[lettergram]

I worked in a billing office for 5 years, there are literally thousands of codes for EACH insurance company, again EACH insurance company.

The reason the cost of healthcare is so high is because medicare pays roughly 15% of a bill, others are somewhere between 20-50% of a bill depending. That is to say if the doctor charges you $40,000 you pay your 10% co-pay of $4,000 and the insurance then only pays maybe another $8,000.

Also, just so everyone knows, it's pretty easy to negotiate down your bill. The reason healthcare is so expensive is so many people don't pay it. If you are willing to pay say 40% of your bill it's already 25% better than medicare.

[badclient]

Also, just so everyone knows, it's pretty easy to negotiate down your bill. The reason healthcare is so expensive is so many people don't pay it. If you are willing to pay say 40% of your bill it's already 25% better than medicare.

This. My Dad is a surgeon and the stories I hear are incredible. Once he operated on a child whose insurance was out of network. So the insurance company writes the parents a check to give to my father. Instead, the parents decide to cash it and never pay for the surgery. So, the parents literally make a few thousand bucks from having their child operated instead of paying that.

[sanderjd]

This is the part I'm always curious about in these discussions: how do people get away with not paying? Is it a debt that is often discharged in bankruptcy or is there some other mechanism by which the debt is erased?

[tracker1]

Well, you can hire a collection agency (who usually gets X% of the collected amount with an $X as a minimum acceptable ammount, usually around 50%).

You, or an agency on your behalf can then have the unpaid amount due as a collection account appear on their credit report, and after that (7 years of no activity) it is supposed to come off. Some unscrupulous collection companies will modify the last account change date to keep it on, but that can be challenged.

You can also take the person to court and have a declaratory judgement, which will stick around on said credit report until paid.

There are also specific laws regarding where the involved parties are as local state laws apply too. It gets a little complicated.

I have two bills on my credit report with agencies that refused to negotiate... and I had an auto loan that was charged off (they repossessed my truck after they broke the payment arrangements that were made when I lost my job, and I refused to pay), after 8 years the collection company had changed the dates several times, I pointed out to the credit reporting agencies that the amount was the charged off amount for over 8 years, and had it successfully removed.

YMMV.

[badclient]

It is a combination. First, healthcare debt isn't weighted as heavily on credit reports. Second, healthcare is one of the few businesses where it is illegal to deny services before payment. You can't walk into a walmart, grab a candy bar and just walk out. With emergency healthcare, you can do just that and sadly, too many people take advantage of it.

[refurb]

To give you an idea of how big of a problem not paying is, I'll relate a story I heard from a small business owner in California:

In an effort to provide his blue collar workers with a decent benefits package, he setup a health insurance plan. After 6 months or so, his HR person came back and said "none of the employees have used the insurance at all!" This was weird since these workers had families and obviously children get sick on a regular basis.

He spoke to his employees and asked why they weren't using their insurance. The answer? Instead of having to pay a $20 co-pay to see a doctor, they could just go to the hospital and say they were uninsured. If they did that, they didn't pay a dime for their healthcare.

[GFischer]

How is that NOT screwed up?

I'm amazed at the ways the U.S. healthcare system is so much worse than most of the rest of the world's.

I guess there are humungous lobbying efforts and entrenched interests to make it stay the way it is.

The caveat being, it also has some of the most advanced medical technology and procedures too, but the day-to-day healthcare is surely the worst.

How it works here in Uruguay:

There are three levels of care

1) Universal (public) healthcare, you just show at the door and you're admitted. The quality is poor (although doctors are mostly good), and some hospital conditions are close to appalling, but it's 100% free (paid by taxpayers blablah), even up to cancer or AIDS treatment (yes, thousands of dollars). Time to treatment is also very bad for surgeries and other conditions.

2) Almost-universal healthcare in a co-op mode (Mutualism, "Mutualistas" and FONASA). Anybody who works or draws a pension has the right to one of those for himself and his children. Quality is decent, and there are some small costs associated (U$ 5 per doctor visit, and a few hundred dollars for major events). Medicine is provided by the hospital at an extreme discount (usually U$ 5 for any medicine, including the ones costing hundreds of dollars. Generics are mandatory whenever possible). The thing is, it's becoming a bit overcrowded and quality is going down, government is over-regulating IMO.

3) Private insurance, US-style. This one can replace 2) although 1) is still free to everybody (double coverage). That one gives access to the very best hospitals, doctors, etc... but it's the most expensive by far, and usually doesn't cover medicines outside of hospital stay.

[lawnchair_larry]

This isn't true. They only have to provide emergency services, and they still charge for them, just not up front. If anyone did that, they would still receive bills in the mail and have derogatory information on their credit report.

Otherwise, please tell me which hospital is giving away free service to the uninsured.

[refurb]

Exactly, these employees would take their children to the emergency room/urgent care. They weren't getting check-ups, but if the kid had a high fever, they would bring them in, get them seen by a doctor, then be on their way.

When asked about billing they simply said "I don't have insurance". Many hospitals, including the DSH (disproportionate share hospitals) write these things off all the time. The hospital just doesn't bother following up. Are you going to spend $200 to chase down a $100 hospital bill?

[sp332]

That seems odd... I've heard from several sources that insurance companies negotiate prices, while individuals get stuck with even larger bills.

[refurb]

There are many hospitals (often inner-city) that serve a large population of the uninsured. They are quite used to not billing patients for procedures.

[njharman]

Debt is not a crime in the U.S.A. Just don't pay it. Eventually collectors write it off as tax loss.

[commandar]

Yeah, I work at a ~400 bed not-for-profit hospital. One of the culture shocks when I started working here was learning that we have an entire department whose sole job is figuring out what billing codes to send insurance companies so that the hospital gets paid for its services.

From everything I've seen, it's a very difficult job, and any mistake -- or not even a mistake per se, just coding something in a way that disagrees with the particular quirks of a given insurance company -- can have a drastic impact on whether and how much we actually get paid for a particular line item on a bill.

[Bamafan]

The reason the cost of healthcare is so high is because medicare pays roughly 15% of a bill, others are somewhere between 20-50% of a bill depending. That is to say if the doctor charges you $40,000 you pay your 10% co-pay of $4,000 and the insurance then only pays maybe another $8,000.

Another reason is the supply of doctors is artificially restricted by the AMA.

[riahi]

The supply of doctors is not restricted by the AMA. The supply of doctors is determined by the number of residency spots available to new graduates; that number is entirely determined by the Centers for Medicare and Medicaid (CMS). Thanks to the Balance Budget Act of 1997, Graduate Medical Education (GME) was dramatically slowed due to decreases in Medicare funding of residency positions. [1]

As long as we require physicians to be US trained and to have completed a US residency, the bottleneck will be GME funding. To fix that, the AMA or any other concerned citizen can lobby Congress for an increase.

[1]: http://jama.jamanetwork.com/article.aspx?articleid=182532

[justincpollard]

If there's a shortage of doctors we could increase the supply or examine whether we need fully trained doctors for certain more basic services in the first place. There are plenty of beneficial/ necessary medical procedures that don't require an MD's expertise.

[bradleyjg]

Why should Medicare pay for every residency in the country?

If hospitals can afford to give their executives seven figure compensation packages, they can afford to fund a few residents.

[Bamafan]

I wasn't referring to residency spots at accredited medical schools.

I was referring to medical school accreditation itself.

[mbreese]

Medical schools are free to set their own limits on the number of students they admit. But they aren't going to admit more students than they predict can find a residency spot. It would look bad to have a high percentage of your students not be able to find a residency.

The real reason why there are fewer doctors is that it simply doesn't make any economic sense to be a doctor anymore. You need too much school, at too high a price, and you push off any real earning potential 6-9 years away from your peers. If you specialize, you can add an extra 2-4 years on top of that. And you really don't make enough over the long run to justify the lost opportunity costs.

So yes, there is a shortage of doctors, but that isn't going to change anytime soon.

[bradleyjg]

Sheer and utter nonsense. First there are a huge number of students who wish to go to medical school and don't get in. There's no shortage of applicants at all. Second the incredibly high compensation for speciality doctors quickly overcomes both opportunity cost and tuition costs as compared to almost any other profession.

I encourage you to run the numbers. You will find that $250k/year catches up very quickly to $100k/year even with a 10 year head start and $300,000 in extra debt.

[mbreese]

I encourage you to talk to some doctors. No one makes $250k per year, except maybe a few surgery specialists (and maybe ER). Primary care doctors (the ones that where there actually is a shortage) can can easily start at under $100k and the max can be below $200k. And if you are a pediatrician or a pediatric specialist, expect to take a cut in pay relative to your adult colleagues.

[arethuza]

Out of interest, is there any good reason why medical degrees have to be done as second degrees in the US? Doesn't that add hugely to the cost of becoming a doctor?

[toomuchtodo]

So we replace doctors with software. Will it be perfect? Not at first. But eventually...

[newbie12]

The same self-interested political forces that keep the number of doctors low are also fighting against automation.

[lifeisstillgood]

Oh that's just utter nonsense.

Automation (especially in diagnosis) is welcomed and supported by the medical profession.

Some vague idea of walking up to a kiosk and the computer telling you your condition and dispensing pills is opposed by everyone apart from the CEOs of kiosk makers

[bradleyjg]

> The reason the cost of healthcare is so high is because medicare pays roughly 15% of a bill, others are somewhere between 20-50% of a bill depending. That is to say if the doctor charges you $40,000 you pay your 10% co-pay of $4,000 and the insurance then only pays maybe another $8,000.

That help may explain extremly high nominal prices, but it doesn't explain the fact that the median price paid is also really high (The $12,000 in your example). Nor do cross subsides explain the high costs.

Both bottom up analysis looking at the amounts paid by various insurance companies for procedures and top down analysis of overall per capita health care spending reveal a system that is far, far more expensive than any other health care system in the world.

[dragonwriter]

> Both bottom up analysis looking at the amounts paid by various insurance companies for procedures and top down analysis of overall per capita health care spending reveal a system that is far, far more expensive than any other health care system in the world.

Its not so much a system as dozens of different systems with completely different premises and extraordinary complex interactions which have to deal with each other.

Which is why it is so expensive.

[Splendor]

This is incorrect. Procedure codes are standardized across the industry (CPT codes, HCFA codes, etc.). Don't confuse figuring out the correct code to bill for a procedure with determining some proprietary code for each insurance company; that is simply false.

[fizzbar]

Re: negotiating your bill: It blows my mind that in America you would approach paying for healthcare the same way you would purchase an expensive car. I don't consider my health to be a luxury good... But in the USA it is priced as such?!

[sseveran]

The vast amount of technology available is turning healthcare into a luxury good. There are newer and better technologies for treating many things available. How much is that worth?

[fizzbar]

The technology should enable better outcomes. But the "good" in question here is your personal health -- its "worth" is infinite.