Insurance “adjustments”

[Voice of Reason 10,298]

Quite a while back, I made a post about how I think it is crazy that insurance writes off SO MUCH of a patient’s bill.  Over 80%, I said.  I was ridiculed, and called a liar, and then provided some examples.

 

Well here I am again, with another example.  Simple outpatient surgical procedure.  Got the bill today.  If I didn’t have insurance, I would be on the hook for $16,330.88.

Total charges:  $16,330.88

Insurance paid: -$2,230.54

I paid                 : -$25.00

Adjustments.   :$-14,040.34

I still owe         :$35.00

 

How is it that an insurance company can get the hospital to write off 86% of the total bill?  Do they really just overcharge everything? Do they bill uninsured folks the total amount, and just hope they know no better and make payments on the full amount?

How is this even legal?

[jg121783 3,917]

While not as extreme as your example I just got the final bill for my son's delivery and the surgery alone was about $12000. The insurance paid about $4000 and we got billed for $1000. I saw a similar pattern on all of my wife's doctor visits before my son was born. I think some of it is the insurance companies negotiating "bulk" deals (bringing a large group of customers to them) with providers in their network. I don't think that would account for all of the cost difference though.

[Steeleballz 7,550]

1 hour ago, IDWAF said:

Quite a while back, I made a post about how I think it is crazy that insurance writes off SO MUCH of a patient’s bill.  Over 80%, I said.  I was ridiculed, and called a liar, and then provided some examples.

 

Well here I am again, with another example.  Simple outpatient surgical procedure.  Got the bill today.  If I didn’t have insurance, I would be on the hook for $16,330.88.

Total charges:  $16,330.88

Insurance paid: -$2,230.54

I paid                 : -$25.00

Adjustments.   :$-14,040.34

I still owe         :$35.00

 

How is it that an insurance company can get the hospital to write off 86% of the total bill?  Do they really just overcharge everything? Do they bill uninsured folks the total amount, and just hope they know no better and make payments on the full amount?

How is this even legal?

 

  The hospital has a full price charge and then negotiates various rates with insurance companies. Part of it is based on the number of patients the hospital expects to get via that insurance provider. If you went to a different hospital you could have the same procedure, similar total charges and have your share could end up being much more. 

 

  The legislature in Colorado tried to pass a bill a couple of years ago to limit uninsured patients to not having to pay more than the contracted insurance rates. Makes sense, if we use your example, people who cant afford insurance are unlikely to be able to pay a $16000 bill and the hospital is basically saying they are fine with getting ~$2500 for the procedure. 

 

  

Edited March 29, 2018 by Steeleballz

[JimandChristy 1,689]

I'd say we cut out the middle man and all of this insurance gibberish such as deductible, co-payment, co-insurance, in-network, out of network, out of pocket maximums etc etc and just go Universal Health Care.

[Boiler 45,657]

Industry average is to double and a bit the actual cost and then look to recover 95% of the net, why not sure...

[Steeleballz 7,550]

   

   IIRC, they cited figures as high as 600% of the actual cost at several hospitals in Colorado. 

[Dashinka 24,589]

6 hours ago, JimandChristy said:

I'd say we cut out the middle man and all of this insurance gibberish such as deductible, co-payment, co-insurance, in-network, out of network, out of pocket maximums etc etc and just go Universal Health Care.

Aren't the folks running a Universal Health Care system still in the middle?  Last I heard the NHS in the UK has almost 50% of their employees for administration only.  Now this might be on par with the amount of folks in the insurance industry, but overall, it is simply a replacement of the middle man.

[RLA 323]

1 hour ago, Bill & Katya said:

Last I heard the NHS in the UK has almost 50% of their employees for administration only.  

16% "infrastructure support" and 30% "support to clinical staff"

https://digital.nhs.uk/catalogue/PUB30240

[Dashinka 24,589]

5 minutes ago, RLA said:

16% "infrastructure support" and 30% "support to clinical staff"

https://digital.nhs.uk/catalogue/PUB30240

That matches the numbers in your link that says 54% is professionally qualified staff which I assume means the professional Dr. and Nurses and other actual healthcare workers.

[Cyberfx1024 7,980]

8 hours ago, JimandChristy said:

I'd say we cut out the middle man and all of this insurance gibberish such as deductible, co-payment, co-insurance, in-network, out of network, out of pocket maximums etc etc and just go Universal Health Care.

One subject where I actually agree with you on except for the universal healthcare. Do you know if pigs are flying yet? But seriously it's because of all this middleman BS is that prices are so high for healthcare, not to mention the US consumer pays the price for all of the R&D that goes into a drug. A pill may cost $20 here while in the Philippines it's literally .20 cents.

 

Also if you go to a dentist or doctor and ask them to pay in cash or a payment plan they will charge you much lower than what they charge the insurance.

Edited March 29, 2018 by cyberfx1024

[Boiler 45,657]

Medicines cost so much in the US because the industry has bought the Politicians to make sure it is that way.

 

When I used to go to see my Doctor in the UK they had one Receptionist, here seems more paper pushers than medical staff.

[bcking 3,157]

11 hours ago, IDWAF said:

Quite a while back, I made a post about how I think it is crazy that insurance writes off SO MUCH of a patient’s bill.  Over 80%, I said.  I was ridiculed, and called a liar, and then provided some examples.

 

Well here I am again, with another example.  Simple outpatient surgical procedure.  Got the bill today.  If I didn’t have insurance, I would be on the hook for $16,330.88.

Total charges:  $16,330.88

Insurance paid: -$2,230.54

I paid                 : -$25.00

Adjustments.   :$-14,040.34

I still owe         :$35.00

 

How is it that an insurance company can get the hospital to write off 86% of the total bill?  Do they really just overcharge everything? Do they bill uninsured folks the total amount, and just hope they know no better and make payments on the full amount?

How is this even legal?

If you went to a hospital asking to pay cash, or pay on time, you would not end up paying the 16,330.88. Would you end up paying more than what insurance paid? Possibly, but there would still be a very big adjustment.

 

The hospitals aren't ever expecting to get the charges. They all have specific "charge to cost ratios" that they set comparing what it costs to provide the service, and what they charge. They charge far more, so that they can "negotiate" and get the number they are reimbursed to be something higher than the cost (though in some cases they take a loss for some services, while others bring it far more).

 

It's a messed up system and part of why it is so hard to understand healthcare economics. Most physicians understand very little and even when we want to understand, you can't get the information easily. It would be nice if we could just be told "This test costs this much", but even down to the individual lab test, imaging study or drug we will get different numbers from different people. 

 

1 hour ago, RLA said:

16% "infrastructure support" and 30% "support to clinical staff"

https://digital.nhs.uk/catalogue/PUB30240

I tried looking through those documents to figure out exactly what is included in those two categories.

 

One thing to keep in mind is the NHS includes a lot of "oversight" organizations that aim to set the "standard of care" and monitor care. Now we could argue how important each one is, but they are also included in those numbers. I'd rather have people running an organization like NICE in the UK, than people running an insurance company that seems unnecessary when it comes to providing healthcare. So even if we both have the same number of "support staff", I think they have more "support staff" doing more important work other than just dealing with random made up numbers (charges) and dolling our reimbursements.

[Dashinka 24,589]

3 minutes ago, Dee elle said:

A trip here to the Urgent care to have a skin flap injury cleaned, dressed and rx for antibiotics... saw 7 staff members on the way through the office... fee $425    Same care in Australia, 2 possibly 3 staff , no difference in  clnical treatment, same outcome.... $70 -  of which $56 was covered by our single payer health care system, and my out of pocket expenses was  $14. All sorts of reasons why the US health costs are way over the top.... not the least is the health care  "industry"

 

 

You can say the same thing about a dentist office.  Way back when (1970s) our dentist had one receptionist and no assistant.  Now, I go to the dentist, and there are 2-3 assistants, 2-3 hygienists, a receptionist, a billing clerk and a business manager.   

[Cyberfx1024 7,980]

44 minutes ago, Dee elle said:

Yes,  exactly.... not saying to go back to no assistants, but the system itself has generated the need for so many  more staff because of the way it works..,   one problem now is that , if excessive health care costs across all sectors is to be reigned in, it will require the rationalization of the health care industry work force.. and realistically , making 5 out of 10 who work in  the industry redundant isnt a good outcome for those people and their families... this is one reason why true lasting reform is so hard

That is why if you go to the dentist or a doctor and offer cash or a payment plan they will discount the services. This is due to less red tape they have to deal with.

[JimandChristy 1,689]

I think Universal Health Care is common sense. The price of Health Care in this country is completely outrageous.

 

Come on America join the rest of the Developed Countries and stop being an outlier!

 

Edited March 29, 2018 by JimandChristy