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Hospitals dodge price transparency bullet with delayed Trump decision

Greenbeard

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There was a lot of fanfare recently about the Trump administration potentially forcing hospitals to disclose their negotiated prices, but it appears that at best that fight is now on hold.

Hospitals dodge price transparency bullet with delayed Trump decision
The Trump administration is promising to issue a "forthcoming final rule" related to its proposal requiring hospitals to post all of their privately negotiated prices with insurance companies. It delayed a decision in a final regulation released Friday.

Between the lines: Even if the Trump administration follows through and issues a price transparency rule, the industry almost certainly will sue to block it — meaning this policy is years away from seeing the light of day.

  • Hospitals and insurers flooded the government with comments, arguing they should not have to publish their negotiated rates because it'd be too complex.
  • These contracts reflect the wild variation of prices and the market power of a given entity, and they will be guarded at all costs.
The bottom line: The health care industry is winning almost every major policy battle in the Trump administration.
 
This might be one case where I might not fault Trump for his inefficacy. The health industry lobby is a formidable foe, and the Dems struggled mightily with them. And now more than ever, Trump has brought the billionaires into our government in positions of power & control.
 
These industry giants consistently win no matter which political party (dependent on their campaign cash) is currently holding majority power. So long as the regulated can legally bribe the regulators don't expect any major rule/policy changes.

It is completely natural that these negotiated prices are desired to be kept secret. It is also apparent that it allows providers to secretly collude with insurers (who are often one and the same in HMOs) leaving the consumer no idea whether they are being taken advantage of (or to what extent).

Many consumer product manufacturing companies (e.g. Murray Tractor Division aka MTD) do the same - make several different "brands" (each bearing a different SKU, of course) of the same basic (mechanically identical) product and allow (arrange for?) exclusive use of each "brand" by a specific (big box) retailer. This allows each (big box) retailer to legally advertise that they have the "guaranted lowest price" on a product (defined as a unique SKU) of that (store specific?) "brand".
 
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This might be one case where I might not fault Trump for his inefficacy. The health industry lobby is a formidable foe, and the Dems struggled mightily with them. And now more than ever, Trump has brought the billionaires into our government in positions of power & control.

I think there are also practical reasons here. I mean, what are patients going to do with this information? Look at the price, say no to treatment, and die?
 
I think there are also practical reasons here. I mean, what are patients going to do with this information? Look at the price, say no to treatment, and die?

No, but the question can be asked...why does a single acetafetamine pill cost 30-80 bucks?
 
I think there are also practical reasons here. I mean, what are patients going to do with this information? Look at the price, say no to treatment, and die?

There is no reason that a CT cost 5000 in one spot and 250 in another.
the person charging 5k for a CT will be forced to compete with the person charging 250.
 
No, but the question can be asked...why does a single acetafetamine pill cost 30-80 bucks?

Which doesn’t tell us anything we don’t already know - that hospitals have enormous markups. You might as well just wait for an itemized bill.
 
There is no reason that a CT cost 5000 in one spot and 250 in another. the person charging 5k for a CT will be forced to compete with the person charging 250.

There’s nothing preventing people from doing that now. They don’t. What makes you think that would change?
 
I think there are also practical reasons here. I mean, what are patients going to do with this information? Look at the price, say no to treatment, and die?
Depending on the urgency of the care, I think it will have quite a bit of effect. Both specific, and in general.
 
Under an insurance system that we have now this is rather impractical. Certain companies can be the difference between paying 10 dollars and paying 60 to 100 dollars for adderall which is already a monumental pain in the ass to get.
 
These industry giants consistently win no matter which political party (dependent on their campaign cash) is currently holding majority power. So long as the regulated can legally bribe the regulators don't expect any major rule/policy changes.

It is completely natural that these negotiated prices are desired to be kept secret. It is also apparent that it allows providers to secretly collude with insurers (who are often one and the same in HMOs) leaving the consumer no idea whether they are being taken advantage of (or to what extent).

Many consumer product manufacturing companies (e.g. Murray Tractor Division aka MTD) do the same - make several different "brands" (each bearing a different SKU, of course) of the same basic (mechanically identical) product and allow (arrange for?) exclusive use of each "brand" by a specific (big box) retailer. This allows each (big box) retailer to legally advertise that they have the "guaranted lowest price" on a product (defined as a unique SKU) of that (store specific?) "brand".
I have contact with overseas healthcare workers that work here domestically. One of the first questions they have, is:

"Why are the drug prices so high here, for the same drug available back home?"

I am not exaggeration here. They pretty much universally are blown away by our rip-off drug prices. Not because the prices are higher. But because the prices are magnitudes higher! 5X, 10X, 50X! They're amazed. And flabbergasted.
 
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I have contact with overseas healthcare workers that work here domestically. One of the first questions they have, is:

"Why are the drug prices so high here, for the same drug available back home?"

I am not exaggeration here. They pretty much universally are blown away by our rip-off drug prices. Not because the prices are higher. But because the prices are magnitudes higher! 5X, 10X, 50X! They're amazed. And flabbergasted.

Ask them if it is common practice in their homelands to allow their drug companies to legally offer "campaign cash" to government officials, then try to explain to them why our system of democracy and "free market" capitalism is better for allowing that practice. ;)
 
There’s nothing preventing people from doing that now. They don’t. What makes you think that would change?

most people don't care they don't see a bill. they just go in pay a co pay and leave.
then the complain and groan about the bill after they get it.
 
No, but the question can be asked...why does a single acetafetamine pill cost 30-80 bucks?

When it is handled by professionally trained individuals who all have massive salary's to pay, along with the overhead of a corporation to pay for (multi million dollar salaries0 and of course the campaign contributions to the government that keeps the party rolling
 
I think there are also practical reasons here. I mean, what are patients going to do with this information? Look at the price, say no to treatment, and die?

how about hosp A charges $ 5500 for a tonsilectomy and hosp B charges $ 4000

wouldnt that be good information to know....along with the doctor's price's, which one provides better patient care, etc
 
how about hosp A charges $ 5500 for a tonsilectomy and hosp B charges $ 4000

wouldnt that be good information to know....along with the doctor's price's, which one provides better patient care, etc

That information is already available, but people don’t ask. And part of that is because it’s not as simple as an upfront price comparison. Hospital B may charge $4K but maybe their tonsillectomy doctor is out-of-network or maybe your insurance company has a lower negotiated rate than at hospital A, or maybe none of it matters because your deductible is so high etc. Theres no such thing as a flat rate to publish. Not many people are going to sit around gathering all of the variables and crunching the numbers.
 
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This might be one case where I might not fault Trump for his inefficacy. The health industry lobby is a formidable foe, and the Dems struggled mightily with them. And now more than ever, Trump has brought the billionaires into our government in positions of power & control.

There are also decent arguments that this move would've been (1) not a good idea, and (2) not legal.

No, but the question can be asked...why does a single acetafetamine pill cost 30-80 bucks?

A few quick points.

1. The outrageous inflated numbers that get thrown out around are usually charges, which aren't particularly meaningful in most cases. That's why the idea here was to disclose the actual rates negotiated between hospitals and every insurer they do business with: those are the actual prices. If you have an inpatient hospital stay, there may be itemized charges generated from the hospital's chargemaster, but the hospital is likely actually being a paid a fixed total dollar amount by your insurer (regardless of how long your stay is or how many services/resources you need) based on your health condition. The charges then play no role in the actual reimbursement to the hospital.

2. Providers, even powerful ones with substantial market clout, don't really have free rein when it comes to the pricing structure of their services (unless they're being reimbursed at a percent of the charges they set). The relative prices of services and procedures tends to be determined by fee schedules developed and maintained by payers. Some of those payers just use the fee schedule Medicare uses as their starting point, others develop their own. But a provider that's making a big margin on Service X and has a negative margin on Service Y can't necessarily just fix the relative prices of those services unilaterally.

3. That said, obviously many providers do have negotiating clout that (1) allows them a significant say in what percentage of the payers' underlying fee schedules they are getting paid, and (2) may afford them some ability to reweight some of the relative prices of those services on the payer fee schedules. But even that process isn't likely to be particularly granular or allow code-by-code pricing changes. So providers and payers negotiating reimbursement are largely talking and thinking in the aggregate. Individual service-level prices aren't necessarily built with a consumer market for care in mind, which is why in isolation they may not make sense.

So we're at an odd in-between state as we evolve toward exposing more people to prices that weren't really designed to be directly reacted to by individual consumers (and can't be easily changed in response to consumer behavior by those selling the services).

how about hosp A charges $ 5500 for a tonsilectomy and hosp B charges $ 4000

wouldnt that be good information to know....along with the doctor's price's, which one provides better patient care, etc

Seems like the patient has to feel some of that $1,500 differential in order for the price to be a meaningful piece of information. In the era of increasingly higher cost-sharing, they might. But there seems to be a significant backlash against that trend brewing.
 
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