Hospitals will settle for a fraction of a bill for insurance providers because the provider tells them that either they negotiate or they will delay payment for a year or more.. while they put it through "review".
:lol: Sure.
But if the hospital settles for a fraction of the bill, and yet remains financially stable...then clearly they are overcharging. Correct?
This has happened to me personally. I provided medically necessary services on a very complex medical patient. Who not only got better but was able to return to work and actually we were able to avoid two surgeries that prior opinions had stated he needed.
The insurance company then called and demanded that we accept HALF of what our charges were. I asked.. "are our charges out of line with other providers (which I knew were not)? "well no." and I had them admit that our charges were BELOW any of our competitors.
I asked "well was any procedure medically unnecessary".. and they insurance said "well no"..
"So why should I agree to take half of the money you owe me for services that were rendered?"
Insurance "because if you don't agree to half we will hold payment for up to a year or more while its reviewed and then you may be offered even less then".
True story.
Which did nothing to counter the point I made. Whether or not the charges are in line with what other providers charge is irrelevant to the fact medical providers overcharge and it doesn't change the fact healthcare providers will settle for a fraction of their cost when offered cash or in discussions with insurance providers or attorneys. I could give you several anecdotes where the medical provider accepted far less than what they billed the patient, because the patient offered them cash (I offered them $1300 on a $6500 bill and they took it...and I should have offered less and I just wasn't thinking) or because the patient hired an attorney (a $1.2 million bill for a back surgery for my wife's aunt, which was a $600,000 bill doubly charged...and was settled for around $35,000).
Medical providers overcharge, likely to try and recoup losses from those who don't pay (bankruptcy, for example). This is why they will accept lesser payments, which actually come closer to the actual cost of care.
And all of this doesn't change the fact I know for a fact my wife has filed several bankruptcies which occurred due to medical bills.
Well.. on a macro basis the statistics say that its not.
So your sources say...if I recall correctly, someone else provided a source which contradicted your sources. Again, all I can speak intelligently to is anecdotal evidence, which I fully acknowledge is not a quality basis, but anecdotally speaking, people file bankruptcy due to overwhelming medical costs. Oh, and just because they may not currently own massive medical debt, that does NOT mean medical costs aren't the reason they file bankruptcy. If I get cancer, I'm going to continue paying the hospital which is treating me, even if it means I rack up massive debt elsewhere.