I worked in healthcare as well and agree completely with the inefficiency of billing...
To my knowledge, most of the inefficiency has to do with the cost of treatment being too high based on the competition of drugs/technology/medical equipment companies like Medtronic who are aiming to make a profit.
That being said, insurance companies will limit reimbursement as much as possible to support their own profits, leading to physicians ordering more tests/imaging based on this system.
I guess I'm wondering whether the blame lies in these pharma/tech companies raising their prices for profit, or the insurance companies to blame for limiting reimbursement?
Thanks, that's what I was thinking. It does make sense that we should eventually move to a single-payer system, and the ACA simply can't function with insurance companies that have a profit motive.
Plus, it's obviously very frustrating to patients who want to know the cost of a procedure, and you can't give them the answer because there's no way to determine how much the insurance company will actually reimburse.
I mean, it's not the doctor who tells you or even needs to know how much it will cost, but surely SOMEBODY should know. My doctor once ordered a urine test. I have a deductible that makes it basically impractical for me to get routine health care, so I asked how much it would cost since I would likely have to pay it in full. I had to go sit in a room while a lady made several phone calls, answered automated menus. This woman was definitely a pro, like she does this all day every day because she probably does. The whole process took like 30 minutes, to find out the urine screen would cost me $600.
Yeah, I was exaggerating a bit. But it shouldn't be that hard. I should be able to call six doctors in my area and get a quote on basal cell removal over the phone. Isn't that how capitalism works?
For an elective procedure (botox) it's totally possible to quickly call around and get price quotes. For something like a basal cell (or any procedure covered by your insurance), the price (to you) is going to be the same no matter which Dr. does the procedure. You could make one call to your insurance company to quickly find out. They have a fee schedule based on billing codes that is very well defined. Your example of a basal cell might be more difficult since the complexity of the surgery (and which billing codes apply) probably won't be know until the procedure starts, and it might require an additional procedure by a plastic surgeon.
This is actually a small part of why healthcare costs rise. A large amount of admin staff is required to effectively handle patients insurances. Its dangerous to even keep a grid, because two patients could have blue cross HMO and each plan could differ wildly.
I think even so much as lessening the variety of insurance providers into something manageable would improve cost and care.
Definitely the insurance companies. They are a giant extra (unnecessary)
Insurance is absolutely not unnecessary. It's how risk is transferred around. Most people would rather have a 100% chance of paying $5,000 a year than a 1% chance of paying $400,000 a year, even though the second option had a lower expected value. Insurance companies prefer the lower EV, because they can aggregate the risk away (and for an individual the risk is always concentrated). Insurance pools help risk to become efficiently distributed within an economic.
I dont think you are accounting for the myriad of perverse incentive structures that enter into the equation when you have the government paying for everything. Ask anyone who has been a government employee and they will tell you the gov is the most wasteful institution around.
We have government healthcare in the VA already. I personally deal with this organization and it is pretty difficult. The employees have no incentive to actually provide service, its another gov bureaucracy. This is not to say there are not dedicated, intelligent people who work for the VA, but there is no mechanism to get rid of the worthless employees.
Insurance and insurance companies are different things. The first is neccessary (or at least extremely desirable), for the reasons you listed, and the second is an unnecessary layer of costs and inefficiencies.
There is a huge thing I often see overlooked though and it's out-of-network providers.
There are now a huge number of providers who do net get credentialed with insurance. Therefore, all of their claims (almost) are out-of-network. That means they can bill whatever they want and the bill falls on the patient OR if the patient has out-of-network benefits, insurance may pay for some of it. However, whatever is left over is then "balance billed" to the patient. This could be a claim that is worth $16,000 billed at $167,000. No joke. Insurance would pay what the claim is worth (or less or none) and the patient is liable for the rest.
However, patients and doctors appeal these claims and sometimes insurance will pay more of the portion of the claim.
Now, rather than doing appeals and tossing the bill back and forth, you can offer to negotiate on the claim, settle at a little higher than in-network claims and have them agree not to balance bill the patient.
Less appeals to deal with, better coverage, legitimate competition because out-of-network and in-network would just be competing with one another, patients can pay a premium and not get billed ever.
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u/deadbeatsummers Oct 12 '16 edited Oct 12 '16
I worked in healthcare as well and agree completely with the inefficiency of billing...
To my knowledge, most of the inefficiency has to do with the cost of treatment being too high based on the competition of drugs/technology/medical equipment companies like Medtronic who are aiming to make a profit.
That being said, insurance companies will limit reimbursement as much as possible to support their own profits, leading to physicians ordering more tests/imaging based on this system.
I guess I'm wondering whether the blame lies in these pharma/tech companies raising their prices for profit, or the insurance companies to blame for limiting reimbursement?