The whole exchange was fairly enjoyable but you two are talking past each other in your haste to assign blame.
But it's simply inaccurate to suggest that large providers are price takers (when it comes to commercial insurance) and are forced to accept whatever rate level is offered. Anyone who's looked has found that relative negotiating clout matters. If you're a powerful provider system you'll command higher prices than others, if you're a powerful insurer you'll win lower prices. Whether either of those scenarios ever translates into actual "savings" for the consumer depends on whether they can or are compelled to vote with their feet by going elsewhere if it doesn't. And for plenty of reasons that often doesn't happen. In the insurance space, for instance, it may be because an employer's choice has locked one in to a particular insurer or set of insurers. In the provider space, it may be because the consumer often has no idea about relative price because their patient liability doesn't take into account relative price and so there's no signal to them as to these differences.
"I'm not at fault, the other guy is" is entertaining but let's be serious. Everyone is playing their part in this little drama.
Yeah.. with all due respect.. the irony is your rush to absolve the insurance you have talked past how these large providers developed the ability in some areas to negotiate better prices.
How do monopolies or virtual monopolies develop? Usually its from undercutting their competition and driving them out of business.
but you are contending that these larger entities developed by INCREASING their prices and demanding more!?!?!
Lets see how this worked out.. so when an area had a one larger provider and several smaller ones.. the insurance company paid the larger provider MORE than the smaller providers. Hmmmm.. and you think this gave the larger provider more marketshare?
Would not it be reasonable that the insurance companies would say.. "screw them. if we can.. we will push patients toward the smaller cheaper providers and thus save money"? You would think that insurance companies would say use the "preferred provider" designations to get patients to go toward cheaper facilities were it was cheaper for the insurance company and the patient say had less out of pocket.. etc. and thus the trend in healthcare would be toward a decentralization of care.. toward LESS consolidation because it would be better for the insurance company and better for patients...
but that's not what happened.. the trend has been toward MORE consolidation.. not less. Hmmmm.. can you explain that? How does larger providers getting paid more explain that?
Wait.. I CAN explain that.
What REALLY has happened is that insurance companies wanted to get the lowest prices they could get. And they cranked down on reimbursements as much as possible and they found that larger providers were more willing to accept these lower reimbursements (because they were more efficient on scale, and because they could control utilization through referral control).
So the insurance companies used the leverage gained, to go to smaller providers and tell them.. accept this rate because the hospital.. your competitor is accepting it. And that has been going on.. for quite some time. And over time.. the smaller providers could not tolerate that low rate. That low rate prevented smaller start ups. And the bigger hospitals simply bought up practices and more importantly.. bought up physicians (who control referrals and utilization).
THATS what occurred and its because of the insurance companies.. NOW you point to the fact that in some markets.. where providers have gotten so big that they can now push back on the rates for insurance companies (which is what has happened historically with monopolies. They undercut prices, and once competition is forced out.. then they are free to raise prices) . But you ignore how they got to that point.
