I work in the health field and worked in an organization overseeing the payment of medical bills at about $30-$40 million per year. You'd be amazed at the cost shift that takes place.
I have a few good examples.
1. A rural hospital that gets mostly medicare patients is happy to get any payer that will pay medicare rates. An urban hospital that has a more "insured" population can't make it on medicare rates. I negotiated a lot of write-offs at the rural hospitals for insured patients who had an insurance but couldn't afford the high copay/deductible.
2. Air ambulance trip typically bills at $45,000ish. We paid $6,500 and they were happy to get it. If someone had no payer source they'd collect what the could of the $45,000 but they typically would NOT accept someone paying $6,500 cash.
3. Medicare rates for hospitals are all based upon costs. Physician owned hospitals have a much lower Medicare rate because they have no ER and they can only accept paying patients. So a knee replacement that might have cost me $19,000 at a typical hospital I could get at one of these physician owned hospitals for about $13,000.
The uninsured really impact the cost shift.
When I was in grad school my boss at the hospital had me help build his chargemaster in Lotus.
Dated things there. He simply took the cost of each item and multiplied by 7. Done. Viola!
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