|
The inflated medical bills are not malice from the medical provider, they're incentivized by the insurance system. Providers are required to have a standard price list for all their billing codes; hospitals are required to publish it even, although compliance with publishing is sketchy. Their contracts with insurers says they can't bill the insurer more than what's on the standard price list, but the insurer won't pay more than the contracted amount for each billing code. As a result, the standard way to make a price list is to periodically review what insurance has paid on all the billing codes you've used lately, and if there's any billing code for which insurance has fully paid, increase the price. This is exacerbated by the fact that a single encounter might be encoded into multiple billing codes. One billing code for an aspirin, one for the nursing time to administer it, for example. Suppose insurance A pays reasonably for the nursing time but in exchange pays a pittance for the aspirin, but insurance B pays enough for the aspirin to cover the nursing time to administer it, but doesn't pay the nursing time billing code, but insurance C pays for an omnibus code for "spent a couple hours in the ER", but doesn't pay for nursing time or aspirin separately at all. A provider can agree to all three contracts, because they each give them enough money to profitably provide the service, but that requires that their price list has a high price for the aspirin, an high price for the nursing time, and a high price for the omnibus billing code. A cash payer gets the same bill an insurance company would - high prices on all three items. But insurance companies never pay that. In the old days, you would just have a totally separate cash pay price list, but medicare rules don't allow that anymore, and limit the magnitude of cash discounts. Fix the insurance system, and the bogus hospital bills that the hospital doesn't actually expect people to pay go away. |