it was critical to avoid being squeezed.

> pharmacists complaining

Pharmacists are a tiny part of the bloat picture and it's always easier to put the screws to smaller players. Come back when drugs and hospital stays stop costing twice as much as the rest of the developed world, or stop growing 10% y/y (on top of regular inflation) and then I'll believe that insurance companies are doing their negotiating job.

> There's a reason they threw so much money at getting bronze/silver/gold standards killed.

I am not aware of these standards being killed. I select a Gold HSA plan every year.

https://www.healthcare.gov/choose-a-plan/plans-categories/

> Come back when drugs and hospital stays stop costing twice as much as the rest of the developed world, and then I'll believe that insurance companies are doing their negotiating job.

How are they supposed to negotiate if there is only 1 hospital in an area or a drug company owns the patent to a drug so they are the only seller? The insurance company is mandated to cover emergency care at the hospital and pay whatever price for the medicine if it has sufficient efficacy data, per the laws.

When there are generic drugs available, insurance does pay less for those drugs.

No, it means that Obamacare is working as written[1]. Insurer profit margins are set to the legally permitted ((medical bills) * 15%) - operating costs.

If insurers want to make more money, they can either make medical bills more expensive, or reduce their own operating costs. Reducing the cost of medical bills does not increase the amount of money they make, unless it means they are capturing market share from a competitor.

The problem is that it's nearly-impossible to capture market share. Which insurer do I have? The one that work provides. Did I have any choice in it? No. Did I choose my workplace based on the insurer bundled with it? No. Will my workplace ever switch their insurer provider of choice? Almost certainly 'no'.

How do you capture market share, when all of your customers, and all of your competitors' customers are captives?

[1] Whether or not it was written well is another question.

It does if it results in them being able to sell policies at lower premiums than their competitors and hence earn more customers.

> Will my workplace ever switch their insurer provider of choice? Almost certainly 'no'.

Why not? I am an employer and we evaluate the cost of health insurance every year. It is a huge expense, so why would we not shop around?

I agree with many of your points. But in terms of employers switching plans, I've experienced such changes several times as an employee of different companies. It's not particularly inconvenient to a business to switch insurers, though it certainly can be to the employees.

“Will my workplace ever switch their insurer provider of choice? Almost certainly 'no'.”

They totally do that if they save money. They won’t do it to help you but for their own bottom line they will do it.

I would like to understand better your definition of "competing" because accidental cartels happen all the time in highly regulated and captured markets such as healthcare.

Nobody chooses to earns a 5% profit margin if they can earn 6%. Low single digits is objectively a low profit margin, for any business, and so must indicate that competitors exist Who prevent charging higher prices to increase the profit margins.

In the US, isn't there regulations that effectively cap their profit margins? Since they have no incentive to increase their margin through negotiation, their only incentive would be to lower their costs below competition.

Medical Loss Ratio:

https://www.healthcare.gov/glossary/medical-loss-ratio-mlr

It says 80%/85% of premiums have to go back out as payments for claims.

> Since they have no incentive to increase their margin through negotiation,

I do not see why this would be true. The less an insurance company pays for healthcare, the lower the premiums or can offer and win more business.

> The less an insurance company pays for healthcare, the lower the premiums or can offer and win more business.

I cover this in the second half of that sentence.

This would be true if there were a reasonable amount of market understanding by customers and the friction to switching were low. Neither are the case. Most of the time, it takes a qualifying life event or open enrollment (once a year) to switch. And then, understanding the trade offs between plans, which are difficult to understand on a good day, is another barrier.

Then why are insurance company profit margins so low? Why wouldn’t they just jack up premiums irrelevant to their competitors and ignore negotiating pricing and see increasing margins?

Low profit margins/multiple sellers indicates a highly competitive field, which means the businesses must be doing something stay in business.

Wouldn't their incentive be the opposite? To get more total dollars so there is more profit at the capped margin.

Aren't all customers "price sensitive" ?

Mostly true, I should have clarified “customers who have a choice to buy an alternative”.

I work in healthcare.

Here is an exchange I had with a major hospital about standard surgery (one of those deemed "Shoppable services") earlier this year. This exchange was possible after I was able to get an email recipient, following a 30min conversation.

>>>> Hello!

I was told by the very helpful Ms. XXX, that you would be able to provide patient responsibility amount , related to CPT codes for XXX procedure. I am attaching front and back of my insurance card (Payor). The member DOB is MM/DD/YY

The specific 2 codes in question are : CPT 12345 CPT 01234

Can you please provide the total cost and patient resp. for the CPTs above?

___________________________________________________________

Response:

Good morning,

>>>>>The hospital does not process estimates for patients with insurance coverage. However, our web portal contains charges under the Hospital Price Transparency link. I have included the link in the subject line for easy access. [comment: This link was broken. After much browsing.. I was able to find an alternate route. The linked file turned out to be a JSON. I couldn't figure that one out] As far as out-pocket responsibility, your insurance company is the best source for that information; they will advise if you have any copay for the encounter.

_______

Read the 1st sentence of the reply again. My blood still boils from that...

This sounds about right. I've worked in the healthcare tech world for about 5 years on both sides (for providers and payors). I totally empathize with how annoying it is that essentially no one processes estimates for patients with insurance. There are some places though that do, and it tends to be small/medium size specialty practices (think orthopedics, ophthalmology, radiology) in forward thinking places (Seattle, Minneapolis, etc). I can give some technical reasons as to "why" they can't/won't give you an estimate. I'm not saying these are legitimate reasons, just stating what I've seen.

One reason they may not want to give you an estimate is because depending on what happens during your visit/procedure, the codes that get billed could change quite a bit. Because of this their initial estimate could be wildly different. In addition to the procedure codes changing, there are modifiers/adjustments that can get applied to a procedure code depending on what happens during the procedure (which adds another level of uncertainty). For example, anesthesia often bills based on time and complexity. If the procedure runs long then it will cost more, if something goes wrong and the complexity increases then it will cost more, if a nurse anesthetist (CRNA) does your anesthesia rather than an MD it will cost less, etc.

Another reason they may not want to give you an estimate is because they have no idea. This is in my experience the case most of the time. A given clinic/hospital is going to have many many contracts with many payors. There's a ton of nuance in these contracts and they are sometimes extremely complicated. I've read hundreds of these contracts and written software to try to scale price estimate tools for patients. It's really hard, happy to dive into it more if there's interest.

I often see comments on hackernews along the lines of "it's just a fee schedule, how hard is it to put it in a database and select amount from feeschedule where procedure = 99215". The big wrinkle here is the contracts. The contracts are often times super complicated, dependent on many many different fee schedules and pricing methodologies. The fee schedules/pricing methodologies may be from the payor, they may be from 3rd party vendors, they may be proprietary, they may be based on medicare, etc. Then there's a whole slew of adjustments/modifiers that can trigger depending on tons of different events and combinations of procedures codes that may appear on a claim.

Another reason they may not want to give you an estimate is because it's not straightforward to verify your insurance. There are clearinghouses that aggregate benefits data from major payors, but the data is kind of shoddy. It may return your insurance is active when it really is inactive. It may have bad data on what is covered vs not covered, what your deductible, coinsurance, etc are so given all this data is kind of unreliable then giving an estimate becomes pretty unreliable.

Anyway, these were a few reasons off the top of my head. Again, I want to emphasize I'm 100% with you on how annoying it is that we can't get estimates. I spent 3 years literally trying to solve this problem, and we actually made really good progress if it gives you any hope that things will maybe (fingers crossed) get better overtime. I just wanted to give some context / spark some conversation around these contracts and why they are challenging from a technical perspective to automate price estimates.

I had a contribution drafted, but lost it all. In summary:

>>>>>>>>>>>>>>>>> One reason they may not want to give you an estimate is because depending on what happens during your visit/procedure, the codes that get billed could change quite a bit. Because of this their initial estimate could be wildly different.

This is a common excuse given by industry. Its also BS. I want to put it out there so people know. Would you accept if an airline tried to charge you extra if because of weather they served you extra food? Or took you to a different airport ? No. https://surgerycenterok.com/ has a price on every procedure. It never changes. How? Because they know that price changes are related to a problem doctor. You can reliably predict a problem doctor due to (a) surprise coding and (b) complications. Good doctors (and pilots) know their cases and plan accordingly.

>>>>>> Another reason they may not want to give you an estimate is because they have no idea.

This is true. They don't know because no one has bothered to translate a scheduled case into specific CPTs and/or looked up rates rates with insurer. So someone dropped the ball.

>>>>>>>>>I often see comments on hackernews along the lines of "it's just a fee schedule, how hard is it to put it in a database.

Actually, you are misinformed here. The vast majority of contracts for independent providers are simple affairs that are % of medicare rates. The only excuse they have for not putting those % rates in the open is that they have no incentive to do so. But its lazy. They could say to patients "our contract with X payor is % of medicare" and then even the patient could figure it out. They don't even do that. And patients suffer as a result. ASC and Hospitals have no excuse. Even with complex contracts, they have massive staff that can do the work.

>>>>>>>>..Another reason they may not want to give you an estimate is because it's not straightforward to verify your insurance.It may have bad data on what is covered vs not covered, what your deductible, coinsurance, etc are so given all this data is kind of unreliable then giving an estimate becomes pretty unreliable.

In my experience, some of the data fields are reliably accurate. For the rest, we are actually working on a solution. But let's not make perfect the enemy of the good. Its not hard to caveat a response like:

"Assuming all your procedures are covered by your plan, based on your remaining deductible of X and coinsurance of Y, your patient responsibility for this procedure is Z" Its not rocket science. I do it all the time myself.

I appreciate the response, it sounds like we have some overlapping industry experiences where we've seen different things, which is interesting.

>>>>>>>>>> This is a common excuse given by industry. Its also BS.

Just to reiterate I'm not saying the reasons I gave are "good" reasons, it's more a statement of what's currently going on. I think the analogies are a little unfair but I agree with your overall point as it applies to elective procedures in certain settings. I think for emergent cases or complications the discussion gets more nuanced. The other point I'd make is that providers can't just decide to "simplify" the claim, the claim has to accurately reflect what occurred during the visit, so if things went sideways and other stuff was done then they need to document/bill for that because they are required to do so. There's also downstream reasons for this like reporting on quality/cost metrics and obviously if they bill for things that didn't occur that's fraud. Besides my anesthesia example, another clear example is an inpatient stay where you're billing an MS-DRG, you have to code in the severity of the case which is going to vary. And to reiterate, I think there are tons of clinicians that would love to move away from itemizing everything and doing something like surgerycenterok, but they are at the whim of the government (medicare/medicaid) and private insurance companies documentation requirements.

I'm aware of surgerycenterok, I'm a fan. Worth mentioning is they can't give pricing on anything done outside their purview (so imaging, labs, physical therapy, complications that send you elsewhere, etc). Definitely a step in the right direction. Side note there's quite a few places like this they just don't advertise it as openly.

>>>>>>>>>> This is true. They don't know because no one has bothered to translate a scheduled case into specific CPTs and/or looked up rates rates with insurer. So someone dropped the ball.

In my experience, payors are typically very uncooperative when making a request such as this. If you ask them any questions related to the contract/pricing they just tell you no.

>>>>>>>>>> Actually, you are misinformed here. The vast majority of contracts for independent providers are simple affairs that are % of medicare rates.

This is a tough one to swallow :) I'm going on ~5 years reading god knows how many of these contracts and writing software/doing analyses to enable practices to provide accurate pricing information. And if I didn't read the contract myself, I maintained/saw how it was implemented on the backend. This spanned small provider groups to the largest in the country, contracts from small payors to the largest in the country, and private/government contracts so I feel like my exposure is pretty well rounded to have a feel for things. But I could very well have a blindspot and we may also be talking about different things. Maybe you've mostly dealt with elective procedures at private practices where you mostly worry about professional fees? Or maybe you're alluding to the industry standard of comparing your contract to % of medicare to see if it's good or not? It's pretty common they'll say "oh we get paid 165% of medicare", but this is just in aggregate their contract may not even mention medicare.

This is interesting though because most contracts being % of medicare is the opposite of my experience. The vast majority have not been % of medicare (it may be a single component of their contract but there's much more to the terms). The handful of contracts that I saw that were truly just % of medicare were usually at smaller private practices in less competitive markets (eg some places in the Midwest). For what it's worth it's still not just % of medicare. There's an entire pricing methodology that underpins the "% of medicare" that is defined by medicare (eg depending on what else is on the claim there may be subsequent adjustments that trigger, then there's totally different rules/methods for different types of stays, etc). For example a really simple adjustment is a multiple procedure adjustment. Medicare publishes a list of procedures that qualify under this adjustment. If I get both my knees replaced and I bill for the procedure code twice I will not get paid the medicare rate times two. The second knee replacement will be adjusted 50% off. This is an extremely simple example but there's a whole slew of adjustments/nuance to the pricing methodologies, and then you add the fact that there's nothing preventing adjustments from stacking (unless the contract says they don't stack in certain situations). And I'm also just talking about the professional fee above.

All of the following were things I commonly encountered in contracts, all of which impacted the price estimates we generated: bill types like inpatient and outpatient were often very messy, handling different sites of service (clinic, asc, hospital, etc), various DRG standards, APCs, EAPGs, diagnosis codes, revenue codes, bundling agreements, modifiers, adjustments (multiple procedure, multiple radiology, multiple endoscopy, mid level provider, etc), carve outs, GPCI adjusted rates, different rules/schedules based on specialty, individual providers, location, 3rd party schedules, proprietary (meaning no one gets access / knows how it works) schedules and entire pricing methodologies that are a weird flavor of medicare pricing methodologies like 3M and optum, what quarter/year schedule is being referenced, what happens if a procedure isn't on the schedule do you grab the first time it appears in the future or the current year rates, is there a hierarchy of schedules to follow, fallback schedules, etc. To top it all off, frequently the contracts didn't outline many of the above nuances. They were assumptions made by the payor (not defined in the contract) that were only revealed until we asked them why our estimates were out of alignment.

This also doesn't even talk about the industry shift that is happening behind the scenes from fee for service to value based care. The value based care contracts I've seen only add an additional layer of complexity. How providers get reimbursed has been on a steep upward complexity curve since the 70s/80s (back when payment was based on Usual, Customary, and Reasonable charges). I would absolutely love to simplify things.

>>>>>>>>>> In my experience, some of the data fields are reliably accurate. For the rest, we are actually working on a solution. But let's not make perfect the enemy of the good.

Yeah, I would say it tended to be accurate, but when it was inaccurate and you then had a weird estimate and then an upset patient it was pretty frustrating for everyone involved. But I totally agree, that we shouldn't make perfect the enemy of the good. The other thing that was frustrating with the clearinghouses/payors was how frequently they'd have outages or the latency with someone's eligibility status if their plan changed.

I'm curious if this is a first step towards hospitals being required to charge the same prices to everyone, insured or otherwise.

This seems so sensible to me that I’m curious why the hell it wouldn’t work.

Medicare and Medicaid pay some of the lowest rates. Private insurance from employers and individual policy holders subsidizes the cost for the elderly and poor. Charging the same price would disrupt that, creating all kinds of political fallout.

Which price and who determines it?

Hospital is free to determine their prices, but they cannot give steep discounts to one channel of sales over other. They have to be consistent.

Healthcare pricing should be based on cost+plus models for the hospitals rather than on value driven approach you see every else in any sales.

We are not questioning their costs whatever they maybe, if the costs logically remain roughly same no matter how a particular patient came to them, then there is no reason for price to be different depending on type/ nature of insurance or lack thereof.

> Healthcare pricing should be based on cost+plus models

Cost plus models provide a perverse incentive to increase costs, as 5% of $2 is more than 5% of $1.

Only if there is no competition and no free market[1]

If you are locked into "choosing" the one in-network service provider in your area who can price very differently for your insurance than for others yes there is room for perverse incentives as is today.

If you and I can choose freely from any service provider in the area and everyone has to price the same way( i.e. not change basis who the customer is) then they will have to be competitive, people are very price sensitive and will tend to move towards the ones which are cheaper.

See how the airlines all slowly have moved towards the low-cost models: more economy/less first class even if they were full service. Sure you will have some Frontier/Spirit type organizations eventually but if they get the job done(Moving you from A to B) at lowest price then that is all that matters[3], similarly if a hospital is no-frills and gets your cataract operation[2] or do regular checkup faster and cheaper they will do so and plenty of people benefit from that.

Force hospitals to compete, not lock into monopolistic preferential contracts with some buyers and force users to now be exhorted crazy premiums to avoid the possibility being charged even more. Price regulation does not mean government fixes the prices, it should just mean that service provider have to charge the same for anyone without knowing their source (which insurance plan/company or self-funded and income level).

----

[1] While there are some cases where two hospitals / doctors are not equivalent and cannot be compared, vast majority of care is fungible, i.e. you can replace one hospital / doctor with another without material impact to outcome of care.

[2] I have seen this myself work https://www.gatesfoundation.org/Ideas/Speeches/2008/05/willi... it is like assembly line, brutal efficiency.

[3] This assumes robust regulation, which we already have in healthcare, probably more so than required, there is no systemic regulatory oversight problems in the industry today.

But what's the cost? Complex hospital services have so many inputs that it's impossible to do cost accounting in a completely consistent way. Hospitals literally don't know what their costs are.

Come on. We can put a price on a house, that has thousands of materials, contractors, and other variables like property taxes and mortgage rates. But we can’t put a price on a medical procedure? Give me a break.

It is not only possible as the sibling post compares, they already do it today.

If your claim is hospital management and administration does not have a clue like a early stage start-up founder on VC money what their per-unit costs are, I am not sure you have negotiated a bill between insurance, hospital and you in the U.S, it is laughably false.

Even doctors are acutely aware of how tagging their services under which SKU is covered how by which insurance and by how much, and also how much they make from the hospital for that as well.

The hospital determines a price and offers it to all comers. Most businesses work that way.

I don't think it would work well. Hospitals are not a free market in most of the US. You have to get a Certificate of Need to set up a new one. Given the near monopoly they have in the local area, regulation is probably going to be required if nobody gets to negotiate.

Why can't a hospital charge the same price for the same procedure? I can see that different hospitals may charge different prices from each other. But a single hospital should charge the same no matter if uninsured, insured or whatever.

The only business that works that way is retail. And even then most will negotiate on bulk orders. Almost everyone else will have a price list they negotiate off of.

As far as a patient goes, a hospital is retail.

I would think that hospitals could create price schedules similarly to how other businesses do.

Although I imagine this gets really messy when dealing with Medicare and with the mandate to treat everyone regardless of their ability to pay. I'd expect those arrangements would need to change to make this work.

I feel a bit silly pontificating about this. Hopefully someone who really understands the topic will weigh in.

I'm not a fan of Trump, but I have to admit, the executive order [0] that forced this disclosure looks fantastic, really fantastic. But if I'm reading it right, it seems like it's just an order to _enforce_ requirements ObamaCare that were intended to increase transparency.[1] Obama and Trump actually accomplished something _together_!

[0] https://www.federalregister.gov/documents/2017/10/17/2017-22...

[1] https://www.federalregister.gov/documents/2020/11/12/2020-24...

Wait till you find out how much it actually costs doctors/providers to render some of these services!

Do you like 90% margins? Doctors sure do! :)

As the spouse of a doctor, this made me giggle. If her practice had 90% margins, my life would be a lot different than it is. Her actual net margin, as in what she brings home after paying all the bills, is closer to 15%.

A private practice owned by the MDs reporting relatively low net margins is meaningless without knowing what the MDs are taking out as income.

Her practice, as are most, is an S Corp. In other words, the net income is her take-home income.

Put another way, the rent, employee pay, supplies, malpractice insurance, etc. etc. etc. add up to about 85% of her gross revenue. That 15% difference is how much she personally makes.

There's a child comment that is in disagreement with the margins you mentioned. I've seen the financials of a lot of practices and hundreds of contracts between payors and providers. The child comment by kstrauser is much more in alignment with my experience, and they also did a good job of noting all the various expenses that are overlooked.

Sometimes there are services that do have 90% margin like you mention, but there are also sometimes services that have a negative (-90%) margin. I want to emphasize I'm talking about specific services/procedures, not the overall margin for the whole practice. A profit margin of 90% is unheard of. Perhaps you're thinking of hospital systems for example which will have certain departments that are operating at a loss and then other departments that are profitable. Then they offset each other.

Spouse of a third year resident here. My wife has volunteered at several primary care (i.e. generic doctor) clinics in Manhattan and nearby area (Queens, Astoria, Brooklyn and even in Boundbrook, NJ). These are all owned by the doctors. She worked in all kinds of operations of a clinic from billing, sending prescription, taking patient history, etc.

Back-of-the-napkin calculation based on my wife's experience -- if you are a primary care (generic) doctor in a highly populated area and you see ~40 patients a day and each patient pays $100/visit.

$100 * 40 patients * 22 days per month of work * 12 months = $1056000 (about $1 million USD)

We are using $100/patient/visit and that's being very conservative. Most of these doctors would encourage the staff/volunteers who do the billing to put as many relevant billing codes as possible in the system (e.g., if someone comes in with a cough, they'll try to bill for anything related to cough symptom although they already knew it's just for seasonal allergy). This is necessary also because a lot (not all) of the patients are on medicare/aid and the reimbursement from medicare/aid is not as good as the ones from the private insurance companies. The cost of the labor is mostly just one assistant or at most two for ~$20-$30/hour max. Not sure about the insurance cost (but we assume that it would cost ~$20-$30K/year for malpractice insurance?) and renting the clinic (some docs do own the clinic). All in all, we believe that having your own practice can net you a lot more than what you'd make by working as an attending/hospitalist at a hospital (on average, hospitalists make between $250K-$300K/year, which is still commendable).

But if you live in a rural area, which tend to have smaller population density, then you are probably better off working for a hospital because as a hospitalist, you can make close or a little more than $300K/year as a general doctor. My wife knows a couple of doctors in Palmdale, CA, who work as hospitalists in two hospitals (6 days a week alternating between two hospitals; the days start at around 9am and ends around 3-4pm). They rake in ~$600K/year from salaries (not including bonuses). A friend of mine just completed his residency and got an offer from a hospital near Dyersburg (Tennessee) for $300K/year salary with $40K sign-on bonus. The specialists earn more of course: https://www.whitecoatinvestor.com/how-much-do-doctors-make/. A cardiologist friend of mine told me that he got an offer from a hospital in Montana that pays $800K+/year.

Just wanted to share what I know about how much the doctors can make in the United States.

There's no way a single assistant could handle 40 patients per day. At that volume, you'd have at least 2 assistants.

Malpractice insurance can be way the hell more expensive than that: https://www.nerdwallet.com/article/small-business/how-much-i...

Rent will probably be another $60K per year.

The receptionist will want to be paid, as will the biller. If you're lucky, one of them will have time to be the designated person to call and argue with the insurance companies every time they deny a payment because it was a waning gibbous moon that day, but realistically, if you have providers seeing 40 patients per day, that's another full time person.

The EMR system will be quite a few thousand dollars up front, plus another several thousand per year.

You'll have to provide health insurance for all of your employees, and worker's comp, and an office liability policy.

And finally, great insurance (from the billing physicians POV) will pay about 40% of the allowed amount. Really crappy insurance, like Medicaid, is basically a write-off. BTW, Medicare has decent reimbursement. Not great, but several times more than Medicaid will pay.

In my experience as being the one who's written the checks for medical practices in a couple of different states over the last 2 decades, you are grossly overestimating revenue and underestimating expenses.

Like you said, most of these clinics have 2 assistants who do pretty much everything (accepting calls, submitting prescriptions, etc.) Sometimes, the doctor will also bring in an aspiring resident (mostly international medical graduates who cannot find clinical experience in the US easily due to their visa status/restrictions) as a volunteer or a paid-under-the-table-for-$12-per-hour to do some miscellaneous stuff around the clinic. But that volunteer's hours are sometimes on a need-base planning (meaning, the doctor will call the volunteer a day or two before if the clinic needs extra help).

Malpractice insurance for internal medicine (general medicine that I'm referring to) is ~$33K-$34K in NY area based on the link you've provided.

Now let's do the math to readjust my estimates.

One full time staff with $30/hr * 2080 hours in a year = $62400 => let's just double that to cover everything like their health insurance and liability insurance so each full time staff costs = $125000/year

2 staff * $125000 = $250000 Rent = $60000 (the doctors sometimes own the practice, but let's just assume it's a rental) Malpractice = $35000 EMR system like eClinicalWorks = $10000 (amortized for upfront and yearly costs; software like eClinicalWorks costs ~$600/month on average)

The total expense of running a primary care (internal medicine) clinic = $250000 + $60000 + $35000 + $10000 = $360000 (let's just say $400K/year)

When I said these clinics on average make $1MM/year (of course, they are all near NYC/NJ metro areas), I truly am underestimating the income these doctors get from each patient visit. As an example, if I visit my physician at NYU Langone for my yearly check-up (at most a 10-mins encounter), the net reimbursement from my insurance they get for my visit (after the insurance company's discount/rate negotiation) is ~$250 without including the lab fees. Out of emergency and convenience, I happened to visit one of these primary care clinic doctors where my wife used to work at, and the doctor charged me $80 (that was back in 2019) in cash for an ear infection check (total of 5-minute encounter) and that's because I paid in cash and because my wife used to work for her. All of these doctors that my wife volunteered at or worked for (she got paid $15/hr max from some of these docs) are making a load of money from these clinics because we know a couple of them personally as well.

Again, I'm not saying you are understating the profit margins. You probably have been working with the clinics in some economically depressed or low-cost-of-living areas. I am only sharing what I know for truth in terms of the income of these primary care clinics in NY/NJ area.

> Most of these doctors would encourage the staff/volunteers who do the billing to put as many relevant billing codes as possible in the system

Is there any way to fight back against this? I've personally experienced getting a bill after a routine office visit with tons of charges I didn't recognize and procedures they absolutely did not perform. In some cases, it equates to $0 after my insurance pays, but in others it results in quite a bit of extra expenses (especially since I'm on a HDHP).

I've worked in the healthcare tech world (for both providers and payors) so I can comment a little here. There's a difference between "billing to put as many relevant codes as possible" and "billing procedure that were not performed". The former is perfectly acceptable, the latter is not and would be fraud. It's possible it was in error, billing is super complicated so I'd recommend just trying to get ahold of the clinic and talk to them first.

There has to be supporting clinical notes for anything that gets billed. There are companies/researchers that try to find large scale fraud and then pursue legal action under the False Claims Act (if they win they get up to 30% of what is recoverable) https://en.wikipedia.org/wiki/Medicare_fraud#Medicare_fraud_...

There are also companies that try to help maximize billing. Really they're just trying to bill for everything that occurred, they aren't doing anything exploitive necessarily.

The insurance company probably has a hotline you can call to report medical billing fraud.

Doctors and Surgeons in America are incredibly highly paid. People love hating insurance and drug companies but the cost of people is driving much of the price.

Disclaimer: I am a physician.

Physician salaries represent a small fraction of overall healthcare costs. Nursing/allied health salaries make up the bulk of any hospital’s costs and are often bloated due to powerful unions physicians don’t have.

For comparison, Canadian physicians are on average better compensated than American physicians.

I practice radiology, a specialty often considered “overpaid” yet my compensation is only high because of the amount of advanced studies ordered in modern medicine. On a per study basis I get paid less and less every year yet scans are getting more and more complex (many studies on this). In addition the standard to which I am held to keeps rising and I spend a significant amount of time doing unpaid QA, following up on my reports to improve my ROC, and at least a few hours every week reading the latest publications in my sub specialty.

The average diagnostic radiologist in the USA is grossing around 400k (no retirement fund, pension, and commonly no benefits).

What is reasonable compensation in your opinion for someone who has finished 10+ years of post-undergrad training and accepts significant liability for every report (a radiologist at HMS missed a lung nodule on an X-ray and lost 16 million in court)?

My brother and his wife both are doctors in the UK. At 400k you earn about the same pay as 3 or 4 doctors there. https://www.bmj.com/careers/article/the-complete-guide-to-nh.... To me that is a lot of money. I realize lots of tech wages are crazy high too, I dont understand that either.

Net margins != gross margins

So do lawyers.

Lawyers don't have the ability to kill you.

A prosecutor could have you killed.

I get where you were coming from but corrupt lawyers landed my handicapped brother in an unlicensed group home where he was mistreated and soon died. Lawyers can absolutely kill you.

This will be huge! I’ve found that self paying can be 1/nth the cost of paying through my insurance. But you need to request self pay up front.

Being able to better understand prices before hand will drastically help people reduce their healthcare costs.

I've seen the exact opposite of this - the self pay option would cost (for example) $300 while insurance would only get billed $150 for the exact same procedure. In the case I saw it, that meant the insurance paid out something like $12 and I was on the hook for the remaining $138. Which is roughly the same I would have owed if insurance had been billed the full amount and paid out the remaining $162.

This would be great news in a world where healthcare company revenue (which never quite trickles all the way down to retail shareholders) wasn’t just a one-way wratchet.

More opaque: costs more. More transparent: costs more.

Want a better deal? Choose better parents pleb.

> Even after the pricing data is public, “I don’t think things will change overnight,” said Leibach. “Patients are still going to make care decisions based on their doctors and referrals, a lot of reasons other than price.”

Ah, but in the USA, there are a lot of uninsured people who end up paying cash for stuff. And there is a corruption problem in that individuals who pay for services and materials get ripped off compared to what insurance pays behalf of an insured patient.

I would expect that this will have an almost instant beneficial effect for some of the uninsured or under-insured. It will be harder to charge them $500 for something that insurance pays $250 for in plain view. People will go back and complain, asking for rebates even after paying.

Why nobody ever talks about how much doctors are overpaid and over valued in this country? Why always demonize insurance companies?

I was in an ER for 7 days, I only saw the doctor 2 times for less than 5 mins each. In the final bill, the most expensive line item was doctor consultation.

Question to somebody who might know as this seems like a relevant thread to ask in.

If a person wants to pay directly in cash/credit-card for services rendered by a doctor, do doctors' agreements with insurance companies generally prevent them from offering a cash discount to cash-paying patiences lower than the insurance company negotiated price?

Yes, not only do they offer it but some insurers will give you credit card gift cards to help pay for treatment. That is how dysfunctional our medical system is at this moment. Providers will lock insurers at one rate, negotiate a different rate for self-insured that could be lower/higher. And insurers get wind of this and try to sneak pay the self rate.

I use one of the "health share" providers instead of insurance. They have negotiated rates with providers but they literally instruct you not to reveal that, get the cash price invoice, and then they will take care of further negotiations if applicable.

Presumably getting the cash price first lets them pick which they would prefer to pay: cash price or the negotiated rate. "Oh yeah, our customer forgot to inform you they qualify for this negotiated rate."

If a doctor accepts Medicare patients, that sets a price floor for cash. Legally, if you accept Medicare money, you cannot offer anyone a better price than you charge Medicare.

Sometimes they aren't allowed to offer a cash option at all, if you've told them you have insurance.

I have come across quite a few doctors that will not treat you at all if you don't have insurance.

This happened for hospitals too, and not much has changed. Cryptic billing codes will make this data hard to understand.

Now tell me about the relationship between health insurers and hospitals, and how they engage in pricing.

Next step is pharmacies. Find out which step in the chain is overpricing. The manufacturers, PBMs or local pharmacies, etc.

Hopefully this approach will help the situation: https://costplusdrugs.com/

I think we all already know it's all of them.

I've been reading about healthcare systems off and on, sometimes fairly seriously, for over 15 years, and my conclusion about the entire US system is that "the problem" is "literally everyone involved".

It's why various schemes that target one thing (say, excessively-expensive doctor liability insurance, which gets talked up as some super-big deal and a huge part of the problem in certain circles) are typically expected, on sober analysis, to have only a tiny effect on prices—everyone is taking too much money, at every level, so at most steps the % increase over what's reasonable isn't huge, but by the time you filter through a few layers of that with everyone piling atop the other layers, sure enough, it's a solid 30%-40% more expensive than it has any reason to be. But there's no one, or two, or even three things you can point at and say "if we fix this, we fix almost the entire problem". Every part of it needs a shake-up. It's like 20 different, though interrelated, problems, contributing to the bad result we see. Addressing most or all of the problem will take tens of measures, or else one big, sweeping, fundamental overhaul (M4A or what have you)

Agreed, but admin is probably the greediest and while adding the least value.

I've lost count of all the problems I've had with medical billing. I can't understand an argument against public pricing because it seems like a clear win if you believe in free market dynamics or progressive reformation of the health care system. But it seems to me the system is just rotten to the core anyway. It makes even my Libertarian self want single-payer healthcare, but I have no expectation the set of people currently working in the system would do anything but keep it rotten.

In the most recent case I tried to get a written quote for procedures because of past problems. I was given the run-around until all I could get was a verbal quote over the phone. But if that wasn't good enough, my only recourse was to delay getting a suspicious lump examined. I was then charged more than I was quoted, and I was even billed for procedures they didn't do. I actually heard one of the employees say "I added that because I thought he was using insurance". Still - hours of phone calls over several weeks before they would even bill me correctly without adding tests that they had no results from. And even then - more expensive than they told me because the person I was transferred to over the phone was in a different state than the clinic I called in the first place.

Absolutely rotten.

Don’t forget all that time spent on the healthcare side. Easily 10%+ of the cost of operation.

Very soon we'll have Congressional hearings after oil companies see profits climb 7000 percent over last year, and they'll look sad and do nothing.

I expect much the same from health insurance companies.

I'd be curious how their profits compare to pre covid profits given then many oil companies were losing a lot during covid due to sharp drop in demand.

Thankfully, that data is public. [0]

And it's still damning. Billions of dollars of profit were made, every single quarter. I have absolutely no sympathy for these companies, especially when they also likely received huge sums of cash from the federal government for this "sharp drop in demand".

>Over 10 percent of the more than 7,000 oil, gas, and petrochemical companies that received PPP funds totaling between $3 billion and $6 billion reported no jobs retained as a result of the loan. The CEOs of Exxon and Chevron got raises in 2020, while Exxon announced that it is suspending the company’s contribution to the US employee retirement savings plan beginning in October and Chevron is cutting 6,700 workers around the globe [1]

0. https://www.macrotrends.net/stocks/charts/XOM/exxon/gross-pr...

1. https://www.sierraclub.org/sierra/bailout-billions-dollars-f...

Not to get political, but pretty sure this is thanks to one of Trump's last executive orders while he was in office. Correct me if I'm wrong

You are correct.

Can anyone provide any hints on the search keywords to find this data at a given insurer's website?

Do you think this can have med to long term effect on revenues earnings and so stocks?

Thanks again President Trump!

I'll admit, this is one thing, perhaps literally the only thing, he did that I think is excellent for individual Americans.

Yep. That, and space force, and cheap energy, and renegotiating trade agreements, and not starting any new wars.

"Cheap energy" is not the boon you think it is. You have to consider other factors - deregulating the food industry and getting rid of the FDA would save millions of taxpayer's money, would lower prices of the supply chain and let consumers pay significantly less for food, yet would have drastic side effects. Cheap energy that requires deregulation, more alarming and precarious climate effects, etc might not be a net positive.

Likewise, "not starting any new wars" can be perceived as bowing to foreign nations by anyone who wants to frame it negatively, or vice versa as an amazing success for diplomacy.

> "not starting any new wars" can be perceived as bowing to foreign nations

This is an interesting take on peace in the middle east.

Hey, I agree with you there, but my point is that any aspect of politics can (and will) be reframed by both sides to support their preconceived beliefs.

I've edited my comment to speak in a more neutral political tone.

Thank you for saying so. Flooding the market with cheap, low-quality crude would drop the price of gasoline, but it'd be horrid for the environment.

Go to the gas station and tell the struggling families how good for the environment it is that they have to choose between essentials and going to work.

If you really think the war on fossil fuels in the West is in the citizen's best interests, you are delusional.

In the West everything is a scam. Our health system is a scam, the military industrial complex is a scam, our education system is a scam, our currency is a scam, our media is a scam, the president is a scam. What makes you think that ANYTHING going on in the West ISN'T a scam?

This is rapidly becoming a Monty Python sketch :)

I appreciated the right to trying life saving treatment even if it isn't officially approved or completed trials yet.

Trump is a troll, but when he was president, he did his job like all presidents before him.

I actually don't think the US president has that much power in practice. After considering the constitution, expert studies, standard procedures, state finances, and public opinion, for most decisions, the president doesn't have much choice. He will however choose how it is presented: make a show out of it or do it discreetly, take full credit or present it as somewhat forced, present a different aspect of it, etc...

In big democracies, heads of state are mostly the face of the country, but most work happen behind the scenes. Even in less democratic major countries (Russia, China,...) there is a limit on what the ruler can do. And if you are asking, I don't think that the Ukraine war is Putin's war, he played a role, but I think it is the almost unavoidable result of decades of tension and complex politics between Russia and the West.

> I actually don't think the US president has that much power in practice.

Completely agree. As the world gets larger and more interconnected/free, the power any one man can have decreases.

IPv6 mandate too

That has nothing on Al Gore, who invented the internet! And in much the same way as any other president doing something popular and uncontroversial: it would've happened almost no matter who was at the top.

(Point is, most legislation and XOs are largely bipartisan. Policy is driven much more by the machinations of hundreds of thousands of faceless/nameless actors than by the guy at the top. In both good ways and bad. The same is true in companies. The genius of leaders is mostly in their salesmanship.)

> The genius of leaders is mostly in their salesmanship.

The topic of a couple Adam Curtis's documentaries IIRC.

Obama's first presidential campaign won marketing awards: https://www.theguardian.com/media/2009/jun/29/barack-obama-c...

I agree. 99% 'people at the top' probably don't even know what IP is. Much less IPv6 migration problems.

However, the point of an xyz 'administration' is that they they take credit or blame for the work of faceless bureaucrats.

> I'll admit, this is one thing, perhaps literally the only thing, he did that

And the COVID vaccine?

Trump did a lot of good things, but he made everything about himself personally which overshadowed all his actions.

On a personal level Trump did a lot of stupid stuff, but on a policy level he didn't.

I would say thank you if he hadn’t put so much effort into undermining Obamacare and making things worse for a lot of people.

I hope this becomes the norm all over

IMO, as a non-affected Canadian, this is one of the (very few) good outcomes of the Trump presidency.

Anecdote: I recently had my yearly glasses update. Cost was $188 to me + $20 of insurance copay, so the glasses provider charged $208 for the glasses.

That's not too bad, so I asked how much it would be to replace/update the lenses on my old frames, entirely at my charge.

It would've been $450. Just for the lenses.

I passed. I find it scandalous how much they can charge when just before they were perfectly happy to accept less than half that amount.

Instead I got another pair on EyeBuyDirect for $80.

It's not just the insurers themselves, but the whole system. Burn it all down.

You might not realize it, but often the insurance company, and the glasses company are the same company.

The whole thing is a scam - pay insurance premium, to lower the cost of glasses (the copay) back to what it should be in the first place.

See: https://en.wikipedia.org/wiki/Luxottica "the world's largest company in the eyewear industry" "It also owns EyeMed, one of the largest vision health insurance providers."

I've been buying glasses from the cheap Chinese websites for ages now. There's some utility to being able to take your time in a show room, but the online venders are so cheap it only took one or two tries for me to find frames I like reliably. And they're $60 instead of $600 even with some premium coatings/features.

> It's not just the insurers themselves, but the whole system. Burn it all down.

Painstakingly, methodically, improve it, taking care at each step that you're making it better. :)

This is exactly how to corner yourself into a local optimum that balances how much people are pissed off, rather than how much people see benefits.

I'm not sure I agree. If it did happen, that's another problem to be fixed.

I do know that the way to design complicated, successful systems is to start with simple, successful systems and build on them: starting to design a complicated system from scratch seems like a recipe for much bigger problems, and that's what you'd have to do after "burning it all down". That's even assuming that "build something new" was the second step implied after "burn it all down", though you'll note that was not stated in the original comment.

I think we can agree that "burn it all down, and that's it" is the worst possible solution.

> If it did happen, that's another problem to be fixed.

Adding problems disguised as solutions is exactly the issue I'm speaking to. You don't actually satisfy needs in this model, you just end up chastising your subjects with "look at what we've already given you, shut up and take it because there are others who need help too". This incites division and factionalism because you've constructed a market which forces people to compete against each other for charity.

Charity is injustice, as Chris Hedges says, because charity demands a cost from the recipient. Beyond this competition, we also can be confident acknowledging that charity develops dependence, which is again the opposite of sustainable self-determinism.

The chaos of "nothing" is very destructive. That realization is at core of why Im a conservative.

https://www.lensabl.com/

The reviewer at wirecutter sent them some cheap foldable reading glasses to put prescription lenses in, and ended up with a pretty unique pair of glasses.

They likely had lenses already available for the frames they had in stock, or were frequently making batches of them.

OTOH the frames you already owned may be out of style, so they would have needed to grind a totally custom pair of lenses, just for you.

This doesn't work as an explanation, lenses are always cut to the frame.

My brother in law owned a lens cutting shop and they have boxes filled with lenses ground to all sorts of prescriptions that are circular plugs 3 or 4 inches in diameter. When the order comes in they use the pupil measurements and the frames to cut the lenses for the prescription down to fit into the frame.

I don't know how well I explained that but you can watch this video to see exactly how it works: https://www.youtube.com/watch?v=uCjGNUPO0WU

Thanks for this explanation - makes complete sense but never thought about it!

Nah. Outside of the vision cartel you can get replacement lenses for any pair of frames < $100, with all the various coatings and special shit for low hundreds. Likewise, using insurance to just replace the lenses, if a plan includes that, is often $50 or less. It's just shopping at the vision cartel without insurance = huge sticker price.

Any tips for how to stay "outside the vision cartel"? (In the US, if that is relevant...)

zenni optical. I mostly use contacts, but I have several 'backup' glasses. You can get decent looks frame for like $11 shipped.

Yeah; that won't work for replacing lenses in existing frames, but for a new pair it's what I do. $50-60 and I've got my prescription in a frame I like with all the coatings.

This is regulation everybody should be able to get behind. How are these markets supposed to function efficiently with healthy competition if critical information like this is hidden away?

I don't think this will lhave much impact on health care cost. The cost is high because it is paid through employer and therefore it is hidden from you. If the law was to force employers disclose lost wages for employees due to health car, that would have bigger impact. The real impact will come if employers turn off the medical insurence coverage entirely and everyone has to cut the checks themselves.

Employer-provided healthcare is a solution for the problem that health insurance, unless it is mandatory, will tend to attract a self-selected group of expensive customers and, in turn, make health insurance (even more) unattractive for healthy people.

Because the obscurity of the prices is a result of regulation as well. We need less layers of control with "unintended" consequences.

Can you elaborate on the regulations that you are referring to?

Generally the issue with pricing in healthcare is insurance, which has the perverse structure of being consumed as a tax benefit without competition to get patients.

There isn't a specific rule that explains this but there is a whole system that begets this as the most efficient system by the current players.

Can’t point to the source, but I think we all know that there is some sort of regulation requiring us to pay providers for services when those providers refuse to provide pricing information at before or during the time of service.

That sounds, among other things, like something entirely unrelated to the issue.

I think you just have you sign documents saying you're responsible for paying whatever the cost turns out to be. Why would a regulation be required to enforce that?

Also why wages and other transaction data (like it is for real estate in most states) should be public.

i don't follow this argument.

thr salient point for me is that people should be able to see prices before they commit to contracting to pay them (e.g. by receiving healthcare).

With wages, employees (and employers) get to see their price before committing. So the need for transparency seems like it would need a different justification.

Price transparency is necessary for market participants to observe the movements of the supply and demand curves.

For example, declining prices of labor indicate to suppliers of labor to reallocate labor supply to other fields.

Increasing prices of labor indicate to suppliers of labor to reallocate labor supply to that field.

thanks for this explanation. it's something I've not thought about before and it's enlightening.

It's because information asymmetry allows for maximum profits.

George Akerlof's work on information assymetry, especially his 'Market for Lemons' is super interesting and I can only recommend reading about it. He won the Nobel price 2001 for it.

https://you.com/search?q=George+Akerlof+information+asymmetr... https://www.investopedia.com/terms/g/george-a-akerlof.asp

I view healthcare as a service, like utilities. There is a reason the PUC exists in so many (all?) US states.

Libertarians ret-conned Adam Smith's definition of "free market" to mean "complete absence of regulation". And they use this appeal to authority (as well as the naturalistic inevitabilism that originates in evo-psych) as a cudgel to push for the permission of exploitative practices. We are becoming more and more aware as a society of the effects of this campaign, which is heartening, but reactionaries stand at arms to defend their ideological convictions to the death.

For the record, what Adam Smith actually meant by "free" was "everyone is free to participate -- barriers to participation are controlled for and mitigated to the best ability". This requires regulation to discourage and ideally eliminate monopolistic behavior.

Those libertarians who have famously been in charge of the United States since it's founding and got the US into the current health care cost mess?

Nah, not to be political but the parent commenter probably means the retconning folks in the GOP who claim libertarianism as a political ideology but are often anything but.

Left libertarianism is summed up as: live and let live. Very different.

That would get in the way of unadulterated profit, you see.

Health insurers in the US have a cap on how much of premiums can go to profits.

Doesn't that just mean that they have an interest in keeping these costs high? The higher the costs, the larger that % is for the in absolute dollars.

If all the costs come down, they are allowed to make less money.

Yes, this is one of the more unfortunate unintended consequences of the ACA.

Insurance costs were increasing at a higher rate each year before the ACA was passed or went into effect.

It may have been unintended but it was defiantly not unknown, I remember people pointing out this exact problem during the debate around ACA.

"unintended"

Insurance companies wrote the bill.

Are you implying that before ACA, insurers had an incentive to keep costs low?

In a vacuum, that would make sense, but most of these insurers still have to compete with at least one or two other big players.

So while you could increase your costs so that you can increase your premiums thus getting 5% of a larger pie, that assumes that you can increase your premiums without losing customers to competitors.

For the most part, on the ACA marketplace, all the plans are pretty similar, so price is really your main differentiator.

Perhaps the obstacles of switching providers makes this competition less of an issue.

Bingo. This is why they loved the ACA. Only allowed one scoop of ice cream? Great I'll use an enormous scoop.

That enormous scoop results in 5% or less profit margins.

Compare to tech companies’ profit margins.

Yes, I agree that price controls set by the state are a bad idea.

Yes. Although painted by reactionaries as a communist plot, ACA was modeled after Massachusetts’ “Romneycare”.

It’s typical old school GOP policy of leveraging private sector actors with public sector dollars. It’s not awful policy, but did create bad cost incentives and encourages cartel like health networks.

It’s called Romneycare because he got it implemented as a lightweight alternative to a pending proposal for more universal coverage.

It’s also similar in nature to the Swiss system. Not a lot of GOP voters in Swiss cantons.

You don’t need to be a reactionary to see that it was very poorly written and that the implementation was even worse.

That's a meaningless cap because you can decrease profits at will by increasing inefficiency and unnecessary costs inside the company.

It’s called medical loss ratio (MLR), and insurers are required by law to spend 80-90% of premiums on medical care.

They can get there by overpaying for care or by refunding money/charging less. But they can’t get there with increased internal administration spending.

IIRC, it's 15%, meaning that they can only have $675,000,000,000.00 in profits.

That is $675,000,000,000.00 they can take from us and instead of using for healthcare or even healthcare administration, it's just additional money that they took.

> it's just additional money that they took.

When did they take it?

All the 10-Ks are showing me 5% or less profit margins.

They have low profit margins, but they massively overpay for the care, meaning that it's still incredibly inefficient.

The problem with this approach, even before the ACA was passed, is that if you have a maximum profit fraction, the way to maximize profit in absolute terms is to just charge more and spend more - it encourages absolutely the wrong behavior in terms of costs management.

It seems like the cap should be unnecessary in the near future if we have full price transparency.

Premiums are not the only source of revenue insurers have.

Would you like to provide a positive statement that coincides with this negative one?

Copays, deductibles, revenue from providers, etc.

It this a windfall profits tax?

The free market produces the most efficient outcome

Sadly, no. Or it does, but only if one defines "efficiency" tautologically as "what a free market would do", which is sadly too common. There are many factors that contribute to inefficient markets, one of which is information asymmetry among the participants. Keeping markets efficient takes work, and, indeed, sometimes requires regulation.

It produces a maximally efficient outcome (by some definitions of efficient) if various requirements hold about the market, the goods in the market, and the market participants.

Almost all real markets deviate from those requirements. Sometimes these deviations aren't enough to prevent the market from producing close to maximally efficient outcomes, and sometimes they are enough to make the market produce outcomes nowhere efficient.

This is one of the reasons why an economics degree requires coursework beyond Economics 101. :-) Economics 101 is the equivalent of Physics 101 where we mostly ignore things like air resistance and friction or Electronics 101 where we ignore things like parasitic capacitance and parasitic inductance of component leads and keep frequencies low and time scales long enough that we don't have to worry about speed of light delays between different sides of our circuits.

It's the courses after the 101 courses were you start to get messiness that is the real world of economics or physics or electronics.

Anyway, when a real world free market deviates from the requirements to produce a maximally efficient output one of the ways to make it work better is to use regulation to try to make it behave as if the missing requirement held.

A good example is when you have a good that costs the maker a significant amount to make but that anyone can easily copy perfectly at close to zero cost. A free market will tend to not be efficient for that good because makers have trouble making a profit (or even staying in business). Consumers pay near zero for their copies and so can consume as much as they want, which makes them happy, but there will be much less variety available than consumers want.

A long time ago the approach to that was to just not have a market for that kind of good. Makers would find some rich patron who was willing to pay to have new goods made. Free copies might still be made for the masses, but the rich patrons gained social status among their peers by being patrons of famous makers so would keep patronizing makers.

A regulatory fix is to make it so only the maker is allowed to make copies of their goods. You can then have a decent market in those goods. It's still not ideal because although it solves the problem of the market getting makers to make it does raise the price to consumers above the theoretical free market price which should be near zero.

Another approach would be to have the government pay the makers, and then let anyone freely make copies. This is probably the way to get closest to maximal efficiency but it raises the problem of how to have the government decide with makers to support. One approach to that is to try to track which things consumers are actually using, and then pay the makers proportionally to that usage.

Another issue with that approach is where should the money for the makers come from? It could come from general government revenues but then you have the problem of deciding how much should be used for this. Also you will have people who don't like these kind of goods and object to their tax dollars going to support them. Another approach is to tax use of these goods to fund the makers, or tax something that correlates well with use of the goods.

Let's not overlook that an approach that requires tracking of consumer use might require surveillance that, in the hands of someone who wants to do something less benign than just figure out how to allocate maker pay, could be used for evil purposes. That might be too high a price to pay just to get the most efficient levels of production and consumption of this particular good.

Real economics is complicated and messy.

"Doctors hate this simple trick to reduce <illness>."

That's the strange spam message I could never understand.

Surely doctors would be delighted at any method to improve health?

So I always assumed the "trick" to be quackery with dangerous side effects. After all, why else would "doctors hate it"?

Eventually I realised these messages are exclusively US American, the only place on the planet where doctors could plausibly resent people improving their health at the expense of their profits (or at least that's the implication that seems to rest on an entrenched cultural cynicism).

Am I totally wrong?

It's not that doctors resent people improving their health, it's that people are wary of their healthcare services existing in a for-profit system- these types of scams play to the paranoia and fear that people associate with medical establishments selling treatments rather than establishing preventative health. Basically it boils down to the sentiment people generally have that doctors benefit from sick people because they make money from people being sick.

Anecdotally, I remember growing up in Brazil and we were taught in school about human anatomy and all sorts of health issues and how nutrition, immunization, proper hygeine, etc. helped prevent being sick... as well as home remedies for simple illness. But here in the US people seem to seek some authority to provide solutions, and these scam pseudo-medical ads play to this and fill the gap where state medicine and folk knowledge would otherwise be.

Simply put, it's a trust issue.

I think in many places people establish a relationship with their primary doctor, where the Dr knows them and their medical history in detail. Growing up, my family doctor had treated my family for generations and was familiar with me as a person even though I did not have many appointments.

But since I've moved to America most of my Dr. appointments are focused on the issue I am having as opposed to treating me for an issue. The Dr skims through my medical history to see if the issue relates to anything relevant. The appointments are hurried and impersonal.

There is a business aspect to medicine in America- it's business more than it is healthcare, really. I have often felt more like I am going in for maintenance like a machine than going in to speak to someone who uses their knowledge to help me be the healthiest I can be.

I know a lot of people here who also go to doctors and have their issues dismissed, minimized, or attributed to stress- and leave without any sense of what to do, besides grab a prescription or see a specialist. There is a helplessness I perceive in many people, and some end up with many prescriptions for different things and later find out there is an underlying issue that was overlooked all along. There are many many stories of people whose problems may not have persisted so long if their medical providers had communicated better- which perhaps most of them have no incentive to do, because this is time consuming and therefore loses them time/money. Whereas in a system where private doctors have to conpete with state provided healthcare, my anecdotal belief, they have an incentive to do better.

Anyway, having an impersonal system leaves people feeling like they need to look for solutions themselves, looking for hope at a cheaper price than a stack of copays and possibly having to deal with waiting long times for referrals. This is also true of anyone anywhere feeling desperate and looking for some control in regards to their health problems. So this opens the door to a market of people offering miracle cures. Just happens to be there is a lot of distrust baked into the reality that healthcare in America prioritizes profit over people.

Yea, it appeals to the same brain matter that conspiracy theorists appeal to: "The mainstream is wrong, and only we few lucky people know the real truth! <Authority figures> are lying to you with their awful _complexity_ and _nuance_ so they can take your money, and hate our truth because it is simple and doesn't let them take your money."

It's more that some people have a realistic view of incentives, and know that people tend not to like things that reduce their income.

You're overcomplicating your analysis. The purpose of ads is to generate attention. The message is effective for Americans for the same way that it is effective for you. It leaves the reader with multiple questions, which is more effective than an alternative phrasing which may leave someone with one or zero questions. Those ads are not posted by medical professionals, they're posted by scam operations.

Healthcare in the US uses specialized labor just like any other developed nation. US doctors are not concerned with financial operations, they're focused on clinical duties. For any typical hospital, the people who do anything with finance or billing are not even in the same building as doctors.

Not at all. The solution in America is often to medicate, not change your own behavior or diet. If you watch regular television here (with commercials), every other commercial is for some new pill you need to take. When you go to a doctor's office, it's not uncommon to see a "drug rep" roll in a suitcase with samples of new drugs they want doctors to push (which inevitably comes with financial incentives).

Being a doctor is a business just like any other. And just like any other business, some operate ethically while others don't.

Those messages come from the "health supplement" industry, which is basically a segment of the health industry that the FDA is prohibited by law from regulating. And it entirely feeds on consumer cynicism towards the health industry, despite the fact that the major players in "health supplements" are guilty of everything the health industry is accused of being.

What you're saying is a revalation to me. I did not realise the US medical science was split along economic/regulatory lines. Surely this is doing everyone a disservice?

> That's the strange spam message I could never understand.

Well the message is likely untrue so maybe it's best not to try to understand it.

> Well the message is likely untrue so maybe it's best not to try to understand it.

I hear you saying - don't give credence to idiots.

But at the same time that's a strange philosophy as I've found some of the most interesting truths come from understanding the lies people tell, and why.

You are totally wrong.

Quackery exists all over the EU and other socialized systems. The idea that you can fix issues by drinking water or vinegar instead of going through Chemo or surgery has always been an easy sell to the gullible.

So you're saying my initial interpretation is the correct one? "Doctors hate this" because it's fake and leads people to false hope and ineffective outcomes? But I'm still confused. Other than as an arresting "attention grab" (as another commenter says) why would someone advertise a product by denigrating it, even semi-ironically?

"Hey Doc, I've stopped going to Chemo because the internet told me drinking vinegar would cure my cancer"

The scam only works if you isolate the gullible from their doctor.

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