Today’s Managing Health Care Costs Number is $356,884.42
There are two articles in the news this week that show that price matters. (Not Tom Price, the HHS Secretary, who also matters!).
Elisabeth Rosenthal, long-time NY Times reporter who is now the editor in chief of Kaiser Health News, has an article in the NY Time Magazine “Those Indecipherable Health Care Bills: They’re One Reason Health Care Costs So Much.”
Wanda Wickizer awoke from her brain bleed with months of recovery ahead of her. She lost her insurance after her husband died, and found bills including:
· $356,884.42 from the hospital
· $50,000 for the air ambulance
· $78,000 from the medical group for professional services
· $16,000 from the emergency department
Rosenthal reviews the history of medical coding and the escalating battle between providers – who use codes to upgrade their fees – and insurance companies, which use the same codes to cut fees down. Left out of this battle altogether are those who have no insurance company to run interference with them. Even with a team of expert volunteers, Wickizer had a hard time figuring out her inscrutable bills –and had little luck negotiating decreases.
Hospitals often say that their “chargemasters,” which are the “rack rates” or “asking price,” are irrelevant since no one pays them anyway.
But that’s not true.
Research published in Health Affairs on Monday demonstrates that hospitals which increase their chargemaster by a dollar receive an extra 15 cents in revenue. So – someone IS paying these rack rates! The research also shows that when California prohibited billing more than Medicare rates to those without insurance who had incomes under 350% of the federal poverty limit, the actual amount paid by uninsured patients of modest income decreased dramatically.
By the way, the researchers also investigated whether higher chargemasters were associated with better quality. There was no association.
This is solid evidence that some type of price ceiling could lower the actual cost of medical care in the US – because the price charged does indeed matter
This shows that when chargemasters increased, the uninsured paid much more in California before 2007, and did not subsequently Source
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