How about a law stating that a medical provider has to charge everyone the same price for the same service?
This would eliminate the many-to-many negotiation problem that contributes to absurdities like Duke University Hospital having 1,300 billing clerks for 900 beds (https://www.pbs.org/newshour/economy/why-does-health-care-co...). It would also make it much easier to estimate costs before going to a provider, because instead of having 1000 different prices, that service will have one price (albeit with some variability depending on what's actually done).
If you paired it with a law that mandated that hospitals publish their prices for services in a simple JSON format, such that companies could use it freely to create price comparison tools, suddenly you'd make it much easier for market forces to push prices down to sane levels. It's insane how difficult it is currently to figure out how much even routine and planned operations like delivering a child will cost, and as a result people don't bother to even try, so there's no incentive for hospitals to keep their list prices anywhere near the realm of sanity.
I mean, realistically, probably because the industry lobbyists don’t care for the idea. It is completely obvious as a (partial) solution, and isn’t even really anti-market, so should be acceptable to all sides of the POLITICAL spectrum. But the industry wouldn’t like it very much.
> It's insane how difficult it is currently to figure out how much even routine and planned operations like delivering a child will cost, and as a result people don't bother to even try
In my real-life experience, that is false. When my wife was pregnant we asked the doctor if we could pay upfront. She said yes, gave us a price, and explained what that would cover. We paid her; the delivery was at the hospital, and everything went well.
Was the doctor's quoted price the same as the all-in price? In our case, the OB's bill was something like 10% of the final total, which was close to 6 figures, despite being bog standard.
Your total seems to be one to two orders of magnitude greater than what we paid. We fully prepaid, and there were no complications. However, I wasn't talking about cost but replying to the assertion that one could not forecast costs.
I replied to, "It's insane how difficult it is currently to figure out how much even routine and planned operations like delivering a child will cost, and as a result people don't bother to even try". Your post seemed to refute that as well.
If a doctor accepts the Medicare price, then they'd be obligated to charge everyone else the same price. Or they're free to charge more, and not accept Medicare patients (or the patient would be responsible for the amount over the coverage). This would be easy to look up ahead of time, since their prices would be public and easily accessible via a variety of price comparison tools, and it would be easy for tools to let you filter by whether your insurance covered the amount charged by that provider for that service.
Medicare pricing is currently only possible because healthcare providers can cross-subsidize Medicare patients via raising prices on other patient pools. It's not going to work.
Keep in mind that 25-30% of current medical spending goes to administrative overhead, much of which is billing related. If that was eliminated or severely simplified, that would mean significantly more money for a given amount billed.
It's extremely bloated in other ways too. This isn't a streamlined system with nothing to cut. So I think it's a bit premature to say Medicare pricing is only possible because they're allowed to gouge others, there are many other levers.
It's layers of markups and artificial scarcity stacked one on top of the other. Hospital associations that lock up their turf, and have geographic monopolies. Electronic medical record companies that create proprietary and incompatible standards. Medical device manufacturers that use regulatory capture at the FDA to ensure they have exclusive production rights. The American Medical Association restricting the supply of doctors and nurses, to keep their wages high.
Pharmaceutical manufacturers making slight tweaks to existing drugs to extend their patents only to cease all production on the old generics... causing even simple things like insulin to be outrageously priced.
Since insurance plans shield consumers from the costs, they have little or no incentive to price shop. So nobody notices these layers of markups, they just notice the big insurance premiums and assume it is all evil insurance companies charging too much when that is just the tip of the iceberg.
It's low enough in the UK, that if I lived in the US and found myself needing to pay privately for something non-urgent, I'd probably fly to the UK or elsewhere to do it. There are in fact several private London hospitals that market themselves to foreign patients.
Maybe we pencil in a Medicare exemption then. But one service one price cuts out a lot of inefficiency and allows actual price shopping, making the system more efficient; everyone wins (on average).
If that is true, it just highlights how broken US healthcare pricing is, if even hospitals or hospital groups are unable to negotiate good enough supplier pricing to be able to make that work.
For some perspective of this: The US government in recent years have often paid more per US citizen for all of Medicare and Medicaid than UK citizens pay for the NHS (1).
The difference being that that per citizen cost in the UK provides universal coverage. Per eligible person, while Medicare is quite cheap by US standards, it's incredibly expensive by the standards of most other developed countries... So US tax payers pay more for healthcare than UK taxpayers before most of you even get any cover yourself.
You might expect it to be higher than the UK given difference in salaries etc., but the per eligible person costs in Norway, Switzerland and Luxembourg, the three most expensive countries in the world for healthcare outside of the US, largely driven by high salaries, are lower than the Medicare per eligible person costs (2), and lower than the combined Medicare/Medicaid per eligible person costs for Norway and Luxembourg and just barely higher for Switzerland. But Medicare cover is also far more limited.
If looking at just Medicare you come out a bit lower at $2167, but of course that includes cover for far fewer people, only about 55 million, for costs per patient more comparable to the NHS of more than $12,700. The per-patient cost of Medicaid and Medicare combined is more than $9500/year.
> or the patient would be responsible for the amount over the coverage
Medicare's current terms don't allow that. If you accept Medicare and charge more than 15% over the Medicare price, you stop being eligible for reimbursement by Medicare.
Those terms could be changed, of course. But then it's worth asking why that limitation is in place now.
I never said it would be easy politically. Healthcare is a morass with a huge number of entrenched and entangled interests. And the dark side of reducing its absurd costs is that much of the reason for the high price is a bunch of pretty unnecessary high paying jobs involved that largely exist to deal with the system's complexity. And while most people can cheer for lower healthcare cost, they might have a harder time cheering for putting all the people out of work.
Worse, it's an industry that employs lots of people in every locality. So it's politically very difficult to tackle.
I don't think this would be that terrible for Medicare patients, though. Doctors who were fully covered by Medicare would make it known far and wide, and those who didn't but have large numbers of Medicare patients would see large drops in their patient load.
Or maybe, the state determines a fee schedule, each doctor is paid the same amount for each procedure completed by the state, then the state bills everyone as a percentage of their income, via taxes? And everyone's covered. And there's no pre-existing conditions. Or co-pays. Or deductibles. Or out of pocket maximums. If only there were examples to draw from ;)
If only "pay for service" wasn't a recognized problem that we're currently trying to solve itself. It's almost as if when doctors are paid per procedure, they do a bunch of unnecessary procedures.
The idea that healthcare can be centrally managed comes from people assuming it's way simpler than it is.
Here's a good place to start. You know that demand in the US for a transparent fee schedule so people know what things cost at hospitals? Here's the list of every service administered in Ontario and exactly how much it costs: http://www.health.gov.on.ca/en/pro/programs/ohip/sob/
Those are in Canadian dollars by the way; yes, a specialist consult costs the province $100 (and you, $0).
It's hard to hear that you're trying to pre-solve cost problems you don't know you'll have if you were to switch to central management when the US is currently the most expensive healthcare system per capita by a lot (like, double), and is ranked 36th by the WHO. Far less expensive systems per capita are ranked dramatically higher even though they have a fixed fee schedule. Sure, there's room to improve, but maybe knock out the low-hanging fruit first.
Further, if that's too distasteful, there's other ways to make this work; the Swiss system forbids private insurers from making profit on the basic administration of healthcare, and caps individuals out of pocket expenses. I'm sure the insurers would find a way under such constraints.
You can have a private insurance system on top of a tax-subsidized public one that provides a baseline.
Or we could try a public option, for starters. I bet that would drive prices down significantly already, simply by virtue of being large enough to negotiate them down.
This would eliminate the many-to-many negotiation problem that contributes to absurdities like Duke University Hospital having 1,300 billing clerks for 900 beds (https://www.pbs.org/newshour/economy/why-does-health-care-co...). It would also make it much easier to estimate costs before going to a provider, because instead of having 1000 different prices, that service will have one price (albeit with some variability depending on what's actually done).
If you paired it with a law that mandated that hospitals publish their prices for services in a simple JSON format, such that companies could use it freely to create price comparison tools, suddenly you'd make it much easier for market forces to push prices down to sane levels. It's insane how difficult it is currently to figure out how much even routine and planned operations like delivering a child will cost, and as a result people don't bother to even try, so there's no incentive for hospitals to keep their list prices anywhere near the realm of sanity.