Those are not the real prices. Those are "chargemaster" prices, they are pretty much entirely irrelevant. The true price is usually going to be somewhere between 10-50% of the chargemaster:
To me, these can be used to shame hospitals by using relative rates in comparison with other hospitals.
“Hospital x is the most expensive in the area by a 15% margin on average” hurts. Ideally these comparisons start forcing hospitals to compete by sheer embarrassment.
> These are the prices they charge people who lack insurance.
No, they are the fake numbers they keep around as starting points so that (1) insurance can claim to have negotiated price down, and (2) they can claim the inflated numbers to be the “usual and customary charge to the general public” for purposes of government programs like Medicaid which include the usual and customary charge to the general public as one of the factors in reimbursement rates.
> They're very real if you get a bill with them on it.
A number of providers give an automatic, no negotiation needed discount from the chargemaster to uninsured patients, and most of the rest expect to allow themselves to be negotiated down. The chargemaster isn't the real price, and has no consistent relationship to it across providers.
I think the expectation in these situations is that the patient goes into the billing office and asks for a realistic price, and the hospitals mostly say yes. Kind of like how Verizon kept doubling my bill and then every 6 months I'd call them and ask them not to double it and they'd mostly say yes. I guess the outcome is that anyone sufficiently savvy or with savvy relatives gets out ok, and the un-savvy people get deeply, shamefully screwed.
Which is a horrible system, but it has an interesting property. The more likely someone is to complain, the more likely the system will actually work for them. To me it seems like some perverse evolved survivorship trait, for the system itself. But then I don't work in the industry, so I could be wrong about all of this.
Nope. Those are the prices that they start with that your insurance claims they negotiated down to 50% or whatever on your bill from insurance for your copay.
You can see the problem. Both the hospital and the insurance company are incentivized to keep that number artificially high.
They (hospitals, out of network specialists) are also under no obligation to negotiate with you. You are on the hook for whatever your insurance refuses to pay, which can be substantial regardless of what your deductible is.
They might negotiate with you, but they might not, in which case you are at the mercy of whatever your state's creditor laws are. Florida? Great laws protecting your primary residence and wages from garnishment if you're head of household. Missouri? Not so much.
Better to say the fair price is 10-50% of the chargemaster. But if you’re not an insurance company and the hospital refuses to negotiate it down then that is the price you face.
(Source: we were billed $16,666.30 for 30g of IVIG after being told it would cost around $2,000 if insurance didn’t cover it. Actual insurance rate would be $2,850 but the hospital won’t negotiate.)
It was my understanding that the chargemaster prices are the ones defaulted to so that the insurers pay them, and that for individuals (e.g. uninsured) they'll be more willing to negotiate it down to 10-50%.
Or at least that's what I gleaned from the billing side during my stint in healthcare IT. Possible that we were an outlier, or (most likely) I just misunderstood.
It is an incredibly abnormal for a hospital to be unwilling to negotiate. It is quite normal to be given prices ahead of time that have no connection to reality.
Because everything was set up for the consumer to not care what the prices are. Because doctors bill separately from the hospital. Because the pricing depends on so many variables. Lots of reasons, sadly. But this is a (small) step in the right direction.
Seems to me that the first step in getting chargemaster prices to closer reflect reality would be to publish them, so that someone (consumers, journalists, cyber activists, hospital administrators) can compare hospital prices to ones near by. Likely not sufficient, but a required step.
“Hospital x is the most expensive in the area by a 15% margin on average” hurts. Ideally these comparisons start forcing hospitals to compete by sheer embarrassment.