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Cost Of Doing Business — Why Now?
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Cost Of Doing Business

David Atkins at Digby’s notes a piece in the LA Times, Many hospitals, doctors offer cash discount for medical bills, that covers the reality of the cost of our current health care system.

Basically the article notes that is can be cheaper to pay cash for some procedures, than to use your insurance coverage and pay the required ‘co-pay’. This is a business reality that isn’t factored into Obamacare.

It costs hospitals and other health care providers a lot of money to collect from insurance companies, and they wait a long time to see that money. As a result, the providers who actually understand business factor those additional costs into what they charge. When you have to pay the people who provide the services, and the people who do the billing, having to wait months for the money means you may have to borrow against those receivables to stay in business during the lag. If you don’t have to wait, it is much cheaper, which is what the lower cash price reflects.

Insurance companies are not going to get the lowest price unless they start paying within 30 days or less, and that isn’t going to happen.

Read the article to see how much more everyone pays when the insurance companies stall and make collection on covered benefits difficult.

Oh, yes, the private sector is cheaper and more efficient than the government, well, except when it is more profitable not to be, which is almost always the case.


1 paintedjaguar { 05.30.12 at 2:49 pm }

Oh, really? My recent experience is that doctors and hospitals are still charging the uninsured “full retail” while billing insured patients at a significant discount. Of course I don’t doubt that even the “discounted” price is vastly inflated compared to fee schedules in more civilized countries.

2 Bryan { 05.30.12 at 3:58 pm }

Here’s the stupid part – you have to make cash arrangements before service is rendered, and you have to pay when the service is received. It’s just another way that people with money get to live cheaper than people without it. If you have insurance, you can threaten to use it, and providers will deal on the price.

The reality is that none of these prices is fixed, and they can be negotiated. If you wait until after the service has been rendered, you have agreed to the highest price.

Update: None of this applies to the Emergency room, where everyone gets ripped off with hyper-inflated prices.