@Woodman i certainly agree that the lack of personal involvement is a part of why costs go up. But my experience with paying for care is different from yours, and certainly the (admittedly very small) number of people i’ve known who dealt with medical billing have said to me that cash is the equivalent of “not going to pay”. Not because every single person without insurance isn’t going to pay, but because typically they simply aren’t able to. A LCSW i know charges 110$US per visit. Not an large amount, sure, but many of her clients are seen weekly. To pay cash you typically would then need 440$US monthly to afford care, and I quite literally know maybe 3 people that could afford that without insurance. In the US, at least, certain places (e.g., the ER) is legally required to treat you regardless of your ability or intent to pay, and (again only speaking from my own experience) they normally assume that anyone without insurance doesn’t intend to pay.
As for lasik, etc, @dakboy’s point is well taken, because the “average” person can’t afford those procedures to begin with, and thus the availability of choice and competition are far and away the more influential drivers in those markets.
Again, if you offer cash up front you can take that down by half. Is it perfect, hell no, but it’s better than paying $900 a month for insurance that would just take it down to a $35 copay.
Cash up front does not mean I’ll gladly pay you Tuesday for a hamburger today.
I work at a TPA (Third Party Administrator) in the self funded group insurance world. I know how a lot of the nuts and bolts of this work. I’ve seen the marketplace evolve over a couple decades now and the influence of the government on medical pricing is insane.
There are choice and competition in those markets partially because they aren’t covered by Medicare. The profit motive drives the innovations which reduce costs and charges. The incentive is almost the opposite direction for Dialysis. If Medicare pays $1,000 for this service, and will continue to pay that regardless of competition or demand for the product, then why innovate? Hell, just take the increase each year and pocket it. And then you can whine about losing money on Medicare, something I believe less and less, and then get $1,500 from Anthem, $1,750 from CIGNA, and $1,599 from Aetna. Off of a $3,000 charge. (Numbers pulled out of ass, discounts close to actual ratios.
Why the hell would I even try to compete in that market? The government determines how much I can make.
Most places I encountered want a return customer rather than a one time patient, which I think @dunerat is getting at. I’ve seen this from my insurance world perspective as well. There’s a certain level of risk involved with seeing these type of patients.
What you say is true, @Woodman, showing up with cash in hand is probably the best case scenario a doctor’s office can hope for in a non-covered patient, and it’s rarely the case when they see it. Most often, they’ll provide a discount in hopes that this customer returns to their office to part with more of their cash (Oh, and get medical care. That’s important, too, I guess.). The best gold mine they could ever hit is a non-covered patient who can afford to visit the office often because A) they aren’t getting paid the lower insurance rates and having to waste time just getting the claim paid. B) they control the prices, the visit frequency, and how they want to deal with the patient without any insurance company dictating how they proceed. C) they get paid immediately.
Not so much, since there is no requirement to accept Medicare, Tricare, or any other government insurance. An individual practice can set its prices wherever it likes, the insurance companies determine how much they feel like paying for any particular service, the patient is billed for the rest, and it’s up to the practice whether it wants to pursue the patient for the remainder. There is a general tendency to match prices with the insurance payouts, since if you want 3000$US for a service and the insurance company refuses to pay more than 2000$US, you’re a bit in the hole. Assuming the patient has a deductable of say, 500$US, they’re going to be a bit put out by you asking for the other 500$US, and not only are you unlikely to see them again as a patient you’re also unlikely to get that 500$US. Enough complaints from the patients and you’ll eventually lose all patients with that insurance company, because they’ll remove you from their network. Unless they feel like paying you cash, or they have additional insurance, in which case you simply billed both companies and got your money to begin with.
[quote=“Woodman, post:22, topic:537”]
There are choice and competition in those markets partially because they aren’t covered by Medicare.[/quote]
Typically elective surgery isn’t covered by anyone, so i’m a bit unclear on what point you’re making here. Not being covered by Medicare is small potatoes if you also aren’t covered by anyone else. So again, these are cash-market services, because if the insurance companies already aren’t going to pay for it, then your only customers are those with enough cash to pay for it in the first place, with the effect that attempting to wrangle that cash from lower-income markets is why these practices offer payment plans.
i can only conclude that our experiences are very different, because i’ve never encountered a cash discount at a practice, regardless of my insurance status. i have been simply turned away for not having insurance, even after offering to work out an installment plan. Even the county health clinics, where many of the offered services are something on the order of free, don’t offer discounts on the services they do charge for (although they will always take cash).
Most carriers use Medicare as a guideline for minimum care standards. Sometimes private insurance starts covering something that Medicare later picks up, but most times it’s the other way around. Most PPOs and insurance carriers also use Medicare reimbursements as a floor for pricing arrangements.
My point in bringing those up is that when market forces can apply directly, the price goes down. When they can’t, it goes up.
This is true, and if you don’t take Medicare, or any insurance for that matter, you can have a successful business. This is a route many providers will take to avoid the ACA. Look at the network of private providers in Canada for an example of the future of medicine. And look at Europe for people actually being charged with crimes for avoiding the public health system.
Here are a couple articles mentioning what I’m talking about.
A payment plan isn’t quite the same as cash, same as buying a car with a loan won’t get a cash discount neither will buying healthcare with a payment plan. I have often gotten cash discounts on things, open box appliances, cars (OK, one car), medical care, whatever.
In my mind, in a perfect world, we would have fully tax deductible medical costs paid directly by people then catastrophic insurance that takes over at whatever level you decide is catastrophic. 5k, 10k, 20k, then the government would take over after 1 or 2 million. Also changing the law on funneling health care for the indigent to county hospitals and clinics. If you can’t pay for the ultra suite in the new birthing center then you get the birthing bay at county.
The problem with the ACA system is we’re asking people who can’t pay for an office visit every year to pay for insurance every month. This just doesn’t make sense, it would make more sense to just pay the claims directly than to subsidize the insurance companies to take on the risk. Or even just run indigent no pay hospitals and clinics for those who can prove need.
When my oldest daughter moved back home after her one year in the ghetto, we had to wait to add her to our insurance during open enrollment, so of course she got sick. We were able to pay our family doctor cash for her office visits. They were considerably less than he charged our insurance for a less complicated visit with me. I know many people who do this because they work for themselves and can’t afford the new insurance prices, even here in Texas where we used to have a great low income/low price health insurance program.
The only reason medical prices are so high is Medicare the Medicare repayment formula which tells doctors what they will be reimbursed for any given procedure or visit. When you can’t charge a post-surgical patient for any follow-up visits or procedures for 90s days after the original procedure, this means someone has to pay for it… so the insured pay for it, even with the negotiated contractual prices. If doctors were forced to compete like vets have to, prices would be much cheaper.
All of this goes into the category of “Be careful for what you ask for, you may just get it!”. One of the biggest problems is that “health insurance” is that it rewards bad behavior, pure and simple. If you live right and take care of yourself, most of the time you will need little care between the ages of about 16-50. In order to “spread the costs” those “healthy” people need to start paying, even if they don’t need health care.
As was once said, socialism works fine until you run out of “other peoples money”.
Socialism as practiced by most countries in reality has an awful lot with high tax rates to provide extended public services, including nationalizing or heavily subsidizing businesses to provide those services formerly provided by the private market.
I have not seen a country push socialism, or a more “share the wealth” attitude that didn’t raise taxes. And the countries in Europe are starting to run out of other people’s money.
The ACA is not socialism, but it is other people’s money. And it’s not going to work. As evidenced by Obama doing things that simply aren’t allowed in order to delay something that people called Cruz a terrorist for trying to delay.
That’s because most people confuse the two terms. Socialism is a governmental form, Communism is an economic form. You can have Socialist Capitalism, for example, as well as Democratic Communism. The SPUSA, for example is (or was, I haven’t talked to any of them in some years) opposed to communist economic policies. You are definitely correct about the “as practiced” part, because most Socialist countries also practice Communism, but neither mandates the other.