- There is no price transparency and no competition in health care billing.
- The health care industry spends twice as much lobbying in Washington as the defense, aerospace, and oil and gas industries combined.
- Medicare has tight control on reimbursement of hospitals and doctors but has been prohibited by Congress from putting price pressure on drug and medical device companies. (Must have something to do with the lobbying and campaign contributions.)
- “Non-Profit” hospitals use their considerable profits to expand capacity beyond what is needed and to advertise to fill up the capacity and can do so successfully because they are guaranteed reimbursement on a fee for service basis with no price competition.
- While Medicare’s reimbursement per incident is low, there are few limits on the number of incidents that can be reimbursed. So, the hospitals can complain about low reimbursements and still "make it up in volume" so to speak since most of their costs are fixed.
- While complaining about reimbursement rates, hospitals base load their operations with Medicare patients for the relatively low but prompt payments and then collect higher payments from private insurance companies and ten to fifteen times the Medicare reimbursement from uninsured patients.
- Hospital bills based on their individual “Chargemasters” (Internal price lists) are ridiculously high, and most hospitals only collect about 35% of what they bill. They know their reimbursements from Medicare and private insurers will be as little as 15% of the nominal charges, but, if they can, they will collect the inflated amounts from the uninsured. That is grossly unfair. (My personal story)
- A new industry is building up around the need to help uninsured patients negotiate lower payments for their inflated hospital bills. (Job creation?)
- The biggest insurance companies negotiate their hospital reimbursements from the Medicare established rates. The smaller ones have to negotiate beginning with the Chargemaster rates.
- Medicare is extremely efficient in processing claims, mostly by private contractors, at a cost of only $0.84 per claim. But, that is largely because there is an extremely high volume of claims, reimbursements are predetermined, and validity is seldom challenged.
- The power of the hospitals is increasing as they buy up physician practices and put physicians on salary. (Who can blame the physician for wanting somebody else to handle the Affordable Care Act paperwork?)
- And, a couple of quotes from the Time Magazine Article:
“The real issue isn't whether we have a single payer or multiple payers. It’s whether whoever pays has a fair chance in a fair market.”
“It’s about facing the reality that our largest consumer product by far – one fifth of our economy – does not operate in a free market.”
I have done more posts on health care than on any other single subject over the past three and a half years, mostly pointing out problems and complaining, but I proposed a pretty neat solution, I think, in this April, 2010, posting. We just need a little free market competition and price transparency with some special rules and regulations possibly to get us through the transition from the mess we are in to a fair, balanced, workable system.