The Chosen One’s demand to drop interest rates

[twenty02]

I haven't read through all the comments and links yet. But basically every medical procedure in the country is tied to a CPT code, which was created by the AMA for Medicare 60 years ago. But is also then used by every private insurer, as well.

And every private insurer reimbursement rate basically ends up being benchmarked off the CMS reimbursement rate. And I use the 'reimbursement rate' term liberally here.... The patient may well be paying that reimbursement rate in full until they hit a deductible.

 

[Digressions]

How you drill down on the pricing is left to smart people like you and JDB but he’s exactly right on how that price is set. No one is billing less that best reimbursement.

It’s why we should eliminate these third parties except for high ticket items….like hospital stays and surgeries and the like. The overall cost to the consumer will plummet

https://upload.wikimedia.org/wikipedia/commons/f/f1/U.S._Health_Care_Spending_as_a_Percentage_of_GDP.jpg

This chart shows NHE as a percent of GDP. It goes until 2008. Given what we know, if we find an updated chart it is going to climb at approximately that same rate.

And we know that pace is going to continue into the foreseeable future. At what point are we going to say "enough"? 50%? 60%?

I know you get it, spatans. I just don't understand what is hard about this concept. Ten years ago we knew if we let it go things would be worse. We did nothing. We know that if we don’t do anything now, it will get worse. We do nothing. Some people have health insurance premiums are already higher than their mortgages. It's getting worse.

 

[Spartans9312]

https://upload.wikimedia.org/wikipedia/commons/f/f1/U.S._Health_Care_Spending_as_a_Percentage_of_GDP.jpg

This chart shows NHE as a percent of GDP. It goes until 2008. Given what we know, if we find an updated chart it is going to climb at approximately that same rate.

And we know that pace is going to continue into the foreseeable future. At what point are we going to say "enough"? 50%? 60%?

I know you get it, spatans. I just don't understand what is hard about this concept. Ten years ago we knew if we let it go things would be worse. We did nothing. We know that if we don’t do anything now, it will get worse. We do nothing. Some people have health insurance premiums are already higher than their mortgages. It's getting worse.

The answer is less third party involvement not more….if we want to continue quality of care and bring down costs.

It’s why the one size fits all model Will not work. We will artificially affect one or both in a negative way

 

[twenty02]

https://upload.wikimedia.org/wikipedia/commons/f/f1/U.S._Health_Care_Spending_as_a_Percentage_of_GDP.jpg

This chart shows NHE as a percent of GDP. It goes until 2008. Given what we know, if we find an updated chart it is going to climb at approximately that same rate.

And we know that pace is going to continue into the foreseeable future. At what point are we going to say "enough"? 50%? 60%?

I know you get it, spatans. I just don't understand what is hard about this concept. Ten years ago we knew if we let it go things would be worse. We did nothing. We know that if we don’t do anything now, it will get worse. We do nothing. Some people have health insurance premiums are already higher than their mortgages. It's getting worse.

It was 17.6% of GDP in 2023.... So it has at least flattened over the last 15 years.

 

[Spartans9312]

I haven't read through all the comments and links yet. But basically every medical procedure in the country is tied to a CPT code, which was created by the AMA for Medicare 60 years ago. But is also then used by every private insurer, as well.

And every private insurer reimbursement rate basically ends up being benchmarked off the CMS reimbursement rate. And I use the 'reimbursement rate' term liberally here.... The patient may well be paying that reimbursement rate in full until they hit a deductible.

Reimbursement rate but not billable rate

 

[Digressions]

Reimbursement rate but not billable rate

I agree with your 3rd party assignment. I guess I'm coming from a, "well, if we don't want to blow it all up" approach.

If you allow public reimbursement rates to climb at CPI-1, and you set private reimbursements at CPI-1.25, over time both cost curves would bend and start coming back together. Additionally, the % to gdp ratio would drop. Prices would continue to increase, but at lower rate of growth. We should have done it 20 years ago, and we wouldn't be discussing it now.

Let those rates run their course until you get to the desired % of gdp. Say 15%. Then peg the rates to cpi.

 

[twenty02]

I agree with your 3rd party assignment. I guess I'm coming from a, "well, if we don't want to blow it all up" approach.

If you allow public reimbursement rates to climb at CPI-1, and you set private reimbursements at CPI-1.25, over time both cost curves would bend and start coming back together. Additionally, the % to gdp ratio would drop. Prices would continue to increase, but at lower rate of growth. We should have done it 20 years ago, and we wouldn't be discussing it now.

Let those rates run their course until you get to the desired % of gdp. Say 15%. Then peg the rates to cpi.

Pretty sure what happens almost every year is that CMS proposes rate reductions, as authorized by law. The AMA screams bloody murder.... And then Congress overrides the reductions in the annual govt funding bills.

 

[Digressions]

Pretty sure what happens almost every year is that CMS proposes rate reductions, as authorized by law. The AMA screams bloody murder.... And then Congress overrides the reductions in the annual govt funding bills.

And it's been across administrations and parties. It's been consistent.

 

[Digressions]

The answer is less third party involvement not more….if we want to continue quality of care and bring down costs.

It’s why the one size fits all model Will not work. We will artificially affect one or both in a negative way

I agree with you on this as well. When you study these charts and read the articles, another theme is that it is ultimately reverting back to the out of pocket expenses becoming what would have been the "original" market. Third parties are basically just tacking on.

 

[twenty02]

I agree with you on this as well. When you study these charts and read the articles, another theme is that it is ultimately reverting back to the out of pocket expenses becoming what would have been the "original" market. Third parties are basically just tacking on.

What peer system around the world doesn't have 3rd party payers? That's not the root cause of the problem. And it's not really prescription drugs, either


The U.S. spends twice as much as comparable countries do on health, driven mostly by higher payments to hospitals and physicians.

What drives health spending in the U.S. compared to other countries? - Peterson-KFF Health System Tracker

The U.S. spends more on healthcare per capita than its peers. Most of the additional health spending goes to providers for inpatient and outpatient care.

www.healthsystemtracker.org

 

[twenty02]

Why does a radiologist make $500k starting salary coming out of school? Why does a partner in a radiology group make $750k to $1m/Yr? My buddies wife is getting offers like this, and hell she's going to work from home!

You telling me that nobody would go into these specialties if they made 25% less than this.

It's absurd.

 

[mcmurtry66]

What peer system around the world doesn't have 3rd party payers? That's not the root cause of the problem. And it's not really prescription drugs, either


The U.S. spends twice as much as comparable countries do on health, driven mostly by higher payments to hospitals and physicians.

What drives health spending in the U.S. compared to other countries? - Peterson-KFF Health System Tracker

The U.S. spends more on healthcare per capita than its peers. Most of the additional health spending goes to providers for inpatient and outpatient care.

www.healthsystemtracker.org

PBMs absolutely increase prices on drugs. Charge more than they pay pharmacies. Hold back rebates. Charge for network participation etc. part of why needy meds and Cuban get right from manufacturer in kind or manufacture themselves

 

[twenty02]

PBMs absolutely increase prices on drugs. Charge more than they pay pharmacies. Hold back rebates. Charge for network participation etc. part of needy meds and Cuban get right from manufacturer in kind or manufacture themselves

I don't disagree with that and needs to change. But it's a small piece.

80% of the problem is how much we pay doctors and hospitals.

 

[mcmurtry66]

I don't disagree with that and needs to change. But it's a small piece.

80% of the problem is how much we pay doctors and hospitals.

And so many med schools today are totally free. Pretty wild

 

[Digressions]

What peer system around the world doesn't have 3rd party payers? That's not the root cause of the problem. And it's not really prescription drugs, either


The U.S. spends twice as much as comparable countries do on health, driven mostly by higher payments to hospitals and physicians.

What drives health spending in the U.S. compared to other countries? - Peterson-KFF Health System Tracker

The U.S. spends more on healthcare per capita than its peers. Most of the additional health spending goes to providers for inpatient and outpatient care.

www.healthsystemtracker.org

Thank you, @twenty02 . I don't understand why this isn't more obvious to people. What don't they get about compounding interest?
Let's just guarantee unlimited revenue in perpetuity.

I get tired of people bitching about entitlements and then rubber stamping the spending. The solution is quick, simple, and justified.

 

[Digressions]

PBMs absolutely increase prices on drugs. Charge more than they pay pharmacies. Hold back rebates. Charge for network participation etc. part of why needy meds and Cuban get right from manufacturer in kind or manufacture themselves

Totally agree. The problems inside of prescription drugs are a different animal.

 

[Spartans9312]

Why does a radiologist make $500k starting salary coming out of school? Why does a partner in a radiology group make $750k to $1m/Yr? My buddies wife is getting offers like this, and hell she's going to work from home!

You telling me that nobody would go into these specialties if they made 25% less than this.

It's absurd.

Isn’t their salary directly related to 3rd party reimbursement rates?

I can’t imagine direct payments from consumers to radiologist are contributing to the salary.

 

[twenty02]

Thank you, @twenty02 . I don't understand why this isn't more obvious to people. What don't they get about compounding interest?
Let's just guarantee unlimited revenue in perpetuity.

I get tired of people bitching about entitlements and then rubber stamping the spending. The solution is quick, simple, and justified.

I'm quite positive everyone involved with national HC policy understands this. But there isn't great political will to tackle it. There has certainly been progress over the last 10-15 years. Things were running completely out of control from a growth rate perspective in the 2000s.

 

[snarlcakes]

Thank you, @twenty02 . I don't understand why this isn't more obvious to people. What don't they get about compounding interest?
Let's just guarantee unlimited revenue in perpetuity.

I get tired of people bitching about entitlements and then rubber stamping the spending. The solution is quick, simple, and justified.

Wait wait wait. According to the chart below costs have greatly outpaced CPI +1. The only thing you’ll accomplish is shifting more costs to the private sector…aka the middle class and young. I assume it’s why the government doesn’t make the cuts. They’ll get voted out of office rather quickly. It’s easier to run deficits.

 

[twenty02]

Isn’t their salary directly related to 3rd party reimbursement rates?

I can’t imagine direct payments from consumers to radiologist are contributing to the salary.

Sure 3rd party reimbursement. They may review 50-75 scans a day. $100/pop. Some moonlight and pick up $2k-3k for a shift.

Private practice in the Midwest not unusual for $600k salary. 12 weeks of vacation a year. Quite a gig. Work from home.

 

[Digressions]

Wait wait wait. According to the chart below costs have greatly outpaced CPI +1. The only thing you’ll accomplish is shifting more costs to the private sector…aka the middle class and young. I assume it’s why the government doesn’t make the cuts. They’ll get voted out of office rather quickly. It’s easier to run deficits.

View embedded media

You still haven't caught up. But you are proving our point.

 

[Spartans9312]

Sure 3rd party reimbursement. They may review 50-75 scans a day. $100/pop. Some moonlight and pick up $2k-3k for a shift.

Private practice in the Midwest not unusual for $600k salary. 12 weeks of vacation a year. Quite a gig. Work from home.

I think they should all be in-house. Same with pathology

 

[JamieDimonsBalls]

It’s actually priced by insurance

No, it isn't. Insurance sets reimbursement, not gross charges.

 

[twenty02]

I think they should all be in-house. Same with pathology

Anesthesiology

 

[JamieDimonsBalls]

This is how pricing occurs…it is set by the highest reimbursement rate

Have you ever looked at a hospital bill? Reimbursement is a portion of that bill.

 

[snarlcakes]

You still haven't caught up. But you are proving our point.

No, I'm trying to do the math, which you didn't address.

 

[twenty02]

Have you ever looked at a hospital bill? Reimbursement is a portion of that bill.

Technically. But nobody ever pays that. You (or your insurer, or some combo) is going to pay the contracted reimbursement rate.

 

[snarlcakes]

I'm quite positive everyone involved with national HC policy understands this. But there isn't great political will to tackle it. There has certainly been progress over the last 10-15 years. Things were running completely out of control from a growth rate perspective in the 2000s.

I doubt they helped curtail most of it. It's more likely just related to demographics.

 

[twenty02]

I doubt they helped curtail mostof it. It's more likely just related to demographics.

That doesn't make any sense, whatsoever. The country is older than it was 15 years ago. Yet total health expenditures as % of GDP are very close to where they were then.

 

[JamieDimonsBalls]

.

 

[snarlcakes]

That doesn't make any sense, whatsoever. The country is older than it was 15 years ago. Yet total health expenditures as % of GDP are very close to where they were then.

Not according to your chart. Stop and think for a second about it. The average age of someone in the U.S. was 28 in 1975. It was 35 in 2000 and now its 39. Yes, people are older today, but the rate has slowed down in demographics as well the past 20 years compared to the previous 20. It almost matches up with the decrease in the rate of change in total GDP costs.

 

[twenty02]

I doubt they helped curtail most of it. It's more likely just related to demographics.

Go look again at the chart I posted above. When were the two periods where HCE saw huge growth? It was the 80s and the 2000s.

It's not irony that the AMA and the Republican party have always been joined at the hip when it comes to reimbursement rates.

 

[twenty02]

Not according to your chart. Stop and think for a second about it. The average age of someone in the U.S. was 28 in 1975. It was 35 in 2000 and now its 39. Yes, people are older today, but the rate has slowed down in demographics as well the past 20 years compared to the previous 20. It almost matches up with the decrease in the rate of change in total GDP costs.

What? The percentage of the total population over aged 65 is higher now than ever.

 

[Spartans9312]

No, it isn't. Insurance sets reimbursement, not gross charges.

Who is paying gross charges?

 

[Spartans9312]

Have you ever looked at a hospital bill? Reimbursement is a portion of that bill.

That’s just a bullshit number…they already know what they are getting paid. That number means nothing. And what they are getting paid is whatever insurance allows

 

[snarlcakes]

What? The percentage of the total population over aged 65 is higher now than ever.

When did I say it wasn't? You brought up rates. I'm addressing the rate of change.

 

[JamieDimonsBalls]

Technically. But nobody ever pays that. You (or your insurer, or some combo) is going to pay the contracted reimbursement rate.

Which varies based on who your insurance payor is, right? A hospital may bill UHC for $10,000 and only get $7,500 (from UHC + patient responsibility). It normally gets less from CMS.

But other insurers may have agreed to higher $s than UHC so it isn't going to change the gross charge on its bill to UHC.

 

[JamieDimonsBalls]

That’s just a bullshit number…they already know what they are getting paid. That number means nothing. And what they are getting paid is whatever insurance allows

Yes, but it varies by insurance. Why do you think the best docs refuse to take Medicare and Medicaid patients? In fact, third party commercial pays 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

 

[twenty02]

When did I say it wasn't? You brought up rates. I'm addressing the rate of change.

The rate of change is much higher from 2010-2020 than it was from 2000-2010. Yet HCE stayed relatively flat in the former, and increased substantially in the latter.

So your demographic argument doesn't make much sense to me.

 

[JamieDimonsBalls]

@Digressions

Not letting me reply to your post b/c of IT error, but here's my response:

CMS' FFS schedule is somewhat irrelevant. Using that as a baseline when private insurance reimburses at a much higher level (see post above), seems impactless.

My perspective on cost increases is that CMS has little impact, despite agreeing with your idea that things shouldn't have automatic, built-in increases. To me, the excess in costs come from our population's makeup and excessive administrative costs

Nobody can deny that an overweight population that makes poor diet choices is going to need more medical care, which creates a higher baseline demand. On top of that, we have far too many people still using things like the ER and hospital, which led to considerable growth in ASCs and urgent care clinics, to hopefully help control those costs.

On #2, this is undeniably the second biggest issue with healthcare costs IMO (I've posted this several times before). I've shown data around a similar phenomenon in higher education. Until consumers start pressuring these institutions to reduce non-provider growth, inflation above the CPI won't change.