“Preferred Provider Organization (PPO) A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network.”
Oh really. The BUCA (Blue Cross, United, Cigna, Aetna) payers reimburse out of network hospitals at about 125% of Medicare while clearly reimbursing In-Network hospitals closer to 300% of Medicare on average. Most hospitals now have cash-pay initiatives at a rate of about 135% of Medicare, and Reference Based Reimbursement pays at average levels just above 150% of Medicare.
So, if you desire to pay more for healthcare services, the PPO model is your best option. The PPOs will charge you an access fee of $12 to $20 to have that option too. One last thing, since employers sign the inane PPO agreements they are legally bound to pay the excessive provider fees by contract. No wonder your healthcare expenses are so high.
I’m all about repeal. But let’s not stop with Obamacare. Let’s move on to many disastrous legislative interventions brought to us from the other side of the aisle. How about Medicare Part D, brought to us by a GOP-led executive? Why didn’t the GOP change the tax code to end the discrimination against individual purchases of health insurance during the time they had all the power? Hint: see paragraph one of this blog. This tax reform isn’t likely as the shift away from employer-purchased plans will gut the scam of PPO repricing, a devastating blow to the big insurance companies.
What does the price of gasoline and the price of a chest x-ray have in common? Not much really, except the price of both have gone up in the Atlanta area recently; but the former did so for expected reasons that are predicated on behavioral economics and the relationship of demand to price. The latter went up, well, because it could.
But the sticker shock that I’ve experience lately trying to find a price on a simple chest X-ray is not due to any shortages (either perceived or real) or any sudden increase in demand. Nor was it from a sudden increase in the cost of performing an X-ray or some phenomenal increase in quality that created a better image or less radiation exposure. Nope, none of the usual factors that go into predicting price behavior were at play.
One of the best pieces I’ve read that exposes the real cost drivers in healthcare. Many of us have been shouting from the rooftops that the “villains” we implicate are just symptoms of a more fundamental poison in that is embedded in our third-party billing system and the cartel-like system it has created. Thanks to Dave Chase for putting the pieces together so clearly. Given the realities exposed here, we can no longer implicate something that has been virtually wholly absent from the healthcare economy which could have prevented this generational theft: A free market.
The Sovereign Patient
Mike Dendy: I hear the talking heads on business TV (like CNBC) talk about stagnation of incomes for the middle class. Wrong. The additional money is there every year, it’s just going into a pool to pay for healthcare instead of into the pockets of the employees in the form of salary increases.
Americans overpay for healthcare by at least 30% and likely 50% in aggregate. For all intents and purposes, every employer in America gives every covered member on their healthcare plan a blank check every year and says….consume all the healthcare you want, anywhere you want, anytime you want, and never be concerned with or ask the price because it’s all paid for. Deductibles and co-pays are irrelevant, especially to hospitals, because pricing is so high it becomes somewhat immaterial.
Trillions Have Been Redistributed from the American Workforce to the Healthcare Industry Creating An Economic Depression for the Middle Class The Washington Post and Vox have done excellent reporting that shows U.S. spends so much more than other countries for one simple reason — price. The good news is that some […]
Those of you that recall the 1980’s and early 90’s will remember when primary doctors were transformed into “gait-keepers” or “quarterbacks of the healthcare team” and designated to lead the capitation movement that was supposed to usher in a new era of cost control, efficiency and better outcomes. Suffice it to say, it didn’t quite work out as planned.
Then there was GM’s answer to affordable gas-efficient imports: they put a crappy 4-cylinder engine in over-size chassis and called in the Cadillac Cimarron. But I digress…
These “solutions” have one thing in common: They did not address the right problem, so they were destined to be an epic fail.The same, I suspect, goes for the newest savior of the healthcare industry: Value-Based Payment Models, or VBP for short.
I have come to the conclusion that it is the ethical and moral obligation of the seller of health care services to provide the prospective buyer a price in advance of the provision of the service. Any other way of conducting medical business affairs has the feel and characteristics of a bait and switch. While many maintain that the provision of advance pricing is impossible, those of you gathered here now know without a doubt that this claim of impossibility is a lie, an excuse to fleece the buyer and an excuse that is no longer credible.
Keith Smith / September, 2014