[jihoon796]

I've worked in medical finance as a consultant, and a huge problem that I've seen is that although private insurance was originally intended to encourage competition, it has made prices much more complicated and opaque for the end consumer (patient).

Generally speaking, each hospital/practice/clinical lab has to negotiate with individual insurance companies to get reimbursed at a given rate minus "contractual adjustments" - this negotiation process is highly inefficient, given that each payer may do things differently (a contract with BCBS of NC may be different than one with Florida Blue), and smaller providers simply don't have the bandwidth or resources to have any leverage in this process.

The complexity of this ecosystem only hurts consumers and providers (and helps the payers, of course), and although many insurance entities call themselves "non-profit", I seriously question their motives.

It's almost reminiscent of the era leading up to the financial crisis of 2008, where complex derivatives, mortgage-backed securities, and other overly sophisticated financial instruments made those that worked in the industry fantastically wealthy, while the common people were left holding the bag when the stock market finally plummeted.

I hope we can find ways to simplify this system - the single payer system, for all of its flaws, seems like a step forward in the right direction.

[notabee]

Insurance companies are also incentivized to make every claim a battle of attrition with healthcare providers and patients through denying, delaying, and traps make of fine print.

[matz1]

Why hospital even need to negotiate with insurance company? Can't they just set the price they deem reasonable and then let the patient and insurance to work out the payment within themselves .

[djrogers]

It works that way for 'out of network' facilities and doctors, and there are higher deductibles and lower limits on payouts for those as the insurance copany has no fiscal control.

The negotiations happen for 'in network' systems, and it's in the hospital's interests to be 'in network' for as many insurance companies as possible, as most people choose 'in network' care providers.

[jihoon796]

Yes, this is also true.

[jihoon796]

Firstly, why would a hospital relinquish control of payment to the patient? The hospital is the one getting paid, after all, and they want to maximize their profits (aka get paid as much as they can).

Secondly, if a provider doesn't negotiate with an insurance company, the insurance company would naturally reimburse a lot less. In the U.S., the lion's share of provider revenue comes from insurance companies instead of patient self-pay, so they have less leverage to negotiate here. Of course, a large hospital system could just say "screw you, we won't join your network" (in which case they have the upper hand, since people are more likely to pay insurance premiums for plans that include their current doctor/hospital).