thegreekdog wrote:They didn't do a very good job. Very disappointed in that article.
While I obviously don't know details, it seems to me that there is probably some combination of "who cares, insurance will pay" and rent-seeking to a certain extent.
Agreed.
e.g.
It is no secret that medical care in the United States is overpriced. But as the tale of the humble IV bag shows all too clearly, it is secrecy that helps keep prices high: hidden in the underbrush of transactions among multiple buyers and sellers, and in the hieroglyphics of hospital bills.
At every step from manufacturer to patient, there are confidential deals among the major players, including drug companies, purchasing organizations and distributors, and insurers. These deals so obscure prices and profits that even participants cannot say what the simplest component of care actually costs, let alone what it should cost.
And that leaves taxpayers and patients alike with an inflated bottom line and little or no way to challenge it.
OHHH!! BOOGA BOOGA BOOGA!!
You could write the same nonsense about shoes. I bet they're real cheap at the Chinese shoe factory in some remote village--if you buy 10,000 instead of 1 in order to get the low price.
But still even if the price of that shoe is $1.00, it's an exchange that's nonexistent until Evil Middlemen bring the product to you.
Proponents of this system say it saves hospitals billions in economies of scale. Critics say the middlemen not only take their cut, but they have a strong interest in keeping most prices high and competition minimal.
Gee, any seller of anything would desire higher prices and less competition, but does that happen? Well, it depends...
The top three group-purchasing organizations now handle contracts for more than half of all institutional medical supplies sold in the United States,
Is that competitive enough? It's like the possible merger mentioned in lootifer's thread: can we know if this is competitive enough given the competition-reducing effects of price controls and government regulations?
[insert irrelevant emotional appeals]
HealthFirst, the Medicaid H.M.O. It paid $119 to settle the grandmotherās $2,168 bill, without specifying how much of the payment was for the IV. It paid $66.50 to the doctor, who had billed $606.
Those kind of arrangments always interest me. Doctor says: One million dollars. I say, "No!," but no haggling occurs. Insurance company says, "eh, 100 Saxbucks." Doctor: "oh okay."
They probably put out high prices because they might profit from some people unwilling to bargain it down.