Hacker News Reader

Comment by refurb | Hacker News Reader

Have you seen the profit margins for the hospitals with these high prices? They certainly aren't raking it in.

I agree that's stupid, but that's how the system works for paying for medical care in the US. From the perspective of the hospital, it makes perfect sense.

View on HN

That makes little difference, or brings little consolation to the parent of the child at end of the day. That was kind of my point. Take the hospital system, laws, economic environment, regulations, solar wind, doesn't matter, mix it all in, shove it in one side of the black box, and at the other side, a bill of $1600 comes out and gets sent to a parent for a dab of glue to fix a minor stitch. Whoever needs to lose and go bankrupt, the insurance company, the hospital, the doctors, the congress-person, doesn't matter, as a supposed "developed" society we have collectively and miserably failed if at the end of the day, it is the parent who has to pay that price for that procedure.

> Have you seen the profit margins for the hospitals with these high prices? They certainly aren't raking it in.

The entire notion of hospitals being profit-making enterprises where people die when they can't afford to pay is literally absurd.

Er, the profit margin metric exists whether or not the hospital is for-profit. All operations have a "difference between income and expense".

Have you seen the profit margins for the hospitals with these high prices? They certainly aren't raking it in.

These hospital are almost exclusively non-profits. Measuring the profit margins of non-profits is folly. They funnel the excess money into salaries, marketing, equipment and expansion (often unnecessary).

A tumor doesn't have a profit , it just grows diverting more blood from the body and expending energy with one purpose of growing. In hospitals case, their purpose is to grow and provide fat salaries to their executives.

Profit margins is just a jargon thrown around here. A doctor/exec taking back ~$1.5 million an year for sure isn't working on a non profit venture. They are working on a venture, which may be a non-profit at an organization level to avoid paying taxes but use that saved taxes to optimize individual salaries.

Either way 'non-profit' venture in nearly all countries have been classic ways to avoid paying taxes. If you are rich, all you need to do is create a non-profit trust- Name it for religious, social or whatever charity. Once you do that you can thrown some peanuts towards a social cause and at the same time park millions worth wealth without paying taxes. Suddenly you can grow your wealth without paying taxes.

This is how it works in my country, India. You will see non-profit trusts, especially religious with billions in assets- Who don't pay a penny in taxes. They will occasionally have some religious festival and may be feed the poor on an auspicious day. While at the same time the trust grows fatter in assets and money everyday as they attract donations in billions, literally!!

That's because if the hospital submits that $2K bill to an insurance company, they get paid somewhere around $300 - $500 for it.

The sucker without health insurance goes bankrupt trying to pay the full price.

They are raking in revenue. If they aren't making a profit, that's simply evidence that they are less efficient than socialised systems. Presumably because of moral hazards (health insurers or the government pays, not customers), and information asymmetries (customers can't judge whether or not they are being conned).

Well i haven't seen it but they must be low if you say so. But that just means they are spending way too much and making the patients pay for it. Perhaps they need to redistribute their costs better. Why make the guy who needs skin glue pay for the expensive stuff he hasnt even used (or needed)

Reply on news.ycombinator.com