Everyone sets their billable rate at the highest reimbursement of the contracts they have agreed to accept. Actually probably 20% above that number. Rates are set by third partiesYes, but it varies by insurance. Why do you think the best docs refuse to take Medicare and Medicaid patients? In fact, they pay SIGNIFICANTLY more
Hospitals charged employers and insurers 254% more than Medicare in 2022: study
Hospitals with larger market shares were among the worst offenders, the Rand Corporation found.www.healthcaredive.com
The Chosen One’s demand to drop interest rates
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I agree with a lot of what you have said and there are many factors that contribute to NHEs. I do want to make sure that we're on the same page.
The public sector is on autopilot. But the private sector is on autopilot too. The private sector reimbursement rates are based on the public sector reimbursement rates. That is the starting point of negotiations between private insurers and providers.
The disconnect between public and private reimbursement is increasing at an increasing rate. The charts show it and the second bullet point in your link alludes to it.
Both reimbursement rates are artificially high. But the ever increasing divergence between the two are why providers are trying to acquire more private and less public. It's baked in and will get worse.
I agree. If you get rid of third party, what will replace FFS?
And if you keep FFS for the big things, it seems you'll still have to address the issue.
Yep. It can not be an automatic set increase or decrease.
What are your thoughts on bundled payments and value based care?
He’s taking about bypass surgery and the like. How do we price those?
My PC provider is no insurance.
My dentist will not accept IU Health Advantage..reimbursement too low. My very good friend Neurologist left IU Health and travels on contract for cash.
Hip replacement in 2000 was a weeks hospital stay...today. it's not even an overnight...patients are not admitted .
My open heart surgery Hospital bill only was $245k...in May of '21..
About the same time my outlaw’s grandfather, one of my all time favorite humans, went in for an endoscopy. He’d been on a shit ton of prednisone forever. His tissue was like tissue paper. ****er perforated his esophagus. Came within a butt hair of dying. Meds were well over a million bucks. Ultimately “fixed” it with Botox
He was real neat. Union organizer. His territory was like Kansas Nebraska and the Dakotas. He had a big lot in Kansas and he’d put a six pack on ice on one end another on the other and by the time he got done mowing he’d have a 12 pack in him. Got old. Carried a gun in his pocket. I’d tell him hes going to shit his balls off. Ex wouldn’t let my daughter in his boat anymore.
Was a real man’s man. Had some surgeries and got hooked on pain meds. Then the endoscopy mess. Still made it to almost 90. Drank blue moons in hospice up until the night before he croaked
Which one? Too many variables to answer. But in general, no. Most CEO comp is tied to company performance. As long as it's aligned with shareholder interest, I have no issue.
How much does Med school cost right now? How many practitioners are still practicing in private groups vs affiliated or PE-backed?
I guess I'm just wondering if you think that's a valid question to ask.
I can think of a lot of jobs that I think get paid too much. A lot where they'd obviously do the job for 25%-50% less that are much more egregious than radiologists (hello, professional athletes!).
I have an issue with it because it's something that we all have to pay for. CEO comp is rather meaningless. If a Walmart CEO gets paid $100k or $50m it is more or less irrelevant to what the costs are in the store. It's such a small amount of people at the top it doesn't matter to the consumer. Plus it's all extremely competitive with basically no barriers of entry (not that medical specialists aren't competitive slots, they are, but only artificially created).
But vs Drs, where its a proven data point that why we all pay so much more is due to how highly compensated our Drs are vs the rest of the world.... And it's heavily gatekept and rent seeked via govt and interest groups.
People get into the medical field today to make money. It was never that way before. My grandfather was a country doctor and a farmer as doctoring was a respected job, but wasn't lucrative. People did it at they had a calling. Now it's a way to guarantee wealth, particularly as a specialist.
My buddy's wife is planning to work 15 years. They have it all planned out. It's get in, max earnings, live basic, then be done by late 40s and go do what they actually like doing with life. I can't blame them, as those are the incentives setup for them. But all I can think is what a wasteful system to train someone for that many years just so they can go cash out ASAP.
And we all have to pay for that waste, we don't really get to choose to just not shop at Walmart (or go to a NBA game) because their costs are too high.
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I think it depends greatly on the specialty.
Med school I think is around $60k/yr on average. Probably $250k total cost.
Yea, that’s an average. Then you tack on required fellowships and other low income periods and $500K doesn’t seem that outrageous for certain fields (e.g., radiology, cardiology).
I’m blown away at the difference between certain specialties that don’t seem as far apart. Derm docs are making $500K while allergy physicians only pull in less than half of that. Both have great hours.
In fairness, most docs aren’t thinking that way for several reasons, but I’ll touch on two:
1) most docs end up loving what they do and genuinely enjoy helping patients
My in laws worked at Northwestern downtown (@BradStevens may have known them) well into their late 60s. It wasn’t because they needed to financially.
2) in contrast to my point above, there are lots of MDs with a lifestyle and spending problem. I get more concerned about those that get cashed out by PE or hospital affiliation deals.
The ACA was among the single biggest “things” we’ve ever done regarding healthcare.
When we “do things” related to healthcare, it typically makes them worse.
Why? Because virtually everything we do is predicated on (1) frustration that we haven’t yet caught the unicorn, and (b) redoubling our efforts to chase it.
It’s not a coincidence that healthcare prices began diverging from the CPI when government began getting heavily involved. It’s also the time when we started relying more and more on private insurance. And that, also, is not a coincidence.
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These are Devils Advocate questions and a bit of push back:
The high CEO comp has more effects on our system than just cost to consumers, I think. The amount of wealth they accumulate makes it a qualitative difference compared to docs, and distorts our democracy via ability to affect public discourse (Musk is the extreme example) and,
probably more importantly, access to the powerful politicians (and judges?).
Re docs, if we didn’t spend a lot of money via medical care from govt, would you be questioning their income? Re corporate CEOs and execs, if they’ve been bailed out or subsidized by govt, does that then make their salaries open to questioning (sorry, Jamie)?
I understand and sympathize with the impulse. I think it makes sense to step back and question any system that produces absurd, irrational, or morally despicable results. However, I don’t think there is a perfect system and you’re usually trading one bad outcome for another in this realm.
We can’t get rid of third party payments.
What we can do is reduce the number of times they’re paying.
You're still not in the ballpark. Something will be done. There is no choice. That's not an opinion.
This isn't a matter of philosophy.
Well, it is a matter of philosophy.
But we have had the wrong one for a long time. We show no signs of changing it. And that’s why everything we do will continue to produce bad outcomes…
…at which time, we’ll insist that our philosophy isn’t the problem, “do something” again, to similar results.
Yeah, you got it backwards. They’re diverging because public sector is paying way less than market rate. What you are proposing would just accelerate the divergence. The private sector rate is the rate that is artificially high because they’re subsidizing the public artificial rate.
I suspect you’d see more providers reducing their patient load of publicly-insured patients.
Yes, they wanted a corrupt autocratic narcissistic populist misogynistic felon to have all the power.
I have a little nickname for them:
"Partito Nazionale Fascista"
Med school is fast becoming like grad school tho. People going free. Half of Wash u has zero tuition. Almost everyone at JH free. Many others
Tuition and Financial Aid
Washington University commits $100 million to MD scholarships, education
Investment provides free or reduced tuition to majority of incoming students
medicine.washu.edu
Yep. Then congress would enact new laws/regulations forcing them to either take more public patients or add more subsidies to make up the difference.
Edit: I’ll also add this is where the CPI number being shit really shows up. To keep the numbers simple. They’re increasing spending on the public 3% annually, but HC spending is increasing 6-7% a year, which lines up closely with average money growth annually.
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