| ▲ | Aurornis a day ago |
| Insurance pays the higher of their negotiated rate or the billed charge. Medical facilities set their billed rates so high that they’re guaranteed to be higher than all negotiated rates, ensuring that they get paid. When you see $37 aspirin on the line, nobody actually pays $37 for it. The billed amount is replaced with whatever insurance rate is allowed for that. If someone is cash paying they get a large discount. The billed items also have to cover everything. It’s not directly $37 for the aspirin, or the $5 or whatever allowed coverage it ultimately gets billed it. That had to cover the facilities, the salaries of the pharmacy staff who reviewed the request and dispensed it, the staff who inventory and order the medications, and the cost of billing insurance. The only part that nationalized health care would change are the allowable billed rate and maybe the administrative overhead of billing different insurances. Even nationalized health care systems have admin overhead though. You can think of it like when you have to pay $11 for a single glass of wine from a bottle that the restaurant paid $10 for. You’re not just paying for the liquid, you are paying into a big bucket of charges that all need to add up to more than the cost of the supplies, staff, building, and everything that goes into running it. The margin on individual products doesn’t make the entire operation profitable. |
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| ▲ | chermi a day ago | parent | next [-] |
| It almost seems like obscurity is the goal with the current system. Basically, job security (for admin, insurance) via obfuscation. |
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| ▲ | Aurornis 5 hours ago | parent | next [-] | | All healthcare systems have administrative overhead, including completely nationalized systems. The US discourse on health care overestimates the administrative overhead by a large amount. We could remove all insurance company profits and adjust our administrative overhead to be in line with countries with nationalized systems and it wouldn't change health care costs by an appreciable amount. The discourse also underestimates how much of our health care costs go to our significantly higher salaries throughout the medical system. No politician wants to propose reducing the salaries of doctors, surgeons, or even researchers making new medications. The only acceptable villains are the administrators and insurance companies, but even in this inefficient system that's a much smaller slice of the pie chart than most people imagine. One of the reasons hospitals operate in this convoluted way and still barely clear a profit is that we require them to treat everyone and attempt to collect payment later. A lot of what you and I pay for health care goes to cover people who can't or won't pay. | | |
| ▲ | Xirdus 3 hours ago | parent [-] | | > The discourse also underestimates how much of our health care costs go to our significantly higher salaries throughout the medical system. Well, the salaries of medical personnel only account for about 20% of total healthcare spending. So even cutting those by half wouldn't change much. > One of the reasons hospitals operate in this convoluted way and still barely clear a profit is that we require them to treat everyone and attempt to collect payment later. A lot of what you and I pay for health care goes to cover people who can't or won't pay. If that was a major reason, then those who don't pay would balance out those who pay and the grand total of all healthcare spending in the US would be pretty average despite individual premiums and out of pocket costs being sky high. But in reality, the total healthcare spending is just as sky high (several times more per capita then median OECD country). | | |
| ▲ | tptacek 2 hours ago | parent [-] | | That number might be true across all health spending, which includes hospital plant, home health care, all public health work (including animal control), and medical equipment. But if you zoom in on clinical and specialist practice, the parts of the health care equation where payer-structure actually enters the picture, compensation for practitioner shoots up; it's the dominant cost of running a health provider. |
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| ▲ | twoodfin 21 hours ago | parent | prev [-] | | It’s more like a politically palatable Rube Goldberg machine for transferring costs to those (well-insured through their jobs, the Federal government, rich supporting institutions and donors) able to pay. |
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| ▲ | sahila a day ago | parent | prev [-] |
| > The billed items also have to cover everything. It’s not directly $37 for the aspirin, or the $5 or whatever allowed coverage it ultimately gets billed it. That had to cover the facilities, the salaries of the pharmacy staff who reviewed the request and dispensed it, the staff who inventory and order the medications, and the cost of billing insurance. That's the same as any? CVS charging $5 for aspirin has to cover their staff who stocked and checked out the item, the shelf space, the marketing, and the looting. The comparison you make between a bottle of wine vs a glass is not the right one. It's two different stores selling the same product. What's different about hospitals? |
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| ▲ | fragmede a day ago | parent [-] | | The nursing staff to give the patient aspirin costs a lot more than someone stocking boxes on shelves. | | |
| ▲ | tptacek a day ago | parent | next [-] | | This is like that thing about about $15,000 toilets at DoD. What's actually happening is a cost allocation function where an agreed-on list price for a whole project is getting distributed pro-rata over as many different line-items as possible. | | |
| ▲ | pstuart 2 hours ago | parent [-] | | That seems like a way to disincentivize cost optimizations in the project (for the client). | | |
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| ▲ | malfist a day ago | parent | prev [-] | | Sure, it's more expensive, but is it thousands of times more expensive? That $5 bottle probably has 50-100 pills in it. A single dose for $37 is 740X more expensive. And its not just that the apsrin is expensive to cover salaries, EVERYTHING is similarly inflated. |
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