Medical Cost Alerts – APRA https://www.americanpatient.org American Patient Rights Association Sun, 09 Feb 2025 17:21:59 +0000 en-US hourly 1 https://wordpress.org/?v=7.0 https://www.americanpatient.org/wp-content/uploads/2018/07/favicon-APRA1-150x150.png Medical Cost Alerts – APRA https://www.americanpatient.org 32 32 Health Insurance Price Data: It’s Out There, but It’s Not for the Faint of Heart https://www.americanpatient.org/health-insurance-price-data-its-out-there-but-its-not-for-the-faint-of-heart/?utm_source=rss&utm_medium=rss&utm_campaign=health-insurance-price-data-its-out-there-but-its-not-for-the-faint-of-heart https://www.americanpatient.org/health-insurance-price-data-its-out-there-but-its-not-for-the-faint-of-heart/#respond Sun, 07 Aug 2022 17:41:06 +0000 https://www.americanpatient.org/?p=59460 Read More]]> Article Summary: Insurers have released information on the cost of services to comply with the price transparency rule, although leaving consumers with huge data that is quite incomprehensible.

By Julie Appleby, KHN, July 27, 2022.

That’s the reaction about three weeks into a data dump of enormous proportions. Health insurers are posting their negotiated rates for just about every type of medical service they cover across all providers.

But so much data is flowing in from insurers — tens of thousands of colossal digital files from a single insurer is not unusual — that it could still be weeks before data firms put it into usable forms for its intended targets: employers, researchers, and even patients.

“There is data out there; it’s just not accessible to mere mortals,” said Sabrina Corlette, a researcher at Georgetown University’s Center on Health Insurance Reforms.

Insurers are complying with federal rules aimed at price transparency that took effect July 1, she and others said. Realistically, though, consumer use of the data may have to wait until private firms synthesize it — or additional federal requirements start to kick in next year aimed at making it easier for consumers to use the price information to shop for scheduled medical care.

So why post prices? The theory is that making public this array of prices, which are likely to vary widely for the same care, will help moderate future costs through competition or improved price negotiations, although none of that is a guarantee.

Hospitals last year came under a similar directive, which stems from the Affordable Care Act, to post what they’ve agreed to accept from insurers — and the amounts they charge patients paying cash. Yet many dragged their feet, saying the rule is costly and time-consuming. Their trade association, the American Hospital Association, sued unsuccessfully to halt it. Many hospitals just never complied and federal government enforcement has proven lax.

While government regulators have sent more than 350 warning letters to hospitals, and have increased the potential civil penalty fines from $300 a day to up to $5,500, only two hospitals have been fined so far.

The requirement for insurers is broader than that faced by hospitals, although it does not include cash prices. It includes negotiated rates paid not only to hospitals, but also to surgery centers, imaging services, laboratories, and even doctors. Amounts billed and paid for “out-of-network” care are also included.

Penalty fines for not posting can be higher than those faced by hospitals — $100 a day per violation, per affected enrollee, which quickly adds up for medium- or large-size insurers or self-insured employers.

“We’re seeing high compliance rates because of the high penalties,” said Jeff Leibach, a partner with the consulting firm Guidehouse.

The data is posted on public websites, but it can be hard to access — mainly because of size, but also because each insurer approaches it differently. Some, like Cigna, require would-be viewers to cut and paste a very long URL into a browser to get to a table of contents of the price files. Others, including UnitedHealthcare, created websites that directly list a table of contents.

Still, even the tables of contents are huge. UnitedHealthcare’s webpage warns it could take “up to 5 minutes” for the page to load. When it does, there are more than 45,000 entries, each listed by the year and name of the plan or employer for job-based policies.

For consumers, accessing any single plan would be a challenge. At the moment, it’s also difficult for employers, who want to use the information to determine how well their insurers negotiate compared with others.

Employers “really need someone to download and import the data,” which is in a format that can be read by computers but isn’t easily searchable, said Randa Deaton, vice president of purchaser engagement at the Purchaser Business Group on Health, which represents large employers.

After an initial peek, she has seen wide variation in costs.

“In one plan, I could see negotiated rates that ranged from $10,000 to $1 million for the same service,” said Deaton.

But the larger picture won’t be clear until more of the data is cleaned: “The question is what is the story this data will tell us?” she said. “I don’t think we have the answer yet.”

Congress and administration policy rule makers expected that the insurer data would be overwhelming, and that private firms and researchers would step in to do the deep analysis and data production.

One of those firms is Turquoise Health, which was “overjoyed by the amount of data,” said Marcus Dorstel, vice president of operations.

The company, one of a number aiming to commercialize the data, had by mid-July downloaded more than 700,000 unique files, or about half a petabyte. For context, 1 petabyte is the equivalent of 500 billion pages of standard typed text. Its expectation, Dorstel added, is that the total download will end up in the 1- to 3-petabyte range.

Turquoise hopes to share organized data with its paying customers soon — and offer it free of charge to ordinary consumers sometime after that on its website, which already lists available hospital prices.

What’s possible right now?

Let’s say patients know they need a specific test or procedure. Can they look online at insurer data postings to choose a treatment site that will be most cost-effective, which could be helpful for those who have yet to meet their annual deductible and are on the hook for some or all of the cost?

“Maybe an individual with a laptop could look at one of the files for one plan,” said Dorstel, but consumers would find it difficult to compare among insurers — or even across all the plans offered by a single insurer.

Consider, for example, what it takes to try to find the negotiated price of a particular type of brain scan, an MRI, from a specific insurer.

The first hurdle: locating the right file. Google “transparency in coverage” or “machine-readable files” with an insurer’s name and results might pop up. Self-insured employers are also supposed to post the data.

Next step: Find the exact plan, often from a table of contents that can include tens of thousands of names because insurance companies offer so many types of coverage products or have many employer clients that must be listed as well.

Downloading and deciphering the tangle of codes to pinpoint one describing a specific service is next. It helps to have the service code, something a patient may not know.

Starting Jan. 1, another rule takes effect that could provide consumers with some relief.

It involves the apps and other tools that some insurers already provide for policyholders so they can estimate costs when preparing for a visit, test, or procedure.

The new rule bolsters what information is available and requires insurers who don’t offer such tools to have them ready by Jan. 1. Insurers must make available online, or on paper, if requested, the patient’s cost for a list of 500 government-selected, common “shoppable services,” including knee replacements, mammograms, a host of types of X-rays, and, yes, MRIs.

The following year — 2024 — insurers must provide consumers with the cost sharing amount for all services, not just those initial 500.

Another regulatory layer stems from the No Surprises Act, which took effect this year. Its overarching goal is to reduce the number of insured patients who get higher-than-anticipated bills for care from out-of-network providers. Part of the law requires providers, including hospitals, to give an upfront “good faith estimate” for nonemergency care when asked. Right now, that part of the law applies only to patients who are uninsured or using cash to pay for their care, and it isn’t clear when it will kick in for insured patients using their coverage benefits.  

When it does, insurers will be required to give policyholders cost information before they receive care in a format described as an advance explanation of benefits — or EOB. It would include how much the provider will charge, how much the insurer will pay — and how much the patient will owe, including any outstanding deductible.

In theory, that means there could be both an upfront EOB and a price comparison tool, which a consumer might use before deciding where or from whom to get a service, said Corlette at Georgetown.

Still, Corlette said, she remains skeptical, given all the complexities, that “these tools will be available in a usable format, in real life, for real people on anywhere near the timeline envisioned.”

Article link: https://khn.org/news/article/health-insurance-price-data-access/

 

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Study Claims Hospitals Charge Double for Specialty Drugs Compared to Pharmacies https://www.americanpatient.org/study-claims-hospitals-charge-double-for-specialty-drugs-compared-to-pharmacies/?utm_source=rss&utm_medium=rss&utm_campaign=study-claims-hospitals-charge-double-for-specialty-drugs-compared-to-pharmacies https://www.americanpatient.org/study-claims-hospitals-charge-double-for-specialty-drugs-compared-to-pharmacies/#respond Fri, 25 Feb 2022 15:34:48 +0000 https://www.americanpatient.org/?p=59181 Read More]]> Article Summary: A new study conducted by AHIP shows hospitals and doctors’
offices charge patients more for specialty drugs compared to specialty pharmacies.

By Robert King, Fierce Healthcare, Feb 17, 2022.

Hospitals on average charge double the price for the same drugs compared to those
offered by specialty pharmacies, according to a new insurer-funded study released as
federal regulators ponder a probe into the pharmacy benefit management industry.

The study (PDF), released Wednesday by insurance lobbying group AHIP, comes as
specialty pharmacies have grown in use among PBMs and payers to dispense
specialty products. The study was released a day before a scheduled meeting
Thursday of the Federal Trade Commission on whether to probe the competitive
impact of PBM contracts and how they could disadvantage independent and
specialty pharmacies.

“The data are clear, specialty pharmacies lower patient costs by preventing hospitals
and physicians from charging patients, families, and employers excessively high
prices to buy and store specialty medicines themselves,” said Matt Eyles, president
and CEO of AHIP, in a statement.

Researchers looked at medical and pharmacy claims data from 2018 through 2020
and calculated the drugs commonly delivered via specialty pharmacies. It then
calculated the three-year average cost for a single treatment of a drug delivered via a
specialty pharmacy, physician office and hospital.

It found that hospitals on average charged 108% the price for the same drugs
compared to a pharmacy, and a doctor’s office charged 22% more. AHIP said that
specialty pharmacies can offer more efficient delivery to cut down on costs.

“These solutions help reduce Americans’ out-of-pocket costs and what they pay in
premiums—making healthcare more affordable and accessible for everyone,” the
study said.

It added that there were higher markups for certain drugs in hospitals and doctor
offices. For example, cancer treatment Herceptin had a 131% price markup
compared to pharmacies and 40% markup from doctors' offices.

Hospitals have additional charges for administering specialty drugs such as storage
and handling.

Insurers have increasingly pivoted to specialty pharmacies as the prices for specialty
drugs to treat conditions such as cancer, arthritis and multiple sclerosis are
increasing.

CVS, for instance, announced in May 2021 that spending on specialty drugs
accounted for 52% of its total pharmacy spending.

The shift has also caused providers to respond. A new group of seven health systems
created its own trade association to promote best practices on integrated pharmacies
in hospitals.

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A hospital hiked the price of a routine childbirth by calling it an ’emergency’ https://www.americanpatient.org/a-hospital-hiked-the-price-of-a-routine-childbirth-by-calling-it-an-emergency/?utm_source=rss&utm_medium=rss&utm_campaign=a-hospital-hiked-the-price-of-a-routine-childbirth-by-calling-it-an-emergency https://www.americanpatient.org/a-hospital-hiked-the-price-of-a-routine-childbirth-by-calling-it-an-emergency/#respond Mon, 08 Nov 2021 16:29:18 +0000 https://www.americanpatient.org/?p=58826 Read More]]> Article Summary: A hospital inflated bills for healthy births by labelling them emergencies.

By Rae Ellen Bichell, NPR, Oct 27, 2021.

As a conservation biologist, Caitlin Wells Salerno knows that some mammals — like the golden-mantled ground squirrels she studies in the Rocky Mountains — invest an insane amount of resources in their young. That didn’t prepare her for the resources she would owe after the birth of her second son.

Wells Salerno went into labor on the eve of her due date, in the early weeks of coronavirus lockdowns in April 2020. She and her husband, Jon Salerno, were instructed to go through the emergency room doors at Poudre Valley Hospital in Fort Collins, Colo., because it was the only entrance open.

Despite the weird vibe of the pandemic era — the emptiness, the quiet — everything went smoothly. Wells Salerno felt well enough to decline the help of a nurse who offered to wheel her to the labor and delivery department. She even took a selfie, smiling as she entered the delivery room.

“I was just thrilled that he was here, and it was on his due date, so we didn’t have to have an induction,” she says. “I was doing great.”

Gus was born a healthy 10 pounds after about nine hours of labor, and the family went home the next morning.

Wells Salerno expected the bill for Gus’ birth to be heftier than the $30 she’d been billed four years earlier for the delivery of her first child, Hank. She’d been a postdoctoral fellow in California, with top-notch insurance, when Hank was born. They were braced to pay more for Gus’ delivery — but how much more?

Then the bill came.

The patient: Caitlin Wells Salerno, a conservation biologist at Colorado State University and a principal investigator at Rocky Mountain Biological Laboratory. She is insured by Anthem Blue Cross Blue Shield through her job.

Medical service: A routine vaginal delivery of a full-term infant.

Total bill: $16,221.26. The Anthem BCBS negotiated rate was $14,550. Insurance paid $10,940.91 and the family paid the remaining $3,609.09 to the hospital.

Service provider: Poudre Valley Hospital in Fort Collins, Colo., operated by UCHealth, a nonprofit health system.

What gives: In a system that has evolved to bill for anything and everything, a quick exam to evaluate labor in a small triage room can generate substantial charges.

The total bill was huge, but what really made Wells Salerno’s eyes pop was the $2,755 charge for “Level 5” emergency services included in that total. It didn’t make any sense.

Emergency room visits are coded from Level 1 to Level 5, with each higher level garnering more generous reimbursement, in theory commensurate with the work required. Dr. Renee Hsia, a professor of emergency medicine and health policy at the University of California, San Francisco and a practicing ER doctor, says Level 5 charges are supposed to be reserved for serious cases — “a severe threat to life or very complicated, resource-intense cases” — not for patients who can walk through a hospital on their own.

So, why did Wells Salerno’s bill include a “Level 5” charge? Was it for checking in at the ER desk, as she’d been instructed to do? She recalls merely going through security in the ER on her way to labor and delivery, but she seemed to have been charged as though she’d received care there — like a patient with a heart attack or someone fresh from a car wreck. That ER charge was the biggest item on the bill, other than the charge for the delivery itself.

Over the past 20 years, hospitals and doctors have learned there’s great profit in upcoding visits. After all, the insurer isn’t in the exam room to know what transpired. An investigation by the Center for Public Integrity found that between 2001 and 2008 the number of Level 4 and 5 visits for patients who were sent home from the ER nearly doubled to almost 50% of visits. In Colorado, the Center for Improving Value in Health Care looked at emergency visit billing from 2009 to 2016 and found that the percentage of emergency visits coded as Level 5 steadily grew from 23% to 34% for patients who have commercial insurance.

After repeated calls in which she questioned the line item on her bill, Wells Salerno eventually got a voicemail from the billing department, which she shared with us. The person who left the voicemail explained that “the emergency room charge is actually the OB triage little area — before they take you to the labor and delivery room.”

A customer service representative later explained the charge was for services given there when a nurse placed an IV for antibiotics, and her doctor checked her dilation and confirmed her water had broken — although none of that was actually performed in the Emergency Department. And those services, performed before every delivery, are traditionally not billed separately — and are routine, not emergency, procedures.

Some hospitals provide that package of services via an “obstetrical emergency department.” OB-EDs are licensed under the main Emergency Department and typically see patients who are pregnant, for anything from unexplained bleeding to full-term birth. They bill like an ER, even if they aren’t physically located anywhere near the ER.

TeamHealth — a health care staffing company owned by the investment company Blackstone, and known for marking up ER bills to boost profit — essentially says an OB-ED can be as simple as a rebranded obstetrical triage area. In a white paper, the company says an OB-ED is an “entrepreneurial approach to strengthening hospital finances,” because with “little to no structural investment” it allows hospitals to “collect facility charges that are otherwise lost in the obstetrical triage setting.”

The OB Hospitalist Group, which is owned by a private equity company, markets a tool to help OB-EDs calculate levels of emergency care. In a case study, OB Hospitalist Group reported that hospitals “leave a lot of money on the table” by billing OB-ED visits as Level 1 and 2 emergencies when they could be considered Level 4 emergencies.

An Arizona facility said its revenue increased $365,000 per quarter after turning its obstetric triage area into an OB-ED. Poudre Valley Hospital’s website doesn’t list “OB-ED” as part of the facility’s offerings, though UCHealth documents do reference OB-ED beds in other facilities.

KHN spoke with four other women who, after giving birth at Poudre Valley in 2020 and 2021, received ER charges on their bills after healthy births. They had no clue they had received emergency services. One wrote a warning note on Facebook to other moms in the area after getting a whopping charge — for the 10 minutes she spent in the triage room, while fully dilated and in active labor.

In Wells Salerno’s case, UCHealth and her insurer have an agreement that Anthem BCBS pays a lump sum for vaginal delivery, rather than paying for line items individually. “Being seen there in OB-ED did not impact this bill whatsoever,” says Dan Weaver, a spokesperson with UCHealth.

But in one of the other moms’ cases, it did make a difference: The hospital received $1,500 from the insurer for that charge, and the mom was on the hook for an additional $375 for coinsurance.

Ge Bai, a professor of accounting and health policy at Johns Hopkins University, says it’s a “questionable” billing practice and one that can matter to those who don’t have the same kind of insurance as Wells Salerno — and to those who have no insurance at all.

Dr. Mark Simon, chief medical officer with OB Hospitalist Group, says OB-EDs can help women avoid being admitted to the hospital too early in labor, ensuring timelier, more appropriate care.

UCHealth’s Weaver says such departments can also help pregnant patients with actual emergencies like preterm labor, preeclampsia or vaginal bleeding get quick care from specialists available 24/7 — often without having to be admitted to the hospital. But at hospitals like Poudre Valley, healthy women having healthy births also get routine “OB-ED” treatment, without their knowledge.

Weaver says the only time someone in labor would not go through the OB-ED — and therefore the only time they would not receive the emergency charge — is if they have a scheduled induction or cesarean section or are directly admitted from a provider’s office.

Hsia, the UCSF researcher and ER doctor, is unconvinced by Weaver’s arguments that these sorts of charges benefit patients: “If they’re actually going to charge a special fee that you didn’t get directly admitted from your physician, that’s absolutely ridiculous,” Hsia says.

Wells Salerno’s “OB-ED” exam was performed by her clinician, but the OB-ED charge still showed up on her bill.

Resolution: Wells Salerno eventually threw in the towel and paid the bill.

“I was at a very vulnerable time during pregnancy and immediately postpartum,” she says. “I just felt like I had kind of been taken advantage of financially at a time when I couldn’t muster the energy to fight back.”

The fact that two healthy brothers could come into the world with such different overall price tags isn’t surprising to Dr. Michelle Moniz. “There is no clinical reason that we have this level of variation,” says Moniz, assistant professor of obstetrics and gynecology at the University of Michigan and its Institute for Healthcare Policy and Innovation. Her research shows that people with private insurance pay anywhere from nothing to $10,000 for childbirth.

“You don’t get what you pay for,” says Wells Salerno, who maintains that — despite the price difference in the cost of their deliveries — both of her children are equally “awesome.”

The takeaway: Anything in our health system labeled as an emergency room service likely comes with a big additional charge.

Data from the Colorado Division of Insurance shows that Poudre Valley typically received about $12,000 for similar births in 2020 — about 43% more than the typical Colorado hospital. So the more than $14,000 Wells Salerno and her insurer paid is very high.

Expectant parents should be aware that OB-EDs are a relatively new feature at some hospitals. Ask whether your hospital has that kind of charge and how it will affect your bill. Ahead of time, ask both the hospital and your insurer how much the birth is expected to cost. In Colorado, the Center for Improving Value in Health Care offers a price comparison tool for common medical procedures, including vaginal delivery.

If you do require a genuine ER encounter, look at your bill to see how it was coded, Levels 1 to 5 — and protest if your visit was misrepresented. Ask “Has this bill been upcoded?” You are the only one who knows how much time you spent with a medical provider and how much care was given and where. Here’s a chart that will help with the proper definition of each level.

Know that victory is possible. At least one mom won the battle and got the emergency charge removed from her Poudre Valley Hospital birth bill. To make that happen she had to put in hours on the phone with UCHealth, have a lot of confidence and had to emphasize to everyone she spoke with that an emergency charge for a routine delivery just didn’t — and doesn’t — make sense.

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137 million Americans suffered hardships from medical costs: American Cancer Society https://www.americanpatient.org/137-million-americans-suffered-hardships-from-medical-costs-american-cancer-society/?utm_source=rss&utm_medium=rss&utm_campaign=137-million-americans-suffered-hardships-from-medical-costs-american-cancer-society https://www.americanpatient.org/137-million-americans-suffered-hardships-from-medical-costs-american-cancer-society/#respond Mon, 20 Sep 2021 05:00:13 +0000 https://www.americanpatient.org/?p=58596 Read More]]> By Justin Doom, ABC News, May 3, 2019.

More than 137 million U.S. adults, about 56%, have suffered because of costs tied to medical care, according to a study released Thursday by the American Cancer Society.

Adults aged 18 to 64 suffered more than seniors, according to National Health Interview Survey data collected from 2015 to 2017. Compared with Americans 65 or older, younger adults reported higher rates of material (28.9% to 15.3%), psychological (46.9% vs. 28.4%) and behavioral (21.2% vs. 12.7%) medical financial hardship.

The study, which appears in the Journal of General Internal Medicine, evaluated concerns including the affordability of care, potentially delaying care until it could be paid for and related stress factors.

High out-of-pocket costs are becoming an “increasingly critical issue for patients,” the ACS said on its website. “It can lead to a depletion of assets and medical debt, as well as distress and worry about household finances.”

Adults aged 18 to 64 with less educational attainment suffered even more, according to the study. Women suffered more than men. Uninsured Americans were the most likely to report multiple instances of hardship.

Until significant action is taken, the study’s authors said, conditions are likely to worsen.

“With increasing prevalence of multiple chronic conditions; higher patient cost-sharing; and higher costs of healthcare; the risk of hardship will likely increase in the future,” the authors wrote. “Thus, development and evaluation of the comparative effectiveness and cost-effectiveness of strategies to minimize medical financial hardship will be important.”

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Jaw Surgery Takes a $27,119 Bite out of One Man’s Budget https://www.americanpatient.org/jaw-surgery-takes-a-27119-bite-out-of-one-mans-budget/?utm_source=rss&utm_medium=rss&utm_campaign=jaw-surgery-takes-a-27119-bite-out-of-one-mans-budget Sun, 19 Sep 2021 23:22:34 +0000 https://www.americanpatient.org/?p=58593 Hospital-employed physicians more likely to order unneeded MRIs, study finds https://www.americanpatient.org/hospital-employed-physicians-more-likely-to-order-unneeded-mris-study-finds/?utm_source=rss&utm_medium=rss&utm_campaign=hospital-employed-physicians-more-likely-to-order-unneeded-mris-study-finds https://www.americanpatient.org/hospital-employed-physicians-more-likely-to-order-unneeded-mris-study-finds/#respond Sun, 19 Sep 2021 23:11:13 +0000 https://www.americanpatient.org/?p=58590 Read More]]> Article Summary: Study findings indicate that the odds of a patient receiving an inappropriate MRI referral increased by more than 20 percent after a physician transitioned to hospital employment.

By Kelly Gooch, Becker’s Hospital Review, May 04, 2021.

Patients of physicians employed by hospitals are more likely to receive inappropriate referrals for diagnostic imaging, according to a study published May 3 in Health Affairs.

The study — led by researchers from Boston-based Northeastern University, Stonehill College in Easton, Mass., and Boston University — is based on commercial health insurance claims from the Massachusetts All Payer Claims Database, as well as Medicare claims data and data from health plans. Data was collected for MRI referrals for three conditions — uncomplicated lower back pain, nontraumatic knee pain without joint effusion, and nontraumatic shoulder pain without joint effusion — for 2009 through 2016.

For the study, researchers compared a study cohort of 583 primary care physicians who became employed by a hospital in Massachusetts from 2009 through 2016 with 3,102 Massachusetts physicians who were not employed by a hospital during the study period. 

The study found an association between hospital employment of physicians and patients’ likelihood of receiving MRI referrals generally. For the study cohort, researchers also found that patients’ likelihood of receiving inappropriate MRI referrals climbed by 26 percent related to hospital employment of physicians.

Additionally, researchers said physicians were more likely to refer patients for MRIs once they were employed by a hospital than before that employment began. 

“Our findings are in line with previous studies that have reported an association between hospital-physician integration and higher costs for patient care,” the study’s authors concluded. “However, our findings offer evidence that such higher costs are not largely a matter of better service access for patients. Rather, hospital-physician integration appears to be a potential driver of low-value care.”

Article link: https://www.beckershospitalreview.com/hospital-physician-relationships/hospital-employed-physicians-more-likely-to-order-unneeded-mris-study-finds.html

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Enough to Wreck Their Rest: $10,322 for a Sleep Study https://www.americanpatient.org/enough-to-wreck-their-rest-10322-for-a-sleep-study/?utm_source=rss&utm_medium=rss&utm_campaign=enough-to-wreck-their-rest-10322-for-a-sleep-study Sun, 19 Sep 2021 22:58:35 +0000 https://www.americanpatient.org/?p=58587 Hospitals and Insurers Didn’t Want You to See These Prices. Here’s Why. https://www.americanpatient.org/hospitals-and-insurers-didnt-want-you-to-see-these-prices-heres-why/?utm_source=rss&utm_medium=rss&utm_campaign=hospitals-and-insurers-didnt-want-you-to-see-these-prices-heres-why https://www.americanpatient.org/hospitals-and-insurers-didnt-want-you-to-see-these-prices-heres-why/#respond Sun, 22 Aug 2021 17:25:31 +0000 https://www.americanpatient.org/?p=53829 Read More]]> By Sarah Kliff and Josh Katz. The New York Times,  Aug. 22, 2021.

This year, the federal government ordered hospitals to begin publishing a prized secret: a complete list of the prices they negotiate with private insurers.

The insurers’ trade association had called the rule unconstitutional and said it would “undermine competitive negotiations.” Four hospital associations jointly sued the government to block it, and appealed when they lost.

They lost again, and seven months later, many hospitals are simply ignoring the requirement and posting nothing.

But data from the hospitals that have complied hints at why the powerful industries wanted this information to remain hidden.

It shows hospitals are charging patients wildly different amounts for the same basic services: procedures as simple as an X-ray or a pregnancy test.

And it provides numerous examples of major health insurers — some of the world’s largest companies, with billions in annual profits — negotiating surprisingly unfavorable rates for their customers. In many cases, insured patients are getting prices that are higher than they would if they pretended to have no coverage at all.

> At the University of Mississippi Medical Center, a colonoscopy costs …$1,463 with a Cigna plan, $2,144 with an Aetna plan, $782 with no insurance at all.

Until now, consumers had no way to know before they got the bill what prices they and their insurers would be paying. Some insurance companies have refused to provide the information when asked by patients and the employers that hired the companies to provide coverage.

This secrecy has allowed hospitals to tell patients that they are getting “steep” discounts, while still charging them many times what a public program like Medicare is willing to pay.

And it has left insurers with little incentive to negotiate well.

The peculiar economics of health insurance also help keep prices high.

HOW TO LOOK UP PRICES AT YOUR HOSPITAL (IF THEY’RE THERE) ›

Customers judge insurance plans based on whether their preferred doctors and hospitals are covered, making it hard for an insurer to walk away from a bad deal. The insurer also may not have a strong motivation to, given that the more that is spent on care, the more an insurance company can earn.

Federal regulations limit insurers’ profits to a percentage of the amount they spend on care. And in some plans involving large employers, insurers are not even using their own money. The employers pay the medical bills, and give insurers a cut of the costs in exchange for administering the plan.

A growing number of patients have reason to care when their insurer negotiates a bad deal. More Americans than ever are enrolled in high-deductible plans that leave them responsible for thousands of dollars in costs before coverage kicks in.

Patients often struggle to afford those bills. Sixteen percent of insured families currently have medical debt, with a median amount of $2,000.

Even when workers reach their deductible, they may have to pay a percentage of the cost. And in the long run, the high prices trickle down in the form of higher premiums, which across the nation are rising every year.

Insurers and hospitals say that looking at a handful of services doesn’t provide a full picture of their negotiations, and that the published data files don’t account for important aspects of their contracts, like bonuses for providing high-quality care.

“ These rate sheets are not helpful to anyone,” said Molly Smith, vice president for public policy at the American Hospital Association. “It’s really hard to say that when a lot of hospitals are putting in a lot of effort to comply with the rule, but I would set them aside and avoid them.”

The trade association for insurers said it was “an anomaly” that some insured patients got worse prices than those paying cash.

“Insurers want to make sure they are negotiating the best deals they can for their members, to make sure their products have competitive premiums,” said Matt Eyles, chief executive of America’s Health Insurance Plans.

The five largest insurers — Aetna, Cigna, Humana, United and the Blue Cross Blue Shield Association — all declined requests for on-the-record interviews. Cigna, Humana and Blue Cross provided statements that said they support price transparency.

The requirement to publish prices is a rare bipartisan effort: a Trump-era initiative that the Biden administration supports. But the data has been difficult to draw meaning from, especially for consumers.

The New York Times partnered with two University of Maryland-Baltimore County researchers, Morgan Henderson and Morgane Mouslim, to turn the files into a database that showed how much basic medical care costs at 60 major hospitals.

The data doesn’t yet show any insurer always getting the best or worst prices. Small health plans with seemingly little leverage are sometimes out-negotiating the five insurers that dominate the U.S. market. And a single insurer can have a half-dozen different prices within the same facility, based on which plan was chosen at open enrollment, and whether it was bought as an individual or through work.

But the disclosures already upend the basic math that employers and customers have been using when they try to get a good deal.

People carefully weighing two plans — choosing a higher monthly cost or a larger deductible — have no idea that they may also be picking a much worse price when they later need care.

Even for simple procedures, the difference can be thousands of dollars, enough to erase any potential savings.

> At Aurora St. Luke’s in Milwaukee, an M.R.I. costs United enrollees …$1,093 if they have United’s HMO plan, $4,029 if they have United’s PPO plan.

It’s not as if employers can share that information at open enrollment: They generally don’t know either.

“It’s not just individual patients who are in the dark,” said Martin Gaynor, a Carnegie Mellon economist who studies health pricing. “Employers are in the dark. Governments are in the dark. It’s just astonishing how deeply ignorant we are about these prices.”

A vital drug, a secret price

Take the problem Caroline Eichelberger faced after a stray dog bit her son Nathan at a Utah campsite last July.

Nathan’s pediatrician examined the wound and found it wasn’t serious. But within a week, Nathan needed a shot to prevent rabies that was available only in emergency rooms.

Ms. Eichelberger took Nathan to Layton Hospital in Layton, Utah, near her house. It hasn’t published price data for an emergency rabies vaccine, but the largest hospital in the same health system, Intermountain Medical Center, has.

Nathan, then 7 years old, received a child’s dose of two drugs to prevent rabies. The bill also included two drug administration fees and a charge for using the emergency room.

Intermountain owns a regional insurer called SelectHealth. It is currently paying the lowest price for those services: $1,284.

In the same emergency room, Regence BlueCross BlueShield pays $3,457.

Ms. Eichelberger’s insurer, Cigna, pays the most: $4,198.

For patients who pay cash, the charge is $3,704. Half of the insurers at Intermountain are paying rates higher than the “cash price” paid by people who either don’t have or aren’t using insurance.

This pattern occurs at other hospitals, sometimes with more drastic consequences for adults, who require a higher dosage.

Prices for a drug that prevents rabies 

> At Intermountain, Murray, Utah $1,800 to $6,400.  UF Health Shands, Gainesville, Fla. $5,200 to $13,100. Wake Forest Baptist, Winston-Salem, N.C. $4,500 to $13,400.

Prices were still secret when Brian Daugherty went to an emergency room near Orlando, Fla., for a rabies shot after a cat bite last summer.

“ I tried to get some pricing information, but they made it seem like such a rare thing they couldn’t figure out for me,” he said.

He went to AdventHealth Orlando because it was close to his house. That was an expensive decision: It has the highest price for rabies shots among 24 hospitals that included the service in their newly released data sets.

The price there for an adult dose of the drug that prevents rabies varies from $16,953 to $37,214 — not including the emergency-room fee that typically goes with it.

Mr. Daugherty’s total bill was $18,357. After his insurer’s contribution, he owed $6,351.

“ It was a total shock when I saw they wanted me to pay that much,” said Mr. Daugherty, who ultimately negotiated the bill down to $1,692.

In a statement, AdventHealth said it was working to make “consumer charges more consistent and predictable.”

If Mr. Daugherty had driven two hours to the University of Florida’s flagship hospital, the total price — between him and his insurer — would have been about half as much.

Similar disparities show up across all sorts of basic care.

One way to look at the costs is to compare them with rates paid by Medicare, the government program that covers older people. In general, Medicare covers 87 percent of the cost of care, according to hospital association estimates.

At multiple hospitals, major health plans pay more than four times the Medicare rate for a routine colonoscopy.

> Prices for a colonoscopy Univ. of Miss. Medical Center Jackson, Miss. $650 to $2,600. Memorial Regional , Hollywood, Fla. $550 to $6,400. Riverside Methodist, Columbus, Ohio $1,300 to $5,500

And for an M.R.I. scan, some are paying more than 10 times what the federal government is willing to pay.

> Prices for a knee M.R.I. Baptist Memorial, Memphis, $210 to $2,800. Beaumont Hospital,Royal Oak, Mich. $250 to $3,100. Mass. General, Boston, $830 to $4,200.

Health economists think of insurers as essentially buying in bulk, using their large membership to get better deals. Some were startled to see numerous instances in which insurers pay more than the cash rate.

Whether those cash rates are available to insured patients varies from hospital to hospital, and even when they are, those payments wouldn’t count toward a patient’s deductible. But the fact that insurers are paying more than them raises questions about how well they’re negotiating, experts said.

“ The worrying thing is that the third party you’re paying to negotiate on your behalf isn’t doing as well as you would on your own,” said Zack Cooper, an economist at Yale who studies health care pricing.

‘They don’t want their secrets out there’

Employers are the largest purchasers of health insurance and would benefit the most from lower prices. But most select plans without knowing what they and their workers will pay.

To find out what the prices are, they would need to solicit bids for a new plan, which can frustrate employees who don’t want to switch providers.

It also requires the employers to hire lawyers and consultants, at a cost of about $50,000, estimated Nathan Cooper, who manages health benefits for a union chapter that represents Colorado sheet metal and air-conditioning workers.

“If you want the prices, you have to spend to get them,” he said.

> At hospitals in the Erlanger Health System in Tennessee, administration of a flu vaccine costs … $54 with a Cigna plan. $104 with a Blue Cross plan. $201 with a United plan.

Employers who do, sometimes come up empty-handed.

Larimer County, in Colorado, covers 3,500 workers and their families in its health plan. In 2018, county officials asked their insurer to share its negotiated rates. It refused.

“ We pushed the issue all the way to the C.E.O. level,” said Jennifer Whitener, the county’s human resources director. “They said it was confidential.”

Ms. Whitener, who previously managed employer insurance contracts for a major health insurer, decided to rebid the contract. She put out a request for new proposals that included a question about insurers’ rates at local hospitals.

A half dozen insurers placed bids on the contract. All but one skipped the question entirely.

“ They don’t want their secrets out there,” Ms. Whitener said. “They want to be able to tout that they’ve got the best deal in town, even if they don’t.”

Hospitals and insurers can also hide behind the contracts they’ve signed, which often prohibit them from revealing their rates.

“ We had gag orders in all our contracts,” said Richard Stephenson, who worked for the Blue Cross Blue Shield Association from 2006 until 2017 and now runs a medical price transparency start-up, Redu Health. (The association says those clauses have become less common.)

> At Memorial Regional Hospital, in Florida, an M.R.I. costs … $1,820 with a Cigna plan. $2,148 with a Humana plan. $2,455 with a Blue Cross plan. $262 with a Medicare plan.

Mr. Stephenson oversaw a team that made sure the gag orders were being followed. He said he thought insurers were “scared to death” that if the data came out, angry hospitals or doctors might leave their networks.

Warnings, but no fines

Ms. Eichelberger’s plan had a $3,500 deductible, so she worked hard to find the best price for her son’s care.

But neither the hospitals she called nor her insurer would give her answers.

She made her decision based on the little information she could get: a hospital, Layton, that said it would charge her $787 if she paid cash. The price for paying with insurance wouldn’t be available for another week or two, she was told.

But even the cash price didn’t turn out to be right: A few weeks after the visit, the hospital billed her an additional $2,260Itemized costs:

It turns out that the original estimate left out a drug her son would need. “ It was the most convoluted, useless process,” said Ms. Eichelberger, who was able to get the bill waived after five months of negotiations with the hospital.

Daron Cowley, a spokesman for Layton’s health system, Intermountain, said Ms. Eichelberger received the additional bill because “a new employee provided incomplete information with a price estimate that was not accurate.”

The health system declined to comment on prices at its hospitals, saying its contracts with insurers forbid discussing negotiations.

It’s not clear how much better the Eichelbergers would do today.

The new price data is often published in hard-to-use formats designed for data scientists and professional researchers. Many are larger than the full text of the Encyclopaedia Britannica.

And most hospitals haven’t posted all of it. The potential penalty from the federal government is minimal, with a maximum of $109,500 per year. Big hospitals make tens of thousands of times as much as that; N.Y.U. Langone, a system of five inpatient hospitals that have not complied, reported $5 billion in revenue in 2019, according to its tax forms.

As of July, the Centers for Medicare and Medicaid Services had sent nearly 170 warning letters to non-compliant hospitals but had not yet levied any fines.

Catherine Howden, a spokeswoman for the agency, said it expected “hospitals to comply with these legal requirements, and will enforce these rules.”

She added that hospitals that do not post prices within 90 days of a warning letter “may be sent a second warning letter.”

The agency plans to increase the fines next year to as much as $2 million annually for large hospitals, it announced in July.

The hospital that treated Ms. Eichelberger’s son has begun posting some information. But it has spread its prices across 269 web pages. To look for rabies, you have to check them all. It isn’t there.

At the Biggest U.S. Hospitals, Few Prices Are Available

Six months after the new rules took effect, The Times reached out to the 10 highest-revenue hospitals that had posted little or no data about their negotiated rates or cash prices. Here’s what they had to say:

N.Y.U. Langone has not published its negotiated rates or cash prices. “We will not be providing a statement or comment.” 

Stanford Health Care has not published its cash prices.“ Services that do not have a fixed payer-specific rate are shown as variable.”  Of more than 300,000 possible combinations of insurance and medical treatment in its data file, it includes prices for 479.

Cedars-Sinai Medical Center, in Los Angeles, has not published its cash prices. “We do not post standard cash rates, which typically will not reflect the price of care for uninsured patients.” The hospital initially posted a 2.5 GB data file composed almost entirely of more than one million lines that contained no data. After The Times inquired about the large file size, the hospital reduced it to a 1.4 MB file.

U.C.S.F. Medical Center has not published its cash prices. “We have listed the fixed rates where possible and, where that is not possible, have listed them as ‘variable.’” Of more than eight million possible combinations of insurance and medical treatment in its data file, U.C.S.F. includes negotiated rates for 346. (U.C. Davis, which is part of the same system and has also not published its cash prices, sent an identical statement.)

Montefiore Medical Center, in the Bronx, has not published its negotiated rates or cash prices. “The resources we provide ensure that our patients know what kind of assistance is available to them and, ultimately, what a procedure will cost them — not us.” 

The Hospital of the University of Pennsylvania added cash prices to its price transparency file after The Times inquired about why that data was missing. “Penn Medicine is committed to transparency about potential costs.” 

Vanderbilt University Medical Center, in Nashville, has not published its negotiated rates or cash prices.

“V.U.M.C. offers a toll-free number which consumers can call if they have questions about what they may be charged for services.” 

Orlando Health has not published its negotiated rates or cash prices. “Orlando Health has worked hard over the past several years to deliver helpful pricing information to its patients.” Methodist Hospital (San Antonio) did not respond to multiple requests for comment. The hospital has not published its negotiated rates or cash prices.

Long Island Jewish Medical Center has not published its negotiated rates or cash prices. “We are continuing to work on the machine-readable file that includes payer-negotiated rates. … It involves analyzing a daunting number of data points.” 

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Free-standing ERs Charging Patients 10X More Than an Urgent Care Center or Doctor’s Office https://www.americanpatient.org/free-standing-ers-charging-patients-10x-more-than-an-urgent-care-center-or-doctors-office/?utm_source=rss&utm_medium=rss&utm_campaign=free-standing-ers-charging-patients-10x-more-than-an-urgent-care-center-or-doctors-office https://www.americanpatient.org/free-standing-ers-charging-patients-10x-more-than-an-urgent-care-center-or-doctors-office/#respond Fri, 21 May 2021 18:19:57 +0000 https://www.americanpatient.org/?p=31519 Read More]]> By Phil Galewitz, Kaiser Health News, May 21, 2021.

Colorado health officials so abhor the high costs associated with free-standing emergency rooms they’re offering to pay hospitals to shut the facilities down.

The state wants hospitals to convert them to other purposes, such as providing primary care or mental health services.

At least 500 free-standing ERs have set up in more than 20 states in the past decade. Colorado has 44, 34 owned by hospitals.

The trend began a decade ago with hopes these stand-alone facilities would fill a need for ER care when no hospital was nearby and reduce congestion at hospital ERs.

But that rarely happened.

Instead, these emergency rooms — not physically connected to hospitals — generally set up in affluent suburban communities, often near hospitals that compete with the free-standing ERs’ owners. And they largely treated patients who did not need emergency care, but still billed them and their insurers at expensive ER rates, several studies have found.

“We don’t want hospitals to have stand-alone ERs, so we are willing to pay to shut them down,” said Kim Bimestefer, executive director of Colorado’s Department of Health Care Policy & Financing, which oversees the state’s Medicaid program. She said using these facilities to treat common injuries and illnesses leads to higher costs for Medicaid, which the state partly finances, and other insurers.

Colorado’s move is part of a new initiative that requires hospitals to improve their quality of care to qualify for millions of dollars in Medicaid payments. Hospitals can choose among goals provided by the state such as lowering readmission rates or screening patients for social needs such as housing. Converting free-standing ERs to meet other needs is one of those goals.

“Money talks,” Bimestefer said in explaining why the state is offering the financial incentives.

Money has been a major driver of the boom in free-standing emergency centers. Hospitals used them to attract patients who could be referred to the main hospital for inpatient care. They are also seen as a way to compete with rivals. For instance, in Palm Beach County, Florida, for-profit hospital chain HCA Healthcare has opened free-standing ERs near competing hospitals in Palm Beach Gardens and Boynton Beach.

In addition, the massive amounts of private equity funds flowing into health care have further fueled the growth of independently owned stand-alone ERs.

The Denver-based Center for Improving Value in Health Care found that most conditions treated in these facilities are more appropriate for lower-acuity, lower-cost urgent care centers. Patients can pay 10 times more in a free-standing ER than in an urgent care center for treatment of the same condition, the organization’s studies show.

Adam Fox, deputy director of the Colorado Consumer Health Initiative, said free-standing ERs have not been placed where health care services are scarce. Instead, they’ve opened in middle- and upper-income neighborhoods where most people have health insurance and access to care. “This push from the state will help” as hospitals rethink whether these facilities still make sense financially, he said.

In the past few years, Colorado has moved to make owning these facilities less attractive with laws preventing them from sticking patients with surprise bills for high fees because the ER was out of their insurer networks. It also has required that patients without true emergencies be told they can get treatment for a lower price at an urgent care facility.

The law requires a free-standing ER to post a sign informing patients it is an emergency room that treats emergency conditions. It must also specify the prices of the 25 most common services it provides.

Even before the new policy begins to roll out later this year, some Colorado hospitals started converting these facilities. UCHealth has turned nine in the past two years into primary or urgent care centers and one into a specialty center. It still has nine others in operation across the state.

The conversions were not prompted by state actions, according to Dan Weaver, a spokesperson for UCHealth, part of the University of Colorado. “Neither surprise billing legislation nor price transparency played a role in these decisions — we converted them because we felt patients in these communities needed urgent care, primary care and/or specialty care services close to home,” Weaver said.

He added that the hospital system always stressed that people should use lower-cost services, including urgent care, primary care or virtual urgent care, in nonemergencies.

Ryan Westrom, senior director of finance at the Colorado Hospital Association, said hospitals have converted some of these centers to services such as urgent care in response to changes in insurance reimbursement and other factors. He said he wasn’t sure whether many hospitals will accept the state payments to close their free-standing ERs.

HealthONE, which has eight free-standing ERs in the Denver area, said it has no plans to close any despite the state incentive payment.

Vivian Ho, a health economist at Rice University in Houston who has tracked the growth of these stand-alone emergency rooms, applauded Colorado’s effort.

But she worries hospitals may decide it’s not worth closing a free-standing emergency department and forfeiting the profits: “You have to attack free-standing EDs from multiple angles to get people to stop going to them and to get hospitals from using them as a way to generate extra revenues for care that can be delivered at lower-cost sites.”

Ho said the covid pandemic, which dampened demand for emergency care, and recent federal surprise billing legislation may hurt the growth of free-standing ERs.

They are already facing headwinds. Adeptus Health, the Texas company that’s been leading the trend there and started dozens of the free-standing emergency rooms, often in conjunction with hospitals, filed for bankruptcy this year. And numerous stand-alone facilities closed at least temporarily during the pandemic as demand for care fell dramatically.

Advisers to Medicare are also pushing back on the growth. A recent proposal from the Medicare Payment Advisory Commission, which reports to Congress, would cut Medicare payment rates 30% on some services at stand-alone facilities within 6 miles of an emergency room in a hospital.

According to a MedPAC analysis of five markets — Charlotte, North Carolina; Cincinnati; Dallas; Denver; and Jacksonville, Florida — 75% of free-standing facilities were within 6 miles of a hospital with an emergency department. The average drive time to the nearest such hospital was 10 minutes.

Markian Hawryluk, KHN’s senior Colorado correspondent, contributed to this article.

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Top Hospitals Charging Patients up to 1,800% More for Services Than They Cost https://www.americanpatient.org/top-hospitals-charging-patients-up-to-1800-more-for-services-than-they-actually-cost-study/?utm_source=rss&utm_medium=rss&utm_campaign=top-hospitals-charging-patients-up-to-1800-more-for-services-than-they-actually-cost-study Tue, 24 Nov 2020 14:40:48 +0000 https://www.americanpatient.org/?p=12320 Read More]]>

The leading nurses union says the study highlights the need for a Medicare for All system to limit high markups

By IGOR DERYSH, NOVEMBER 22, 2020, For Salon.
Hospitals in the United States charge patients as much as 1,800% more than their costs amid the coronavirus pandemic, according to a new study.The 100 most expensive hospitals in the United States charge between $1,129 and $1,808 for every $100 of their costs, according to a study by National Nurses United, the largest nurses union in the country.Overall, hospitals across the US charge an average of $417 for every $100 of their costs. The average markup has more than doubled over the past two decades, according to the report.The markups have resulted in hospital profits skyrocketing by 411% from 1999 to 2017, hitting a record $88 billion.

“The rise in charges coincides with growing hospital mergers and acquisitions by large systems,” the union said in a news release. “The result is increased market consolidation, which leads to higher profits and increased charges, not savings for patients as hospital systems often claim.”

Medical workers worry that high costs will increase the number of people avoiding medical care.

“There is no excuse for these scandalous prices. These are not markups for luxury condo views, they are for the most basic necessity of your life: your health,” nurse Jean Ross, the president of the union, said in a statement. “Unpayable charges are a calamity for our patients, too many of whom avoid— at great risk to their health — the medical care they need due to the high cost, or they become burdened by devastating debt, hounded by bill collectors or driven into bankruptcy.”

The union warned that “high hospital charges also drive up Covid-19 treatment costs.”

A study by the health care data nonprofit FAIR Health in the spring found that uninsured coronavirus patients or those that receive care considered out-of-network by their insurer face costs ranging from $42,486 to $74,310 if they require inpatient hospital treatment.

A survey by the health care research group the Commonwealth Fund also found that more than two-thirds of Americans say that “potential out-of-pocket costs would be very or somewhat important in their decision to seek care if they had symptoms of the coronavirus.”

While insurers often negotiate prices with hospitals, uninsured patients have little recourse. And as with other health care and coronavirus-related disparities, people of color are disproportionately impacted. Latinos are nearly three times as likely and Black people are nearly twice as likely to be uninsured than white Americans, according to a study from the Kaiser Family Foundation.

The National Nurses United report argued that the findings further make the case for a Medicare for All system because Medicare is the “most effective” system to limit price gouging.

“The most viable solution to slowing the growth in hospital charges and the continued inflation of hospital prices, is to bring all health care purchasers together, under a public, nationwide single-payer plan,” the report said.

The RAND Corporation, a nonprofit think tank, found that hospitals charged private insurers an average of 2.4 times more than Medicare rates.

“Nurses know that the best way to rein in these outrageous charges that create such grievous harm for our patients is with Medicare for All, as other countries have proven,” said Ross, the union president. “Medicare for All will not only guarantee health care coverage for every person in the United States, it will end medical bankruptcies, medical debt lawsuits, and the health insecurity faced by millions who make painful choices every day about whether to seek the care they desperately need.”

Republicans like President Donald Trump and centrist Democrats like President-elect Joe Biden have forcefully pushed back on the idea of a single-payer health system, arguing that it would kick tens of millions of people off their employer-provided insurance and vastly increase the federal budget.

Hospitals have also argued that they lose money under Medicare.

“Medicare payment rates, which reimburse below the cost of care, should not be held as a standard benchmark for hospital prices,” Melinda Hatton of the American Hospital Association, an industry trade group, told The New York Times. “Simply shifting to prices based on artificially low Medicare payment rates would strip vital resources from already strapped communities, seriously impeding access to care.”

But the disparity between insurer and Medicare rates shows “market forces are clearly not working,” Richard Scheffler, a health economist at the University of California, Berkeley, told the outlet. “Prices vary widely and are two and a half times higher than Medicare payment rates without any apparent reason.”

Studies have repeatedly shown that single-payer systems vastly drive down the cost of health care, as they have in countries that have long had such systems.

A study published in the Annals of Internal Medicine earlier this year found that 34% of health care expenditures go toward administrative costs alone. The US spent about $2,497 per person on administrative costs in 2017, compared to $551 per person in Canada, which has a single-payer system. Switching to a single-payer system would drive down health care costs by $600 billion on administrative costs alone, according to the analysis.

“Americans spend twice as much per person as Canadians on health care. But instead of buying better care, that extra spending buys us sky-high profits and useless paperwork,” lead author Dr. David Himmelstein, a professor at the CUNY School of Public Health at Hunter College, said in a statement.

Another study published in The Lancet earlier this year found that Medicare for All would save the country about $450 billion per year while preventing more than 68,000 unnecessary deaths annually.

Lead researcher Dr. Alison Galvani, an epidemiologist and director of the Center for Infectious Disease Modeling and Analysis at Yale University, argued that Biden’s proposal to essentially expand Obamacare could actually increase costs compared to the Medicare for All plan that the president-elect decried during the primaries as too costly.

“Without the savings to overhead, pharmaceutical costs, hospital/clinical fees, and fraud detection, ‘Medicare for all who want it’ could annually cost $175 billion dollars more than status quo,” she told Newsweek. “That’s over $600 billion more than Medicare for all.”

An analysis published in PLOS Medicine of 22 single-payer studies showed that 19 of them “predicted net savings … in the first year of program operation and 20 … predicted savings over several years; anticipated growth rates would result in long-term net savings for all plans.”

Critics have argued that reducing costs by switching to a single-payer system would result in doctor shortages and the rationing of health care. But data shows that fewer than 1% of doctors have opted out of the existing Medicare and Medicaid programs, with nearly half of those being psychiatrists. Single-payer proponents also dismiss rationing claims, arguing that Americans are already effectively self-rationing due to sky-high costs, even for those with private insurance.

A Federal Reserve survey published last year found that about 25% of American “adults skipped necessary medical care in 2018 because they were unable to afford the cost.” Another survey found that 26% of Americans with diabetes have rationed their insulin, primarily due to the cost.

“It would be a missed opportunity for America to ignore lessons about universal coverage from other countries out of a fear that they ration health care more than we do,” researchers at the Commonwealth Fund warned in a report last year. “In reality, more people in the U.S. forgo needed health care because access to care is rationed through lack of access to adequate insurance or unaffordable services and treatments.”

IGOR DERYSH

Igor Derysh is a staff writer at Salon. His work has also appeared in the Los Angeles Times, Chicago Tribune, Boston Herald and Baltimore Sun.

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