Medicare Pays Different Prices for the Same Drug | Hacker News Reader

Medicare Pays Different Prices for the Same Drug

wsj.com

> “This stuff is such a black box,” he said. “You never really know how much your drugs cost you.”

I tried a course of allergy injections (I didn't notice any effect). I asked how much it would cost - NO ONE KNOWS. They have to submit it to insurance and then insurance spins a wheel and says a price.

Health care is not designed for any human in the system. Almost everyone is having a terrible time. It's all for the shareholders.

That doesn’t seem to quite explain it. I went to a non-profit hospital – which shouldn’t really have shareholders IIUC – and still got ripped off by confusing pricing and misleading estimates. My uninsured friend has a “good faith estimate” from a hospital that literally quotes the price as being “between $0 and $50,000”.

From the outside, a hospital seems like one thing; but it's really nothing at all like retail. Some doctors can bill separately, the pharmacy can bill separately, different departments can bill separately, different diagnostics can bill separately. One well-meaning hospital can't fix this; it's baked into everyone's expectations.

Could be driven by Private Equity.

Are the bigger hospitals like Mayo Clinic, university medical schools and MD Anderson like this too? I've only visited Mayo Clinic for the executive checkup plan which has a fixed and upfront sticker price (I'm in Europe).

My hospital system, like many others in the US, is owned by the local government. My experience is the same as yours.

Some non-profit hospitals have for-profit management companies.

It's the reason why healthcare is so expensive in the U.S. because this is not just true for drugs, but for procedures as well.

IIRC. I worked orthogonally to medical billing, but never did billing directly.

Fee schedules don't get published. Because if providers know insurance is willing to pay $125 for a procedure, they're going to charge $125 rather than what it cost to do it. So if they want to know, they have to be deduced by the providers.

So providers charge out the fucking ass for everything. Then submit that charge to the insurance. The insurance will say, "We'll only pay $75 of that $300 bill, the rest is patient responsibility". And often, what will happen is that the doctor will write off some or all of the remaining $225, because they weren't looking for that anyway. The charge is just to make sure they get the maximum from the insurance.

The price is completely divorced from the value of the services provided. It's become this weird game.

I've been to doctors that refuse to treat you if you don't want to go through insurance and pay cash upfront for this reason. If they name their real price insurance can (apparently) go after them.

I could understand maybe refusing if I don't have insurance to deal with rare but expensive complications but I do, I just know that it'll be a year long fight and I'll have to pay it all at the end anyway.

If they take medicaid, they might not be allowed to accept private pay.

Even from people not insured by medicaid? Fascinating.

When my son was on Accutane a couple years ago it was a 7mo course. His prescription, from the same pharmacy with the same insurance, never cost the same amount twice.

Just insane

Why is this news worthy? US Healthcare is littered with various middlemen who have control of different parts of system and regions and any national program won't have flat price because of these middlemen.

EDIT: These middlemen have lobbied Congress to prohibit Medicare from using any government power to force this middlemen to cooperate.

It's not new news, but it's certainly worth repeating in the hopes people will eventually listen. Our system costs way too much for the outcomes we receive in return (the whole system, not just the socialized parts). ACA sort of helped, at least with coverage, but not really with prices. And yet people are terrified of "socialized medicine" ignoring the fact that a significant portion of the population is already successfully receiving socialized care through Medicare, Medicaid, veterans benefits, etc. Le Sigh.

Medicaid in particular is managed by states and the service, reimbursement and access varies wildly between different locales.

There is an elephant in the room that rarely gets the attention it deserves is that 17.3% of the US GDP is contained in the healthcare system. This problem has grown so large that if we fixed it suddenly we could see a tenth of our GDP simply vanish overnight and it'd cause economic shockwaves across America. Twenty years ago this problem could have been solved in a relatively smooth manner - at this point I don't even know if my personal dream of a perfect solution would cause more harm to average people's lives than it'd help.

We are up a creek and determinedly throwing every paddle we find as far as we can manage.

Somewhere between 15-30% of health care spending in the US can be classified as "waste" or "administrative overhead" (values and descriptions vary by study). Even if we cut that 15% waste in its entirety, that's moving us from 17.3% to 14.8%. Is that going to leave some administrative staff looking for jobs? Absolutely. But, I don't see that totally crashing the economy, not when that money is freed up for productive spending (more cars, more travel, more dining out, whatever).

In the long term the market will absolutely adjust to more efficiently using that potential - but that's the long term. If America suddenly socialized health insurance millions of people[1] would be out of a job. The long term outlook of the economy would much better - but the short term would be extremely painful.

1. UHC appears to be about 440,000, CVS about 300,000, Elevance (aka Anthem) 104,900 - those are just a trio of the larger insurers out of hundreds.

That's assuming every job at those companies is absolute waste/overhead. I'm not convinced that's true.

If we kill private insurance and move to Medicaid-for-All (I'm not suggesting this is the right approach, just thinking aloud here), the size of the Medicaid bureaucracy would have to grow, offering some of those former UHC/CVS/Anthem employees an "easy" transition into similar work.

Anyways, no change this big would ever be made overnight. So, phase in changes over 5-10 years. Problem "solved".

It's not solved. I know many on this website have probably changed technology they used and used to learning but that's not the case for vast majority of people. They just want a job, pushing the buttons/emails, collecting a paycheck and doing not work thing.

As non FAANG person, the number of developers I've met who continue to greenfield in Java 8 and .Net Framework is mind blowing and any attempt to make them learn something new falls on deaf ears.

Wasn't Obama swayed against a single payer system, because eliminating all the middle men would end up with like 2 million people going unemployed?

More likely he was swayed because ACA was closer to a sure thing than anything remotely socialized.

Obama was "swayed" because there were several "democrats" whose vote was required to pass anything who explicitly said they would not vote for single payer.

People get this weird idea that democrats "aren't doing anything", but you need votes in the US system to do anything and democrats consistently lose elections. The people who stayed home and didn't vote will then insist that democrats didn't do enough to win their vote. But you can't do anything in the US without votes.

  > whose vote was required to pass

The 111th Congress had a historically large majority that has not been seen by either party since.

https://en.m.wikipedia.org/wiki/111th_United_States_Congress

They had more than enough votes: the ACA passed the senate 60-39. The senate filibuster that led them to compromise on the public option is a procedural rule that can be altered by simple majority, not a law.

Removing the filibuster is a "nuclear option" - once it's gone, when the Senate inevitably swings the other way, the new majority will make use of it's absence to ram through whatever they want. There are arguments that this would actually be preferable and moderating, but that's a whole other debate.

The 60 member supermajority was also fragile. And only lasted 72 days. There was a time limit on passing anything major.

None of which is to say your wrong, only that there was a bit more nuance than "Dems had majority and flubbed".

I had to look it up, defense spending is 2.3ish% of GDP, and healthcare is 17.3% of GDP. There does seem to be a lot more fat to cut in healthcare than defense.

I have never seen that number before, that is fascinating.

Why would socializing or privatizing fix anything?

The root problem is that there's too much fluff and middle men and bureaucracy and paper trail and it all has to be paid for.

Simple answer: economies of scale.

Would that be better than a true "free/open market"? No idea. But, it seems we get the worst of both systems in the US, which has led to all sorts of regulatory capture, massive administrative waste, etc.

I support M4A for other reasons, but as of today the US governments(s) spend more on health care per citizen than many/most European countries with universal health care. A little more than a third of Americans are on Medicaid and/or Medicare. The scale is already there and the costs are already out of control.

I think the GP is right that the inefficiencies are baked in at every possible level. M4A makes people's lives easier, but it won't solve the cost problem. We're at a point where we need massive reform of the entire system, not just nationalization (or privatization, if you want to go that way), and there would be a lot of people unemployed (or suddenly asked to do a lot more work[1]) and a lot of pain re-aligning people's expectations around medical care.

[1] One example of this is the degree of specialization and division of labor that is just wasteful. A friend has a medical job where he is on-call to monitor a machine. He does nothing else. He rarely works more than a few hours a week. Another example: a family member needed an ultrasound. The doctor's office had an ultrasound. The doctor wanted an ultrasound. It was urgent. The ultrasound tech had recently quit. He ordered an ultrasound from an imaging center with a two-month wait time instead of simply doing a very easy ultrasound himself, which he would be the one required to interpret anyway. He wasn't busy either; he chatted about golf for almost a half-hour. In his mind, it was simply not his job. (Perhaps insurance also won't compensate doctors for performing ultrasounds, only techs. Who knows.)

To your example... Would the physician in your example really do the reading of the ultrasound? Every time I've had imaging done, a radiologist has done the initial read of the scan - the ordering physician has only worked on the treatment plan. Maybe my experience really is just another example of what you're saying - I don't know how capable a typical GP is at reading ultrasounds or MRIs or whatever else. Possible counter-example... my wife broke her pelvis a few years ago in a bicycle crash - the attending physician at the ER totally missed the break and sent us on our way (with instructions to follow up with a specialist later). Maybe a radiologist would have caught the break up front and saved us some pain+suffering.

To your point about Medicaid/Medicare spending... one of my (perhaps naive) thoughts is simplifying the system would help cost cutting debates because we'd all be trying to solve the same problems. Right now, we're all spread across different programs/systems, so it's almost impossible to even talk to individuals about cost savings.

> Would the physician in your example really do the reading of the ultrasound? Every time I've had imaging done, a radiologist has done the initial read of the scan - the ordering physician has only worked on the treatment plan.

My last ER visit involved being dismissed by the ER doctor with a diagnosis I knew was wrong. I played Dr. Google when I got home, went to a nurse practitioner, told her what I thought it was and requested an ultrasound to confirm. The tech came in and did it, and we all three saw exactly what it was and she ordered a referral to the surgeon on the spot. I'm sure there is some complex of rules regarding radiologists, but I don't know what they are. They also don't send one in for most prenatal ultrasounds; it's just the doctor and the tech, or sometimes only the doctor.

I would expect a radiologist is only needed in certain complex cases, or for certain types of scans.

> the attending physician at the ER totally missed the break and sent us on our way (with instructions to follow up with a specialist later). Maybe a radiologist would have caught the break up front and saved us some pain+suffering.

Maybe. A lot of doctors are just not great at their jobs. I have many, many stories about this. If I were once again to play Dr. Google, I'd hope that the reason he missed it is because it was a comparatively small and non-obvious break, for which there isn't really treatment besides rest anyway. Since you mentioned averting pain and suffering...maybe not.

I switched to VA healthcare totally since the PACT Act was signed. So nice not to have to worry about this shit anymore.

https://archive.ph/vlVDP

medicare.gov has an estimator in its plan comparisons. You put in your prescription drugs and it tells you how much it will cost for the year for different part D (drug coverage) or part C (medicare advantage + prescription drug coverage) plans.

Do no use it. It's always wrong. It can completely mess up your whole year. I once picked the cheapest advantage plan based on that and it was completely incorrect, i ended up paying outrageous prices.

You have to actually look up what each plan says in its terms (what tier is my drug and how much do i pay for that tier) and calculate a cost for the year. You can find negotiated prices for the pharmacy / company pairing at q1medicare.com. Or you can call the sales department of the different advantage or part D plans.

Reform health care by returning to a free market

If we allowed a TRUE free market the US drug prices would collapse. If I could buy a drug from an online pharmacy in literally any other country I would be saving 90% of money.

It is absolutely crazy that us Americans accept this broken system.

> It is absolutely crazy that us Americans accept this broken system.

Want to talk about broken systems?

The US government bailed out GM for $51 billion dollars. That's billions that could have been spent on schools, or healthcare or much needed infrastructure. This month, GM spent billions on stock buybacks and millions on bonuses for execs while firing a ton of regular workers.

I find it staggering Americans are not rioting in the streets. So many systems are utterly and completely broken.

> The US government bailed out GM for $51 billion dollars.

The headline number here should be ~$11B [1] -- while the US put in more than that, they also got most of it back.

[1] https://www.reuters.com/article/us-autos-gm-treasury-idUSBRE...

The bailout allowed the government to impose strict conditions on GM that benefited the UAW and which they wouldn’t have gotten in a bankruptcy.

Wasn’t the GM bailout a loan that was repaid? If so, it’s not quite a 1-1 comparison to spending that much on schools

As per another comment, $11 billion was never repaid - pure bailout.

The U.S. already spends an immense amount on schools, healthcare, and infrastructure. Our problem is not the amount spent so much as the lack of results commensurate with the cost.

Bankrupting other countries' socialized healthcare programs is an unacceptable solution. Canada already has to contend with frequent medication shortages due to the stress American health tourism puts on the system.

How would fixing our pricing do this?

One of the following is likely to be true (or a blend of the two): 1 - The US subsidizes everybody else's lower prices by overpaying.

2 - BigPharma is taking advantage of regulatory capture in the US to charge more than a "free market" would allow.

If #1 is true, and the US starts negotiating prices, that's on the other countries to figure out. Not our concern.

If #2 is true, and the US starts negotiating prices (or otherwise fixes the market), great, we've removed rent seeking and freed up massive piles of money for more productive spending.

The US is under no moral obligation to keep the healthcare of other nations in a solvent state.

> If I could buy a drug from an online pharmacy in literally any other country

Is something actually stopping you from doing this? I've never tried Rx drugs but I've imported non-FDA approved sunscreen before and it went fine.

I'm allowed to physically travel there, get an Rx, fill it, and take it back home. Does the online nature introduce a different hurdle?

https://www.fda.gov/industry/import-basics/personal-importat...

No, you are not allowed to travel there and take it home, but often the border guards look the other way

“ In most circumstances, it is illegal for individuals to import drugs or devices into the U.S. for personal use because these products purchased from other countries often have not been approved by the FDA for use and sale in the U.S.”

Serious question because maybe I'm ignorant about it: was it ever a free market?

And the follow-up question is: should it even be a free market given that healthcare is not very conducive to shopping around and price matching, it's always possible to allow private clinics while providing a decent level of care to society in general. I simply do not see how a free market healthcare will be any better.

Yes. Yes.

Care to expand on it? Not much to converse about with this kind of reply.

Unless you're just an ideological parrot, then carry on.

Except there cannot always be a free market for healthcare. That only would works for preventative care assuming that there is enough supply that you can make a decision because there might be shortages of a specialty you need and cannot get an appointment for 6+ months.

If you're significantly injured in a car accident (to use an example that does not weigh on past medical history), you do not have time, nor likely the wherewithal, to be looking up which EDs are going to be cheapest and then comparing it to their most common outcomes to similar injuries to make the informed decision to which hospital the EMTs will haul you. Rather, you will be taken to the closest available ED with availability.

The existence of some amount of emergency care should not drive the structure of the whole market

I recently learned that my neighbor works for Partners in Health (pih.org). They have built an open-source EMR, which they use in far-flung regions like Haiti. I suggested that they can maybe sell their software under commercial terms in the US, to subsidize their international work. Her comment was that EMR systems like Epic are actually a billing system, less a medical record system. The whole system has been built to be opaque.

Honestly, at this point, it feels like the whole US insurance system is run by and for the insurance companies. People, of course, never got much out of it - and it would be cheaper for the government to adopt Sweden's system. I did some calculations once, and if you take Sweden, they spend in total per person four times less than the US government (Medicare and Medicaid alone) does per person (at least in 2022).[1][2][3][4].*

It's somewhere on my "things there has to be a super powerful lobbying group for because no one benefits from this" list, along with the continued existence of the penny.

*The government spent 1750 billion dollars on Medicare and Medicaid. It could have spent about 440. That gap of 1.310 trillion dollars is the vast majority of the US deficit[5]

Sources [1]: Swedish government spending: https://sweden.se/life/society/healthcare-in-sweden [2]: US government spending: https://www.cms.gov/data-research/statistics-trends-and-repo... [3]: Currency converter: https://measuringworth.com/datasets/exchangeglobal/ [4]: Population: The graph that pops up when you search on Google for Sweden population and US population. [5]: https://fiscaldata.treasury.gov/americas-finance-guide/natio...

It's not just Medicare, the whole system is confusing, frustrating, and flat-out broken for anybody who relies on prescription drugs to stay alive.

We have several prescriptions in the family that our insurance won't allow to be filled locally, instead passing to some sort of bulk mail pharmacy. Which would be fine, except you don't know which drugs those are until you take the presciption to the local pharmacy only to have them tell you they can't fill it under our plan. But, by that time, they've got the prescription in their system, so now we need to call the doctor and have them figure out which specialist pharmacy to use (for which the doctor charges us an extra fee), creating more overhead, more cost, more annoyance.

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