Price Differences for Medical Equipment

[bluemarlin08]

Needed a new tube for a CPAP machine and called my local medical supply house. They pulled my insurance info and said the tube would be, after adjustment, to be $60. Called back and asked if I didn't have insurance how much, $20. Went to the store later yesterday and the clerk tried to charge me $45, ended up paying $20. Still don't understand why insurance companies don't monitor costs of equipment.

 

[somarco]

It could have easily gone the other way. Quite a few things in life are priced based on what the market will bear.

Good chance they quoted you a teaser price of $20 to get you to come in, with hope of hosing you (no pun intended) when you walked in.

 

[dgoldenz]

I went to the doctor the other day and was prescribed two things, asked for generics. Total cost without GR discount was $29 as one of them was on the free list. With the discount it was $5.25. Brand name equivalents would have been $410. The free one's brand name equivalent was $305. Crazy...

 

[Newby]

It could have easily gone the other way. Quite a few things in life are priced based on what the market will bear.

Good chance they quoted you a teaser price of $20 to get you to come in, with hope of hosing you (no pun intended) when you walked in.

Isn't everything priced at what the market will bear?

 

[somarco]

Isn't everything priced at what the market will bear?

Not really.

Insurance is a variation on cost plus.

 

[Crabcake Johnny]

No. A Mass. investigation found that the pricing of services/equipment was much higher (X3) depending on the provider. They also found that the higher charges didn't result is better care - just that providers with a lot of muscle simply charged a lot more.

Because of that study the new proposal is a flat reimbursement for services regardless of the provider.

 

[IndividualHealthGuy]

No. A Mass. investigation found that the pricing of services/equipment was much higher (X3) depending on the provider. They also found that the higher charges didn't result is better care - just that providers with a lot of muscle simply charged a lot more.

Because of that study the new proposal is a flat reimbursement for services regardless of the provider.

Because just like with automobiles, all doctors and hospitals are the same. No difference between Acura and Kia, just like there is no difference between County General and Loving Sisters of the Heart We Really Want You to Live Hospital.

Sorry, I'm not really a fan of the MLR passed on to hospitals and doctors now, too. I'd like to think there is a free market economy still surviving somewhere in this country besides on CraigsList massage ads.

 

[Crabcake Johnny]

Correct. The insinuation is some providers almost "blackmail" the carriers when it comes to price negotiation. If a business entity for example controls some of the best hospitals in the area I'm guessing the negotiation goes a bit like this:

"Ok Blue Cross, you're going to reimburse us $35,000 for this procedure. Yes, yes, we know other hospitals charge $20K for the same procedure with the exact same quality but you'll pay us $35K or we'll simply drop your ass. Let us know."

Under the proposed system, each procedure would be reimbursed the same amount across all providers.

 

[IndividualHealthGuy]

The disparity is nowhere near that large. As a matter of fact, the largest provider systems offer economies of scale that allow larger carriers to get lower rates than they do with other hospitals/doctor groups. The entire reason reform is going to kill our healthcare system as we know it is because private insurance has been the pillar that providers support their operations on.

As far as this DME provider giving a lower cost to an "uninsured" individual than what they bill the carrier, well that is against most provider contracts. If they cared to, the carrier could sue them for breach of contract as they are not to bill anyone a different amount than what they bill the carrier. Not charge less than what the carrier defines as reasonable and customary, but the actual billed charge the provider submits. Of course, this is a bit like enforcing jaywalking laws, in that it's not really worth the time and money to investigate and prosecute.

My point is that the negotiation of service pricing is a direct result of an open market. I've seen enough of a command economy model the last year and a half, thank you very much.

 

[somarco]

Under the proposed system, each procedure would be reimbursed the same amount across all providers.

Good luck with that one.

While cost has no real bearing on outcome, the studies carriers are relying on today ping on cost EFFICIENT methods of treatment. KP (and presumably other similar models) have used this for years.

Watch for carriers to tier reimbursement based on cost effective hospitals with higher reimbursement for more efficient hospitals and lower reimbursement (more patient OOP) for less efficient ones.

Sounds good until you consider the lower cost hospitals typically do not have residency programs, an ER or maternity dept. All of those are high cost, low return items that have to be subsidized with other hospital services.