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Justifying the cost of healthcare.

August 27, 2018

With another year ending and health insurance premium increases once again in the news, it might be time to ask if the first thing we should do is control the cost of care as an avenue to controlling premiums.

As this article illustrates, price gouging by some health care providers is an ongoing, and some would say pervasive problem that contributes to the cost of insurance.

Obviously trying to set a national average for procedures and equipment would be another one of those ineffective “one-size-fits-all” non-solutions.

But setting some sort of reasonable and necessary mark-up standard for providers might just provide the sort of cost control that would help to control insurance premium costs.

As the above-referenced article notes, some providers seem to assign highly inflated billing costs relative to their actual costs.

Now, we know that no business can afford to sell things at cost, but should they be able to more than quadruple their costs?

For instance the article mentions two coronary stents that cost the hospital in question $1,153 each, but were billed to the patient at a marked-up price of $19,708 each.

Mark-up is how businesses pay for ancillary costs, such as taxes, building maintenance, and salaries. Businesses also build profit into mark-up, usually at a net  of around 4 to 10 percent after taxes.

Either the hospital is an Olympic class price gouger, or their costs of doing business need to be controlled.

Another problem is whether the provider passes all post insurance payment balances on to their customers.

Most insurers require the patient to have some responsibility for the costs (deductibles and co-pays), but even if the provider says they accept insurance as payment in full in their advertising, many will insist that patients sign a document that negates that policy. Hospitals in particular are prone to doing that. Fail to sign, and they simply tell you to go somewhere else.

So perhaps while we are worrying about socialized medicine, we should also worry about whether over-charging would make that impossible, even if we wanted to put the government in charge of our health.

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John McCain – 1936-2018.  Warrior, defender of the flag, idealist, maverick and patriot.    RIP.

 

From → op-ed

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