Private enterprise bankrupting America?

[Hawker]

If they have published numbers that don't support their point, show them.  Its the willingness to accept what they mean that is a problem.

I hate reading these stories... I just know at the end I will have two choices:

1) Resign myself to being slightly indoctrinated
2) Spend hours trying to figure out whats actually going on (what the numbers in the charts mean, what are the distributions of numbers that lead to the averages, etc)

In good time. This is worthwhile to be informed about.

Ah - so when you said "The numbers they present do not actually support it though" you haven't found the numbers that are "wrong" yet.

Isn't that sort of "you keep your facts and I keep my opinions" approach exactly what ineededausername was talking about?

[bb113]

Huh, you just agreed with me earlier...

[Hawker]

Huh, you just agreed with me earlier...

I agreed its puzzling how it lists $800 for the angiogram in the Kaiser Permanente hospitals and $23 for Canada.  Both are impossibly low.  Perhaps its for the materials only.

[bb113]

So the numbers they present mean nothing on their own... I don't see where there is room for misunderstanding then.

[Kluge]

Related. Went to an after-hours clinic yesterday after getting some methanol-containing shellac in my eye. Mom drove me. She sprained her ankle a few weeks ago and had her ankle x-ray'd. They billed her $1400 just for the x-ray.

Asked the doctor @ the clinic about it. They are equipped to do the same x-ray and would've charged $50. To have my eye examined under UV, and some other basic tests, cost me $40 (and I'm fine, btw). Pretty darn reasonable. I also waited a much shorter time in the clinic than my mom did in ER (granted, they were at different times, so somewhat non-comparable). He also prescribed me an antibiotic for bronchitis -- $10 for a full prescription, no gov't subsidization.

So, why do hospitals charge 28x more for the same procedure than an apparently-profitable clinic? Valet services? Subsidizing those who can't afford to pay the extreme prices?


ETA: Uncle's home insurance is covering my $40 cost to have eye examined (+having bronchitis looked at in the same visit), so total out-of-pocket cost for me - being uninsured myself - between bronchitis, a prescription, and having my eyes examined for damage after a can of shellac exploded, is $10. 

[Hunterbunter]

So, why do hospitals charge 28x more for the same procedure than an apparently-profitable clinic? Valet services? Subsidizing those who can't afford to pay the extreme prices?

Could it be because, taking marketing into consideration, hospitals are just much better at business and making a profit than that clinic? Why didn't your mother go to the clinic to begin with? Was there an assumption that the hospital would be better? And did she pay for that until you knew better?

[Kluge]

So, why do hospitals charge 28x more for the same procedure than an apparently-profitable clinic? Valet services? Subsidizing those who can't afford to pay the extreme prices?

Could it be because, taking marketing into consideration, hospitals are just much better at business and making a profit than that clinic? Why didn't your mother go to the clinic to begin with? Was there an assumption that the hospital would be better? And did she pay for that until you knew better?

She wasn't sure if the clinic was open and didn't have access to a phone or computer to check. She wasn't expecting anything like a $1400 charge from the hospital, either.

ETA: fwiw, she refused the splint they wanted to put on, as well as bandages. Someone pushed her from the entrance to the ER, did the x-ray, and gave her 2 Vicodin pills. She requested an itemized list -- waiting on it.

[Rassah]

That does seem high. All my x-rays, whether at hospitals or clinics, typically cost from $90 to $300

[Hunterbunter]

So, why do hospitals charge 28x more for the same procedure than an apparently-profitable clinic? Valet services? Subsidizing those who can't afford to pay the extreme prices?

Could it be because, taking marketing into consideration, hospitals are just much better at business and making a profit than that clinic? Why didn't your mother go to the clinic to begin with? Was there an assumption that the hospital would be better? And did she pay for that until you knew better?

She wasn't sure if the clinic was open and didn't have access to a phone or computer to check. She wasn't expecting anything like a $1400 charge from the hospital, either.

ETA: fwiw, she refused the splint they wanted to put on, as well as bandages. Someone pushed her from the entrance to the ER, did the x-ray, and gave her 2 Vicodin pills. She requested an itemized list -- waiting on it.

Pretty much all profit is made on a mis-alignment of information. I don't think I've ever heard of a private enterprise subsidizing some customers by charging others more...although if you think about it, the base supply/demand curve could be seen that way - "reduce the price to get more customers", is the same effect but under a different name.

Hospitals vs clinics are similar to 24hr megamarts vs local grocery stores. They just have more stuff, are open all the time, and because you don't know what you want/need until you get there, you'll usually end up going to the bigger place.

[ineededausername]

If they have published numbers that don't support their point, show them.  Its the willingness to accept what they mean that is a problem.

I hate reading these stories... I just know at the end I will have two choices:

1) Resign myself to being slightly indoctrinated
2) Spend hours trying to figure out whats actually going on (what the numbers in the charts mean, what are the distributions of numbers that lead to the averages, etc)

In good time. This is worthwhile to be informed about.

Ah - so when you said "The numbers they present do not actually support it though" you haven't found the numbers that are "wrong" yet.

Isn't that sort of "you keep your facts and I keep my opinions" approach exactly what ineededausername was talking about?

Exactly -- one cannot claim to be either rational or open-minded if one assumes the opponent is always wrong, and then works from that assumption.
The numbers are correct until they are proven wrong.

[bb113]

If they have published numbers that don't support their point, show them.  Its the willingness to accept what they mean that is a problem.

I hate reading these stories... I just know at the end I will have two choices:

1) Resign myself to being slightly indoctrinated
2) Spend hours trying to figure out whats actually going on (what the numbers in the charts mean, what are the distributions of numbers that lead to the averages, etc)

In good time. This is worthwhile to be informed about.

Ah - so when you said "The numbers they present do not actually support it though" you haven't found the numbers that are "wrong" yet.

Isn't that sort of "you keep your facts and I keep my opinions" approach exactly what ineededausername was talking about?

Exactly -- one cannot claim to be either rational or open-minded if one assumes the opponent is always wrong, and then works from that assumption.
The numbers are correct until they are proven wrong.

So, you think that, in Canada, it costs $35 in supplies (anesthetic, contrast dye, ), as well as technician and doctor time for an angiogram?

The numbers are misleading 90% of the time, in my experience... So here is the source of that data:


-Prices represent public sector fees for the province of Nova Scotia

-U.S. costs are based on commercial claims data from Thompson Reuters MarketScan Research Databases. The claims data was compiled by Deloitte Consulting LLP on behalf of Kaiser Permanente Health Plan. Any opinions or conclusions expressed herein regarding the data are not those of Deloitte Consulting LLP. Because a broad range of prices were available, the national 25th percentile (low), average, and 95th percentile are presented.

http://www.ifhp.com/documents/2011iFHPPriceReportGraphs_version3.pdf

Lets see what WaPo is comparing. First of all the numbers represent different things for each country, so let's focus on canada and the US. They are comparing the "public sector fees" in Nova Scotia (pop <1 million) with the "average commercial claim" in the US (pop > 300 million). Here are a few questions that need to be answered before comparing these numbers:

1) Is this "average" the median or the mean?
I don't know and Thomson-Reuters are dicks about releasing the data or even white papers explaining the data. The US price appears skewed toward the lower end though.
2) Are "commercial claims" the initial claims, or final adjusted claims?
-Ditto.
3) Who pays for the property and lab equipment in Nova Scotia? Do the doctor's have to recover costs here, or are those costs "off the books" (funded by taxes beyond the public sector fees reported in this chart)
- I don't know

The numbers presented are useless (they cannot support anything) without knowing the answers to these questions.

[bb113]

And oh yea, even the disclaimers of the WaPo's source says " Do not use this for anything important, also be wary of comparing across countries":

Below each chart:

FOR ILLUSTRATIVE PURPOSES ONLY

Survey Data Constraints and Limitations
•Due to data availability, public, private, mixed and/or blended fee schedules were used. Mixture of fee schedule types complicate comparisons
•There are different scan and imaging fee structures across countries e.g., all scans may be a single price across many scan and/or imaging procedures, while other countries have different prices depending on the type of scan / imaging procedure
•Drug prices may vary because of differing pricing systems. Some prices include taxes, dispensing fees, etc while others do not.
•Single plan’s data might not be representative of the overall prices and fees.
•Some fees are snapshots in time (e.g., as of a specific date), while other fees represents of a certain time period (e.g. charges based on claims database).

So sorry, inau. Your policy of "the numbers reported in the news are correct until proven otherwise" has led you to draw conclusions that even the source of the data says not to. I guarantee that if we find the primary sources, there will be even more uncertainty that has been obfuscated at each step as this information traveled from the researcher's collecting it to your eyes.

I stand by my original post.

[Rassah]

Wait, do these numbers include the government subsidy that people pay indirectly through taxes? Or are these just direct out of pocket costs?

[bb113]

For "Canada" (every country's number is calculated different), it is the fee that the Nova Scotia government pays to the doctor. This fee is negotiated once a year with the provincial medical association, most likely (I am guessing) there are various deals made so that equipment and property subsidies are traded for lower fees on certain procedures the politicians have heard complaints about.

[bb113]

I have seen elsewhere that the average cerebral angiogram (yes there are many different types of angiograms being grouped together here) cost over $400 to perform in Ontario in 2002. So the money to perform these procedures is coming from somewhere besides the fee displayed in the chart.

http://www.ncbi.nlm.nih.gov/pubmed/12500380

[Hawker]

The chart you link to says the charge is for performing the scan.  It also says that the US cost commercial cost if $164 but that average fee charged in the US is $798.

Does that not reinforce the central point?

US citizens get charged more and the reason is purely a case of "charge what the market will bear." 

[bb113]

The chart you link to says the charge is for performing the scan.

It is explained in the words below the chart. For "Canada", the number refers to the fee doctor's charge the Nova Scotian government for each angiogram. For the US, the three numbers refer to the 25th, "average", and 95th percentile commercial (not VA, medicare, or medicaid) insurance claims made for angiograms. The wide spread is likely due to the different types of angiograms (cerebral, coronary, renal, etc), more expensive procedures if there are complications, etc.

It also says that the US cost commercial cost if $164 but that average fee charged in the US is $798.

Incorrect, all three numbers are commercial insurance claims. They represent the 25th, "average", and 95th percentile claim values.

Does that not reinforce the central point?

No, the chart tells us nothing about the total cost of care. Any amount over the $35 fee is somehow covered by the government from a different source of revenue. We also do not know if the percentage of different types of angiograms is the same between Nova Scotia and the US. Some types may be more common in the US and thus pull up the average price. This cannot be gleaned from those numbers. They do not show what you are supposed to think they show.

US citizens get charged more and the reason is purely a case of "charge what the market will bear."  

Perhaps, but that information is not present in these charts. We need to know the actual cost to the hospital of performing the different types of angiogram in each country. That way we can see if the US insurance providers are being overcharged compared to the public Nova Scotian insurance provider.

[Hawker]

Another article with the same basic facts.

http://www.nytimes.com/2012/03/06/health/policy/an-interview-with-victor-fuchs-on-health-care-costs.html?ref=science

Money quote:

“If we solve our health care spending, practically all of our fiscal problems go away,” said Victor Fuchs, emeritus professor of economics and health research and policy at Stanford University. And if we don’t? “Then almost anything else we do will not solve our fiscal problems.”

[bb113]

I don't understand, are we ignoring the misleading numbers in the WaPo article now or has it been acknowledged that we cannot trust the media to inform us?

I like this quote:

American history is studded with examples of things that were not politically feasible until they were. The emancipation of slaves. Creation of a strong, independent central bank. The replacement of the gold standard with fluctuating foreign-exchange rates. A trillion-dollar bailout of the financial industry.

He mentions one change made during the Civil War and three things that many people consider scams that made the rich richer and the poor poorer. Anyway, if American's spend twice as much per capita as the rest of the world I want to know where that money is going. Insurance premiums? Hospitals? Pharm companies are definitely making more in the US, but prescription drugs "only" account for a couple hundred billion dollars a year. It seems like we should be able to figure out how much money is going where but I never see anyone quantifying this.

[Hawker]

I don't understand, are we ignoring the misleading numbers in the WaPo article now or has it been acknowledged that we cannot trust the media to inform us?
...snip...

The Kaiser Permanent figures in the WaPo article show that the US citizen pays more.  Are you disputing that?