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Tuesday, August 07, 2018

Trump's free market approach to hospitals

The answer to the failure of socialism is always more socialism. The two industries that have enjoyed the highest inflation in prices annually for the last five decades are higher education and health care.

They enjoy untaxed profit margins because of the federal government's subsidies that separate consumer from the merchant.

Student loans prey on the young in a manner that exploits them. The government offers low-interest signature loans to people with no visible means of support who have no collateral.

They never bother to shop for the best price. If they truly were smart, every Harvard freshman not on a full scholarship (or a parent footing the bill) would attend community college for a year to knock off the first year of college at a savings of $50,000 or so in tuition.

But what do they care? When they graduate they will be millionaires, right?

Then there are Medicaid and Medicare, the twin peaks of socialized medicine, aka, hospital welfare.

People will shop around for plastic surgery because the expense is out of pocket.

But medical expenses covered by an insurance card go largely unchallenged despite co-payments and deductibles.

President Trump will upend this by introducing price tags to hospital stays.

"Hospitals will be required to post online a list of their standard charges under a rule finalized Thursday by the Trump administration," The Hill reported.

"While hospitals are already required to make this information public on request, the Centers for Medicare and Medicaid Services (CMS) said the new rule would require the info be posted online to 'encourage price transparency' and improve 'public accessibility.'

"Starting Jan. 1, hospitals will be required to update the information annually.

"The CMS said it is also considering how to 'allow consumers to more easily access relevant health care data and compare providers.'

"Increasing price transparency has been a priority for the administration as a way to drive down health-care costs."

Sunlight is the best disinfectant.

It also is a great way to save money.


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  1. Transparency is good, but this new regulation could drive consumers crazy. Take, for instance, hip replacement surgery. Will hospitals have to post the inclusive costs for that kind of surgery, totaling up the many dozens of items that in practice contribute to the full cost of the patient's medical care? Or will they post prices for those individual items and leave it to prospective patients to do the math to figure out the total cost of their surgery and hospital stay? And what happens if a patient incurs additional costs for medical care during his hospital stay that was unanticipated? Will that be considered "bait and switch," possible grounds for suing the hospital? I expect to see a number of crusading consumer advocacy groups haul doctors and hospitals into court over claims of price gouging and consumer fraud. Because that is what they do.

    1. Yes, that is what they do and many, not just a few, medical providers prey on the system to price gouge. For example, if I go to my doctor and he orders blood tests I then go the lab. When the tests come in his Medical Assistant (basically a limited knowledge clerk) calls me with the results and the doctor's instructions, if any, to deal with them. If I have questions that the Medical Assistant can't answer I have to make another appointment to see the doctor and pay another $200+ just to go in and ask a question. That's a racket and should be stopped. Other providers, like hospitals, often unbundle charges so that costs can be billed at higher rates to insurers. Many blood tests, for example, can be ordered as a package that gets a package price, but many hospitals unbundle that package and bill the tests separately greatly increasing the amount they can bill the insurers. No one has dared to address the abuse by providers and that is a major factor in high insurance costs (insurers get bills they have to pay and those costs have to be recuperated which then drives insurance premiums up). Insurers aren't innocent either, but they have been under watch and attack for some time and things are starting to get reigned in. But providers have had carte blanche in many ways and have made out like bandits under the guise of being the "good guys" because they are caring for patients. The entire system is a disaster and there is no easy cure for the sickness of our healthcare system.

  2. Posting the price schedule is a good thing, but I don't Medicare patients and those covered with private insurance will do all that much shopping. The only way to encourage shopping is to require the patient to pay a percentage of the bill out of pocket.

    1. I have never heard that Medicare patients and private insurance customers do NOT have to pay anything out of pocket. Can you give me a reliable source on that? I do not see that on Medicare's web page and every insurance plan I have looked at does have some copays and deductibles, especially since Obamacare! . -- BJ54

  3. Hospitals will be required to post online a list of their standard charges

    Nifty. This is basic business and only a good businessman would think of it. Politicians all start running for office the day they leave law school.

  4. One thing to be on the lookout for is the creation of ancillary charges that will be appended to the charges on whatever list is posted officially. I hope there is a penalty for this practice included in the regs proposed. When I was in private practice I listed prices, forcing local competitors to do the same. A couple of them told people they were getting lower prices than I was charging, but ran up their bills with ancillary charges, while my listed prices were global. They were getting ripped off. I didn't find out about this until years later, too late,to do anything about it.

    The above is why I don't feel comfortable calling this a free market reform. Sure, it tends in that way, but until the monopoly on health care is broken (by abolishing medical licensing) there won't actually be a market in health care.

    1. Well, doc, it's worse than that. "List" price is NOT the same as the price charged to Medicare, or to Blue Cross, which may not be the same as the price charged to United Healthcare.

  5. Should be the same price for a patient paying in full at the time service is rendered for any particular procedure as the lowest proce prenegotiated with any contracted insurance company. Pricing is inflated for all but the insurance companies. You have to have insurance just to get the better prices as it stands now.

    1. I have heard that some cash-only medical providers charge LESS for their procedures because they are saving money on all the paperwork required by various insurance companies, and Federal, state, and local "coverage." I wonder if the ads are lying?

  6. Even more important than the cost is checking out the rates of infection, etc., at different hospitals. Some are so dismal I wouldn't take a dog there. If I had a choice, I would be willing to pay more for a cleaner hospital with a more efficient staff and a better history of surgical competency. Cost may be the bottom line, but there are other considerations as well. For some reason, I've known a number of acquaintances who have gone to a hospital for a "routine" operation, then somehow they have a stroke when under general anesthesia. - Elric

  7. The hospital's price list will probably reflect only their asking or full retail price. The key information needed is the discounted price actually paid by the various healthcare plans and medicare. I wager that information will remain difficult to obtain. A cash patient shouldn't pay full retail.

  8. calm down everyone, stop thinking of reasons why this can't be done. it already is.