Entry tags:
our wacky health care system
I just got a medical bill in the mail. ![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
shalmestere had wanted to know whether her childhood immunizations were still protective or needed a refresher, so she had some blood tests. The list price for the five blood tests came to $1061.14, of which the insurance company paid $34.58, we owe $39.41, and the remaining $987.15 vanished in a puff of negotiated smoke.
Obviously, these blood tests don't actually cost $1051.14 to run, or the screening lab would go quickly bankrupt getting paid six cents on the dollar. I assume that if we didn't have insurance, we would have gotten a bill for the full $1061.14, but I'm quite sure that
(a) uninsured patients are a small fraction of the total, and
(b) even uninsured patients don't necessarily pay that much, because some of them simply can't.
Let's guess that at most 10% of patients actually pay the list price, and the rest pay roughly what we and our insurance company are paying. That averages out to the lab actually getting paid $172.70 for these tests, so the cost of running them must be less than that. Why not just charge everybody $175, regardless of what insurance they have (if any)?
(If 5% rather than 10% of patients pay the list price, the lab would be getting $123.35 per patient; again, why not just charge everybody $125 rather than making up this wacky number with no connection to reality, hoping to actually get it from a tiny fraction of patients?)
shalmestere had wanted to know whether her childhood immunizations were still protective or needed a refresher, so she had some blood tests. The list price for the five blood tests came to $1061.14, of which the insurance company paid $34.58, we owe $39.41, and the remaining $987.15 vanished in a puff of negotiated smoke.Obviously, these blood tests don't actually cost $1051.14 to run, or the screening lab would go quickly bankrupt getting paid six cents on the dollar. I assume that if we didn't have insurance, we would have gotten a bill for the full $1061.14, but I'm quite sure that
(a) uninsured patients are a small fraction of the total, and
(b) even uninsured patients don't necessarily pay that much, because some of them simply can't.
Let's guess that at most 10% of patients actually pay the list price, and the rest pay roughly what we and our insurance company are paying. That averages out to the lab actually getting paid $172.70 for these tests, so the cost of running them must be less than that. Why not just charge everybody $175, regardless of what insurance they have (if any)?
(If 5% rather than 10% of patients pay the list price, the lab would be getting $123.35 per patient; again, why not just charge everybody $125 rather than making up this wacky number with no connection to reality, hoping to actually get it from a tiny fraction of patients?)
no subject
Alternatively, it's like how the cops say they're going to charge you with everything under the sun. Variant of the "door in the face" technique.
no subject
no subject
I'm guessing that in, say, the mid-20th century, list prices were really what service providers charged, and an insurance company's job was to pay part of that if it was crushingly large.
But then insurance companies came up with the idea of "provider networks": they would sign contracts with particular service providers saying "we'll steer our patients to you, and in exchange you'll give our patients (or rather, us) a substantial discount from your list price." As insurance companies got bigger and more locally-dominant, their bargaining power increased and the discounts grew, which enabled them to exert even more "steering" force on their patients, which enhanced their bargaining power with providers even more, and so on.
But I don't actually know in what order or when these things happened.