Challenge is the whole system is just a mess. Medicare probably lays too little. Commercial insurers have formed a mountain of red tape and bureaucracy and arguably pay too much, although individual bills (EOBs) are rarely logically defensible against any scrutiny.
Healthcare providers try and combat all this by literally just making up pricing and trying to negotiate something while also having bloated administrative structures that raise costs for all.
Nothing about the current state of the healthcare system makes much sense to anyone that tries to peel back the onion.
Issue #4, not enough people going to prison for fraud. For instance, if you count a motorcycle death as covid to cash in on tens of thousands of dollars in covid benefits, you should go to prison. No "oopsies" just prison. That's tax money, and you were caught trying to steal it.
Author here. The 254% figure comes from RAND Round 5.1. I built a Python pipeline on CMS HCRIS cost reports (FY2023, 3,193 hospitals) to compute cost-to-charge ratios by ownership type. The surprising finding: nonprofit hospitals have a median markup of 3.96x actual costs. All scripts are in the repo. Happy to discuss methodology.
This is a believable result. Meta-analysis is 141-259% [1].
Three reasons:
1. Medicare has quasi-monopolistic negotiation power that private insurers can only dream of -- Medicare spend two-thirds of all the private insurers combined. That's why private insurers would combine in a heartbeat if the FTC allowed it.
2. Moreover, that Medicare volume is concentrated in a specific segment of the market. If many providers dropped expensive United contracts, the insured people/companies might move to a new insurer. But Medicare's base will never leave.
3. Since Medicare covers older individuals, often on a fixed income, there is natural discriminatory pricing. (Think of the "senior discount" at your local entertainment venue.)
Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits.
Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money.
Challenge is the whole system is just a mess. Medicare probably lays too little. Commercial insurers have formed a mountain of red tape and bureaucracy and arguably pay too much, although individual bills (EOBs) are rarely logically defensible against any scrutiny.
Healthcare providers try and combat all this by literally just making up pricing and trying to negotiate something while also having bloated administrative structures that raise costs for all.
Nothing about the current state of the healthcare system makes much sense to anyone that tries to peel back the onion.
Daily reminder that the United States spends more public money per capita on healthcare than any other country and it's not close[1].
If you want to know what socialized healthcare in the US would look like, you are lookin' at it right now bub.
[1] - https://en.wikipedia.org/wiki/List_of_countries_by_total_hea...
Issue #4, not enough people going to prison for fraud. For instance, if you count a motorcycle death as covid to cash in on tens of thousands of dollars in covid benefits, you should go to prison. No "oopsies" just prison. That's tax money, and you were caught trying to steal it.
https://www.fox35orlando.com/news/fox-35-investigates-questi...
Author here. The 254% figure comes from RAND Round 5.1. I built a Python pipeline on CMS HCRIS cost reports (FY2023, 3,193 hospitals) to compute cost-to-charge ratios by ownership type. The surprising finding: nonprofit hospitals have a median markup of 3.96x actual costs. All scripts are in the repo. Happy to discuss methodology.
This is a believable result. Meta-analysis is 141-259% [1].
Three reasons:
1. Medicare has quasi-monopolistic negotiation power that private insurers can only dream of -- Medicare spend two-thirds of all the private insurers combined. That's why private insurers would combine in a heartbeat if the FTC allowed it.
2. Moreover, that Medicare volume is concentrated in a specific segment of the market. If many providers dropped expensive United contracts, the insured people/companies might move to a new insurer. But Medicare's base will never leave.
3. Since Medicare covers older individuals, often on a fixed income, there is natural discriminatory pricing. (Think of the "senior discount" at your local entertainment venue.)
[1] https://www.kff.org/medicare/how-much-more-than-medicare-do-...
Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits.
Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money.
Several doctor friends have told me this as well.