Quote:Well, I can certainly see that when a for-profit company can use a 'Medicare did it' justification to cut costs they might be on that like catnip, but I meant the relationship of all other charges to Medicare. I am not sure I am reading it right, but it looks like there might be a 2.5X average excess compared to medicare rates as opposed to other charges in this JAMA article, and I have seen elsewhere reports of standard 500% markups in different specialties compared to Medicare schedules. I am not an expert on this stuff, and find it rather confusing. I remember back in the dark ages I worked for a truckine. Tariffs had to be published(I believe with the ICC). It seems a shame that there doesn't seem to be any transparency regarding health care rates. 

So hospitals mark up the cost of care to insurance and they bicker back and forth. What usually happens is the insurance has a pre-negiotiated rate that is not the 'sticker price' but the patients with coinsurance still end up paying a percentage of 'sticker' even tho they are not supposed to (cause they are supposed to pay 20%, but if I pay 20% of $500 and my insurance pays $100 I really just paid 50% of the cost). This is less of a thing with individual providers and more with hospitals as a system. 

 

With medicare its different. The hospital will bill medicare its rate and then medicare decides it is only going to pay 60%. So the insurance see what medicare pays and try to get that same deal. But you as an individual cannot get that deal. But the hospitals also use the markups to cover costs from non-paying patients. Say a person couldn't afford a surgery at all (sticker or reduced). If the hospital decides to take a loss (which happens more often then people think like 10-20% of surgerys), the hospital says that they couldn't afford the sticker price of the surgery in order to use it to decrease profits etc. So instead of you not being able to afford a 5000 gallbladder removal (just pretend thats the 'real price') they say you couldn't afford a 25k or 35k gallbladder removal. Anyway that is my understanding as a cog in the system.

---