I recently had a planned, non-emergency outpatient procedure that did not involve any incisions, nor medications, lasted about 2-3 hours. Hospital billed $100K, insurance negotiated to about $20K. The actual doctor only got $2-3K.
Makes me wonder why doctors don’t build their own hospitals…
Doctors are not allowed to own hospitals. That was one of the stipulations of the ACA (Obamacare).
Link to the AMA, though not endorsing them as saints on the topic of healthcare costs. https://www.ama-assn.org/about/leadership/end-restrictions-p...
Doctors who own DI practices on the side, or shares therein, tend to vastly over-refer their patients for DI.
I shudder thinking about this applied across a whole trauma center.
But those numbers have no relation to reality. The amount you would pay as a private individual would be something else again.
> The actual doctor only got $2-3K
Could the doctor do the procedure on the street with their bare hands? That $2k also gets taxed and pays for education (it isn't disposable). I think you are hinting that you think the worker should get much more of the profit - but I'm unsure what economic theory that is called.
Exactly. The worst horror stories I've heard aren't of uninsured billing—self-pay individuals typically get a steep discount from what I've seen—it's the out-of-network hospital bills (especially pre-No Surprises Act) that consistently screw people over.
In those cases the hospital would bill the insane number they officially ask for from insurance companies, the insurance company says "nope" and pays the portion they consider fair, and then the patient is (or at any rate used to be) on the hook for the remainder. If they were billing as uninsured the hospital wouldn't have come up with the insane number they started with, but now that's on record and that's the number they want.
An obvious incentive is that the insurance company wants a big number so they can sell the patient on just how amazing their insurance is!
> The average salary for a Therapist is $31.40 per hour in United States
And yet my insurance is billed at $1,000/hr. They knock this down (thankfully!) to $20/h, and merrily claim to have saved me 98% of the bill! Wow! And yet … I'm paying 64% of the therapist's salary.
If I were uninsured, Google says that I would most assuredly pay nowhere near $1k/hr. I.e., the "98% saved" bit is hot, steaming bull.
You’re interpreting this wrong. For a hospital to be in-network, it has to have a contract in place with the insurance company that sets its reimbursement rates.
What’s closer to what’s happening in your example is that the hospital knows that the insurer will only reimburse 20% of the “cost” of the service, so it inflated the nominal cost fivefold to ensure the actual cost of the service is covered by the insurer.
Of course that creates an awkward situation when the insurance turns out not to cover it and a private individual gets hit with the nominal cost.
But to anyone who doesn’t think to question it, it’s great for the insurance company. It looks like they stood up to some asshole hospital, they’re giving you an amazing deal, and that healthcare would be impossibly expensive without them.
Not that everyone else is jacking up their posted prices for the purpose of negotiating with the insurance companies.
> Chargemaster rates serve as baselines when negotiating the rates at which these payers will reimburse hospitals, which is why they're often much higher than actual costs. A Health Affairs study found that in 2013, the typical hospital with 50 or more beds marked up the costs contained in its chargemaster more than fourfold. Some services such as CT scans have charge-to-cost ratios of almost 30, while others like routine inpatient procedures are much lower at only 1.8.
> Insured patients do not normally pay chargemaster rates, since their payer reimburses at the negotiated rate and passes on any co-pays and below-deductible responsibilities.
https://healthcaremba.gwu.edu/blog/chargemaster-hospital-adm...