perfidy

I think the lab can charge anything they want but they should have the prices on the wall like a fast-food restaurant so you know what you are going to get charged and can shop around.

Price discrimination is one of the things I hate most about capitalism. I agree with Bram, and I think it should apply universally. You can sell your products or services for whatever you want, but you have to charge everyone the same. Anything else seems to me to be an attempt at taking advantage of the customer.

Ross,
You know, "the theory being that normal business competition takes place" is often considered in higher ed.

Education is a business- a quirky one, to be sure- but like medicine, a business nonetheless.

It is easy to find 100 articles that discuss why higher ed is expensive. Fewer that explain why a year at Yale, say, costs the same as 2 at your state U or 4+ at your local community college. Especially considering that, in terms of fundamentals, it's the same data being imparted.

Oh, I'm not against price discrimination - it is prevalent in every other industry - I just think we should know ahead of time what we are going to pay.

I use coupons, corporate discounts, and internet searches to find the best prices for purchases – medical services shouldn’t be any different.

Ross:

You've left out a crucial part of the equation. Along with that MSA, there's a companion "high-deductible" insurance plan. Such tag-along insurance plans are what keep the rest of the costs in check. The patient isn't subject to a pure "fee for service" any more than he would be under a full insurance scheme.

That said, I'd agree that the medical insurance system in the US is out of whack. It has been for quite some time, due to fundamental misconceptions about the role of insurance, as opposed to the role of prepaid scheduled maintenance.

From the employers' standpoint, the goal is to have healthy employees without costing an infinite amount.

From the employees' standpoint, the goal's the same, except they've historically not cared what it costs.

"Consumer driven health plans" have been designed to try to align the conflicting parts of those two sets of interests. Unfortunately, CDHPs' performance in that regard, so far, has been piss-poor. Why? Because buying health care isn't as simple as buying tomatoes, and providing the consumer with cost incentives via left-over MSA money has caused consumers to avoid necessary care.

These implementation problems aren't political party specific, by the way. They're consumer/payer driven, not legislation driven.

Price transparency, as noted by others in comments here, would be quite helpful. And in order for that to become possible, some form of coverage for the uninsured has to be part of the picture. Those outlier sky-high prices? Designed to balance out the uninsured who don't pay at all. Is it fair to the rest of us? No. Is it fair to the uninsured? Also no.

It's a conundrum, I tellsya. Massatwoshits' and Tennessee's attempts at solutions are instructive, and not necessarily yet in a positive way.

"...a huge disparity between what’s charged to the insurance company and what a normal person must pay?"

That's not quite accurate. The insurance company gets charged the full price that a normal person ("normal" meaning uninsured) does. But, the insurance company only pays an amount that they deem reasonable, and different companies pay different amounts. Sometimes those are negotiated beforehand between the provider and the insurance company, and the lab (or doctor, hospital, etc.) can still go after the patient for the uncovered portion of the full amount if they have no prior agreement with the insurance.

If an insurance company won't pay enough of the bill, then providers will stop accepting that insurance, which means an effectively larger pool of patients vie for the smaller pool of providers meaning longer wait times for services.

It's a balancing act for insurance companies and medical providers. Some who can afford to accept less (maybe a new doctor just building a practice or a lab in an area with lots of competitors), can afford to stop accepting reduced profit margins once business conditions change for them. At that point, they drop the insurance.

$125 for bloodwork doesn't sound unreasonable to me. For $30 I can get a high-school dropout to change my oil, whereas for that $125 you get someone trained to draw blood (with as little pain and physical damage as possible) using specialized equipment, under sanitary conditions, with the knowlege to get the amounts and pre-test work accomplished correctly. You get the tests done by a lab under special conditions (it's not done at the dining room table in the evenings). Don't forget to add in a hefty self-imposed surcharge for malpractice insurance.

My wife has spent years working in various medical offices, often dealing with just these kinds of insurance issues. I just couldn't let that oversimplification pass by.

The other thing is that one may negotiate in advance with the provider to accept the UCR (usual, customary, and reasonable, what the insurers pay). A smart provider will jump on it--get the same fee with lower overhead related to the individual transaction, more gross profit.

Bram, I think if there was "cost transparency", as Patton put it, it would put a big crimp in the worst of the price discrimination. I don't have a problem with sales or coupons, what I do have a problem with is when they won't tell you the price because they don't want other people to realize how badly they are being ripped off. Hiding prices makes it easier to overcharge people because they are unaware of what other people are paying. As soon as it becomes transparent, people will start thinking "hey, why did I pay a lot more for the same thing?" and competition will kick in, hopefully.

So that's my point I guess, not that I want to make it illegal to sell something at a discount under some circumstances, but rather that I hate it when prices are hidden specifically so that some people can be overcharged without realizing it.

NicholasV, there is no price discrimination, as you put it. That's against the law and if you ever run up against an actual case, please report it to the authorities.

You seem to have a problem with insured people taking advantage of economies of scale (which is what medical insurance does), and I talked about the "fair and reasonable" prices negotiated by insurance companies and providers.

Another factor is insurance cost. I pay a lot for my health insurance, and in return I generally have a higher percentage of costs covered and don't have a lot of co-pays. Someone who pays less for their insurance will get dinged by having their insurance cover a lesser percentage or by bigger co-pays or reduced numbers of procedures covered.

It's nobody else's business what I pay for *my* medical costs because that's between me, my insurance, and my provider. If I get a better deal, it's because I have better insurance, for which I pay a premium. I don't care what my provider charges - for the most part - because that cost is between the provider and insurance company. I only get involved there if the provider expects me to pay above and beyond the insurance payment, and I can't remember the last time that I didn't know ahead of time that it was going to happen. Medical providers don't want you to be surprised in that situation, because people have a tendency to react by not paying their bill, and collect processing is expensive and a hassle for everyone.

The competition is there, you just don't like the way it works because you misunderstand the mechanism.

Actually, where I live I get free medical care provided through income tax.

What I don't understand is, if competition works in the American health care system, why is it so expensive? Even if I were to pay for an operation here, it would cost a lot less (and I'm talking about approximately a factor of ten here) than if I went to the USA and paid to have it done there. I don't think the quality of care would be so much different as to justify the difference.

I talked to my friend who is about to become an intern here and she said that to some extent it's because of the interaction between the public and private health care systems that prices are kept down here, but that's not the whole story.

To be honest, I'm not an expert, but I think that hospitals and medical services in the USA take advantage of the way the insurance system works to charge a lot more for their services than is really justified. There's very little incentive for them to keep prices low, so they don't. But that's just the impression that I get. In reality the situation is far more complex than that.

I just hope our public health care system doesn't fall apart like the one in the UK seems to be in the process of. I'm told that you get better treatment here in a public hospital than a private one, although you don't get a private room or any of the other niceties that you can have if you pay for insurance...

Fellers,

Well, a goodly part of the costs associated with medicine and all things medical, is the amount that has to be reserved for torte claims, lawyers, etc. malpractice insurance is way out of whack, because the legal system is way out of whack. My personal physician has restricted her practice and will not accept any new patients until one leaves. She simply cannot afford the costs associated with malpractice insurance these days.

One other area that concerns me is that the Feds have started to place restrictions on the purchase of medical equipment. I keep a well-stocked emergency medical kit at my house, in case of an emergency, natural disaster, etc. I needed to replace some items (sutures, betadine, etc) that were nearing code. The local drug store now won't sell them without a prescription. Seems the Feds are starting to crack down on underground hospitals in the nig cities, and, as a result, all the rest of us are having to be restricted as well.

Bullshit.

Respects,

Prescription required for sutures?!?!

The libertarian in me (yes, you read that right, after I bitched about price discrimination) is angry.

I think the gubmint should stop sticking its fat thumbs into every pie in sight... I think the idea that health care works best with a free market might be better validated if it were, ya know, actually a free market...

From an item in today's email inbox, a potentially interesting Q&A entitled "Is Health Care Making You Better—or Dead?"

Apropos price transparency, I pass along a link to a story on that matter that came across my transom today:

"Consumers demand health care transparency"

http://ebn.benefitnews.com
/asset
/article/96220/index.html

All mashed together, it triggers the Ministry blacklist, for some friggin' reason. So I've unmashed it, and you should remash it if you're interested in viewing the story.