Medicare Prices Shape Payment Formulas for the Entire Health Care System
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Our results suggest that Medicare’s decisions are far more influential than you may imagine,” said Joshua Gottlieb, an economist at the University of British Columbia. His research shows that a $1 change in the price that Medicare pays yields a $1.30 change in what private insurers pay.
What happens if the government gets those prices wrong? In the past year, a Washington Post investigation has shown that Medicare prices are sometimes based on faulty premises, offer perverse incentives for unnecessary care and provide widely varying amounts for equivalent drugs…
“Our results indicate that the private sector will copy Medicare’s pricing errors,” Gottlieb said. (Washington Post)
This is why people should pay for themselves and only use insurance for catastrophe.
You mean the way it was and should now go back to?
It’ll never be that way again.
You don’t think so?
No. Too many people want free stuff.
Too true. Just look at entitlements.
Government can barely keep roads up, let alone accurately predict the costs of anything.
They’ll keep trying to though, no matter how bad the economy gets.
“I’m helping! I’m helping”
-The Government
“Our results indicate that the private sector will copy Medicare’s pricing errors,”
Why wouldn’t they? If its under than they recoup losses, and if its over then they get more money. Win win.
“provide widely varying amounts for equivalent drugs”
Looks like someone got paid off.
Or they didn’t walk down the hall to talk to someone.
“Hey Frank, are these two drugs the same?”
“If they sound different then bill them differently!”
Typical government incompetence.
More like typically greedy private sector screwing things up by asking for more.
Private Insurers ask for more after the govt asks for more, and for less after the govt asks for less. Or didn’t you get that from the article?
His research shows that a $1 change in the price that Medicare pays yields a $1.30 change in what private insurers pay.
That is really interesting.
The law makes it illegal for a medical privider to bill Medicare more than he bills another payer, but he sure as hell can bill the same.
133% of the Medicare allowable is not justified, since the private payer who pays cash does not require detailed documents and justification and the doc or facility doesn’t have to employ people to deal with 3rd-party payers, doesn’t have to justify the procedure after the fact, doesn’t have to wait months for payment and doesn’t have to risk denial of payment for services rendered.
Ideally, a doc or facility would give a cash-paying patient a 40% discount. But the law, of course, again interferes with the right of contract.
If you want to pay a fair price for your treatment, look to Mexico, Costa Rica, Thailand, India–in no way will you be treated fairly in the USSA.
If you ever end up in an ER, refuse to pay more than the Medicare allowable, since in a suit under quantum meruit, you have to pay only what is customary and usual, which is to say, what Medicare pays. I’ve done this twice and in both cases the ER has written off the bill entirely!