0. https://www.econtalk.org/keith-smith-on-free-market-health-c...
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.
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.
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.
We overpay for healthcare because we must pay, and it has institutional and natural bottlenecks which restrict availability and choice.
Tl;dr Mr Cuban is right, but I think hospital accounting nears P/NP-level complexity
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."
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 insuring 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.
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.
sfn42•54m ago
elo2000•43m ago
cmiles8•43m ago
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.
inanutshellus•39m ago
Xunjin•37m ago
heavenlyblue•37m ago
Dusseldorf•34m ago
nkurz•33m ago
altcognito•32m ago
(used to be Latin for "Recipe", aka, here's how to make this medicine)
makosdv•31m ago
mananaysiempre•28m ago
sfn42•29m ago
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.
bluGill•24m ago