[snuxoll]

Administrative fees, paying too many MD's to do work that PA's and NPP's could accomplish if they were allowed to, as well as paying high salaries because our education costs have skyrocketed so we have people leaving school with tens to hundreds of thousands of dollars of debt to enter the medical field. People abusing the emergency room (especially Medicaid members) for the sniffles instead of going to an urgent care or a family practice.

Oh, and let's not neglect that hospitals have no choice but to jack up prices to insane rates because insurance companies will just negotiate them down heavily.

The whole system is messed up.

[pravda]

>paying high salaries because our education costs have skyrocketed

This whole thread is chockablock with fallacies, but let's limit ourselves to this one for now.

Education costs are sunk costs. Doctor's salaries have nothing to do with education cost.

Doctor's salaries are high because the government restricts the number of doctors. That leads to high salaries for doctors. Supply and demand, not sunk costs.

Hint: you've got a bunch more fallacies in your post!

[jjnoakes]

If the insurance companies are successfully negotiating the prices down so low, shouldn't they have more money?

[snuxoll]

This part only affects the underinsured.

Let's say you have some crazy medical test, like an MRI. It costs roughly $2,000 to run the test (totally random number out of my hat). If a hospital is negotiating a contract with an insurance company, and says "An MRI costs $2,000 here" the insurance company will say "We will pay you $500".

So, to make sure they can be correctly compensated by insurance carriers they instead say "An MRI costs $8,000", the insurance company will then say "Okay, we will pay you $3,000". It's total luck to get the correct amount, so you will usually WAY over compensate and end up getting more than you NEED to be reimbursed in return, just to provide a safety net for insurance carriers messing around with you.

Under most cases people with amazing low-deductible plans are fine, they pay their $500 deductible for the year plus 20% of the remaining and make off quite well for the procedure. People with high deductible plans (like mine) get screwed, I would end up having to meet my $2,500 deductible and then pay 20% after that (up to my annual out of pocket max, which is $5000).

Because hospitals have to play this stupid game with insurance companies, it's rare that you can get charged the "real" price of any procedure or lab time. People without insurance can negotiate extremely discounted rates based on financial need, but if you are underinsured you are stuck with whatever contracted rate the facility has with your insurance company.

[toomuchtodo]

Why don't insurance companies own the vertical and purchase healthcare providers, in order to control costs?

It seems like cost controls are the root of the problem.

[snuxoll]

Some do, they're called HMO's (Health Management Organizations), Kaiser Permanente being a prominent one. A lot of people don't like having to see a doctor not part of the organization without going through headaches, however, which lead to the prevalence of modern PPO's.

[dragonwriter]

> Some do, they're called HMO's (Health Management Organizations), Kaiser Permanente being a prominent one.

KP is an HMO, and does own its provider network rather than contracting with providers (for most things, at least), but that's not a defining characteristic of HMOs. Many HMOs have contracted, rather than insurer-owned, provider networks.

[wahern]

But the issue is still the same: the network of doctors you can see is very much restricted. And in any event, the way Kaiser is structured (at least in Southern California, where a friend is a Kaiser doctor), the doctors are employed by separate legal entities which contract with the hospitals. So it's kind of a distinction without a difference. HMO implies vertical integration where incentives line-up differently than when providers and insurers are more at arms length.

That said, PPOs also have in-network restrictions. They're looser, but PPOs are also often significantly more expensive.

In my limited experience, it's not the network restrictions per se, but that people want to continue going to a specific doctor or to a specific hospital. My relative who is a partner at a law firm rails against Obamacare because of the ridiculous premiums her firm has to pay. But they only pay those premiums because she demanded a policy that allowed her to continue seeing the same doctor she's seen for over 20 years. She's smart and almost always votes Democratic; the cognitive dissonance in her rants would be comical if it weren't for the fact that so many people exhibit that kind of thinking.

I use Northern California Kaiser and love it. For one thing, it's ridiculously inexpensive, all things considered. And I don't expect the kind of relationship with my doctor portrayed on television. Kaiser is very technologically savvy and data driven. (Though that doesn't mean they used the latest & greatest tech). Their doctors are disciplined to attend to patients efficiently. I've never felt rushed or anything of the sort (even during the 48 hour birth of my son), but neither the doctors nor staff will linger unnecessarily.

But because Kaiser works as a holistic entity, some people may feel neglected. Kaiser dis-intermediates you from the doctor and his personal staff. Appointments are booked on the web or via a call center. For illnesses, you first contact the Kaiser nursing call center, where a nurse and on-call doctor will do a preliminary diagnosis over the phone and often even write a prescription. For common injuries like sprains, etc, you might be scheduled to see a doctor at their sports injury center or similar specialized department, which at my medical center is conveniently (and I doubt coincidentally) located across the corridor from the imaging department. Follow-ups with a doctor will often use their electronic messaging system (basically, web mail).

I _love_ that aspect of Kaiser because I appreciate the effort that goes into reducing costs and improving outcomes. For people who want to feel coddled by their doctor and his staff, or use them as an outlet for their anxiety, it's probably a nightmare.