[Zooper]

To give a real-world example of why this is problematic: my wife recently had surgery, and they had a follow-up a month later to remove a stent. Even though she was insured, a slew of wholly unintelligible bills from various departments at the hospital followed. When she showed up to have her stent removed, the director of the hospital's billing department told her that all past bills must be payed before they are able to remove the stent: this was a blatant lie, and the doctor overrode the decision in about 30min. Now after speaking with the nurses about this, one reveals that the collections department has a whiteboard game going on in the office where they write up their names and have an ongoing competition over who can extract the most money from patients. The hospital and its services are under no obligation to provide accurate pricing until ipso facto, and the pricing can often be changed because it doesn't stand up when placed under scrutiny. Does anyone believe a system like this is capable of producing an accurate "score"?

[Reedx]

I just learned, to my surprise, that pricing and transparency changes may go into effect next year.

Forcing hospitals to disclose prices:

https://www.nytimes.com/2019/11/15/health/list-hospital-pric...

Though the hospital industry is fighting it, so we'll have to see if the rule survives.

[ceejayoz]

I'm completely onboard with price transparency, but am skeptical as to the utility of it to the consumer. I suspect a lot of people will get "oh, we thought it'd be X, but it turned out to be Y, which is 3x the price" sort of scenarios.

I'm sure "colonoscopy, clear" and "colonoscopy, with removal of polyp and pathology on it" will have different prices, but you won't know which it is until after the procedure.

[unishark]

The pricing game in the medical field is not that though, it's just a ridiculous tradition. They give hugely inflated prices then accept a fraction of that from insurance companies because it was their real price anyway. If any uninsured individual (e.g. with good credit they want to protect) gets ensnared by this and ends up paying their 3x number it's totally unfair.

when they are selling similar procedures for elective or cosmetic surgery, like plastic surgery patients, the prices they ask are much more competitive.

[albeebe1]

i wonder if they inflate the prices to inflate their write offs come tax time.

[pkaye]

No they can only write off actual costs.

[Gibbon1]

I'm pretty sure a good accountant can drive semi-truck full of large bills through that.

[devonkim]

I dunno, the reality is that we have mark to market accounting https://en.m.wikipedia.org/wiki/Mark-to-market_accounting

[SkyPuncher]

Some how automotive repair, general contracting, and many other industries have been able to solve this problem.

It's baffling how medicine can't produce accurate estimates. Sure, there are edge cases and differences between patients. However, every surgeon has a rough idea of how they're planning to do a procedure. They've been trained and practiced on it many, many times.

I have a torn meniscus. The doctor can happily tell me how easy it is to clean up and exactly what he'll do to fix it. He certainly knows what the risks are and potential complications.

Why he can't document that prior to surgery, I have no clue.

[ajford]

Shit... my vet can do that. They saw my cat, estimated the surgery necessary, the length of care in an ideal and not-ideal situation, cost of potential extras based on possible complications or additional needs such as full sedation.

I was given three estimated prices that ranged from $800 to almost $1800, with an expected final cost of $1000 being the most likely outcome. Surgery came out to $975.

And this is with a non-communicative and uncooperative animal, not a human.

Not to belittle what a doctor does, but I totally agree that a doctor should be able to estimate the most likely and most extreme situations and gauge the range.

[joquarky]

When one of my pets had surgery a few years ago, the surgeon's office actually sent us back a bit over $500 a few weeks afterward since it went smoother than expected.

[ceejayoz]

The extremes are much wider in human medicine, though.

No one's going to spend a million bucks on a severely premature puppy, but we will for a human, regularly.

"This might be $500, or $250,000" isn't super helpful.

[ajford]

True, but it should be possible to say the average cost is $10,000 according to the last N similar operations. In the event of something abnormal occurring, you might require an extra $25,000 for this and that, and if the shit hits the fan, expect $250,000 for extreme lifesaving effort.

[bonzini]

That's why private healthcare makes no sense. You just cannot attach a price tag to human life no matter if it's premature birth or a child with leukemia or routine surgery like an appendicitis. The only sensible way to run healthcare is by socializing it.

[xylophone]

I agree. I would say the only reason providers are not cost estimating is because they don't need to in order to get business.

For automotive I'm typically getting a problem diagnosed first, then after diagnosis, I'm agreeing to a price for a fix. This is the norm for that industry.

For a walk in appointment for a rash, I'm agreeing to a fixed visit fee, PLUS signing that I agree to pay any charges my insurance does not agree to pay. The true costs can (and should) be computed by the provider, so the only true unknown in that equation is what Insurance will cover. THEN the provider (wanting to cover their bases) is putting that risk of not getting paid by insurance, back onto the patient.

I like to think we're 1 killer app away from a shift in consumer behavior here to change the expectations

[pkaye]

I'm in the Kaiser Permanente system in California where the hospital and insurance are one entity. Since everything is pre-negotiated, most times its just the copay. So under my plan, for example $20 for primary physician visit, $40 for specialist visit, $20 for blood test visit and $100 for emergency visit. Having one entity involved simplifies things.

[pblcprvscrt]

Kaiser utilizes the Experian program.

[blaser-waffle]

They can totally do it. It's only a problem because they want it to be a problem.

I worked in Australia for a little and had a couple of doctors visits (mole removal, fractured rib). They were able to tell me, on the phone, cost for a consult, removal, xray, check-up, etc. I was able to pay for the mole removal + biopsy with cash...

I'd love to see something like this in the US:

"Assuming a standard hernia surgery, you're looking at $3000 base for the procedure, with another $300-900 for consumables. 91% of surgeries are at or under $3500, 99% are under $4100. Though patients can go home the same day, 24 hour of hospital bed are covered under the fee; additional days in hospital beds are available at [X] rate. In the event of serious complications, consumables, beds, and misc. are billed at [Y]."

[fjp]

The very existence of insurance allows this insane inflation to occur. It completely obscures the need to to price things accurately.

[bonzini]

Not really, insurance must exist because healthcare expenses aree simply too unpredictable. And anyway places with single-payer healthcare spend much less than the US even though they are effectively a state-run insurance. Heck, the same applies to Medicare.

[sharadov]

Only in the US, in India, every medical procedure has a cost attached. 90% of the transactions are cash, and it would not work otherwise.

[gshulegaard]

While I understand your healthy skepticism, I would be a bit more bullish given this example from 2013:

https://kfor.com/news/okc-hospital-posting-surgery-prices-on...

One thing is for sure, any improvement to price transparency is a boon to competition.

[therealdrag0]

Thought provoking chat with owner: https://www.econtalk.org/keith-smith-on-free-market-health-c...

[ceejayoz]

> Some Hospital administrators accuse the surgery center of cherry-picking the healthiest and wealthiest patients.

You probably won’t see this place put a fixed cost on a 26 week preemie like my twins.

[dsfyu404ed]

>I'm sure "colonoscopy, clear" and "colonoscopy, with removal of polyp and pathology on it" will have different prices, but you won't know which it is until after the procedure.

Considering that colonoscopies are not urgent you'll likely elect to have your butt probed at the clinic that doesn't have a massive price discrepancy between removing something and not.

I really hope the price transparency rule works as alleged. I'd be totally unsurprising if the entrenched industry finds some way to neuter it but I'm hopeful.

[ivalm]

> Considering that colonoscopies are not urgent you'll likely elect to have your butt probed at the clinic that doesn't have a massive price discrepancy between removing something and not.

For most people they have insurance and for them to get any kind of help paying they need to be working with an in-network provider. There is no meaningful market here even for elective/non-acute procedures.

[TYPE_FASTER]

> am skeptical as to the utility of it to the consumer.

Yeah, me too. It definitely seems like more of a way to look like the industry is doing something without actually reducing costs to the end patient.

Our daughter went to the ER and was administered ibuprofen. We got an itemized invoice. Insurance paid $9 for one pill.

So going forward, I guess I'll be able to ask how much the pill will cost, then...haggle? Tell them not to give my daughter medicine?

Just seems like we're going backward...

[thiagomgd]

> I'm sure "colonoscopy, clear" and "colonoscopy, with removal of polyp and pathology on it" will have different prices, but you won't know which it is until after the procedure.

Which is expected, and kinda ok. At least, if you do a colonoscopy and there's nothing else, no complications, it would be that price.

[cryptonector]

Hospitals are protected businesses in the U.S. To build one you need a "certificate of need" in most jurisdictions in the United States. I.e., they are government-granted monopolies. They behave like government-protected monopolists do: they rent-seek.

If you want to see affordable hospital care you have to see the protection removed and competition allowed and encouraged.

This is happening to some degree already. Nowadays we have unprotected, standalone ERs, urgent care clinics, and specialist clinics. But it's not really enough, not yet.

[Spooky23]

> Nowadays we have unprotected, standalone ERs, urgent care clinics, and specialist clinics.

In your example the tail wags the dog. Hospitals are mostly obsolete. You have outpatient surgery in strip malls because hospital beds are capped and reduced, and Medicare began refusing to pay for bad outcomes, which are more common in hospitals.

The government-allowed monopolies are the sprawling health networks the turn medicine into a sales funnel. They are labelled with hospital branding, but the monopolist actions are all about doctors. For example, in my region, 90% of renal doctors work for a single practice.

Urgent care is a whole other animal -- that's all about the reducing standards and addressing supply shortages of primary care doctors caused by restricted supply (there are caps) and higher salaries in specialities.

[tptacek]

Depending on what you mean by "beds are capped and reduced", the opposite may be true: my understanding is that one of the major inefficiencies in US health care is that we have an unusually high vacancy rate in hospital beds. Addressing that problem is the central argument of Certificate Of Need laws.

[Spooky23]

Everyone fights hospital closures, so it's really hard to do. It's sort of like how everyone hates Congress, but loves their congressman. Certificate of Need addresses growth.

IIRC in New York, they closed something like 20 hospitals, with 10-12 in NYC. In my area (NY, but not NYC), there has lately there have been a bunch of hospital "mergers", where the lesser hospital gets converted into a sort of outpatient surgery site with urgent care, or an ER without longer term care.

[tptacek]

I'm not even saying that CON laws are good; I have no idea. I'm just saying that the premise behind them appears to be accurate, and the argument that they are nationally responsible for lack of available hospital beds seems flawed (there are regions where there aren't enough vacant beds, but that doesn't seem to correspond to CON laws, and nationally the statistic is in the other direction).

[cryptonector]

> just saying that the premise behind them appears to be accurate

There's only one way to find out.

Indeed, we're finding out as we speak, because all those new ERs and urgent care clinics and specialist clinics and birthing centers, they did not need CONs, so they got built. And they got built by people who risked capital to do it. And it seems to be working out. I know I'm not going to any hospital's ER if something happens to me, and neither is anyone in my family -- we know the score on pricing and billing.

So the free market has found a way around the protectionist regulation of hospital construction. Is that even a surprise to anyone?

[big_chungus]

> The government-allowed monopolies are the sprawling health networks the turn medicine into a sales funnel.

Crazy levels of regulation is one of the most sure-fire ways to make monopolies or oligopolies inevitable by creating huge economies of scale. The red tape burden is much easier for larger players than smaller ones. They can keep a staff of dedicated pencil-pushers that know the industry, its regulation, and how to deal with the bureaucrats.

With less regulation and no more "certificate of need" nonsense, it would be not only easier for competitors to start but just as importantly easier and more economical for them to remain independent. The government has created the environment in which monopolists thrive and the free market is stifled; people then complain and turn to the government to fix it? We're in the insurance mess to start with because of wage & price controls. Even the EU makes it easier to try new drugs, at least from a regulatory standpoint. The market is smarter than any pencil-pusher or congressman; let it do its job. Corrupting it is what got us here in the first place.

[knightofmars]

This ignores the fact that markets fail under certain circumstances. Removing regulation would not remove the fact that a significant portion of healthcare is a natural monopoly[1] due to the fact that a significant portion of the population cannot "shop around" when incurring medical costs and the starting costs to enter the healthcare market as a provider are high: provide adequate facilities, hiring staff, purchase of equipment

[1] https://en.wikipedia.org/wiki/Natural_monopoly

[jfengel]

Medicine is pretty much every economist's go-to example of inelastic demand. And the go-to thing to ignore when saying "markets will fix everything".

[mixmastamyk]

Not all medical care is emergency care, and after a while folks learn which provider is a better value. They hear other's outcomes as well. Even if they don't choose perfectly every time, word gets out eventually.

Pricing transparency is necessary to the process, however. So, the assertion that folks "can't shop around" is exaggerated and about to become less true with the transparency law.

[Retric]

I think US dentistry is probably the best example of US heathcare, but it’s unusual in several ways. Most notably it’s not been part of standard heath insurance coverage and it’s mostly small independent practices. Together that’s keeping prices reasonable and bureaucracy to a minimum.

You get some shopping around, but many people will stick with the same dentist for years if not decades.

[knightofmars]

Nice, a down-vote without addressing the content and the reference to support said content. But hey, what do actual economists know about markets and monopolies.

[strbean]

The downvotes are flowing freely nowadays on HN. I think the downvote threshold could use a massive increase -_-

[knightofmars]

Haha, down-vote to that one too. Feel free to address the original criticism, I'm waiting to have an actual debate instead of an naive emotion fueled down-vote fest.

[texasbigdata]

With first hand knowledge this is correct but much more technically complicated at the ground level than you would ever believe.

[Ididntdothis]

“The hospital and its services are under no obligation to provide accurate pricing until ipso facto, and the pricing can often be changed because it doesn't stand up when placed under scrutiny”

That’s what’s driving me crazy. No other business can make up charges repeatedly and when found out, say “oops” and change them a little. In what way is this not fraud?

[cgriswald]

Try being uninsured. I had a woman come into my room (!) during my ER visit and ask for payment. I asked very clearly if this was covering the cost of the visit. I made it clear I understood the doctor and xrays would be billed separately. I paid. It wasn’t cheap.

I got the bill from the doctor. It was reasonable and I paid promptly. I got the bill for the X-ray and it was ridiculously low to my surprise. It was paid immediately. In my mind, I was done.

Then I started getting phone calls from a broken machine. Please call <actual silence> at <more silence> about your past due amount of <~$4000>. I assumed they were spam, but after about 10 of these calls over three days, the message variables were randomly filled or not on any given message. At no point was the message clearly about my hospital visit identified, but I figured it out by the phone number and the name of the parent company.

At this point I hadn’t even been mailed a bill. And I know they have the right address because the other bills came and I’ve only ever lived at my current house since the first time I went to this hospital.

So I went down to the hospital to sort it out. Well, they don’t have a billing department. They have “financial counseling” or something equally not what I need. And even though it was in the hours they are supposed to be there, everyone had gone home for the day.

I still haven’t paid. I haven’t gotten a bill, and I’m not entirely sure the calls aren’t just a scam someone is running.

[bcassedy]

Even when you're insured this happens. I had a woman come into my ER room and demand payment of my full deductible. They ended up refunding me 2/3 of it about a year later.

[lowercased]

yep, same thing happened here. I'd seen pictures, but.. yeah.

Wife cut her hand Thanksgiving night - had to go to ER - bleeding pretty bad. Initial triage was a few minutes, then in to an ER room to 'wait'. Someone came in after about 10 minutes with a portable POS on wheels, saying we had to pay $450 for the ER visit. No explanation about anything, and... I paid, but... I was in no position to 'shop around', nor even be confrontational. If I make a scene, or refuse to pay, or ask for more details, will they make us wait 6 hours? Or 8? I wanted this addresses ASAP, and paid. And... we still ended up getting bills for around $3400 (total of 9 stitches on her hand). This is with 'full insurance', which, we pay $1k/month for for 2 people.

That anyone defends this system as 'the best' is beyond me.

[Ididntdothis]

I couldn’t even imagine going to a hospital uninsured. It means you are pretty much giving them a blank check to take all the money you have.

[jasonjayr]

I have read and been told repeatedly that if you are not insured, you can typically negotiate any fee down to a reasonable rate, so long as you are diligent about it.

[Ididntdothis]

“Reasonable” is relative. Also first try to pull this off yourself. It’s not a pleasant process and takes a long time.

[alistairSH]

What's your other option? If you're critically ill/injured, the hospital/ER is where you go - that's who can treat your problem immediately.

[protanopia]

If you owe a bank thousands, you have a problem; owe a bank millions, the bank has a problem. It isn't in hospitals best interest to have people go bankrupt.

[code_duck]

it can work out exactly the same later on if your insurance it decides that they don't agree with doctors about a procedure being necessary, putting you on the hook for whatever.

[ajford]

Yep. My wife was billed almost $500 for out-of-network pregnancy testing when she went in for an injury, as they needed to confirm before they could give her painkillers.

She was certain that she wasn't pregnant, given she had seen her GYN just two weeks prior and was on implanted BC.

We're still fighting the appeal and the hospital regarding the use of an out-of-network lab instead of the in-network lab then used for the rest of tests.

[gotoeleven]

College prices are kind of like this, in that they follow the simple formula

tuition cost = how much you can borrow + how much you can pay

What is strange is why do we stand for huge price discrimination in college and medical care, but not for buying a candy bar?

[Ididntdothis]

Somehow doctors and colleges have maneuvered themselves into a position where they act like greedy companies but have a reputation for working for the greater good and should be trusted more than regular companies . Also people still believe that non profits are dogooders which is completely untrue in the case of schools and medical facilities.

[big_chungus]

This is what I don't get about "financial aid". The "elite schools" name an outrageous figure, charge the rich kids, give money to the poor ones, and ignore the middle class. This is probably intentional: they want either students whose daddies will donate or students who look good on press releases about "diversity". Now that the feds have nationalized student loans, colleges can continue these stupid policies knowing that the bottomless credit card of the American taxpayer has their back. Federal student loans don't consider a student's major, either; there's no way a "xyz studies" or poetry major should get the same loan at the same rate of a stem kid, even if that student has the same financial situation. From an actuarial perspective, it's nuts: one is going to end up a starving artist and the other has a promising career.

Oh, and my two cents: if you want to end up with larger numbers of under-represented groups in higher-paying fields, maybe making the long-term outcomes clear at that stage would help. Saying, "follow your dreams!" is very, very stupid advice to an eighteen-year-old.

[alistairSH]

That's not 100% accurate (the middle class is NOT ignored at the elite privates). For example, Stanford meets 100% of the tuition for students with family income <=$150k.[1] And the assistance doesn't evaporate completely at $151k. For families with incomes <$65k, tuition and expenses are covered. Most of the Ivies are similar.

The problem is really at elite publics, which don't have the massive endowments, so cannot subsidize middle class students.

We're at a point where it can be LESS expensive for many middle class students to attend Harvard than UMich or UVA.

1 - https://financialaid.stanford.edu/undergrad/how/parent.html

[Nasrudith]

Colleges and doctors are both decommoditized and competed over by those seeking "quality" and the minimal end up comparatively shunned if at all aware or having an alternative. High stakes breed those sorts of markets - it is no accident that doctors and lawyers are synonymous with highly paid non-management roles.

They are also seevices which means there is no preserved buffering possible. You can't just have a factory of doctors fill a warehouse with 40 hours of medical care each every week. Given the opportunity cost trying to "squeeze in" what they can in a discard free knapsack problem sort of way makes sense given the incentives even if the outcome isn't ideal or fair.

[Loughla]

>tuition cost = how much you can borrow + how much you can pay

I need this flushed out a little bit more. I have worked in higher ed for decades, and have never encountered a college that charges in that manner. They have a flat tuition, and the student fills that payment however they are able. But it's not like it changes based on how much capital they have access to.

Can you please explain that statement?

[jefftk]

It sounds to me like your parent is describing financial aid at high end colleges. The college has a sticker price, say $50k/y, and for people that can't afford it they have need-based financial aid. They ask you lots of details about your family's income and assets, and come up with a number that they think is the most you can pay.

It's price discrimination, in that it's charging people in proportion to what they can pay.

[apta]

Are you referring to the loan-based "financial aid"? This is one of the most hypocritical terms I came across. It's a loan, not an aid. An aid would directly reduce the amount of money you have to pay (discounts, scholarships, grants, etc.). A loan is not an "aid".

[jefftk]

I'm primarily talking about grants, not loans, since that's where the price discrimination is clearest. They're effectively setting the price at exactly what they calculate you can pay.

[big_chungus]

No, the generous "financial aid" policies of many universities amount to perfect price discrimination. They meet "one hundred percent of demonstrated need"; their phrase, not mine. This means they calculate how much you can afford to pay and charge you that much. That' is every monopolist's/oligopolist's dream. Oh, and they don't show how they calculate that "demonstrated need". I got prices much higher than what I could afford.

[KptMarchewa]

It's not on the level of individual student, but overall market. As ability of whole group of students to pay goes up, the price also goes up.

[theseatoms]

Just wait until Uncle Sam foots the bill directly.

He has quite the "ability to pay".

[bcassedy]

Right, but he also then has a lot more incentive to keep costs down and the power to enforce some requirements and controls to keep costs down.

[CamperBob2]

Seems to work OK in every other civilized country on Earth.

[dfxm12]

In what way is this not fraud?

In the way where you buy the legal definition of fraud from the senate.

[merpnderp]

Hopefully Congress passes medical price transparency and this game will end, and price competition can truly begin. If a hospital has to publicly announce they charge Blue Cross Blue Shield 20% of what they charge cash patients, they'll be in an untenable position and have to make drastic corrections.

I expect a lot of service providers to become untenable after price corrections, go bankrupt, get bought out by more efficient providers who remove all the unproductive staff.

Course this is all premised on Congress doing something useful, so...lol.

[e40]

My wife was denied short term disability for a foot operation due to a completely unrelated medical issue. It took 6 months to reverse the idiotic decision, which of exactly what they wanted. Infuriating.

[texasbigdata]

Real world example (slightly annonymized). You have a 50 FTE "billing and collections department". You can outsource, but at a certain scale it makes sense to build your own.

How do you motivate these people? Or manage their performance? Or manage a good outcome for the busieness, the payor and the client?

This wasn't a hospital setting. Much lower acuity. Upon joining they measured exactly this: CPT codes, bills, A/R, etc. 95% of the time those metrics correlate with their job: getting your complex insurance to reimburse for a procedure they administered.

It's a) not clear that's what you should measure, but let's assume it's not the worst thing in the world, b) straightforward how you can get the "evil" white board example you mentioned.

Not saying this is good or bad and American healthcare is arguably broken. But just another example to maybe calibrate your view.

[ochoseis]

EconTalk recently did an episode on pricing in healthcare that talks about a lot of these issues. Well worth a listen: http://www.econtalk.org/keith-smith-on-free-market-health-ca...

[sjg007]

Next time ask for that demand in writing. That's an easily winnable lawsuit. In fact you should just tell your insurance company that they demanded this AND tell your state's attorney general. That nonsense will be squashed immediately.

[TYPE_FASTER]

> the director of the hospital's billing department told her that all past bills must be payed before they are able to remove the stent

That's nuts.

What has changed about healthcare in the last 20yrs to drive up the cost of insurance premiums and pretty much everything?

[bobowzki]

I'm so happy I don't live in the US and have to deal with private healthcare.

I hope your wife has made a full recovery!