The problem with cutting what medicare pays for services is that the
difference is added into what is charged to private insurance companies
for services rendered to their clients.
The cost of health care went up drastically with medicare because
medicare pays a rate significantly lower then any other health insurance
company, and sometimes below what it actually costs providers to render
the care. The difference is made up by increases in the "customary
charge". The customary charge is what you would pay if you paid cash.
The significance is this is also the amount used when insurance
companies negotiate the agreed upon rate, which is what they will pay
for services if providers agree to accept that insurance.
Example: If the actual cost, not what is charged, is $25 and medicare
only pays $20, that $5 loss gets made up by increasing the customary
charge in order to recoup the difference from other patients. Now what
if that test is something done millions of times every day by providers
across the nation? That $5 is now millions, and that charge gets added
elsewhere.
Now, that MRI you talked about. Medicare already pays the lowest of any
insurer for an MRI. MRI machines cost millions of dollars to buy, and
thousands a month to operate and maintain. That $1000 less Medicare
pays, gets rolled into the customary charge, increasing the cost of an
MRI for everyone else. If a given provider gives 1000 MRI's to medicare
patients in a year, that is one million dollars!! Let's say the same
provider gives 5000 MRI's to non Medicare patients the same year. To
make up the 1 million the provider must collect, not charge but collect,
an additional $200 per MRI on those 5000 patients. Since private
insurance pays an agreed upon rate based on the customary charge, which
may be 80% of that charge, the provider increases the charge by $250 per
MRI. Insurance companies pay outs go up, so premiums go up to make it
up. Now duplicate that by every decrease medicate makes in what they pay.
That, in short, explains why health care in this country is so
expensive. It isn't greed, it isn't private insurance, it's the
government. Badly run plans, that pay far below market value for
services rendered, with overwhelming administrative costs, have done
nothing to reduce the cost of health CARE in this country so far. I am
skeptical that another one of these programs will have any more success.
Kelly
On 7/1/2012 6:23 PM, elizabeth wrote:
>
> The Independent Payment Advisory Board (IPAB) was established to help
> reign in costs to Medicare. So rather than charging $4000 for an MRI,
> they may change it to $3000 and used the savings on patient care. It
> was not designed to cut patient care, but figure out some better ways
> to pay for it and keep it solvent. The board forms in 2015, but
> Congress does have a check on the payments.
>
[Non-text portions of this message have been removed]
No comments:
Post a Comment