Today, the New York Times published an analysis of hospital pricing in the US, comparing prices charged to uninsured people, to Medicare, and to different insurers, revealing that these prices can vary up to 900%, often to the detriment of large insurers.

https://www.nytimes.com/interactive/2021/08/22/upshot/hospital-prices.html

1/

This represents a marked contrast to the story we are often told about health-care pricing in America - that large insurers use their might to negotiate lower rates from price-gouging hospitals. That might be true sometimes, but often, it's not.

And as the Times points out, it's not necessarily the insurers who pay those inflated prices - many insurance plans are actually run by large employers, and only administered by the insurance company.

2/

So when Cigna turns down a treatment, it's actually your boss doing it.

That may be a nice fiction for your boss to maintain in order to deflect your ire the coverage you're denied - but it also means that when Cigna allows a hospital to gouge it for your care, it's your boss that pays for it - not Cigna's shareholders.

3/

Meanwhile, the variations in prices are simply wild. If you get a colonoscopy at University of Mississippi Medical Center, it costs $1463 if you're with Cigna, $2144 if you're with Aetna, and $782 if you're uninsured.

$782!

4/

The percentage differences are even more pronounced with small-dollar items, like a pregnancy test at Hospital of the University of Pennsylvania:

$18 if you're with Blue Cross PA.

$58 if you're a Blue Cross NJ HMO customer.

$93 if you're a Blue Cross NJ PPO customer.

$10 if you're uninsured.

5/

There's so much more of this. Hospital and insurance spokespeople told Sarah Kliff, Josh Katz and Rumsey Taylor that all of this was not nearly so bad as it looks, that it was taken out of context, that there's an innocent explanation - but were unable to provide that explanation.

6/

The reality is that it's much *worse* than it looks. The data-set they were reporting on is fragmentary, drawn from the minority of hospitals that deign to comply with a bipartisan order (started under Trump, affirmed by Biden) requiring hospitals to provide this pricing data.

These are the hospitals with the *least* to hide, the best of the bunch, and they're *so* bad. There's repeated stories of parents being horribly gouged on rabies shots for their children, for example.

7/

All of this puts the lie to the story of health-care as a market. A parent whose child is in need of urgent care following a wild animal attack doesn't shop around for a deal. There's no "demand elasticity" in rabies shots for children.

8/

But even if a heart-attack patient in an ambulance was interested in shopping for a bargain on their care, they would be stopped cold. Hospitals and insurers treat their pricing information as trade secrets, and refuse to disclose it, even when legally obliged to do so.

That secrecy extends to your employer, who is unable to see prices even when shopping for an insurer for thousands of your co-workers.

9/

In 2018, Larimer County, CO tried to get the insurer who covered its 3,500 employees to disclose its negotiated hospital prices.

They raised the issue up to the insurance company's CEO, who personally told them to fuck off, pay him, and forget about ever finding out how that money was being spent. They put the contract out for rebid. Of the six insurers who bid, five refused to disclose prices.

10/

A former Blue Cross exec told the Times that they put "gag orders in all our contracts," ensuring that no one would ever know whether they were getting ripped off.

Six months after the order that legally required hospitals to post prices, the Times contracted the ten highest-grossing noncompliant hospitals. NYU Langone told them to fuck off ("We will not be providing a statement or comment").

11/

They got bafflegab from Cedars Sinai: "We do not post standard cash rates, which typically will not reflect the price of care for uninsured patients."

Penn Medicine made a funny: "Penn Medicine is committed to transparency about potential costs."

This is not a market. Markets have prices and shoppers (not hostages). This is a racket.

12/

If you doubt it for an instant, tune into Arm and a Leg, a podcast that reveals health care's crooked billing practices and explains how to resist them.

https://armandalegshow.com/

When I moved to America, a number of friends counselled me to take out catastrophic injury insurance and skip regular health insurance, and show up at doctors' offices and hospitals with cash in hand, ready to bargain.

13/

They swore up and down that they were paying less in cash money for treatment than I would pay in deductibles and co-pays for my insured coverage. It looks like they were right in many cases. But this is no way to run a healthcare system.

For one thing, it leaves people with chronic conditions out in the cold. For another, it allows the system to continue to rot, transforming into a financial institution first and a way to treat patients as a distant second.

14/