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How much health insurers pay for almost everything is about to go public


I'm one of the co-founders of Turquoise Health, mentioned in the article here. We've been downloading and parsing this data all day. It's a really big deal in the industry that the prices that insurance companies pay doctors are now being shared publicly. It will have all sorts of positive impacts over time, hopefully making rate negotiations more consistent and fair between different insurance plans. Right now, 10x differences in prices paid for the same healthcare service from the same doctor between insurance plans is not uncommon.


My dentist dropped my insurer (Delta Dental) because they claim they did not cover things as reliably as they should. When I saw a comparison bill of what it would be in and out of network for a recent service it looked like the 60% increase in price was purely because my dentist billed more, which they then claimed is due to the discount The insurer provides.

None of this makes sense to me. How can I leverage this new data access to my advantage?


People keep complaining government is too complicated and too expensive and bafoonish, yet they don't see how corporations are no different except their priority is maximizing profit not providing cost-efficient quality.


The point (in theory) is that in efficient markets you can choose between different companies offering a product/service and that competition drives down prices / costs. The healthcare market in the US is very much not a competitive market (in part due to transparency issues which this is trying to address, in part because of the perverse incentives in the health insurance system).

It's not so easy to have a competitive marketplace for government services (though I would not be surprised if the US saw the emergence of private police forces now, for those parents who actually want police officers that have a duty to protect their kids...)


> When I saw a comparison bill of what it would be in and out of network for a recent service it looked like the 60% increase in price was purely because my dentist billed more, which they then claimed is due to the discount The insurer provides.

Well, rebates kinda DO end up working like that.


I appreciate what you all are doing. We need people to try and really fix our Healthcare Industry. However, I do have a question. Are you trying to get rid of Insurance mafia at all for at least some things like basic preventive care etc because I am sure that drives costs up a lot if Insurance companies are always between a doctor and a patient. I really hope something can be done where I can just go to a doctor/hospital, ask how much and pay for it out of pocket instead of crazy premiums and all the other BS we have to go through everytime.


Most healthcare providers are happy to accept cash payments from patients. You can sometimes even negotiate a discount.

If you have a medical plan subject to the Affordable Care Act then most preventive care is already fully covered at no cost to the patient.


> most preventive care is already fully covered at no cost to the patient.

Sigh. Someone has to pay and that someone is all of us.

Health insurance plays on the fallacy most individuals have that they will somehow beat the system and receive more services than they pay for.

So, it becomes a race to use as much as possible. Over prescribed meds for the sexy new illness you think you might have after seeing that commercial, unnecessary office visits, bloated testing.

Combine that with Drs who are scared shitless of being sued so they do whatever the patient wants, you have a the reasons for what we have today which is extreme over use of medical services. And that is precisely why insurance and care is so expensive.


> Most healthcare providers are happy to accept cash payments from patients. You can sometimes even negotiate a discount.

Actually, if you don't have insurance, you get the special cash price of $Maximum. /been there //tried that.


You could but without insurance, you are taking a big risk. The point is that I cannot just buy insurance that covers catastrophic stuff. It is binary. Either I buy insurance (crazy premiums) and then I might as well use it everywhere or I don't. If I don't buy insurance, good luck.

The point is that Insurance should be offered for catastrophic issues with caps and out of pocket limits and premiums should be much lower because the insurance should not cover basic stuff and for those, we should use cash thereby have price transparency AND market competition b/w various providers.


Where is the - if it exists - list of locations where different entities have published their machine-readable files?


We really need to move to reference based pricing. We can cut so much waste out of the current system including brokers. Reference based pricing also get rids of the loopholes for things like anesthesiologists being "out of network" at a hospital/facility that is "in network". It also gets rid of the situation where if you offer cash you get one price but if you submit for the same code, it could be 3x or 10x or even more.


Or we can have one network every doctor is in, and the state pays for everything. All doctors are independent contractors to the state. Everything is paid for. There's one price for everything. Everyone is covered. All this garbage just disappears.

Then there's one nice fee schedule like this, with all the prices on it, but it doesn't even matter, unless you're a physician doing your billing. [1]

[edit] As you can see from the PDF, a dermatology consult (A025) is $72CAD.



I suspect we could do decently by requiring insurance to purely reimburse the patient (possibly without the patient needing to pay first). If an insurer pays up to $1k for an MRI, and a hospital charges $15k but an outpatient imaging center charges $700, there will be a strong incentive for patients to stop using the hospital’s MRI.

Combining this with an auto-service requirement for a binding estimate before services are rendered would be amazing.

(Dealing with actual emergencies in this model may be hard.)


You don’t need to have the state pay. Make them charge the same price to all customers. Then you can have insurances compete. My body shop doesn’t charge one insurance $10/hr and another insurance $100/hr for the same work.


The how would all the hospitals afford to build all those fancy new buildings? Think of the architects!


What's reference-based pricing?


It's basically price-controls.

A regulatory body looks at how much something "should" cost based on its history of reimbursement and the cost of its inputs and then sets a cap of say, cost + 20%.

The problem is having an independent body that is free of influence of health insurance companies and hospitals, both of which have perverse incentives to continue profiteering.


The sibling is right but in this case we'd probably do something like Medicare + 20%, which is actually close to what most insurers do for some of the codes already. It just removes the cost of negotiation, brokers, out of network, etc. and actually lets you know the cost up front for most appointments. We also need to get rid of service levels for most appointments. It is just used as an excuse to up charge by having patients fill out pointless paperwork. We also need to reimagine our service provider models. We have already move to CMAs to take blood pressure, etc. We also need to move to PA or LPN instead of a Dr for most cases. Ear infections, colds, flus, etc. are a majority of family appointments and can be handled by lower levels. The Dr can then review cases and deal with the more complicated cases where her expertise is most needed.


A few times I’ve seen a 10x price decrease when I asked to pay cash before.

Sometimes the co-pay alone is more then cash for procedure.

Weekly injections and MRIs is the worst offenders I’ve seen.


Sorry, but the only thing that will help is Medicare for all. We need to get rid of insurance companies completely.


Non-American here: your healthcare system is so abysmal that you could stop short of implementing Medicare for all and still have a significantly improved system. You should obviously have Medicare for all, but let’s not kid ourselves about how far from that you are.


Lots of countries have great systems that aren't single payer.


Should Europe get rid of their insurers too?


as european i am not entirely convinced that it makes sense to have hundreds of companies providing the same heavily regulated service.

if there were too few of those i would probably also object.

idk about the situation where there are no private companies involved at all and the government takes over healthcare top to bottom because on the one hand i see a massive problem with for profit healtcare as it is and on the other hand i can see how incentives would wither away if there is no drive for efficiency at all.


“Right now, 10x differences in prices paid for the same healthcare service from the same doctor between insurance plans is not uncommon.”

Makes me wonder how things got to this point. How can a business perform any planning if they sell their services with such big differences between prices charged to customers?


The honest answer is because that’s what insurer negotiation had led to with hospitals having using their negotiating position.

If you’re a hospital in an area with standalone MRI clinics the negotiation pressure is high, insurers can say “ill send patients elsewhere”, so you give on price, maybe below cost.

But that same hospital is the only cath lab in 100 miles. Great! We’ll just tell the insurer “we’re charging 300% the normal cost of a cath procedure, take it or leave it”. So the insurer takes it because how can you offer insurance and tell customer they have to drive 100 miles for a heart procedure?

Hospital is happy because they’re profitable overall. Insurer just lives with paying 3x for cath procedures in that area.


Hospitals don't let you obtain imaging elsewhere. They force you to use their imaging services--full stop.


Over time the higher paying ones subsidize the lower ones. Due to this we'll see some people's insurance premiums increase, some decrease, and some insurance providers probably go out of business (all good IMO).


Short answer is: because they can.

And they can because there's a lack of transparency that makes people believe this is OK.


What do you serve to gain from scraping all of this information?


Our industry-focused products are based on knowing how much every service costs at every healthcare provider. It's the underpinning of our products.

We also post a lot of the rates publicly in a consumer-friendly searchable format, but we don't charge any money for that. But this data will let us greatly expand the scope of that free service.


The information on their landing page was immediately relevant to me

I hope they have a good business plan and manage to stick around!


Thanks! So far, so good. We don't sell anything to consumers. Our products are aimed at the healthcare industry which lets us post information for consumers for free and we have pretty good product-market fit.

Obligatory "if anyone is interested in joining a fast growing, series A company doing impactful work, hit up our careers page!"


I was guessing it was this bit at the bottom of their landing page:

> Are you a transparent provider or payer? > There is a market for transparency. Let patients find you by claiming > your provider page and listing your services. It only takes 10 minutes.

But following through that link says it is a free program.


We build products that help healthcare providers and insurance companies broker contracts between themselves based on actual market information instead of guessing at prices. The goal is to drive down prices by making the market more efficient.

Part of that is assuming that prices will be public, so we encourage them to claim their own page and take control of the rates listed there.


For anyone looking to download the data, here are a few links:

Empire Blue (Anthem):

United Healthcare:

Aetna (Seems like the right page, but I don't see any download links — possibly because they haven't been posted yet):

Search keywords:


Thank you thank you thank you!

Here's Cigna:

UCLA Health keeps theirs:

But sadly, still can't find my insurance company's download links.

I can't wait to lose a weekend doing something with this data, it's a dream dataset and a perfect example of a very narrow type of project I love doing.

Is there a canonical list of the major insurance companies?


Cigna posted a single 570GB gzipped JSON that barely qualifies as machine-readable


Blue Cross

So are there programs I can use to parse this? It looks like a json file with links to more gziped json files...


> It looks like a json file with links to more gziped json files

Yup! Should be pretty easy to whip up a parser, it's just JSON and HTTP, you could do it in shell if you cared to. The challenge is what are you parsing it _to_. That is to say, what's your data model. I'd choose that first, then worry about parsing.

throwaway743 is unfortunately.

If you know a language you could run through it. Otherwise ypu might be able to find something like a json to csv converter online


Hey has anybody created and open API or just downloaded it all to a single source?


> “What we’re learning from the hospital data is that insurers are really bad at negotiating”

Do the insurers have any incentive to negotiate well? Since their customers are not very price-sensitive (since they aren't marketing directly to patients or doctors), I would imagine they don't have a huge incentive to do anything but apply a markup to whatever prices the hospital tells them it costs.


Insurers are incentivized to pay higher prices for claims. The Affordable Care Act enforced that insurance companies must have at least an 80% "medical loss ratio." Meaning that insurance companies must make at least 80% of their total spend on actually paying out medical claims. This law was put into place because insurance companies would spend huge amounts of money on advertising and giving execs bonuses, all paid for by patient premiums. Some only paid out 50% of their spend on medical claims.

The Affordable Care Act introduced the newer perverse incentive of insurance companies tolerating higher prices. Because if you can only pay your execs bonuses based on 20% of your total spend, insurance companies can pay execs more if the underlying claims they're paying cost more. 20% of a $1,000 MRI isn't as juicy to your C levels as 20% of a $10,000 MRI.

All insurance companies, all of them are corrupt. The whole system needs to be burnt down. PPOs are the worst, I wish HMOs were the norm, but that won't fix everything.

Further reading:


>The Affordable Care Act introduced the newer perverse incentive of insurance companies tolerating higher prices. Because if you can only pay your execs bonuses based on 20% of your total spend, insurance companies can pay execs more if the underlying claims they're paying cost more. 20% of a $1,000 MRI isn't as juicy to your C levels as 20% of a $10,000 MRI.

If this perverse incentive were true, then you would expect the medical care costs to rapidly increase after the passage of ACA, but medical trend has actually slowed down since then[0] [1].

You can also look at the total dollar spend on hospital and medical expenses for the entire health insurance industry [2]. After the passage of ACA, there was a large increase in medical spend as more people obtained insurance coverage, but the increase in medical expenses year over year has settled back into the 5% range, which doesn't seem that perverse.





Having no idea what the real trend is, couldn't any other factors counteract the perverse effect, making both parent's and your observations true at the same time ?

For instance rhe sustained efforts that lead to ACA peobably didn't stop there, and more effort surely were made to reduce healthcare cost from there. If ACA could be passed in the first place, it wouldn't be surprising if other effective actions were also passed as well ?


From your second link, except in the last year, healthcare spend has been outpacing inflation by more than 2 to 1. The economics of scale are backwards in healthcare, I find that perverse.

UnitedHealth total comp have been rising for C levels, except the CEO who recently left, who stayed around 17mil.


Kind of but not really.

Insurers compete for customers, typically corporations buying group plans.

My employer switched insurers all the time to get the same or better coverage at a lower price.


Competition is scarce. Hospitals and providers don't take all insurances, based on backroom shady deals. Depending on location, there often isn't much choice for insurers.

Insurance policies have dozens of knobs they can turn to charge your more while claiming it's a lower price. Premiums, copays, coinsurance, deductibles, out of pocket maximums, in network benefits, out of network benefits, and all of that for individual vs family. It's all a scam.


Private Healthcare is the Classic Agency Problem.


Well, if they can negotiate a particular incident down then they pay less for it, but in the long run big picture you're exactly right. So long as they can inject noise into the plan shopping channel and so long as they aren't doing worse than their competitors by that noise margin, they'll do fine. Which in practice means that they just pass along the costs.


Health insurance customers are price sensitive


Not really? I'm pretty sure the vast majority of health insurance customers are part of group plans from their employer and so the individual customers have very little influence or choice in the matter, and basically just have to put up with whatever bullshit the insurance companies throw at them since the alternative is seeking individual coverage separate from their employer and paying double or even triple in premiums alone.


Exactly. Employers, especially large ones, have big sway over insurance companies. They can change their benefits and shift a lot of business to a competitor. It’s happened at several places I’ve worked. Definitely a hassle for employees but a save employers a lot.


All they really need to care about is the average amount paid.

Ten $100 brain surgeries and $2,000,000 for 1000 routine neurological screenings is a fine outcome. (Or would be, if not for price transparency)


If insurers’ customers were not price sensitive, then they would have higher profit margins than 5%.


There’s no universal %margin on turnover that applies across all sectors that tells you whether a market is efficient or not. If I supply you widgets for $1000/ea and take a $50 management fee that we assume is fair for the work involved, then if there’s a shortage of widget materials that pushes the price up to $10000/ea, it’s no extra work for me so the fair management fee is still $50. If I charge $500 to keep the % the same I’m adding no extra value for that extra $450.

Building contractors are an example of an industry that runs on razor thin profit margins in % turnover terms, because all they’re doing is passing on the cost of labour and materials from their suppliers and subcontractors onto their clients and just making their profit adding value in a thin management layer. Which sounds a lot more analogous to insurers than industries that earn 5% profit on their turnover.


There are legions of people working at UHC/Anthen/CVS/Cigna/Humana/Molina/Centene trying to price insurance as competitively as possible to win as much business as possible. If they could price it lower and win more business, it is safe to assume they would be.

If they could price it higher, then why would they choose to only earn low single digit profit margins?

You have 7 huge publicly traded companies competing with each other, and unless there is proof of collusion, it is probably safe to conclude that they are running their businesses as well as they could be.

If you think otherwise, then you have discovered an arbitrage opportunity, which would be worth quite a bit so you should be able to pitch it to someone who wants to invest.


The accusation here isn't that they are skimming a disproportionate amount, it's that they aren't doing their job, which is to put downwards pressure on provider prices.


The fact that there are at least 5 large insurers competing nationwide and all have 5% or less profit margins means there is lots of competition, and if they are not providing the best prices, their customers will go elsewhere.

See pharmacy forums as an example for all the pharmacists complaining about how independent pharmacies are so tough to operate due to ever smaller payments from insurance companies for the past 10 years.


In the US, isn't there regulations that effectively cap their profit margins? Since they have no incentive to increase their margin through negotiation, their only incentive would be to lower their costs below competition.


Medical Loss Ratio:

It says 80%/85% of premiums have to go back out as payments for claims.

> Since they have no incentive to increase their margin through negotiation,

I do not see why this would be true. The less an insurance company pays for healthcare, the lower the premiums or can offer and win more business.


Wouldn't their incentive be the opposite? To get more total dollars so there is more profit at the capped margin.


Aren't all customers "price sensitive" ?


Mostly true, I should have clarified “customers who have a choice to buy an alternative”.


I work in healthcare.

Here is an exchange I had with a major hospital about standard surgery (one of those deemed "Shoppable services") earlier this year. This exchange was possible after I was able to get an email recipient, following a 30min conversation.

>>>> Hello!

I was told by the very helpful Ms. XXX, that you would be able to provide patient responsibility amount , related to CPT codes for XXX procedure. I am attaching front and back of my insurance card (Payor). The member DOB is MM/DD/YY

The specific 2 codes in question are : CPT 12345 CPT 01234

Can you please provide the total cost and patient resp. for the CPTs above?



Good morning,

>>>>>The hospital does not process estimates for patients with insurance coverage. However, our web portal contains charges under the Hospital Price Transparency link. I have included the link in the subject line for easy access. [comment: This link was broken. After much browsing.. I was able to find an alternate route. The linked file turned out to be a JSON. I couldn't figure that one out] As far as out-pocket responsibility, your insurance company is the best source for that information; they will advise if you have any copay for the encounter.


Read the 1st sentence of the reply again. My blood still boils from that...


This sounds about right. I've worked in the healthcare tech world for about 5 years on both sides (for providers and payors). I totally empathize with how annoying it is that essentially no one processes estimates for patients with insurance. There are some places though that do, and it tends to be small/medium size specialty practices (think orthopedics, ophthalmology, radiology) in forward thinking places (Seattle, Minneapolis, etc). I can give some technical reasons as to "why" they can't/won't give you an estimate. I'm not saying these are legitimate reasons, just stating what I've seen.

One reason they may not want to give you an estimate is because depending on what happens during your visit/procedure, the codes that get billed could change quite a bit. Because of this their initial estimate could be wildly different. In addition to the procedure codes changing, there are modifiers/adjustments that can get applied to a procedure code depending on what happens during the procedure (which adds another level of uncertainty). For example, anesthesia often bills based on time and complexity. If the procedure runs long then it will cost more, if something goes wrong and the complexity increases then it will cost more, if a nurse anesthetist (CRNA) does your anesthesia rather than an MD it will cost less, etc.

Another reason they may not want to give you an estimate is because they have no idea. This is in my experience the case most of the time. A given clinic/hospital is going to have many many contracts with many payors. There's a ton of nuance in these contracts and they are sometimes extremely complicated. I've read hundreds of these contracts and written software to try to scale price estimate tools for patients. It's really hard, happy to dive into it more if there's interest.

I often see comments on hackernews along the lines of "it's just a fee schedule, how hard is it to put it in a database and select amount from feeschedule where procedure = 99215". The big wrinkle here is the contracts. The contracts are often times super complicated, dependent on many many different fee schedules and pricing methodologies. The fee schedules/pricing methodologies may be from the payor, they may be from 3rd party vendors, they may be proprietary, they may be based on medicare, etc. Then there's a whole slew of adjustments/modifiers that can trigger depending on tons of different events and combinations of procedures codes that may appear on a claim.

Another reason they may not want to give you an estimate is because it's not straightforward to verify your insurance. There are clearinghouses that aggregate benefits data from major payors, but the data is kind of shoddy. It may return your insurance is active when it really is inactive. It may have bad data on what is covered vs not covered, what your deductible, coinsurance, etc are so given all this data is kind of unreliable then giving an estimate becomes pretty unreliable.

Anyway, these were a few reasons off the top of my head. Again, I want to emphasize I'm 100% with you on how annoying it is that we can't get estimates. I spent 3 years literally trying to solve this problem, and we actually made really good progress if it gives you any hope that things will maybe (fingers crossed) get better overtime. I just wanted to give some context / spark some conversation around these contracts and why they are challenging from a technical perspective to automate price estimates.


I had a contribution drafted, but lost it all. In summary:

>>>>>>>>>>>>>>>>> One reason they may not want to give you an estimate is because depending on what happens during your visit/procedure, the codes that get billed could change quite a bit. Because of this their initial estimate could be wildly different.

This is a common excuse given by industry. Its also BS. I want to put it out there so people know. Would you accept if an airline tried to charge you extra if because of weather they served you extra food? Or took you to a different airport ? No. has a price on every procedure. It never changes. How? Because they know that price changes are related to a problem doctor. You can reliably predict a problem doctor due to (a) surprise coding and (b) complications. Good doctors (and pilots) know their cases and plan accordingly.

>>>>>> Another reason they may not want to give you an estimate is because they have no idea.

This is true. They don't know because no one has bothered to translate a scheduled case into specific CPTs and/or looked up rates rates with insurer. So someone dropped the ball.

>>>>>>>>>I often see comments on hackernews along the lines of "it's just a fee schedule, how hard is it to put it in a database.

Actually, you are misinformed here. The vast majority of contracts for independent providers are simple affairs that are % of medicare rates. The only excuse they have for not putting those % rates in the open is that they have no incentive to do so. But its lazy. They could say to patients "our contract with X payor is % of medicare" and then even the patient could figure it out. They don't even do that. And patients suffer as a result. ASC and Hospitals have no excuse. Even with complex contracts, they have massive staff that can do the work.

>>>>>>>>..Another reason they may not want to give you an estimate is because it's not straightforward to verify your insurance.It may have bad data on what is covered vs not covered, what your deductible, coinsurance, etc are so given all this data is kind of unreliable then giving an estimate becomes pretty unreliable.

In my experience, some of the data fields are reliably accurate. For the rest, we are actually working on a solution. But let's not make perfect the enemy of the good. Its not hard to caveat a response like:

"Assuming all your procedures are covered by your plan, based on your remaining deductible of X and coinsurance of Y, your patient responsibility for this procedure is Z" Its not rocket science. I do it all the time myself.


I appreciate the response, it sounds like we have some overlapping industry experiences where we've seen different things, which is interesting.

>>>>>>>>>> This is a common excuse given by industry. Its also BS.

Just to reiterate I'm not saying the reasons I gave are "good" reasons, it's more a statement of what's currently going on. I think the analogies are a little unfair but I agree with your overall point as it applies to elective procedures in certain settings. I think for emergent cases or complications the discussion gets more nuanced. The other point I'd make is that providers can't just decide to "simplify" the claim, the claim has to accurately reflect what occurred during the visit, so if things went sideways and other stuff was done then they need to document/bill for that because they are required to do so. There's also downstream reasons for this like reporting on quality/cost metrics and obviously if they bill for things that didn't occur that's fraud. Besides my anesthesia example, another clear example is an inpatient stay where you're billing an MS-DRG, you have to code in the severity of the case which is going to vary. And to reiterate, I think there are tons of clinicians that would love to move away from itemizing everything and doing something like surgerycenterok, but they are at the whim of the government (medicare/medicaid) and private insurance companies documentation requirements.

I'm aware of surgerycenterok, I'm a fan. Worth mentioning is they can't give pricing on anything done outside their purview (so imaging, labs, physical therapy, complications that send you elsewhere, etc). Definitely a step in the right direction. Side note there's quite a few places like this they just don't advertise it as openly.

>>>>>>>>>> This is true. They don't know because no one has bothered to translate a scheduled case into specific CPTs and/or looked up rates rates with insurer. So someone dropped the ball.

In my experience, payors are typically very uncooperative when making a request such as this. If you ask them any questions related to the contract/pricing they just tell you no.

>>>>>>>>>> Actually, you are misinformed here. The vast majority of contracts for independent providers are simple affairs that are % of medicare rates.

This is a tough one to swallow :) I'm going on ~5 years reading god knows how many of these contracts and writing software/doing analyses to enable practices to provide accurate pricing information. And if I didn't read the contract myself, I maintained/saw how it was implemented on the backend. This spanned small provider groups to the largest in the country, contracts from small payors to the largest in the country, and private/government contracts so I feel like my exposure is pretty well rounded to have a feel for things. But I could very well have a blindspot and we may also be talking about different things. Maybe you've mostly dealt with elective procedures at private practices where you mostly worry about professional fees? Or maybe you're alluding to the industry standard of comparing your contract to % of medicare to see if it's good or not? It's pretty common they'll say "oh we get paid 165% of medicare", but this is just in aggregate their contract may not even mention medicare.

This is interesting though because most contracts being % of medicare is the opposite of my experience. The vast majority have not been % of medicare (it may be a single component of their contract but there's much more to the terms). The handful of contracts that I saw that were truly just % of medicare were usually at smaller private practices in less competitive markets (eg some places in the Midwest). For what it's worth it's still not just % of medicare. There's an entire pricing methodology that underpins the "% of medicare" that is defined by medicare (eg depending on what else is on the claim there may be subsequent adjustments that trigger, then there's totally different rules/methods for different types of stays, etc). For example a really simple adjustment is a multiple procedure adjustment. Medicare publishes a list of procedures that qualify under this adjustment. If I get both my knees replaced and I bill for the procedure code twice I will not get paid the medicare rate times two. The second knee replacement will be adjusted 50% off. This is an extremely simple example but there's a whole slew of adjustments/nuance to the pricing methodologies, and then you add the fact that there's nothing preventing adjustments from stacking (unless the contract says they don't stack in certain situations). And I'm also just talking about the professional fee above.

All of the following were things I commonly encountered in contracts, all of which impacted the price estimates we generated: bill types like inpatient and outpatient were often very messy, handling different sites of service (clinic, asc, hospital, etc), various DRG standards, APCs, EAPGs, diagnosis codes, revenue codes, bundling agreements, modifiers, adjustments (multiple procedure, multiple radiology, multiple endoscopy, mid level provider, etc), carve outs, GPCI adjusted rates, different rules/schedules based on specialty, individual providers, location, 3rd party schedules, proprietary (meaning no one gets access / knows how it works) schedules and entire pricing methodologies that are a weird flavor of medicare pricing methodologies like 3M and optum, what quarter/year schedule is being referenced, what happens if a procedure isn't on the schedule do you grab the first time it appears in the future or the current year rates, is there a hierarchy of schedules to follow, fallback schedules, etc. To top it all off, frequently the contracts didn't outline many of the above nuances. They were assumptions made by the payor (not defined in the contract) that were only revealed until we asked them why our estimates were out of alignment.

This also doesn't even talk about the industry shift that is happening behind the scenes from fee for service to value based care. The value based care contracts I've seen only add an additional layer of complexity. How providers get reimbursed has been on a steep upward complexity curve since the 70s/80s (back when payment was based on Usual, Customary, and Reasonable charges). I would absolutely love to simplify things.

>>>>>>>>>> In my experience, some of the data fields are reliably accurate. For the rest, we are actually working on a solution. But let's not make perfect the enemy of the good.

Yeah, I would say it tended to be accurate, but when it was inaccurate and you then had a weird estimate and then an upset patient it was pretty frustrating for everyone involved. But I totally agree, that we shouldn't make perfect the enemy of the good. The other thing that was frustrating with the clearinghouses/payors was how frequently they'd have outages or the latency with someone's eligibility status if their plan changed.


I'm curious if this is a first step towards hospitals being required to charge the same prices to everyone, insured or otherwise.


This seems so sensible to me that I’m curious why the hell it wouldn’t work.


Medicare and Medicaid pay some of the lowest rates. Private insurance from employers and individual policy holders subsidizes the cost for the elderly and poor. Charging the same price would disrupt that, creating all kinds of political fallout.


Which price and who determines it?


Hospital is free to determine their prices, but they cannot give steep discounts to one channel of sales over other. They have to be consistent.

Healthcare pricing should be based on cost+plus models for the hospitals rather than on value driven approach you see every else in any sales.

We are not questioning their costs whatever they maybe, if the costs logically remain roughly same no matter how a particular patient came to them, then there is no reason for price to be different depending on type/ nature of insurance or lack thereof.


The hospital determines a price and offers it to all comers. Most businesses work that way.


I would think that hospitals could create price schedules similarly to how other businesses do.

Although I imagine this gets really messy when dealing with Medicare and with the mandate to treat everyone regardless of their ability to pay. I'd expect those arrangements would need to change to make this work.

I feel a bit silly pontificating about this. Hopefully someone who really understands the topic will weigh in.


I'm not a fan of Trump, but I have to admit, the executive order [0] that forced this disclosure looks fantastic, really fantastic. But if I'm reading it right, it seems like it's just an order to _enforce_ requirements ObamaCare that were intended to increase transparency.[1] Obama and Trump actually accomplished something _together_!




Wait till you find out how much it actually costs doctors/providers to render some of these services!

Do you like 90% margins? Doctors sure do! :)


As the spouse of a doctor, this made me giggle. If her practice had 90% margins, my life would be a lot different than it is. Her actual net margin, as in what she brings home after paying all the bills, is closer to 15%.


A private practice owned by the MDs reporting relatively low net margins is meaningless without knowing what the MDs are taking out as income.


Her practice, as are most, is an S Corp. In other words, the net income is her take-home income.

Put another way, the rent, employee pay, supplies, malpractice insurance, etc. etc. etc. add up to about 85% of her gross revenue. That 15% difference is how much she personally makes.


There's a child comment that is in disagreement with the margins you mentioned. I've seen the financials of a lot of practices and hundreds of contracts between payors and providers. The child comment by kstrauser is much more in alignment with my experience, and they also did a good job of noting all the various expenses that are overlooked.

Sometimes there are services that do have 90% margin like you mention, but there are also sometimes services that have a negative (-90%) margin. I want to emphasize I'm talking about specific services/procedures, not the overall margin for the whole practice. A profit margin of 90% is unheard of. Perhaps you're thinking of hospital systems for example which will have certain departments that are operating at a loss and then other departments that are profitable. Then they offset each other.


Spouse of a third year resident here. My wife has volunteered at several primary care (i.e. generic doctor) clinics in Manhattan and nearby area (Queens, Astoria, Brooklyn and even in Boundbrook, NJ). These are all owned by the doctors. She worked in all kinds of operations of a clinic from billing, sending prescription, taking patient history, etc.

Back-of-the-napkin calculation based on my wife's experience -- if you are a primary care (generic) doctor in a highly populated area and you see ~40 patients a day and each patient pays $100/visit.

$100 * 40 patients * 22 days per month of work * 12 months = $1056000 (about $1 million USD)

We are using $100/patient/visit and that's being very conservative. Most of these doctors would encourage the staff/volunteers who do the billing to put as many relevant billing codes as possible in the system (e.g., if someone comes in with a cough, they'll try to bill for anything related to cough symptom although they already knew it's just for seasonal allergy). This is necessary also because a lot (not all) of the patients are on medicare/aid and the reimbursement from medicare/aid is not as good as the ones from the private insurance companies. The cost of the labor is mostly just one assistant or at most two for ~$20-$30/hour max. Not sure about the insurance cost (but we assume that it would cost ~$20-$30K/year for malpractice insurance?) and renting the clinic (some docs do own the clinic). All in all, we believe that having your own practice can net you a lot more than what you'd make by working as an attending/hospitalist at a hospital (on average, hospitalists make between $250K-$300K/year, which is still commendable).

But if you live in a rural area, which tend to have smaller population density, then you are probably better off working for a hospital because as a hospitalist, you can make close or a little more than $300K/year as a general doctor. My wife knows a couple of doctors in Palmdale, CA, who work as hospitalists in two hospitals (6 days a week alternating between two hospitals; the days start at around 9am and ends around 3-4pm). They rake in ~$600K/year from salaries (not including bonuses). A friend of mine just completed his residency and got an offer from a hospital near Dyersburg (Tennessee) for $300K/year salary with $40K sign-on bonus. The specialists earn more of course: A cardiologist friend of mine told me that he got an offer from a hospital in Montana that pays $800K+/year.

Just wanted to share what I know about how much the doctors can make in the United States.


There's no way a single assistant could handle 40 patients per day. At that volume, you'd have at least 2 assistants.

Malpractice insurance can be way the hell more expensive than that:

Rent will probably be another $60K per year.

The receptionist will want to be paid, as will the biller. If you're lucky, one of them will have time to be the designated person to call and argue with the insurance companies every time they deny a payment because it was a waning gibbous moon that day, but realistically, if you have providers seeing 40 patients per day, that's another full time person.

The EMR system will be quite a few thousand dollars up front, plus another several thousand per year.

You'll have to provide health insurance for all of your employees, and worker's comp, and an office liability policy.

And finally, great insurance (from the billing physicians POV) will pay about 40% of the allowed amount. Really crappy insurance, like Medicaid, is basically a write-off. BTW, Medicare has decent reimbursement. Not great, but several times more than Medicaid will pay.

In my experience as being the one who's written the checks for medical practices in a couple of different states over the last 2 decades, you are grossly overestimating revenue and underestimating expenses.


Like you said, most of these clinics have 2 assistants who do pretty much everything (accepting calls, submitting prescriptions, etc.) Sometimes, the doctor will also bring in an aspiring resident (mostly international medical graduates who cannot find clinical experience in the US easily due to their visa status/restrictions) as a volunteer or a paid-under-the-table-for-$12-per-hour to do some miscellaneous stuff around the clinic. But that volunteer's hours are sometimes on a need-base planning (meaning, the doctor will call the volunteer a day or two before if the clinic needs extra help).

Malpractice insurance for internal medicine (general medicine that I'm referring to) is ~$33K-$34K in NY area based on the link you've provided.

Now let's do the math to readjust my estimates.

One full time staff with $30/hr * 2080 hours in a year = $62400 => let's just double that to cover everything like their health insurance and liability insurance so each full time staff costs = $125000/year

2 staff * $125000 = $250000 Rent = $60000 (the doctors sometimes own the practice, but let's just assume it's a rental) Malpractice = $35000 EMR system like eClinicalWorks = $10000 (amortized for upfront and yearly costs; software like eClinicalWorks costs ~$600/month on average)

The total expense of running a primary care (internal medicine) clinic = $250000 + $60000 + $35000 + $10000 = $360000 (let's just say $400K/year)

When I said these clinics on average make $1MM/year (of course, they are all near NYC/NJ metro areas), I truly am underestimating the income these doctors get from each patient visit. As an example, if I visit my physician at NYU Langone for my yearly check-up (at most a 10-mins encounter), the net reimbursement from my insurance they get for my visit (after the insurance company's discount/rate negotiation) is ~$250 without including the lab fees. Out of emergency and convenience, I happened to visit one of these primary care clinic doctors where my wife used to work at, and the doctor charged me $80 (that was back in 2019) in cash for an ear infection check (total of 5-minute encounter) and that's because I paid in cash and because my wife used to work for her. All of these doctors that my wife volunteered at or worked for (she got paid $15/hr max from some of these docs) are making a load of money from these clinics because we know a couple of them personally as well.

Again, I'm not saying you are understating the profit margins. You probably have been working with the clinics in some economically depressed or low-cost-of-living areas. I am only sharing what I know for truth in terms of the income of these primary care clinics in NY/NJ area.


> Most of these doctors would encourage the staff/volunteers who do the billing to put as many relevant billing codes as possible in the system

Is there any way to fight back against this? I've personally experienced getting a bill after a routine office visit with tons of charges I didn't recognize and procedures they absolutely did not perform. In some cases, it equates to $0 after my insurance pays, but in others it results in quite a bit of extra expenses (especially since I'm on a HDHP).


I've worked in the healthcare tech world (for both providers and payors) so I can comment a little here. There's a difference between "billing to put as many relevant codes as possible" and "billing procedure that were not performed". The former is perfectly acceptable, the latter is not and would be fraud. It's possible it was in error, billing is super complicated so I'd recommend just trying to get ahold of the clinic and talk to them first.

There has to be supporting clinical notes for anything that gets billed. There are companies/researchers that try to find large scale fraud and then pursue legal action under the False Claims Act (if they win they get up to 30% of what is recoverable)

There are also companies that try to help maximize billing. Really they're just trying to bill for everything that occurred, they aren't doing anything exploitive necessarily.


The insurance company probably has a hotline you can call to report medical billing fraud.


Doctors and Surgeons in America are incredibly highly paid. People love hating insurance and drug companies but the cost of people is driving much of the price.


Disclaimer: I am a physician.

Physician salaries represent a small fraction of overall healthcare costs. Nursing/allied health salaries make up the bulk of any hospital’s costs and are often bloated due to powerful unions physicians don’t have.

For comparison, Canadian physicians are on average better compensated than American physicians.

I practice radiology, a specialty often considered “overpaid” yet my compensation is only high because of the amount of advanced studies ordered in modern medicine. On a per study basis I get paid less and less every year yet scans are getting more and more complex (many studies on this). In addition the standard to which I am held to keeps rising and I spend a significant amount of time doing unpaid QA, following up on my reports to improve my ROC, and at least a few hours every week reading the latest publications in my sub specialty.

The average diagnostic radiologist in the USA is grossing around 400k (no retirement fund, pension, and commonly no benefits).

What is reasonable compensation in your opinion for someone who has finished 10+ years of post-undergrad training and accepts significant liability for every report (a radiologist at HMS missed a lung nodule on an X-ray and lost 16 million in court)?


My brother and his wife both are doctors in the UK. At 400k you earn about the same pay as 3 or 4 doctors there. To me that is a lot of money. I realize lots of tech wages are crazy high too, I dont understand that either.


Net margins != gross margins


So do lawyers.


Lawyers don't have the ability to kill you.


A prosecutor could have you killed.


I get where you were coming from but corrupt lawyers landed my handicapped brother in an unlicensed group home where he was mistreated and soon died. Lawyers can absolutely kill you.




This will be huge! I’ve found that self paying can be 1/nth the cost of paying through my insurance. But you need to request self pay up front.

Being able to better understand prices before hand will drastically help people reduce their healthcare costs.


I've seen the exact opposite of this - the self pay option would cost (for example) $300 while insurance would only get billed $150 for the exact same procedure. In the case I saw it, that meant the insurance paid out something like $12 and I was on the hook for the remaining $138. Which is roughly the same I would have owed if insurance had been billed the full amount and paid out the remaining $162.


This would be great news in a world where healthcare company revenue (which never quite trickles all the way down to retail shareholders) wasn’t just a one-way wratchet.

More opaque: costs more. More transparent: costs more.

Want a better deal? Choose better parents pleb.


> Even after the pricing data is public, “I don’t think things will change overnight,” said Leibach. “Patients are still going to make care decisions based on their doctors and referrals, a lot of reasons other than price.”

Ah, but in the USA, there are a lot of uninsured people who end up paying cash for stuff. And there is a corruption problem in that individuals who pay for services and materials get ripped off compared to what insurance pays behalf of an insured patient.

I would expect that this will have an almost instant beneficial effect for some of the uninsured or under-insured. It will be harder to charge them $500 for something that insurance pays $250 for in plain view. People will go back and complain, asking for rebates even after paying.


Why nobody ever talks about how much doctors are overpaid and over valued in this country? Why always demonize insurance companies?

I was in an ER for 7 days, I only saw the doctor 2 times for less than 5 mins each. In the final bill, the most expensive line item was doctor consultation.


Question to somebody who might know as this seems like a relevant thread to ask in.

If a person wants to pay directly in cash/credit-card for services rendered by a doctor, do doctors' agreements with insurance companies generally prevent them from offering a cash discount to cash-paying patiences lower than the insurance company negotiated price?


Yes, not only do they offer it but some insurers will give you credit card gift cards to help pay for treatment. That is how dysfunctional our medical system is at this moment. Providers will lock insurers at one rate, negotiate a different rate for self-insured that could be lower/higher. And insurers get wind of this and try to sneak pay the self rate.


I use one of the "health share" providers instead of insurance. They have negotiated rates with providers but they literally instruct you not to reveal that, get the cash price invoice, and then they will take care of further negotiations if applicable.

Presumably getting the cash price first lets them pick which they would prefer to pay: cash price or the negotiated rate. "Oh yeah, our customer forgot to inform you they qualify for this negotiated rate."


If a doctor accepts Medicare patients, that sets a price floor for cash. Legally, if you accept Medicare money, you cannot offer anyone a better price than you charge Medicare.


Sometimes they aren't allowed to offer a cash option at all, if you've told them you have insurance.


I have come across quite a few doctors that will not treat you at all if you don't have insurance.