Ellen Pearsall recently wrote of the remarkable disjunct between what we think a medical service “should” cost and what our hospital says the price for that service is (“Something’s Wrong,” The Public Speaking, March 6.)
I imagine a lot of people saw the special edition of Time magazine featuring what I will call an investigative report by Steven Brill. One point it made clear is that every medical service provider has the freedom to set any price it wishes as its manufacturer’s suggested retail price (MSRP), a practice we are familiar with in almost every form of business. Brill went on to demonstrate exhaustively that those MSRP’s can amount to 10 times the cost of providing those medical services.
While “cost” is subject to debate, what is not subject to debate is that a couple of “customers” don’t pay MSRP and the rest of us should pay attention to why that is.
The first such customer is the U.S. government. Medicare spends a huge amount of time figuring out its view of what a medical procedure costs and offers to pay that amount and not much more. Take it or leave it. But of course, if you leave it for one patient, you leave it for all 44 million patients covered by Medicare and probably the 48 million other Americans covered by Medicaid and the 18 million Americans covered under military programs.
The others are a like-minded group of medical insurance providers. It seems those companies manage to haggle discounts of from 30 to 70 percent off MSRP pretty routinely.
If that’s how this market works — that the poor fellow who gets wheeled into the ER with no insurance is going to see a bill of $1,000 for a service for which Medicare pays $100 or an insurer pays $500. Who do you want on your side?
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