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Old 02-24-2013, 07:23 AM   #41
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The sad truth in the USA is that many people are denied health insurance (myself included) even when they can afford to pay for it (unwillingly...). I bought into my state's high-risk pool after BCBS refused to take me - and pay $941 a month for myself. It's bankruptcy insurance for me, and has a known end in sight when on June 1, I get on Medicare. Still, it is appalling. It does get me a good discount on prescriptions, but very little else. What it really does is cover me so that if something catastrophic happens, there is an upper limit to what I have to pay out of pocket - and they pay 100% after that. Three more months and counting down.

I worked in the healthcare industry for the last 12 years of my working life. There is nothing in the Time article that strikes me as inaccurate, or unusual. Not only does Medicare get a huge discount on services it pays for, all insurance companies do. Nearly 20 years ago I had a surgery bill for $21K (from the hospital, not counting doctors' fees). The hospital got about $7K for that bill from my insurer.

The whole system is crazy. My internist thinks it's crazy. All the doctors have to employ people whose entire job is arguing about payments, with insurance companies.

I hope it gets better. At least on Medicare I won't pay as much for the insurance.

Here is the problem with this statement.... that the $21K is the amount that should have been billed based on the costs to provide you service with a reasonable profit...

My example is even worse.... the hospital's charge for a 5 minute operation on my DW was over $10K... the cost to us was about $660 with our insurance.... there is NO WAY that it should ever be billed at $10K... they know it, insurance knows it, we know it.... so why do they even have these stupid prices...

And it is not even limited to hospitals.... they had two anesthesiologists billing us at over $1K each... when I called they said they spent 15 minutes... (no way, I was there when he came and gave my wife injections and after the operation... probably 10 minutes total).. but, who charges $4,000 per hour And why did we need two of them

So as long as hospitals and doctors are trying to charge these ridiculous amounts, we will not believe that they are not making money at the low amounts they get reimbursed....
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Old 02-24-2013, 08:20 AM   #42
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Originally Posted by Texas Proud

Here is the problem with this statement.... that the $21K is the amount that should have been billed based on the costs to provide you service with a reasonable profit...

My example is even worse.... the hospital's charge for a 5 minute operation on my DW was over $10K... the cost to us was about $660 with our insurance.... there is NO WAY that it should ever be billed at $10K... they know it, insurance knows it, we know it.... so why do they even have these stupid prices...

And it is not even limited to hospitals.... they had two anesthesiologists billing us at over $1K each... when I called they said they spent 15 minutes... (no way, I was there when he came and gave my wife injections and after the operation... probably 10 minutes total).. but, who charges $4,000 per hour And why did we need two of them

So as long as hospitals and doctors are trying to charge these ridiculous amounts, we will not believe that they are not making money at the low amounts they get reimbursed....
You think that's bad. I once had a realtor charge me 90 thousand dollars to sell my house. Took her ten minutes tops to fill out the contract. Crazy world.
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Old 02-24-2013, 09:34 AM   #43
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I'm sure that physicians and other providers would like to be paid more than Medicare pays but that doesn't mean to receiving less that the preferred amount means that provider is losing money.
From what I can gather medicare uses something called RBRVS, something to do with relative value of service, and the AMA is the one that recommends the price to CMS. Here's some info on it, Does Medicare Under-Pay Hospitals? | Health Beat by Maggie Mahar

Private insurers base their payments off of medicares rates, so they must be underpaying as well.

If they are underpaid so much why do they do any medicare at all ?

The bigger problems seems to be that no one knows why any of this cost so much and where any of the money goes. Prices are unknown and different based location, payment method, insurance provider and anything else they can dream up.
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Old 02-24-2013, 09:54 AM   #44
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The bigger problems seems to be that no one knows why any of this cost so much and where any of the money goes. Prices are unknown and different based location, payment method, insurance provider and anything else they can dream up.
Not a complete answer by any means but maybe a piece of the puzzle.

Our administrative costs are double or triple all other OECD countries too, among other costs not shown on this chart.
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Old 02-24-2013, 10:19 AM   #45
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The information on that chart is critical. We can believe hospitals and doctors when they say that they're not making big money... Where's the money going? Look at the left half of that chart!
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Old 02-24-2013, 10:56 AM   #46
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That last chart really tells the tale Midpack; thanks for posting it!

The article is long but really worth reading all the way through for those that may have just skimmed. The author's proposed improvements and partial solutions at the end are especially interesting to me because of how moderate and nuanced they are - bascially because he knows how powerful and wealthy the powers-that-be (insurance companies, hospitals, Doctor's lobbies, big pharma, etc.) really are.

Given how broken the system is our collective unwillingness to look at what does work in every other first-world country is pretty astonishing, but perhaps not given the general lack of media coverage of health care in other countries.

Here's the link to the Jon Stewart interview with the author that I believe Midpack mentioned:

Exclusive - Steven Brill Extended Interview Pt. 1 - The Daily Show with Jon Stewart - 02/21/13 - Video Clip | Comedy Central
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Old 02-24-2013, 11:04 AM   #47
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Here's the link to the Jon Stewart interview with the author that I believe Midpack mentioned:

Exclusive - Steven Brill Extended Interview Pt. 1 - The Daily Show with Jon Stewart - 02/21/13 - Video Clip | Comedy Central
I watched both, but this is the one I mentioned with Charlie Rose, understandably more substantial than the Stewart clip. The article itself goes into more than either TV piece.

Charlie Rose - Steven Brill
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Old 02-24-2013, 11:15 AM   #48
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The information on that chart is critical. We can believe hospitals and doctors when they say that they're not making big money... Where's the money going? Look at the left half of that chart!
I'm not sure you can believe them. You have to factor in the salaries that everyone is making. If the head of the hospital is making $1 million a year then it might appear that the net profits are not that high, but there may be a lot of people making a great deal of money. Read the article in Time about some of the salaries.

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The article is long but really worth reading all the way through for those that may have just skimmed. The author's proposed improvements and partial solutions at the end are especially interesting to me because of how moderate and nuanced they are - bascially because he knows how powerful and wealthy the powers-that-be (insurance companies, hospitals, Doctor's lobbies, big pharma, etc.) really are.
The article was a great article but the part of it I didn't totally agree with was his solutions. I think the article is a powerful argument in favor of, well, extending Medicare (or single payer) to everyone... The other alternative would be price controls. See this article in Slate as to that point regarding the article:

http://www.slate.com/blogs/moneybox/...al_prices.html
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Old 02-24-2013, 11:51 AM   #49
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I'm not sure you can believe them. You have to factor in the salaries that everyone is making. If the head of the hospital is making $1 million a year then it might appear that the net profits are not that high, but there may be a lot of people making a great deal of money. Read the article in Time about some of the salaries.
I never received a bill from a hospital with a line item for "head of the hospital salary". Furthermore, I suspect the CEO of most of the companies that we interact with in some way, throughout our day earn in excess of $1 million a year. If you want to talk about executive salaries, you're honor-bound to talk about it as a societal issue, not a health care issue, and my experience is that people don't get much mileage with such criticisms of society. Regardless, as a societal matter, it doesn't discount what Midpack posted one bit, i.e., highlighting that the problem of cost in health care comes far more so from pharma and medical equipment, not service providers.

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I think the article is a powerful argument in favor of, well, extending Medicare (or single payer) to everyone... The other alternative would be price controls.
The difference between the two is pretty slim.
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Old 02-24-2013, 12:03 PM   #50
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Here is a link to book review on cspan a few weeks ago. The author , David Goldhill, discussed his experience with the healthcare system. The video is about an hour long.

Book Discussion on [Catastrophic Care] - C-SPAN Video Library

A NYTs review

Father's Death Spurs Son To Tackle Health Care : NPR
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Old 02-24-2013, 01:25 PM   #51
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I'm not sure you can believe them. You have to factor in the salaries that everyone is making. If the head of the hospital is making $1 million a year then it might appear that the net profits are not that high, but there may be a lot of people making a great deal of money. Read the article in Time about some of the salaries.
Excellent points.

While I want to believe that the Midpack chart points irrevocably to Big Pharma and the med equipment providers as the guilty culprits, because the chart is in percentages, it leaves the question open. It would be handy to know how the absolute quantity of profit dollars of Big Pharma compare to the total health care cost outlay in the USA today. The guilt may still be there, but we don't know from the percentage charts.

I also wonder how the non-profit status of many of the providers effects the numbers. Or how about tax supported providers? I wonder if perhaps a non-profit provider's revenue is nicely above costs, do they still count as "zero profit" for this set of data? That is, a hospital that would be making a nice profit as a private, for profit organization might have the same numbers counted as zero profit if they have non-profit status?

I'm not a fan of Big Pharma or of med equipment manufacturers, but I'm also not a fan of providers since their billing schemes seem arbitrary and aimed at bilking the system. It's doubtful readily obtainable numbers will ever point accurately to the real villians.
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Old 02-24-2013, 01:50 PM   #52
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Net profit margins of different industries

Industry Browser - Yahoo! Finance - Full Industry List

Those are data published in Yahoo finance on 2/15/13

Radio has the highest net profit margin at 63.6%
Hard to believe periodicals has a profit margin of 61% as number 2.
Drug manufacturers: 16.9%
Medical Instruments 14%
Perennial whipping boys like Money Center Banks and Major Integrated Oil and Gas are low on the list at 8.7% and 7.4%.
Hospitals are supposed to be at 4.8%
Major Airlines are at 2.9%
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Old 02-24-2013, 01:51 PM   #53
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I have read a few articles in the past about people outsourcing their medical procedures, ie: flying to Rio to get a face lift, or to India for extensive medical care.
I am looking abroad for alternatives, but my face is past lifting.

One of the articles facts were that 69 percent of medically caused bankruptcies were from insured people. I don't want my DW to live in poverty if I should be hit with a catastrophic illness. However, I was brought up with a different ethos' that we let our pets die with more dignity than we give ourselves.
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Old 02-24-2013, 02:00 PM   #54
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Drug manufacturers: 16.9%
Medical Instruments 14%
If we legislated new rules and brought these folks down to breakeven, would that materially affect total health care expenditures in the USA? That is, would the seizure of all their profit, in absolute dollars, be enough to cause the USA to be competitive with, say, Canada for health care costs?
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Hospitals are supposed to be at 4.8%
As mentioned in my post above, I'm suspicious that average hospital profit margin calculations are impacted because many of them have non-profit status. Or some other similar tactic. My MIL is in hospital right now. Visiting her yesterday, I couldn't help but note that it's a real nice place, with lotsa fancy equipment, expensive looking cars in the doc's indoor parking area, a new addition being added, advertisements in the media trying to attract more business, etc., etc. My anecdotal observation could be totally off base. Still, it just doesn't seem like this hospital is "just barely getting by."
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Old 02-24-2013, 02:11 PM   #55
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You think that's bad. I once had a realtor charge me 90 thousand dollars to sell my house. Took her ten minutes tops to fill out the contract. Crazy world.
Were you trading up or down on your 1.8 million dollars house, assuming a commission of 5%?
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Old 02-24-2013, 02:25 PM   #56
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If we legislated new rules and brought these folks down to breakeven, would that materially affect total health care expenditures in the USA? That is, would all their profit, in absolute dollars, be enough to cause the USA to be competitive with, say, Canada for health care costs?
Probably would help, but I suspect our health care cost crisis is much deeper than just this and will be much more difficult to deal with.

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As mentioned in my post above, I'm suspicious that average hospital profit margin calculations are impacted because many of them have non-profit status. Or some other similar tactic. My MIL is in hospital right now. Visiting her yesterday, I couldn't help but note that it's a real nice place, with lotsa fancy equipment, expensive looking cars in the doc's indoor parking area, a new addition being added, advertisements in the media trying to attract more business, etc., etc. My anecdotal observation could be totally off base. Still, it just doesn't seem like this hospital is "just barely getting by."
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Old 02-24-2013, 02:35 PM   #57
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Probably would help, but I suspect our health care cost crisis is much deeper than just this and will be much more difficult to deal with. ...
I've gotta believe that if you follow the money you get to real answers. And at $8,000 per American per year, that is one heck of a lot of money. That is a tremendous incentive to obfuscate, deny, bribe, lobby, intimidate, you-name-it, to maintain the status quo.
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Old 02-24-2013, 04:44 PM   #58
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Were you trading up or down on your 1.8 million dollars house, assuming a commission of 5%?
I sold and banked the 1.2 million profit.
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Old 02-24-2013, 05:13 PM   #59
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I did think of something to add to this. Hospital pharmacies have to have each pill in a blister-pack with a bar code on it. This is so the nurses or whoever can scan it and make sure the patient gets the right drug. It raises prices of - say - Tylenol to astronomical levels. The question is, HOW astronomical? How much is the overbilling and how much is the real cost? The jury is out.
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Old 02-24-2013, 05:13 PM   #60
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I think the article is a powerful argument in favor of, well, extending Medicare (or single payer) to everyone... The other alternative would be price controls.
Or, maybe something as close as possible to a free market in medical care provision. That amazing innovation whereby we coax increasing improvements in the quality and cost of goods and services in virtually every other portion of our lives.
This doesn't (necessarily) mean shopping around for an MRI when you're bleeding. It might mean shopping for a total care package by price and quality.
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