[chimeracoder]

> Providers would still be free to set whatever price they wanted, they just could not have different rates "negotiated" for different customers

In theory, this could work in a totally free insurer market. Unfortunately, the current system relies on public insurers (Medicare/Medicaid) being able to set prices for their patients by fiat. Unless we required Medicare and Medicaid to accept providers' billing rates (which I could actually support, but would be a political non-starter), providers' prices can't be standardized.

However, even if that happened, there's the other problem of actually enforcing this. Prices are set by billing codes and collections of codes that are billed simultaneously, and they may not be linear[0]. There are 70,000 billing codes, which are far more insanely detailed than you could imagine[1]. Mathematically, it would always be easier to play tricks with the particular codes submitted for billing than it would be to prove any misconduct.

[0] So, billing for the sets {A, B} and {C} would not cost the same as {A, B, C}. Which is totally reasonable, because providing anesthesia (A) for a bronchotomy (B) is less complicated than providing anesthesia for a bronchotomy in which some complication (C) occurs during the surgery.

[1] e.g, G44.82: "headache associated with sexual activity"

[mindslight]

But Medicare cannot dictate that a provider must provide services to Medicare, so the providers are obviously finding it beneficial to do so, right? If Medicare is paying only the variable costs and not the amortized fixed costs, this is a fundamental economic problem which must be fixed to have any hope of sanity.

I've heard of how complex the condition codes are, but an individual should not need to understand that system to make financial decisions. The entire problem here is essentially one of complexity, much of it necessary but much of it unnecessarily generated as time goes on. A person has a procedure done for straightforward reasons, possible complications are enumerable, and anything more complex can be billed on prepublished hourly rates and cost-plus for materials.

Individuals can only function as economic actors when they have understanding, with the current system being an abject failure of "nobody knows" as the end result of computers fighting computers.

[chimeracoder]

> But Medicare cannot dictate that a provider must provide services to Medicare, so the providers are obviously finding it beneficial to do so, right?

That's not quite true. There are a lot of intersecting laws that, in their cumulative effect, all-but-require most inpatient providers to accept public insurance.

That said, the situation has gotten bad enough in recent years that some hospitals are openly trying to figure out a way to terminate service for Medicare patients. (The fact that this has been a discussion point for so long should give you an idea of how complicated it is to do so legally).

> If Medicare is paying only the variable costs and not the amortized fixed costs, this is a fundamental economic problem which must be fixed to have any hope of sanity.

I agree. But so far, there's little sign of hope.

> I've heard of how complex the condition codes are, but people should not need to understand that system to make financial decisions.

I'm not saying that patients would need to understand ICD-10 billing codes in order to make their own financial decisions; I'm saying that this would be a serious logistical challenge to enforce any sort of law mandating uniform pricing.

It's the same reason that every PC laptop you purchase has a thousand different model names and numbers, even though they're all 99% identical. They do that so that they can each get a different SKU (they are technically different products). So retailers can provide price-match guarantees with low risk of actually having to make good on that promise (you're unlikely to find the exact same SKU at a different retailer).

[mindslight]

I can imagine hospitals being so large (and coupled with mandatory-service emergency rooms), that there would be a lot of hoops to extricate themselves. But smaller private providers surely make the choice more voluntarily. Tangentially, I'd venture that if billing and other deadweight overhead were actually reformed, current Medicare reimbursement rates would actually be quite profitable.

But regardless, either of the archetypical sane systems requires correct reimbursement rates. If not corrected in a functioning market, Medicare doesn't get services. If not corrected in a single-payer government system, then the hospitals go out of business. Healthcare cannot be reformed without solving this problem!

> It's the same reason that every PC laptop you purchase has a thousand different model names and numbers, even though they're all 99% identical

I too see this as another instance of the same general phenomenon (although obviously not as harmful). Computation is being wielded to generate unbounded complexity, to destroy individuals' ability to understand situations for making rational self-interested choices. If you want an even worse one, try buying toilet paper!

I'm not one to reactively say "there needs to be a law", but it seems if there is any economic function of government, it's to facilitate the understandability of transactions. Saner states already have "unit pricing" laws, and they're badly in need of updating to restore their usefulness.

I don't hold out hope given the dysfunctional state of government, so my only real hope is that we can build bottom-up technology to fight back by cutting through the artificial complexity, restoring individuals' economic ability. But that's clearly a long slog away.