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Discussion (50 Comments)Read Original on HackerNews
We overpay for healthcare because we must pay, and it has institutional and natural bottlenecks which restrict availability and choice.
MRI machines generally run close to capacity because of how expensive they are. There is very little slack.
Cancer treatment already costs a fortune.
The ease of availability of same-day MRI services in London suggests to me there's quite a bit of slack here at least.
EDIT: Though one solution to preparedness for temporary capacity issues without as much over-provisioning everywhere: Mobile suites. My local hospital currently has a mobile MRI suite parked outside to clear their backlog.
When hospitals routinely operate at 120% and a major crisis doubles what we ask of them, people don't get the treatment they need.
I'm sure most of us have stories of friends or relations who needed hospital care during COVID and received less care than they normally would have received outside of the crisis.
How often is there a malpractice case for a hip replacement?
I'm willing to bet that the costs of a malpractice case can be one, two, three, or even more orders of magnitude higher than all of those other expenses. Dwarfing any of those enumerated costs. Even cases that they win.
Of course they're looking at the statistics rather than counting beans.
Finance guys think you're going to turn hospitals into walmart and make it up on ruthless efficiency and volume but it's not that kind of business. There's so much unknown going into any one situation that it makes this "transparency" hard to do. Plus, people want the best and whatever they need to survive so the "consumer" doesn't want transparency
And then you layer on top the huge amount of uncompensated costs from uninsured and denied coverage. It's why a single national payer system actually makes sense, if you can keep the fraud from running amok. We really should just pay for outcomes and spread the actual cost over the entire system
It's impossible to answer "How much will it actually cost to insure person X" because you don't have any of the data on what the costs will be when person X needs a given surgery, all you have is the aggregate costs of the entire system - a lot of which is misleading because things are cross-subsidized because no one is really tracking costs. It may well be that whilst every surgery is billed equally in reality obese patience are responsible for 80% of the cost. Or it may even be that the hospital is making an average loss on hip surgeries because their negotiations with the insurer drove those prices down whilst brain surgeries give a nice profit margin.
And so you can't ask "How much would it cost for the government to fund service X" because you don't know how much it costs, all you know is the aggregate money spent across all medecine.
Then Cuban is wrong. I had a heart valve replacement surgery last year and I got a detailed to the penny to the mg of tylenol what they consumed and what they charged. It was not a big massive one line "heart surgery" on the invoice, there were dozens and dozens of line items. I think quite the contrary they know exactly what their inputs are to a surgery, it's just that is not the only cost you get billed.
>because you don't have any of the data on what the costs will be when person X needs a given surgery
This was exactly my point, and yes part of it is because of cross-subsidization, but it is also because my valve replacement almost certainly cost someone differently than the next guy having the same surgery the next day because of any number of factors
Also part of determining insurance costs is that you probably don't know which surgeries someone is going to need at the time the premiums are being set. Even if you knew perfectly how much every surgery in the system costs, you don't know how many of those surgeries you are going to have to pay for
Either assign an equal portion of your insurance to all procedures, or use the amortization techniques insurance uses to assign a malpractice risk to the procedure.
In any case, this cost is not directly part of the "hospital's" cost of service since the surgeon is most often a semi-independent contractor who bills the patient "professional charges" that are separate from the hospital's "technical charges."
Maybe they do this intentionally to avoid insurance refusing to pay for the most expensive but potentially necessary services.
If a hospital doesn't know what it's own costs are, and are doing creative accounting to hide charges in random places, how the hell is an insurance company supposed to know how much reimbursement makes sense, and if a procedure should be done that costs $10K at this hospital vs $5K at another down the street with seemingly no difference in outcomes.
So w/ the creative accounting, which both the provider and the insurance company knows everyone is doing, you get administrative bloat where both sides have massive billing departments dedicated to figuring out each others BS. And this bloat is a hilariously large amount of the reason why costs balloon.
Both the providers and insurance companies are aligned in driving up costs. Hospitals probably will never get their act together in knowing actual pricing, but lying about it through creative accounting hurts everyone.
0. https://www.econtalk.org/keith-smith-on-free-market-health-c...
Tl;dr Mr Cuban is right, but I think hospital accounting nears P/NP-level complexity
He’s not just some blowhard billionaire with an opinion. He’s really legit shaken things up in Rx and proven it’s a racket.
He'd make even more butt loads of money than he already does, people would get more sensibly priced healthcare, everyone wins. Except the crooked and apparently incompetent existing healthcare execs, who don't deserve to win anyway.
(used to be Latin for "Recipe", aka, here's how to make this medicine)
And then he would charge whatever the market would bear in order to maximize return on his investment.
"Running it like a business" *is* part of the problem.
Health care is not just another business. Once you're in the hospital, it's a little late to go price shopping. And with your life on the line, do you really want to choose the low cost provider?
If you reformed the whole system you could trim a lot of hospital overhead, but it's a systemic problem. More overhead and waste is happening in the insurance companies which is what needs to be cleaned out first, then you can start dealing with providers' overhead that exists to serve the rest of the system
You wonder how much of a hospital is true emergencies vs scheduled care. While ERs are indeed busy, how many of those should actually go to a primary care doctor instead. Even then I would imagine your schedule appointments are the bulk of the volume at a hospital.
His prices are fairly comparable for his limited selection of cheap generics compared to other mail order options. Also, his pricing is cash only --- no insurance.
But dispensing drugs is not really comparable to "health care". Running a hospital comes with a lot more unknowns and risk.
If he has it all figured out, why hasn't he bought a hospital? Let me guess --- it's not a good investment.
If you're getting a routine colonoscopy every few years, it may be feasible to shop around.
Have you actually tried this? Most won't give you a fixed price up front because of the potential for things to go wrong.