So true! When my girlfriend had surgery a few years there were several occasions where the hospital sent a bill for things that never had happened. She called and every time they basically said "Oops. We'll take it off". And at least once they sent the same claim again a while later.
It's hard to imagine any other industry getting away with that behavior.
Another thing is the insane markups. The surgery my girlfriend was getting was about implanting a device my company is producing. I asked around in my company and after a while got told that our device costs usually around 30000. Looking at the bill the hospital charged 80000 and the insurance paid it.
American hospitals and health insurance are a ripoff and fraud on a gigantic scale and it's shocking that they are getting away with it. The whole system is so corrupt I don't think it can be salvaged.
In many areas, the local hospital system is the major, if not the only, source of high quality employment. Insurance companies are usually cast as the villain, but they’re the entities actually fighting to contain costs, and their profit margins are far thinner.
Consequently the local hospital is often protected by regional politicians and judges. Trying to take on a hospital network is about as likely to succeed as going after the favorite hometown sports team.
Its almost as if health care is not something that would ever be accepted by any stakeholder as a truly free market. So why does America pretend that it should be treated like one?
It's definitely not the hospitals fault. It's insurance companies getting involved since paying out of pocket is abnormal. So when you do pay out of pocket, you're paying what the insurance company pays and the hospital billing department is most likely very apathetic to that. Since they operate as non-profits, they often are willing to negotiate. Which is most likely why they can get away with this as opposed to a for profit entity.
No, the insurance companies did not force the hospital to do this.
Insurance companies deserve plenty of criticism: cherry picking, lemon dropping, leveraging the low feedback coefficient of their industry to sell one thing and deliver another, a failure to control long term cost growth, the list goes on. But insurance companies do not deserve criticism for this. This one is on the hospital, plain and simple. Normally this hustle would have been checked by an insurance company, yes, but that doesn't excuse it in the slightest.
Right, and how exactly is it advantageous to the insurance company’s to pay a $3500 bill if it really was $1500 (or possibly lower). The racket on the insurance side is if the bill is truly 1500, which they payout to the hospital, but then still go ahead make back $3500 on the premium off the patients.
I don’t know who taught who to be dirty, but it seems like the hospitals and insurers are becoming one in the same (possibly the hospitals learnings from the insurance industry).
My hot take:
Insurers might be on the patients side simply because Americans are living longer, and maintaining the general level of sickness (diabetes, heart conditions, etc). Prices going up does not favor them when medical care is going up, so they are oddly on the average person’s side.
But for the hospitals and doctors, this is all a dream come true. Endless supply of patients, so charge whatever you want.
The insurance company’s profits are capped at a percentage of what they pay out, so (generally speaking) they are incentivized to maximize the amount they pay out so that they can maximize their capped percentage profit.
Aren’t they worried about costs? They just pass the cost on to the consumer via increased premiums.
That’s the racket.
Insurance companies are definitely not on the average person’s side when it comes to containing costs.
If the bill was $3500, the negotiated price for the insurance company was surely less than $1500. I had my appendix out, the bill was $20k, negotiated price picked up by insurance was $2000.
Price transparency doesn't go far enough. Regular purchasers need to be able to get the real prices, but here we are and we can't even find out what the real prices are, much less purchase at that price.
Healthcare insurance companies and for-profit hospitals divert money from patient care. How is that supposed to improve patient outcomes?
Also, why would you side with insurance company and just assume their lower pricing is correct? You know they add overhead, and they are raking in premiums. The relationship between the payer and provider is adversarial, with the payer holding the stick.
>but then still go ahead make back $3500 on the premium off the patients.
Insurance pricing is very competitive, and health insurers have single digit profit margins. Most less than 5%.
> I don’t know who taught who to be dirty, but it seems like the hospitals and insurers are becoming one in the same (possibly the hospitals learnings from the insurance industry).
The west coast has had a combination insurer/healthcare provider for a long time, Kaiser Permanente. It’s a very popular organization.
No, hospitals absolutely share a lot of the blame for problems like this. Even WITH insurance, I've been burned so many times that I ask a lot of questions in an attempt to prevent problems and surprises. I get asked to sign forms acknowledging I've seen papers that they can't show me because they don't have them. They will refuse to provide care without me signing the form. Eventually I sign - and will later see a copy of this paper when I contest a bill. I will ask them what something will cost me in the event that my insurance doesn't cover it, and they'll tell me "it depends on how it's coded", and it takes time for them to find out how it will be coded. They will tell me. And then they will code it differently when billing the insurance. I've had bills from doctors for services provided at a hospital that had no record of that doctor, yet the doctor had copies of all the forms I signed at that hospital. And insurance wouldn't cover it because the doctor was not part of my network, even though the hospital proper was.
Insurance companies are full of scum bags and I have my problems with them too, but there's plenty of blame above that really has nothing to do with my insurance company.
Hey, wtf are you doing? Scumbags do not deserved to be lumped in with insurance companies - it's insulting to the scumbags and doesn't accurately describe how despicable anyone involved in the insurance industry truly is.
It's both the hospital and insurance provider's fault. In my opinion it's absurd that non-emergency care costs can be adjusted after the fact.
Imagine if a car repair shop could quote you $500 for a fix, then after the repair is done, you've paid, and you get your car back, they say "actually it's $5000, and we'll send you to collections if you don't pay." Non-emergency medical services should be required to follow a similar model, and none of the vague "you agree to pay far, far extra if we don't think to tell you about it ahead of time" bullshit that pretty much everyone has had to deal with.
There was no insurance company involved in the above story.
> So when you do pay out of pocket, you're paying what the insurance company pays and the hospital billing department is most likely very apathetic to that.
This has nothing to do with a health insurance company.
> Since they operate as non-profits, they often are willing to negotiate. Which is most likely why they can get away with this as opposed to a for profit entity.
This has nothing to do with non profit tax status. Car dealerships negotiate too.
I think your parent is saying that the quote was given ASSUMING insurance. So when the bill was formally given, it didn't match the quote because the quote was given under false-assumptions (about insurance).
There is always an insurance company involved with the prices of medical procedures.
Hospitals set their prices above what most insurance companies will pay to make sure they get the maximum amount from the insurance company.
When you come in without insurance, you appear to get screwed because the prices are extra high just in case some new fancy insurance comes along willing to pay more. Luckily, in many cases it's not terribly difficult to negotiate a lower payment.
I'm not advocating for this system, I think it's terrible, but I understand how it came to be.
>Hospitals set their prices above what most insurance companies will pay to make sure they get the maximum amount from the insurance company
Tis is generally not as simple. There are two prices that matter to this conversation: the hospital chargemaster and the usual and customary rate (UCR). The two are not functionally intertwined. The chargemaster exists in the hospital back office as a legal fiction and has little to no relationship to anything the insurance companies do although yes, sometimes chargemasters may be used as part of the rate negotiation with insurers. UCR is governed by what it says on the tin, it is what the market is paying in the specific geography.
The shenanigans kick in when the hospital tries to do something with the fictional difference between their chargemaster and the UCR, or, worse, tries to charge the fictional price to uninsured and under-insured individuals.
If you are paying out of pocket you are likely being billed more than what an insurance company is paying with their negotiated rate.
A large number of hospitals are for profit and in many parts of the US a for profit hospital may be your only reasonably close choice. My experience has been that there is very little difference between how for profit and non-profit hospitals work as far as negotiation of billing.
When without dental insurance, my dentist office put me on a special "no insurance" price list where I got much better quoted prices, because they knew they weren't dealing with an insurance company with people dedicated to negotiating low rates for each specific procedure individually. They may not have been quite as low as insurance companies paid in some cases, but it was much cheaper overall.
It's not like this is impossible or hard, it just takes the hospital actually caring about their patients enough to not screw them over when they don't have insurance.
I’ve had my local university-associated hospital knowingly overcharge & double-dip and repeatedly refuse to back down even when shown the evidence. My insurance company stepped in and resolved the situation by reminding the hospital about which billing practices are not legal.
Don't forget that "non profit" in american hospitals often means a lot of profit for administrators and politically connected people like construction companies, test labs and other providers who can charge outrageous prices without any oversight.
