Reference pricing as another no

The biggest problem with American health care financing going forward is cost.  For the same common procedure, American providers charge much more (purchasing power parity adjusted) than other OECD providers.

 we pay higher prices for the same care? Among prescription drug costs, we pay far more than any other country, at least 20% more than Canada and over 60% more than New Zealand. For the same MRI’s and CT scans, we also pay more: $1,080 is the commercial average cost for an MRI in the U.S. as compared to $599 in Germany; at CT of the head costs $510 on average in the U.S. versus $272 in Germany. For a hip replacement, we again pay the most: $1,634 among public payers and $3,996 among private payers, versus $1,046 and $1,943 respectively in Australia. And physicians’ incomes are the highest: $187,000 on average among primary care doctors in the U.S. versus $93,000 in Australia; and $442,000 among orthopedic surgeons in the U.S. versus $154,000 in France.

Reference pricing is a cost controlling payment strategy.  It works when an insurance company looks at its contracts with providers and see that 75% of the providers who meet quality standards charge no more than X for a given procedure or bundle of procedures. The insurance company then says that X is the most that it will pay for the procedure.  If a patient goes to a doctor that charges no more than X, the insurance company pays full benefit.  However if a patient goes to a provider who charges more than X, the insurance company pays full benefit up to X, but after that, the patient/member is on the hook the remainder.

Reference pricing works well for elective, non-urgent procedures that are well defined and common.  For instance, reference pricing has been tried by CalPers for hip and knee replacements.  Other common procedures where reference pricing could be useful would be vasectomies, ACL replacements, lapband, gastic bypasses and anything else which has a significant amount of flexibility in the scheduling.  The goal is to drive people to use less expensive providers in order to get high cost providers to drop their prices. 

This is similar to tiering and steering that we discussed last month as it is a strong nudge to get people to go to lower cost providers as there is minimal evidence that shows high cost providers are noticably higher quality providers. 

I think tiered networks will be more common on the Exchanges this fall as well as more common for employee sponsored plans as they produce cost savings while at least maintaining the illusion of unlimited choice.

Reference pricing, from a member point of view, acts similarly to a tier network but at the procedure level instead of the provider level.  It is a bit more complicated that a true tier and steer network model.

The reason why the past 470 words are important is the Obama Administration last week issued a clarification on reference pricing for Exchange policies.  Reference pricing will be allowed, and it the amount that members/policy holders have to pay over the reference price will be attributed to the out of network out of pocket costs.  This is important because in-network out of pocket is limited to deductible, copayments and co-insurance to no more than $6,350 for a single person in a policy year. 

Your health insurance plan slaps a hard limit on what it will pay for certain procedures, for example, hospital charges associated with knee and hip replacement operations. That’s called the reference price.

Say the limit is $30,000. The plan offers you a choice of hospitals. If you pick one that charges $40,000, you would owe $10,000 to the hospital plus your regular cost-sharing for the $30,000 that your plan covers.

And that extra $10,000 doesn’t count toward your plan’s annual limit on out-of-pocket costs.

That’s crucial because under the health care law, most plans have to pick up the entire cost of care after a patient hits the annual out-of-pocket limit, currently $6,350 for single coverage and $12,700 for a family plan. Before the May 2 administration ruling, it was unclear whether reference pricing violated this key financial protection for consumers…

I think this is a good thing on the proviso that any reference pricing scheme is extremely clearly disclosed, and pricing is amazingly transparent.  We need systems of No on medical care, and reference pricing is one of the stronger systems of No that has a demonstrated history in both the United States and overseas of reducing costs without compromising quality.

Share On Facebook
Share On Twitter
Share On Google Plus
Share On Pinterest
Share On Reddit






52 replies
  1. 1
    aimai says:

    It sounds good but if I’m understanding it right it means I have to pick the insurance I get very carefully to make sure that it has the widest possible networks because I just don’t know what emergency treatment I’m going to need at a later date. It would never occur to me to check all the possible kidns of treatment–say for hip replacement–now, at my age. And in fact because we have employer healthcare we have relatively little choice in the matter anyway. But it seems like a person could feel very caught in a trap if their primary care physician tells them to go to a practice that is not covered by their insurance. Its not like people make these choices on price–they make these choices on connections, social connections.

  2. 2
    Tommy says:

    Richard I am blessed with amazing health. A few years ago I got really sick. A one in ten million virus. Cut from ear to ear and in the ICU with a tub down my throat. Not sure how you price that out, cause they literally saved my life, but a price tag was put on it. $79,335. I know that number cause my health insurance didn’t pay it. I did. I kid you not I got sick while I changed my health care provider. Told it was a preexisting condition.

    I yelled at them. That I always had health care. Like the best of the best. I paid into it. Never use it. Now I need help you are not there for me. Fuck you!

  3. 3
    gene108 says:

    I think this is a good thing on the proviso that any reference pricing scheme is extremely clearly disclosed, and pricing is amazingly transparent.

    You are aware medical pricing is the opaque?

    No one really knows what the cost of a procedure is because the payment for those procedures varies based on the payment contract insurance companies have with the provider.

    I do agree someone has to say “No” but I do not see how consumers should bear the brunt of this problem versus the providers, who are charging more. Consumers are the least informed and have the fewest resources, with regards to figuring out what medical pricing should be.

    Plus medical procedures are largely price inelastic, which is one reason medical inflation is out of control, because if you are sick – bad knees needing knee replacement, chronic condition, etc. – and the doctor says take “x” drug or do “y” procedure at “z” provider the patient does not have the resources to construct a valid rebuttal, so people take “x” drug without many questions.

    There’s a lot that should be done on the provider side, with regards to price transparency in order for the above proposal to be fair to consumers.

  4. 4
    randomworker says:

    I agree that it can help bend the cost curve down but as a practical matter people are going to keep running afoul of the rules and it will be a PR nightmare. People just cant pay that close attention to arcane rules and make rational choices when they are sick, stressed, or otherwise hurting.

  5. 5
    Tommy says:

    @gene108: It blows my mind. My father worked at high levels within the DOD. For a few decades. He has government provided health care with his pention. About this time last year mom got sick. In the ICU for a month. Guess what they got billed. Well zero dollars. My mom had the best health care anybody could want and didn’t have to pay a penny for it. I wish everybody had this.

  6. 6
    Walker says:

    Good luck on doing anything about doctor’s salaries. In the US, medicine is seen as the number one road into the upper middle class. I read admissions at my university. It is not an exaggeration to say that at least 75% of the applicants are interested in pre-med. Heck, if medicine did not require an undergraduate degree, a significant portion of the US university system would collapse overnight.

  7. 7
    JKC says:

    Let’s also look at how much a medical education costs in the US compared to other countries. A $200,000 salary as an ER doc sounds great, until you look at servicing the $300,000 worth of student loans it took to get there.

  8. 8
    Tommy says:

    @Walker: My grandfather was a small town doctor. He became rich to where there is generational money. When he passed away in the 90s I helped to clean out his office. There was an entire file cabinet with note cards. Short hand. I was like what is this? Told they were people that couldn’t afford to pay him. That as a kid when I was around and I was told that person was an uncle, bring by a chicken, they were paying him. Those note cards were what they said they’d pay him.

  9. 9
    Glidwrith says:

    I also seem to recall the insurance companies using specific companies to survey what the costs were, then deciding that a given procedure would cost too much (or pressure the surveyors to throw out the top-costing ones) for profitability and simply setting a price that would ensure that profit. Hence, you get shafted even if the insurance ‘covered’ you.

  10. 10
    Walker says:

    @Tommy:

    My father was a small town doctor too (which is why I am not). For those families, he used barter instead of IOUs. We got a lot of nice furniture and butchered hogs out of it.

  11. 11
    MomSense says:

    @gene108:

    We can now haz the pricing data.

    Here is an article about it.

    http://www.washingtonpost.com/.....her-38000/

  12. 12
    Tommy says:

    @Walker: I am happy you understand. I think many folks might not understand.

  13. 13
    Schlemizel says:

    I must be doing healthcare incorrectly. When I needed surgery I didn’t ask the doctor, hospital or anesthesiologist how much they were going to charge and then call 3 other doctors, hospitals and anesthesiologists to get quotes and compare prices. In fact I do not recall ever discussing the cost of any of these things ever. I also don’t recall anyone I know ever having done anything like that either. I know the insurance companies have never made an effort to give me any information about costs.

    How, exactly, is this system of only paying up to a certain amount supposed to control costs When you don’t know the covered amount until too late?

  14. 14
    Tommy says:

    @Schlemizel: Well maybe this is what is wrong with healthcare. That nobody price shops.

  15. 15
    Schlemizel says:

    @Tommy:
    Exactly! You would have been so much better off instead of going to the ICU right away you have shopped around for a lower cost provider.

    But then what if the cheapest one has poorer outcomes? Or what if the more expensive one is successful less often but it is because they take cases the low cost provider knows are tricky and so they push them away?

  16. 16
    Edmund Dantes says:

    Really informative, but it need to be cleaned up a bit for typos and some missing words or dropped words.

    It seems like we are putting the cart before the horse with this setup. This works if we have transparent prices, if we have consumer base knowledgeable enough to form informed choices, and a market where people have the ability and time off to go where the price is cheapest.

    We don’t have any of that, but we are putting in controls and draconian punishments as if we did. 10,000 is a draconian punishment to almost anyone making less than 200K unless they are completely debt free and even than that is a stretch.

  17. 17
    NonyNony says:

    @Tommy:

    Well maybe this is what is wrong with healthcare. That nobody price shops.

    The insurance companies price shop. Doctors complain about it all of the time.

    This is actually a good-sized chunk of what we pay insurance companies to do – use their leverage to get us a good price. I think reference pricing doesn’t go quite far enough if the insurance companies are leaving it on the table for their clients without direction about what to do, but if reference pricing (“we pay this much and no more for this outpatient surgery”) is combined with a bit of information (“and here are the providers in your area who have agreed to charge no more than that price for that procedure”) I think it’s a good service and it will provide pressure on doctors to bring their prices down to the reference price for those things in some cases.

    But it needs to be for, as Richard describes above elective, non-urgent procedures that are well defined and common. If you go into the hospital with an emergency that needs surgery immediately (like showing up with a burst appendix or having a heart attack), then reference pricing isn’t going to work and shouldn’t be used because nobody is going to comparison shop in that situation. And it isn’t going to work for everything – pediatric surgeons, for example, will continue to be able to charge whatever the fuck they want because a message from your insurance company that your kid’s surgeon is “too expensive” and “here’s a list of providers who are cheaper” is only going to terrify you and piss you off, even if the procedure is non-life threatening. Because you already feel all of the parental guilt about your kid having to go under the surgical knife – you aren’t going to compound that by being a cheapskate.

    (Pediatric surgeons who take advantage of parents that way and charge way outside the bounds of typical pricing should, by the way, be investigated by the state medical boards and heavily reprimanded. It’s another way that complete price transparency would really help us make informed decisions, since it would help us sift out the assholes who take advantage of their patients in their weakest moments.)

  18. 18
    Schlemizel says:

    Here is my example. I fracture my pelvis into 3 pieces. Taken to the nearest hospital and put in traction. After 2 days it was obvious to the doctors that traction was not bringing the bones back together. Someone (and I honestly don’t know who, I was never consulted and neither was my family) decided that this other doctor could operate and save it. But that doctor only worked at a different hospital. I found this out when they told me they were preping me for an ambulance ride to the other place. In my drugged state I agreed and the outcome could not have been better for me.

    Was I wrong? Should I have demanded an estimate from the other hospital and doctor? Should I have remained in traction getting no relief or improvement for a couple of days while we called other orthopedic surgeons and hospitals to get competitive bids? GIven that pelvis fractures can take many forms is it even possible to compare the costs? Its not like a wheel alignment on a 1952 Chevy, they are all the same people & fractures are not.

  19. 19
    NonyNony says:

    @Schlemizel:

    This doesn’t fit the category of elective, non-urgent procedures that are well defined and common, so you shouldn’t be worrying about it at all. This is not the kind of case where reference pricing is going to help anyone to control costs and so it shouldn’t be used here. This is the kind of thing that your insurance company and the hospital should be fighting over because this is part of the service (fighting over costs for emergency procedures) that you are paying your insurance company to provide.

    (And I will add if it isn’t clear here – if the ruling by the Administration says that this IS the kind of thing that is covered by reference pricing, then they’re idiots and need their heads examined. Because it won’t control costs, it will just shove the costs onto the backs of the patients, and that isn’t going to do anything but piss a bunch of people off.)

  20. 20
    beltane says:

    Perhaps it should be a requirement that hospitals post pricing information on their websites in a way that is easy and convenient for the average person to see. Right now, most people go to whatever specialist their primary care doctor refers them to without the question of cost entering the equation at all. In fact, if you ever want to experience awkward silence at its most awkward, try asking your physician about the cost of a particular treatment or procedure.

  21. 21
    Joel says:

    @JKC: the tuition can be seen as an offshoot of high compensation…

  22. 22
    Schlemizel says:

    @NonyNony:
    Well, it wasn’t an emergency as such & it was elected really so I am not sure, but I see your point.. My guess is very few payments are made for elective non-emergency things. And even then people are more likely to go to the doc they know and trust rather than shop the yellow pages to find a deal.

  23. 23
    Richard Mayhew says:

    @Edmund Dantes: My company is working on a reference pricing model for a few products as a pilot project next year. It will be for colonoscopies, vasectomies, and knee MRIs not performed at the ER. We’re producing massive 72 point marketing material for members which says IF YOU GO TO XYZ — YOU PAY 0 — IF YOU GO TO ABC — YOU PAY BIG

    Minimal transparency is needed if it is clear what procedures are in the reference pricing model and what docs get the better rate.

  24. 24
    dr. bloor says:

    @Walker: Your applicants are waaaay behind the curve. No one in their right mind who wants to get into the upper middle/upper class would choose medicine over finance or other business-oriented professions. Far less debt, and vastly greater earning potential for adults in their twenties and early thirties.

    Doc salaries really aren’t the killer in health care. For most the incomes are no more than competitive with professions that call for smart people with postgrad professional/graduate training.

  25. 25
    Richard Mayhew says:

    @Edmund Dantes: cleaned up a bit

  26. 26
    Villago Delenda Est says:

    @Schlemizel: You’re supposed to peruse the slick advertisement inserts in the Sunday paper and shop for surgery just like you would for a new big screen TV, silly.

  27. 27
    Villago Delenda Est says:

    @Edmund Dantes: Transparent prices? What sort of commie crap is this?

    The socialists are everywhere now!

  28. 28
    Jim says:

    If only we could get good pricing information from hospitals. Reporters who’ve tried it have run into brick walls. Parking fees, quite clear! Hospital procedures, not even the hospital can give you a straight answer. This is why the GOP plans that “let” you shop around are such a stupid idea. As another commenter has noted, this is what we pay the administrative costs of insurers to do for us, since we as individuals don’t have the leverage.

  29. 29
    mm says:

    I see a primary doctor and a specialist or two during the year. I take a 4 or 5 ongoing prescription medicines. Otherwise I’m in good health and have never been hospitalized overnight.

    I don’t ask the doctor what the visit will cost me. I’ve tried and they can’t tell me. They take my copay and can never give me a number. Sometimes I get a bill within weeks and sometimes it takes months.

    Was the bill made before my insurance pays them? Will they send me a new bill once they get paid? I don’t know.

    Every doctor’s bill has a different format. It takes study to figure out what each number means. Sometimes they’re a combination bill and statement and list visits going back several years. I’m never sure how to match them up to the documents that the insurance sends to me.

    My doctor upped the dosage on one of my prescriptions and since the pill isn’t available in the new dosage size I have two copays for 2 pills so I’m effectively paying double.

    None of this is emergency care. My eyes just glaze over with this stuff. I have a college degree.

    My dentist has software that tells them what they should expect to be paid by the insurance and what my out of pocket will be. But even there, they always say that they have to check with the insurance company for the final number.

  30. 30
    Walker says:

    @dr. bloor:

    I don’t disagree. I am just saying what the applications are like here. And at every university in the country.

    Economics is a distant second place in applications. But even it is not the right track to get into finance. We actually have a financial engineering program that has very little to do with the economics department.

  31. 31
    JKC says:

    @Joel: not really: I think high levels of medical school debt push young docs into specialty medicine where they can make more money. If you want to have a system where primary care docs are rarer then hens teeth because they can’t afford to practice, keep things as they are. If you want to cut the money docs charge and make, start by cutting the cost of a medical education.

  32. 32
    Mnemosyne says:

    @JKC:

    If you want to have a system where primary care docs are rarer then hens teeth because they can’t afford to practice, keep things as they are. If you want to cut the money docs charge and make, start by cutting the cost of a medical education.

    Yep. I have no problem with having a sliding scale of either tuition or loan forgiveness that incentivizes medical students to go into primary care fields (internal medicine, family practice, pediatrics, etc.) rather than expensive specialties. People who want to go into specialties that pay a lot can afford to pay more for their education.

  33. 33
    Calouste says:

    @gene108:

    Patients do not have the resources to construct a valid rebuttal because it takes 8-10 years and $2-300,000 to get the knowledge to construct a valid rebuttal. That’s why a patient-provider free market (in the Adam Smith sense, not in the current unregulated-free-for-all-privatize-the-benefits-socialize-the-costs sense) can’t work, because the knowledge gap is unsurmountable.

  34. 34
    jl says:

    Thanks for column on reference pricing, which is an important topic for a number of reasons. One additional reason to understand reference pricing is that international reference pricing for brand name drugs may be having a big impact on how drug companies make pricing decisions. One way drug companies have maximized profit through the early 00s was to use price discrimination, and roughly calibrating the prices that that they asked for drugs in different countries to ability to pay, measured by each country’s per capita income. Reference pricing by large national systems, insurance systems. or large buyer groups in national health care systems has disrupted that system.

    Just to make sure I understand this post, the word ‘No’ in this post refers to saying ‘No’ to higher prices when there is no underlying justification for them in terms of real economic cost. Is that right?

  35. 35
    Ella in New Mexico says:

    The hospitals, doctors and for-profit medical field is being allowed to secretly set prices and is in general, charging people depending on how their insurance does or does not reimburse them. And that should be frigging illegal, especially since we no longer have real HMO’s or PPO’s that at one time were good at keeping prices down, and passing that off to the consumer in the form of set copays and reasonable out of pocket maximums.

    Example: a 29 year old male who went for years without health insurance until they finally just hired on with a starting salary in the low $40’s with a state agency. He was elated to be able to buy himself what he thought was “decent” health insurance. As an individual, it has a $350 annual deductible for him, a set co-pay for some things like office visits or pharmaceuticals, and co-insurance for others. Maximum annual out of pocket cost for him is $3250. “God, I will never need to spend THAT much money for my routine health care needs”, he thought. Sounded reasonable–until he tried to use it.

    He has had a long-standing issue (bleeding hemorrhoid) that will require a very minor outpatient surgical procedure under local anesthesia. When he went for his “pre-op registration, he was told that the hospital bill would be $12735. This did not necessarily include any other fees that might be charged by outside providers including other doctors and pathology fees. His portion? You guessed it: the maximum out of pocket cost of $3250.

    This same plan offers my husband insurance. I researched what it would cost to get this done under our plan: $450. Why? because it still negotiates with providers and sets limits without co-insurance. I have no idea what the hospital charges our insurance, since I am not actually getting the procedure.

    But I somehow doubt that it is much more than the $3000-$4000 they get when someone actually has to write them a check. This is just wrong.

  36. 36
    Mnemosyne says:

    @Ella in New Mexico:

    Assuming he hasn’t been able to appeal successfully to his insurance company, I’ve been strongly encouraging people to file complaints with their local insurance regulators and with HHS. Assuming he’s in New Mexico, it looks like he can file a complaint with the Office of the Superintendent of Insurance. You can file an HHS appeal here.

    It’s really, really important to let the state and federal regulators know whenever an insurance company does something hinky, because if consumers don’t report it, they won’t know. It may turn out to be totally legal now, but could be something that would be addressed in future legislation, so definitely report them.

  37. 37
    docg says:

    Single payer, single payer, single payer.

  38. 38
    pseudonymous in nc says:

    @docg:

    Single payer, single payer, single payer.

    Doesn’t have to be single payer. The German system isn’t single payer, but the insurers work together to negotiate reimbursement rates with the providers, coded on a much broader basis than the American billing model. You have a big catalogue of standard reimbursement rates that apply to every insurer and every provider, and it’s all public.

    Point is, that it doesn’t force sick people into stupid comparison shopping. A patient might be told “well, Doctor X surcharges $Y”, and you can say “well, I’m not paying a surcharge.”

  39. 39
    Mnemosyne says:

    @Ella in New Mexico:

    Also, if the insurance company says they were totally allowed to do it this way, don’t believe them. File the complaint and make them justify themselves to the state and the US government.

  40. 40
    pseudonymous in nc says:

    @beltane:

    Perhaps it should be a requirement that hospitals post pricing information on their websites in a way that is easy and convenient for the average person to see.

    Have you ever seen a full line-itemized hospital bill?

    They could put that shit on their websites, and you still wouldn’t cotton on that getting blood drawn will be billed under 27 different line items.

  41. 41
    mclaren says:

    Say the limit is $30,000. The plan offers you a choice of hospitals. If you pick one that charges $40,000, you would owe $10,000 to the hospital plus your regular cost-sharing for the $30,000 that your plan covers.

    And how do you know that your hospital charges $40,000 for that procedure?

    You don’t.

    The hospital never tells you — until they send you the bill.

    Thanks for explaining why the broken American medical-industrial complex is collapsing and irretrievably dying, Mayhew. The only reasonable solution to this problem is: nationalized single-payer health care.

    Otherwise, hospitals and imaging clinics and medical devicemakers and doctors and hospitals will simply raise their prices up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up and up until nobody can afford health insurance because of the stratospheric cost of the underlying medical procedures.

    Stick a fork in the American health care system: it’s dead, it just doesn’t know it yet.

    Clowns like Mayhew are still trying to slap a margarita in the corpse’s hand and pretend it’s alive, but that Weekend at Bernie’s act isn’t working.

  42. 42
    mclaren says:

    @dr. bloor:

    Doc salaries really aren’t the killer in health care. For most the incomes are no more than competitive with professions that call for smart people with postgrad professional/graduate training.

    You need to improve your lying skills, Doc. You’re just not doing it right:

    Greg Mankiw features the chart above on physicians’ salaries in the U.S. vs. various European countries and Canada, showing that MDs in the U.S. make about $200,000, which is between 2 and 5 times as much as doctors make in other countries. How do we explain the significantly higher physician salaries in the U.S.?

    One explanation is the restriction on the number of medical schools, and the subsequent restriction on the number of medical students, and ultimately the number of physicians. Consider the difference between law schools and medical schools.

    In 1963, there were only 135 law schools in the U.S. (data here), and now there are 200, which is almost a 50% increase over the last 45 years in the number of U.S. law schools. Unfortunately, we’ve witnessed exactly the opposite trend in the number of medical schools. There are 130 medical schools in the U.S. (data here), which is 22% fewer than the number of medical schools 100 years ago (166 medical schools, source), even though the U.S. population has increased by 300%. Consider also that the number of medical students in the U.S. has remained constant at 67,000 for at least the period between 1994 and 2005, according to this report, and perhaps much longer.

    Source: “The medical cartel: why are MD salaries so high?”

    As for your laughably false and foolishly dishonest claim that “For most [doctors] the incomes are no more than competitive with professions that call for smart people with postgrad professional/graduate training,” here’s data on the salaries of professions that call for smart people with postgrad pofessional/graduate training:

    Average salary of a postdoctoral research fellow: $35,000 to $50,000. Compare with the average salary of a general M.D. in America at $230,000. “As a baseline, in 2012, the National Institutes of Health (NIH) National Research Service Award (NRSA) postdoctoral stipend for new postdocs was $39,264, increasing to $54,180 for those with seven or more years of experience. Funding levels at universities are broadly similar.”

    How about engineers with masters degrees?

    Aerospace, aeronautical and astronautical engineers earn an average wage of $87,000 per year, with the highest 10% of them earning $124,550 and the lowest 10% on a salary of $59,610 per year. The average starting salary for aerospace engineers with a bachelors degree is $53,408 per year; for those with a masters degree they can expect to start on an average salary of around $62,549 per year; and those with doctorates start on an average salary of approximately $73,814.

    Biomedical engineers earn an average salary of $73,930 per year. The lowest 10% earn approximately $44,930 per year, and the highest 10% earn around $116,330 each year. The starting salary for biomedical engineers with a bachelors degree is an average of $51,356, and for those with masters degrees the average starting salary is around $59,000 per year.

    Chemical engineers earn an average salary of approximately $79,000 per year. The highest 10% of chemical engineers earn an average of $119,000 every year, whilst the lowest 10% receive an average salary of $50,000. Chemical engineers with a bachelors degree have an average starting salary of $59,000; those with a masters degree earn approximately $58,600 as their starting salary; and $73,600 average starting salary for chemical engineers with a doctorate degree.

    From the article “10 jobs that require a graduate degree”: the salaries range from $177,000 per year (at the very most, for a business executive) to $65,000 per year for a librarian (at the very most). The median salaries for these graduate-degree-required jobs are much lower, ranging from $77,000 per year to $42,000 per year.

    So we can see that Dr. Bloor is lying. And not only that — he’s not just lying, he’s telling a particularly ignorant and incompetent lie.

    You need to study Goebbels’ methods, doc. That way, you can sharpen up your lying skills and possibly convince a few of the more gullible dupes on this forum…instead of making a fool of yourself.

  43. 43
    mclaren says:

    @Mnemosyne:

    Also, if the insurance company says they were totally allowed to do it this way, don’t believe them. File the complaint and make them justify themselves to the state and the US government.

    Yes, while you’re dying because you’re bleeding out from a catastrophic car wreck. Because you have sooooooooooo much time to contact a lawyer and file complaints and fill out paperwork when you’re convulsing and coding out in the E.R.

    Seriously…WTF? Bloor and Mayhew are offering us regular ordinary stupid…but you’re giving something special: advanced stupidity.

  44. 44
    demit says:

    @mclaren: What a pain in the ass to have to scroll thru. I guess you thought that was a clever thing to do.

  45. 45
    dr. bloor says:

    @mclaren:

    Greg Mankiw. Pretty much all you need to know.

    http://www.nytimes.com/2014/05.....&_r=3

    Just so you know, btw, I’m a Ph.D. I make less than my plumber on an hourly basis. I have no dog in the fight that would compel me to “lie,” at least as you define it.

  46. 46
    Mnemosyne says:

    @mclaren:

    Er, no, you file the complaint after you get the bill, which generally happens after one is released from the hospital. Haven’t you ever been hospitalized? Do you have any clue how medical billing works, at all?

  47. 47
    Ella in New Mexico says:

    @Mnemosyne:

    Thanks for the helpful and intelligent comment. When you say file a complaint, what specifically do you think he should/could say is the problem?

    In any case, I think this is all part of a Vast, Right-wing Conspiracy to make everyone with employer subsidized insurance so stabbed in-the-back-sick of ACA that they’ll vote in a Republican Senate in 14 and Jeb Bush in 16.

    The insurers and employers have made absolutely sure that there is nothing “legally” wrong in these new ways of screwing the consumer because they can just blame it on the fact that you get what your particular employer chooses to negotiate on behalf of it’s employees. My husband’s employer (DoD) negotiated a better plan for it’s group, whereas the State of NM did not.

    I mean, seriously, what costs have increased so much that this plan I’m talking about needed to jack up it’s costs to the employee from 2012-2013 (in which a single person had a $175 deductible, a OOP limit of $1750, and 10% coinsurance) to the ones I described above for this year’s plan. They also announced that state employees will see a 10% increase in their premiums start
    ing in July 2014’s fiscal budget. I don’t see where health care costs for this particular insurer in this state have increased that much to justify their pricing.

    So a lot of what makes me really PO’d is that not only are hospitals and medical providers not transparent in their charges and change them according to who they are dealing with, too many employers also took the 2014 ACA Exchange rollout as an opportunity to cut their costs by jacking up geometrically the net sum the employee will pay for their care, barely meeting the standards for the cheaper plans on the exchanges. I’m hearing from friends and family who are experiencing this across all kinds of organizations, public, not-for-profit and for-profit. I work for a damn hospital that has crap insurance and also gouges the employees so they get a double ream job and all my coworkers are angry as hell about it because they are not rich and spending several thousand dollars for what used to cost them a couple of hundred is wrecking their finances.
    Why, I don’t know, I may be wrong gut It’s almost like they are TRYING to make people hate Obama care…

    We need the equivalent of the Consumer Financial Protection Bureau for health care. Or better yet, universal payer insurance and the outlawing of for-profit medicine.

  48. 48
    Mnemosyne says:

    @Ella in New Mexico:

    When you say file a complaint, what specifically do you think he should/could say is the problem?

    From what you said (and assuming I understood correctly ;-) it sounds like the insurance company is basically declining to cover his care since they’re not negotiating the rate with the hospital at all. It’s also a little suspicious that “his portion” just happens to be the exact amount of the annual out-of-pocket limit. So his complaint should probably be that the insurance company is refusing to cover him.

    The insurers and employers have made absolutely sure that there is nothing “legally” wrong in these new ways of screwing the consumer because they can just blame it on the fact that you get what your particular employer chooses to negotiate on behalf of it’s employees.

    I say, complain anyway. Make them explain to the state and to the federal government that it was someone else’s fault while providing boatloads of documentation. My husband works in healthcare and whenever a state regulator shows up, it’s a really big deal.

    Am I advocating that you be a nuisance and make the state investigate things that are probably legal on paper just to annoy the insurance company? Yep! What are they going to do, drop the whole hospital’s account?

  49. 49
    richard mayhew says:

    @jl: Correct — the NO refers to the ability of payers to say no to pricing that does not reflect improved quality of anything other than the class of hookers and the amount of blow.

  50. 50
    richard mayhew says:

    @jl: Correct — the NO refers to the ability of payers to say no to pricing that does not reflect improved quality of anything other than the class of hookers and the amount of blow.

  51. 51
    richard mayhew says:

    @Mnemosyne: McClaren has a demonstrated ability of not knowing what the hell he is talking about, so please be realistic with our bigotry of low expectations for him

  52. 52
    slag says:

    We’re having a similar problem currently with AMR who claims that our insurance company hasn’t paid an ambulance bill in full and wants us to appeal to our insurance company. According to our insurance company, they have paid the bill and don’t owe the ambulance company any money at all.

    According AMR, the “customer” (their word) is responsible for resolving the discrepancy, because AMR claims that they don’t have a contract with the insurance company and that the insurance company paid contracted rates. What a scam.

    Probably the most ironic part here is that the emergency incident occurred with my significant other who was unconscious at his place of work, and it was his place of work–the large, wealthy corporation through which he gets his insurance–who made the 911 call that got him the ambulance in the first place. If there’s any situation in which insurance contractual disputes should never happen, it’s that one. (Could the loop get any more closed, given our current healthcare system?) It’s not hard to imagine how screwed “customers” might be if they happen to have a medical emergency in less fortunate circumstances.

Comments are closed.