Bitter Pill: Why Medical Bills Are Killing Us – II

ref: Bitter Pill: Why Medical Bills Are Killing Us

  • So as it comes out the chargemaster is something nobody is concerned about.  They really do not need to examine how the charges are created so long as they get paid.  And yes they do get paid by insurers, because they too have collection departments.  So, there is no incentive to revisit and revise it.  I am hoping that with healthcare exchanges round the corner, the insurance companies would be compelled to bring their premium rates down.  That “might” trickle down to hospitals being more competitive rate wise.
  • Also the impression I am getting from this article is that Medicare rates are very conservative and accurate.  It states that Medicare ensures that non-profit hospitals are paid for all the costs but actually be non-profit after their calculation.  Also, it seems fair that Medicare reimburses hospitals not only the direct costs, but also all the overheads incurred.  In all the problems related to healthcare, the accuracy of calculation of Medicare costs is a saving grace.  Its time something is done about the chargemaster, esp in relation to non-profit hospitals.
  • The article quotes an executive saying that very few  people actually pay the chargemaster rates.  I am sure almost all of such must be uninsured or inadequately insured.  Also what they charge the insurance companies isn’t as low as Medicare price either.  So, they actually go by those chargemaster rates.
  • The costs structure is further complicated by probably unnecessary tests administered by defensive medicine practiced these days due to fear of litigation.  On top of that hospitals have recover the costs of equipment, so they too look the other way around.
  • It is a real challenge to desist doctors from ordering multiple tests.  As it is a decision best left in the hands of doctors, we would need some sort of governance model to control it.
  • The report talks about how profitable s the business of selling hospital equipment.  That’s because the hospitals are able to recover the costs rather fast.

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