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A baby step toward a Bismarck scheme in the US?
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arkstfan Online
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A baby step toward a Bismarck scheme in the US?
A Bismarck system has a price list. Someone whether the government or a coalition of the insurers working with the providers makes a set price list.

Here's the quick and dirty.

We all know that if a hospital bills $1500 for an MRI but agrees to accept $400 from Blue Cross of CSNbbs that a patient covered by BCCSNbbs will get a bill from the hospital for $1500, the insurer will send a check for some amount between $400 and $0 depending on whether you've met stop loss, deductible, or co-pay. The hospital then bill you for the difference between $400 and the amount actually paid.
If you don't have BCCSNbbs you are on the hook for $1500 unless the hospital has mercy on your soul or you go to bankruptcy court.

If you are on AlliedHealth of CSNbbs and the hospital is out of network and Allied believes the proper price is $300 the normal outcome is Allied pays $210 (70% of the network price) and the patient is on the hook for the remaining $1290 unless the hospital takes mercy or the judge grants a discharge in bankruptcy.

Two similar proposals out there. One from ER Doctors and one co-sponsored by Senators Cassidy (R Louisiana) and Hassan (D New Hampshire).

It essentially creates a system of arbitration.

The insurer and the provider when there is an out-of-network impasse instead of dumping the cost directly upon the patient, the insurer and provider get forced to sit down and work out a price or have one imposed.

So you might have insurance that only provides $300 for an MRI and you've been billed $1500.

The likely outcome is going to either be:
1. The insurance company laughs at $1500 and points out the hospital is running people in and out of the machine all day long at $400, in fact probably performs 80% or more of MRI's at $400 and the arbitration results in in award of $400 or someplace nearby to account for the extra hassles of billing and arbitration. Either insurance eats the difference (hahaha) or the patient gets the better price because either the insurer pays $210 for being out-of-market, leaving the consumer owing $190 or the insurer agrees to pay their normal rate of $300 leaving the patient owing $100.
2. The insurance company points out the costs involved and argues that while the local insurer may pay $400, the rate of return is very high and $300 which is the price where the company has leverage is the fair price. If the hospital loses that arbitration, the insurers the hospital deals with will quickly refuse to sign any new in-network with the hospital unless the price comes down.
3. While a pain in the butt for the providers, turning a patients $10,000 out-of-network bill into a $1000 out-of-network bill makes life easier in the long run. Joe Low Level professional is much more likely to keep plugging away at $1,000 debt than a $10,000 debt.

Over the course of time arbitration will end up setting prices instead of providers being able to demand higher prices from smaller prices in the market.

If you have a fair arbitration panel, eventually a price list emerges and the burden to deviate above it will be difficult.

Once you have Bismarck style price controls, the system can evolve into something more full fledged.

NOTE: Under the doctor sponsored plan, ER costs would shift the burden of collecting co-pays and deductibles from the ER to the insurance provider. I don't believe that is a component of the Senator introduced plan. The ER Doctor version would essentially require the doctors to bill the insurance company and cash the checks and defend any arbitration, they would never direct bill patients.

LINK
https://www.vox.com/health-care/2019/1/2...om-doctors
(This post was last modified: 01-29-2019 03:30 PM by arkstfan.)
01-29-2019 03:27 PM
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georgia_tech_swagger Offline
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RE: A baby step toward a Bismarck scheme in the US?
I'm not sure that just price transparency alone is enough to make for an efficienct Bismarck scheme. We'd probably need to federally eliminate "certificate of need" laws. And that means a lot of really insanely rich people running "medical campuses" are going to find themselves and many of their colleagues financially untenable in a free market. They have the money politically (obviously) to stop that from happening.
01-31-2019 09:04 AM
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arkstfan Online
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RE: A baby step toward a Bismarck scheme in the US?
(01-31-2019 09:04 AM)georgia_tech_swagger Wrote:  I'm not sure that just price transparency alone is enough to make for an efficienct Bismarck scheme. We'd probably need to federally eliminate "certificate of need" laws. And that means a lot of really insanely rich people running "medical campuses" are going to find themselves and many of their colleagues financially untenable in a free market. They have the money politically (obviously) to stop that from happening.

The bills aren't about price transparency, rather price setting. If a provider is out-of-network and wants $1000 and insurance is offering $200 with the patient on the hook for the remaining $800, it goes to arbitration to set a price.

Eventually arbitrators will determine enough of the cases that everyone in the business will know what they are likely to get and will settle at that price point.
01-31-2019 12:49 PM
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