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There are multiple parallel problems here.
The cost is fundamentally unknown. It is reasonable to determine what the average cost of a thing is, but that is not helpful information because when we leave the average the costs can become profoundly immense. More people are upset with an estimate that is off by multiple orders of magnitude than by no estimate at all, and that will happen.
To torture your mechanic analogy, it's like if you go to buy a car and ask for a Corolla, but 5% of the time you get a Bentley whether you want it or not.
The average cost is not necessarily known to your doctor. If I'm your surgeon I know what my professional fees are and how long my average case takes. I probably know the billing codes used, if I'm business minded I may know something about the average cost of supplies, instruments, and equipment. However a run of the mill routine surgery requires a team of 40+ people between the office visit, PAT, pre-op, intra-op, PACU, and post-op. It is unbelievable how many hands are involved and it is incredibly difficult to keep track. You immediately start running into problems like "cleaning staff are a critical part of the OR and are a cost to the hospital but are not usually considered a part of the surgery, is that a cost or is it not a cost?" or "does this facility charge by the minute for anesthetic gases or use a flat fee" both options are viable, your anesthesiologist probably knows, your surgeon probably doesn't. Keep track of "costs" is a full time job with an entire department just for the OR. Your surgeon might be able to say "your surgery probably costs 10k" because they asked someone in a billing meeting what all the averages on the spreadsheets said, but nobody wants to have a 20 minute conversation about how much of an oversimplification that is.
Additionally that is fundamentally not the surgeons job and does nothing to improve the surgeons provision of medical care. We evaluate whether to perform a case or not based off of the medical risks and benefits, not the cost. This is part of why healthcare is expensive in the U.S. but most people prefer that to the alternative.
Doctors wear a lot of hats. Things like increased regulatory burden and the dance with insurance below mean that you have of multiple departments involved in figuring out how to deal with the above. We already do a lot of things like that slow us down and prevent us from actually spending time with patients. Making it worse is not desirable to us or our patients.
The cost is irrelevant, which disincentivizes processes involved in streamlining all these things and makes it useless for your doctor to know and be able to relay to you. Almost all procedures are paid for by insurance or involuntary charity care by the hospital, with a small rarity of actual self-pay. Getting insurance to pay for something involves complicated negotiations where they try and pay you less than "cost" so you exaggerate cost as much as possible in hopes you don't actually lose money. It is not uncommon for the payment mix to end up being something like medicaid reimbursing 80% of cost, medicare 85% and private insurance 110%. If you mostly care for medicare and medicaid patients you go out of business (which has happened a lot lately) or require government bailouts. This is why the sticker price is so insane, and hospitals will almost always drop 90% of the bill if you end up being cash pay. You have to negotiate with the insurance company and that involves the "official cost" of a gallbladder removal being 100k instead of 5k or whatever.
A surgery has more in common with a government procurement and bidding process than getting a car repaired.
Even more simple things like an office visit are a pain in the ass to figure out. Unless you are doing very specific types of PCP practice or outpatient cash Psychiatry you are taking insurance. Therefore I don't know what the visit costs. I know what my billing team will try and charge for my time, they'll use the specific office visit billing code, I'm told to make sure to put X and Y thing in my note so they actually cover the work I did, but then I know that even the insurance company is supposed to pay for that code they'll make a big stink about it and require hours of the billing teams time going back and forth to make sure that its not worth it to actually get paid for that, even though the other insurance company always takes it if I put in X and Y, so my office staff will adjust the coding and bill you for the down coded visit even though that's not what I did and that's somewhat illegal, and your sister will get billed the actual billing code because she has "better" insurance.
All kinds of asinine shit like that happens for the most routine interaction with healthcare.
This is why psychiatrists are like "dude just pay me 100 an hour and we are good" and why there are now multiple forms of primary care that avoid working with insurance.
"What's my rate for a visit" is never a viable question because every insurance company pays me differently and its constantly changing year to year and I'm effectively only paid for by insurance.
As minimum they should be obligated to answer yes/no questions like "is consulting with this specific doctor covered by my health insurance"
If that is too risky to answer I guess they can insure themselves.
Or force health insurance companies to make legally binding answers.
So the way this works is that for things that are planned (like a routine surgery or an office visit) you will give your insurance card to the team that works with that physician and they will figure out if the planned services are covered. If they are? Great. Easy.
Immediately this runs into some problems.
What if you go to the office and the doctor wants to perform an unplanned mild procedure? Do you want to come back a week later after insurance has been worked out or just get it done? I have literally seen patients been given this option and then forget about it when the bill comes.
What if you didn't plan going to the doctor? Your anesthesiologist for your emergency surgery may not be in network, but this is not planned you get what is available. The insurance should be forced to pay for this, but they are lobbying to not.
Healthcare delivery is a 24 hour problem. Insurances are not generally open 24 hours. This limits the ability to contact the insurance and ask if something is covered. Plenty of practice environments are open outside of insurance hours even for routine things. Sometimes patients spend extra days in a hospital waiting for insurance to approve the next phase of care.
Now you might say "well listen, just tell me if this DOCTOR is covered." Some places will have a website that will tell you if a doctor is in network or not. Sounds great right?
Well no, just because a doctor is in principle in network doesn't mean they actually cover anything that doctor does. They might be in network for emergency care, but not routine care, or reimburse less than cost for a given procedure so performing it is not financially sustainable. It's not uncommon for certain types of procedures to just not be done in non-emergency settings because insurances won't pay more than it costs to do the thing.
Lastly even if you get something done that is covered, with a doctor that is covered, and you checked in advance with your insurance to make sure that it was covered...sometimes they just won't cover it anyway. They have all kinds of random excuses and often this can be addressed by some combination of patient and physician appeals, but:
We don't know if something is covered by insurance because 5% of the time they decide not to cover what they said they said they would.
*I don't know the true number here it is probably wildly variable on region, insurance, and specialty. United being notoriously bad about this.
You are replying to short post that included "force health insurance companies to make legally binding answers".
Yes sorry, I though you were focusing on the doctor side of things which is what the rest of this mess is on about.
If you want to laser focus on that we still have problems, even as an insurance critically person I admit it's fair for them to go "okay I'll pay for it but you have to justify it correctly" because that prevents various bad actors in healthcare provision (including doctors) from doing sketchy stuff.
It's pretty fair for them to ask us to put into our note our medical decision making and only pay if it is justified.
But then they play games with what is required to justify it.
Mandate legally binding answers and you get "yes we will pay for this service if it is documented correctly." That is necessary but has chasm wide potential for abuse (and is generally what they do now).
Even if you were to hand wave away those problems that doesn't address after hours approval, delays in approval, surprise billing concerns and so on.
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This is false, as we've already discussed.
I don't care whose job it is. Every single other industry has figured out how to do this basic business practice in a decent way, and many times, there is division of labor.
This is the most pernicious, absolutely atrocious lie that is the core reason we have such a disaster of a medical industry. You cannot believe that anyone will read this entire thread branching from the OP and think that this a remotely reasonable response. Sure, if we just accept that everything is broken with insane prices that don't mean anything, then nothing means anything and we're doomed to dysfunction. We can do better.
"Your surgery will cost anything between 4,000 and 5 million dollars, as those are the minimum and maximum recorded prices we have charged in the last ten years." Is not a satisfactory answer. "The median price for the surgery is 5,000 dollars" is not viable either because patients will sue if it's wildly off that. Either way the cost doesn't matter, it's almost entirely removed from how much the hospital gets paid or collects.
This like a governmental procurement process. The person who has knowledge of everything is the head of the OR or billing department, not the person who is on the ground doing the thing. You can't have the head of the FBI come down every time and explain what the cost of an investigation is, the individual agents sure as hell don't know, why would they need to?
Healthcare systems (including doctors) are the victims here, victims of a predatory insurance industry and unhelpful overregulation that needs to be replaced with functional regulation or needs to be understood to be reducing the amount of and increasing the price of care. Don't blame us doctors and nurses are leaving the field and hospitals are shutting down because insurance companies are winning the battle. Blaming us helps them collapse the system faster.
C'mon man, you did better in the linked comment. You already gave a vastly better answer. Did you forget what you said yesterday?
You cannot seriously think that every other industry that has solved this problem requires the head of their billing department to generate every price. How do you think other industries solve this problem?
I'm not blaming you. I'm just asking you to do basic business practices in a decent way, just like how everyone else does. You can do this. You really can.
I'm confused as to how you see his earlier estimate as better at all, much less vastly better. Are you saying you'd be happy with a price tag which consists of the range $4000 to $1500000?
The chance of hitting the $1.5m upper end makes this price tag functionally identical to "idk, could be anything" for most people. Unless you have millions in assets then 1.5 million is already enough to ruin your life and put you in a place where you're probably staring down bankruptcy. Whether the cost caps out at 1.5 million or 1.5 billion is irrelevant to people who can pay neither of those numbers.
The important point is the conceptual realization that patients cannot consent without being informed. It's called informed consent. Part of being informed is being informed about the costs. Obviously, there is going to be a knowledge gap both in terms of the medical and financial costs/benefits. When it comes to medical cost/benefits, people mostly acknowledge the knowledge gap and say that it's important for doctors to find a way to explain the situation as they can to the patient. There is obviously a range of quality here, but the answer is that you have to try. When it comes to the financial side, they instead just say that it's impossible. They give up. They don't even try. (It's just a coincidence that doing this is in their interest.)
His prior answer gave a probability attached to a known unknown, conveying the information known by the doctor in a way that is very representative of the doctor's knowledge. First, it is obvious that they can do this sort of thing.
Second, as to the question of comparing the quality of the answers, suppose you were considering playing a lottery-style game. One just told you, "The range of payouts is between $5k and $1.5M." A second told you, "The payout is about $5k with about probability p, and the payout is about $1.5M with probability 1-p." Which of these answers do you think is better quality information? Which of these answers do you think is more helpful in analyzing whether you would like to play?
Third, the lingering question is whether/when it matters. It will obviously depend. It will depend on the dollar figures; it will depend on the probabilities; it can also obviously depend on how the individual's personal insurance is structured (common factors would be deductible, co-insurance, and out-of-pocket max). From there, we have a several-dimensional parameter sweep. We could sit down and generate plots. I'm sure we would see tons of regimes where having the information is basically useless. But I'm also confident that we would see tons of regimes where having the information is useful. I'm sure the good doctor we are talking to can come up with plenty of individual examples off the top of his head that are in the regime where it doesn't matter. Don't care. There are almost certainly also plenty of examples where it does matter; I would venture to guess that, actually, for the vast majority of regular, routine decisions, it can, in fact, matter. The standard party line is to just not even try, in any case, because there might be other cases where it doesn't matter. That's absurd. Moreover, it betrays a lack of understanding of economic thinking. There are always non-marginal cases. In no other area of economics do we say, "There are some extremely high/low value producers/consumers, and since their behavior won't be changed by [alteration to the price system], we should just completely blow up the price system and abandon it." Economists push back on this shoddy reasoning constantly. Sure, there might be someone who just loves eating exactly one apple every day so much that even if we blow up and get rid of the price system for apples, just don't tell anyone how much apples cost, and have them paid for via some complicated mechanism, they'll still buy exactly seven apples every week. Who cares? The price system is there for all of the other cases.
The challenge to someone saying that we should never talk about prices because they never matter is to actually show that they never matter, not that there are some cases in which they might not matter. I think they probably do matter to a hell of a lot more cases than they're willing to admit.
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Healthcare is like aviation and nuclear in that bad outcomes are considered unacceptable, therefore there is a ton of regulation and complexity that does not exist in other industries, there is also more variation in health care than aviation and nuclear because people's bodies are variable and much of the more complicated stuff cannot easily be standardized.
It is its own entity not like other economic segments and intuitions brought in from elsewhere have a tendency to be incorrect. This is why companies like Amazon, Google, and Apple all tried to start healthcare projects and bailed out. This is why PE firms buy hospitals, crash them and then just sell the land. This is why Theranos happened. Healthcare doesn't work the same way as everyone else. Maybe it should but it doesn't.
Part of that, and something you really need to simply address is "who the fuck cares about the prices" the prices are made up, they don't matter, insurance pays and insurance NEVER actually pays the price. There is no value to you in knowing what the price is, and as given in an example in my last post sometimes the prices DOESN'T EXIST.
There is no cash value for my professional time if I don't see cash patients and what the insurance company will give me for my time is a big fat question mark.
Look, I get it. You want it to be one way. You want to just keep everything the same; just stop all the change; just go into work, do a good job at doing your job, close your eyes to any dysfunction and make no changes to your mindset concerning the entire conceptual schema of the industry. That's fine. That's natural. Parts of it may even be commendable.
...but as the old saying goes, things that cannot possibly keep going the way they're going, won't. Change gon' come. I've seen this in industry after industry after industry. This is an industry that just had two different bills passed by two different congresses and signed by the last two presidents (one of whom is coming back in and may be interested in taking another bite at the apple) specifically because this stuff is a problem. The purpose of this entire thread is because a notable CEO was shot dead in the streets of NYC, possibly because of frustration with these problems; news outlets are reporting people cheering this. It's not always regulation; sometimes it's in other forms. Sometimes, the industry cleans itself up. Sometimes, there's just a shift in the case law. Sometimes, there's a disrupter. Sometimes, new regulations get dropped like bombs. And I get it, that last category is scary. I don't like a lot of new regulation. You know full well that I'm aware that it is often done shoddily, with all sorts of unintended consequences. This is the least-preferred solution in my mind. But everyone knows the medical industry is broken. Everyone knows that it can't keep going on forever without change. You know that it's broken when you say:
I've heard industry after industry swear up and down about how unique they are, how they have to do things differently, how they can't possibly change things. A silly little example from the last few months is real estate. Oh Sagan, the kicking at the goads, even after the details of the settlement became clear. You should have seen the levels of broken people's minds were; how they were constantly talking about ways to try to get around the new rules, how they simply could not conceptually wrap their minds around the fact that they couldn't just operate the same way that they always had, how their industry is a special snowflake and their special needs will always shine through. You saw some of the smart ones figure it out reasonably quickly, and sure enough, they started doing the obvious things to follow the new incentives and improve their business. I'm sure some of the folks who kicked too hard or weren't smart enough to figure it out or were simply broken by the conceptual change are struggling right now; some might already be out of business.
Change will come, no matter how unique you think you are. You really have an opportunity now. You can change your conceptual schema, evangelize the change in mindset, and begin to fix what you can in your corner of the big problem. Maybe it'll be a lost cause for the purpose of avoiding some dumb regulation, but that's your opportunity. I'm just sounding the warning, like I did long ago for IoT. We saw how that worked out when they didn't heed the warning, banking on swearing up and down about how unique they were and how things had to be different for them. They probably liked the regulation they got less than they would have liked the alternative opportunities they previously had in front of them.
So, in the spirit of helping you get a head start, a leg up on your competition for when change comes, so that you can adapt, optimize, and make bank, rather then ending up broken, conceptually lost, and possibly out of business, let's really think about what you can do. You gave an answer yesterday about the cost of a gallblatter removal. Perhaps you forgot that answer today, but I'm guessing you didn't. Think about your previous answer; what was wrong with it? I liked it; I thought it was pretty good. If you didn't forget it, I sort of have to believe that you consciously or unconsciously chose to change your answer to a less good answer. Perhaps reflect on why you might have done so. What were your motivations in trying to be less helpful? How do you think it will affect people's (possibly including potential customers') impression of you as a person or as a possible topic expert when they see that you are choosing to be less helpful than they know you can be? How do you think the mindset of choosing to be less helpful will affect your business if/when change is imposed on your business or industry?
Additionally, I suggest you seriously study how other industries manage to solve this problem. All of them do it. There are a variety of solutions. Can you think of any? If the only one that you honestly can think of is to have the head of the billing department personally perform every single estimate for every single procedure for every single patient, how do you think that will affect your business's ability to adapt to changes? If regulation comes, could your lack of insight into how these problems are typically solved leave you lagging behind the competition in adapting to the new environment? Could it even pose an existential threat to your business?
I suggest you consider these things, because some of your competitors will. They will not only survive and make money; they will thrive and eat your lunch. You have a great opportunity now.
You don't just get to declare that medicine is the same thing as everything else and call it done. Frankly I can't recall other industries telling me they were uniquely weird, my friends in most industries emphasize how similar they are to each other and go what the fuck when I explain how things go in medicine. "You get paid less for working in higher cost of living areas or for more prestigious jobs? What the fuck." "More years of training decreases your salary? What the fuck." "More complicated jobs pay less? What the fuck." "What do you mean a routine procedure could cost five thousand dollars or one million? What the fuck." "What do you mean you do 20+ hours of unpaid labor a week? What the fuck."
To emphasize: name another business that is forced to work for free and is prohibited by law from closing unprofitable businesses segments (example: the ED). Healthcare is prohibited by law from being more efficient and cost effective.
As previously mentioned we have a parade of outside actors coming into medicine in attempt to take care of low hanging fruit and apply general business knowledge because they assume everyone must be idiots. And then they catastrophically fail.
The complexity of medicine is higher than nearly every other field for a number of reasons including the fact that actual human lives are at stake. Bad outcomes are unacceptable so that makes things expensive in a way that does not apply to other industries. Voters have elected to avoid tort reform or rationing or a reduction in administrative and documentation burden and others things that might address the problems.
You are right of course that people will attempt to solve the problem by increasing regulations and doctor salaries will be likely cut. Well administrative costs are about a third of healthcare spending. Guess what is going to go up with increased regulation? Physician salaries are about 8%. Guess what's not going to move the needle if it is cut?
And of course price controls lead to shortages, which we already see quite a bit.
You seem to think that everyone in healthcare is stupid and that nobody has tried to apply general business knowledge to these problems. Of course they have. Some well run places have managed to improve things slightly, but we don't have to speculate as to how hard this, just point to the parade of corpses that tried what you are suggesting.
And of course you have things like HCA which seem to be legitimately profitable! Great. Oh wait no they are grossly unethical and constantly under investigation for illegal business practices and nobody who works there wants any of their family members anywhere near those hospitals.
EDIT: Let me add one more - where else in modern America do you see costs kept down by using indentured servants? The closet thing to Residency is visa abuse in tech and that's not anywhere near the same level of insanity.
post offices in some countries
this does not stop them from clearly stating prices
Good example! However that specific point is meant to illustrate the oddity and complexity of healthcare delivery, not be the specific reason for lack of price transparency.
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Don't need to. That does not in any way prevent you from giving a price. You know that it doesn't. You know that you can do it. You've basically admitted such by your responses and non-responses.
You have an opportunity in front of you. Perhaps you'd like to respond to the questions I asked rather than not responding.
This is hilarious, given that you were just defending a claim about residency slots that looked extremely poor upon even a cursory look at the entire data you linked to. Maybe your industry is like other industries from an economic point of view when it comes to cartel behavior restricting supply. Like, economists know how systems like this lead to abuse, and perhaps if we stopped restricting supply and truly opened it up to competition, where if one hospital was known for abusing their residents or even paying them poorly or whatever, they would likely have other competing options. You might not be such a unique industry, impervious to literally all traditional analysis, as you think.
But yeah, you know there are atrocious problems. You can keep making bad arguments, pointing to data that you know doesn't show what you say, avoiding answering questions, choosing to be less helpful than we know you can be, etc. And one set of results will flow from that. There is another way, and hopefully another set of results to go with it.
EDIT: There are indeed many different dysfunctions in the medical industry, and one can always say, "Well, we can't spend time focusing on X, because there's also A, B, C, D, E, F that cause weird problems, too." That results in just spinning wheels and nothing ever gets done. When someone later suggests, "Here's an idea that can improve D," you will again say, "But we can't spend time on D, because there is also A, B, C, X, E, and F."
For IoT, I had originally suggested that people just focus on one thing, a little thing. You had to figure out a way to get default passwords out of the industry. It had to be done. It absolutely could be done. But it had to be done. Instead, we got the same distraction tactics, the same Obvious Nonsense claims that it was actually impossible, etc. We saw the results that followed.
I think it is plausible to start with one thing (I suggest just providing prices), especially one that we all know is actually, totally possible. There is no real reason why it cannot be done. If you adopt the mindset that it must be done, it must be the first step to changing the mindset of the rest of the culture, you at least have a chance of success. It requires admitting that there is dysfunction, admitting that the mindset needs to change, admitting that the old mindset and the old dysfunction was fundamentally built on lies, and here is one very straightforward, very easy way to demonstrate that it was built on lies and that we're going to have to call out those lies if we're going to have any hope at broader change.
Giving prices is possible. It will not break other things. It will not make other problems any worse. In some cases, it might not matter much; in other cases, it will. But it is an easy first thing that you can do to break the cycle of lies built upon lies and give us any hope of an alternative solution to something like the haphazard, chaotic mess of additional regulation. Not doing something like this is simply resigning to whatever other, possibly incoherent, change will come. The same dysfunctional mindset will persist, and I, for one, would have little hope that anything will be fixed anytime soon if we can't even do one little thing.
Let's go back to basics. We can estimate the price of a given surgery prior to providing it but that estimate is misleading due to the frequency with which it is wrong, often to the degree of orders of magnitude. You might say "yes you can give me an average that's an estimate" another person might say "an estimate is only meaningful if it is reasonably correct."
In my experience people get pissed if they ask how much it is going to cost to renovate their kitchen and they get a bill for 3 million dollars instead of the initially stated 30,000.
So
Estimates cannot be provided in the same way they can be in most other industries due to an intrinsic excess in variability secondary to the complications involved in human health.
Giving estimates reduces bargaining power with insurance companies and is therefore disincentivized.
Estimates have no value to patients because your insurance is going to be paying not you.
Please pick one or more of these you disagree with and explain why.
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