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Of course they do. He's just saying passing on those higher costs doesn't make them more money so they do make an effort to keep an eye on this sort of thing. Insurance fraud is not the main reason medical care costs so much in 'merica.
 
Insurers don’t pass on higher costs in the form of rate increases?

Of course they do. As all businesses do. But to suggest they don't try and control expenses is just ignorant in a competitive market like health insurance.
 
Of course they do. As all businesses do. But to suggest they don't try and control expenses is just ignorant in a competitive market like health insurance.

The financial aspects of the US healthcare system are so convoluted, confusing, and opaque, that these types of charges occur constantly. They occur on all scales, and most are not on purpose (though a small number are). The cost of this confusion is passed on to consumers.
 
Of course they do. He's just saying passing on those higher costs doesn't make them more money so they do make an effort to keep an eye on this sort of thing. Insurance fraud is not the main reason medical care costs so much in 'merica.

But this wasn’t insurance fraud. This was a insurance company paying an outrageously expensive bill because the cost to pay it was less than the cost to actually ensure that medical charges are correct and appropriate. Which benefits the insurance company and the medical providers at the expense of the consumers.
 
Of course they do. As all businesses do. But to suggest they don't try and control expenses is just ignorant in a competitive market like health insurance.

Based on my latest premium increases, it seems like they aren’t trying very hard.
 
In situations like that, where there was clear overcharging, the doctor's office should have to eat the bill.

That would change behavior quickly.
 
But this wasn’t insurance fraud. This was a insurance company paying an outrageously expensive bill because the cost to pay it was less than the cost to actually ensure that medical charges are correct and appropriate. Which benefits the insurance company and the medical providers at the expense of the consumers.


I thought the issue people had with insurance companies is that they would deny charges. Now it's that they will pay anything?
 
I thought the issue people had with insurance companies is that they would deny charges. Now it's that they will pay anything?

They do both, with little rhyme or reason. That’s one of the reasons the system is broken.
 
In situations like that, where there was clear overcharging, the doctor's office should have to eat the bill.

That would change behavior quickly.

It’s not the doctor’s office that is overcharging. The testing lab created the charge, and it’s probably an appropriate charge for a dna viral panel. So the problem is that it should not have been ordered, but I bet the physician had no idea how much the test cost, because it is impossible to know the cost of anything if it is different for each insurance contract.
 
It’s not the doctor’s office that is overcharging. The testing lab created the charge, and it’s probably an appropriate charge for a dna viral panel. So the problem is that it should not have been ordered, but I bet the physician had no idea how much the test cost, because it is impossible to know the cost of anything if it is different for each insurance contract.

A doctor's office has no idea they are ordering a $25K test for a cold/strep throat?

If the insurance co didn't pay, this was going to be on the patient to pay.
 
A doctor's office has no idea they are ordering a $25K test for a cold/strep throat?

Correct. Anyone can test this if they wish. If you call your physician’s office and ask how much it will cost to have a CBC (the most common blood test, run 20+ times daily at most offices) they will tell you they don’t know. That’s because it depends on your insurance, the specific contract, if the lab is run in the office or sent out, etc. You can then call your insurance and ask the same question, and they will also tell you the same answer - they don’t know. It depends on which physician orders it, what space they are in when it’s ordered (clinic, hospital-based clinic, etc), which lab it goes to, etc. If this is the case for the most common test, imagine what it’s like for much more uncommon tests.
 
Correct. Anyone can test this if they wish. If you call your physician’s office and ask how much it will cost to have a CBC (the most common blood test, run 20+ times daily at most offices) they will tell you they don’t know. That’s because it depends on your insurance, the specific contract, if the lab is run in the office or sent out, etc. You can then call your insurance and ask the same question, and they will also tell you the same answer - they don’t know. It depends on which physician orders it, what space they are in when it’s ordered (clinic, hospital-based clinic, etc), which lab it goes to, etc. If this is the case for the most common test, imagine what it’s like for much more uncommon tests.

conditions like these are obviously incubators for abuse
 
Correct. Anyone can test this if they wish. If you call your physician’s office and ask how much it will cost to have a CBC (the most common blood test, run 20+ times daily at most offices) they will tell you they don’t know. That’s because it depends on your insurance, the specific contract, if the lab is run in the office or sent out, etc. You can then call your insurance and ask the same question, and they will also tell you the same answer - they don’t know. It depends on which physician orders it, what space they are in when it’s ordered (clinic, hospital-based clinic, etc), which lab it goes to, etc. If this is the case for the most common test, imagine what it’s like for much more uncommon tests.

Which is a major problem with our current system. The test has a cost. It should have a price regardless of your coverage. Doctors should have to have price lists like other companies.
 
And rate setting addresses these issues directly.

The cost of labs/procedures would be known, shared with the customer for approval, and limited to a modest profit margin.


btw, what we don't know in this story is how much of the $28,000 lab is profit. I bet it is around $20k or more. The lab is doing the gouging.
 
And rate setting addresses these issues directly.

The cost of labs/procedures would be known, shared with the customer for approval, and limited to a modest profit margin.


btw, what we don't know in this story is how much of the $28,000 lab is profit. I bet it is around $20k or more. The lab is doing the gouging.

Only $20K????
 
At least as important in this case is there seems no good reason the lady was prescribed an antibiotic for her almost assuredly viral illness. I’m quite familiar with the dynamics of why this is commonly done against good medical practice. Still it’s a problem.



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If irc, the lab entity was related to the practice of the ordering provider. I doubt it was some accidental oversight ordering the ridiculous and unnecessary tests.
 
A few thoughts.

More cost transparency is certainly coming, both through market forces and regulatory rule making. Lots of action on this front. Im a fan of this in general though some aren't and its not a panacea by any means. But well laid out, meaningful cost data is certainly a move in the right direction.

I disagree with the notion that there should be one cost. If a payer, public or private, can negotiate a better lower price, package it with a pay for value model, more power to them.

In this case, its a total shame that a provider ordered a 25k strep test. I am very surprised there isn't a medical policy at BCBS Minnesota to prevent this. I suspect there is info not being shared that may explain more whats going on here.

Ultimately this is yet another argument for why we need to move to a value based reimbursement model vs a fee for service one.
 
You disagree with one price because you think it should be on the patient to negotiate better prices?
 
Whoever the payer may be, large employer, insurer, gov't agency, etc.
 
But why? Seems very inefficient.
 
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