what kind of man capes for an organization he doesn't own :damedame:
Hospitals Are Robbing Us Blind
- Thread starter 88m3
- Start date
what kind of man capes for an organization he doesn't own :damedame:
fukk i look like letting another man stare into my eyes
if i need an eye exam, give me a mirror, i'll do it myself
Hospitals Are Wrong About Shifting Costs to Private Insurers
http://theincidentaleconomist.com/
To hear some hospital executives tell it, they have to make up payment shortfalls fromMedicaid and Medicare by charging higher prices to privately insured patients. How else could a hospital stay afloat if it didn’t?
But this logic is flawed.
Study after study in recent years has cast doubt on the idea that hospitals increase prices to privately insured patients because the government lowers reimbursements from Medicare and Medicaid.
Indeed, one recent study found that from 1995 to 2009, a 10 percent reduction in Medicare payments was associated with a nearly 8 percentreduction in private prices. Another study found that a $1 reduction in Medicare inpatient revenue was associated with an even larger reduction — $1.55 — in total revenue.
This would be impossible if hospitals were compensating for lower Medicare revenue by charging private insurers more. (Under different market conditions in prior eras, but not today, a few studies found some evidence that hospitals made up shortfalls from one payer with higher prices charged to another. Some are reviewed in a paper by me in Milbank Quarterly, and older ones are summarized in work by Michael Morrisey.)
The theory that hospitals charge private insurers more because public programs pay less is known as cost shifting. What underlies this theory is that a hospital’s costs — those for staff, equipment, supplies, space and the like — are fixed. A procedure or visit simply takes a certain amount of time and requires a specific set of resources. Therefore, if Medicare, say, does not pay its full share of those costs, a hospital is forced to offset the loss with higher prices demanded of private insurers.
The cost shifting theory goes back decades. But economists have long been skeptical of it, pointing to two key weaknesses. One is that it assumes hospital costs are immutable. We should be just as suspicious of such claims in health care as we would be for any other industry.
Jeffrey Stensland, Zachary Gaumer and Mark Miller — who serve on the commission that advises Congress on Medicare payment policy — offered a different view in a 2010 article in Health Affairs. Hospital costs, they said, can change and do so in response to market forces. They found that hospitals that face little competition are less efficient and have higher costs. With few competing hospitals to turn to, private insurers have little choice but to cover those high costs. But Medicare’s prices are fixed and are therefore low relative to the high costs of these inefficient hospitals.
Conversely, hospitals in more competitive regions are more efficient and can earn a profit on Medicare prices. But, because of competition, they must charge lower prices to private insurers. Put it together and it is hospitals’ underlying costs, driven by competition — not cost shifting — that lead to differences in prices charged to insurers and Medicare shortfalls or profits. This theory was conveyed in a report to Congress in 2011.
Another weakness of the cost shifting theory is that it runs counter to basic economics. Hospitals that maximize profits, or even maximize revenue to fund charity care, would not raise private prices in response to lower public ones. In fact, such a hospital would already be charging the highest possible prices to all payers. And, instead of raising them to one insurer if another paid less, they’d do exactly the opposite. Prices charged to two types of customers would move together, not in opposition, for the same reason it does so in other industries.
If a theater finds that bulk ticket purchasers are unwilling to pay as high a price as expected — perhaps because demand by tourist groups and corporations is down — it wouldn’t raise ticket prices for individual purchasers. Because it had filled fewer seats than anticipated from bulk sales, it would reduce prices to others in order to increase sales volume. With seats to fill, when bulk purchasers pay less, so do individual ones. Likewise, retailers charge lower prices to clear inventory, not higher ones to make up for less revenue from early purchasers. Economists have shown that the same logic applies to hospitals: They shift volume from Medicare and Medicaid to privately insured patients by lowering private prices in response to lower public ones — a spillover effect.
Though hospitals don’t seem to cost shift, it remains true that they do cross subsidize. That is, more profitable customers and services enable the provision of less profitable ones. That’s often confused as cost shifting, but there’s a key difference. Cross subsidization isn’t a dynamic process. If one customer becomes less profitable, that doesn’t automatically cause the hospital to charge another more, as the cost shifting theory demands.
The evidence is clear: Today, hospital cost shifting is dead, and the spillover effect reigns. A consequence is that public policy that holds or pushes down Medicare and Medicaid prices (or their growth) could put downward pressure on the prices hospitals can charge to all its customers and, in turn, on the premiums we pay to insurers.
It’s natural, then, that hospital executives continue to promote the idea of cost shifting. The widespread belief they encourage — that it promotes higher premiums — could foster support for larger public payments. It may be a politically useful argument, but it is an economically flawed one.
http://theincidentaleconomist.com/
To hear some hospital executives tell it, they have to make up payment shortfalls fromMedicaid and Medicare by charging higher prices to privately insured patients. How else could a hospital stay afloat if it didn’t?
But this logic is flawed.
Study after study in recent years has cast doubt on the idea that hospitals increase prices to privately insured patients because the government lowers reimbursements from Medicare and Medicaid.
Indeed, one recent study found that from 1995 to 2009, a 10 percent reduction in Medicare payments was associated with a nearly 8 percentreduction in private prices. Another study found that a $1 reduction in Medicare inpatient revenue was associated with an even larger reduction — $1.55 — in total revenue.
This would be impossible if hospitals were compensating for lower Medicare revenue by charging private insurers more. (Under different market conditions in prior eras, but not today, a few studies found some evidence that hospitals made up shortfalls from one payer with higher prices charged to another. Some are reviewed in a paper by me in Milbank Quarterly, and older ones are summarized in work by Michael Morrisey.)
The theory that hospitals charge private insurers more because public programs pay less is known as cost shifting. What underlies this theory is that a hospital’s costs — those for staff, equipment, supplies, space and the like — are fixed. A procedure or visit simply takes a certain amount of time and requires a specific set of resources. Therefore, if Medicare, say, does not pay its full share of those costs, a hospital is forced to offset the loss with higher prices demanded of private insurers.
The cost shifting theory goes back decades. But economists have long been skeptical of it, pointing to two key weaknesses. One is that it assumes hospital costs are immutable. We should be just as suspicious of such claims in health care as we would be for any other industry.
Jeffrey Stensland, Zachary Gaumer and Mark Miller — who serve on the commission that advises Congress on Medicare payment policy — offered a different view in a 2010 article in Health Affairs. Hospital costs, they said, can change and do so in response to market forces. They found that hospitals that face little competition are less efficient and have higher costs. With few competing hospitals to turn to, private insurers have little choice but to cover those high costs. But Medicare’s prices are fixed and are therefore low relative to the high costs of these inefficient hospitals.
Conversely, hospitals in more competitive regions are more efficient and can earn a profit on Medicare prices. But, because of competition, they must charge lower prices to private insurers. Put it together and it is hospitals’ underlying costs, driven by competition — not cost shifting — that lead to differences in prices charged to insurers and Medicare shortfalls or profits. This theory was conveyed in a report to Congress in 2011.
Another weakness of the cost shifting theory is that it runs counter to basic economics. Hospitals that maximize profits, or even maximize revenue to fund charity care, would not raise private prices in response to lower public ones. In fact, such a hospital would already be charging the highest possible prices to all payers. And, instead of raising them to one insurer if another paid less, they’d do exactly the opposite. Prices charged to two types of customers would move together, not in opposition, for the same reason it does so in other industries.
If a theater finds that bulk ticket purchasers are unwilling to pay as high a price as expected — perhaps because demand by tourist groups and corporations is down — it wouldn’t raise ticket prices for individual purchasers. Because it had filled fewer seats than anticipated from bulk sales, it would reduce prices to others in order to increase sales volume. With seats to fill, when bulk purchasers pay less, so do individual ones. Likewise, retailers charge lower prices to clear inventory, not higher ones to make up for less revenue from early purchasers. Economists have shown that the same logic applies to hospitals: They shift volume from Medicare and Medicaid to privately insured patients by lowering private prices in response to lower public ones — a spillover effect.
Though hospitals don’t seem to cost shift, it remains true that they do cross subsidize. That is, more profitable customers and services enable the provision of less profitable ones. That’s often confused as cost shifting, but there’s a key difference. Cross subsidization isn’t a dynamic process. If one customer becomes less profitable, that doesn’t automatically cause the hospital to charge another more, as the cost shifting theory demands.
The evidence is clear: Today, hospital cost shifting is dead, and the spillover effect reigns. A consequence is that public policy that holds or pushes down Medicare and Medicaid prices (or their growth) could put downward pressure on the prices hospitals can charge to all its customers and, in turn, on the premiums we pay to insurers.
It’s natural, then, that hospital executives continue to promote the idea of cost shifting. The widespread belief they encourage — that it promotes higher premiums — could foster support for larger public payments. It may be a politically useful argument, but it is an economically flawed one.
DonFrancisco
Your Favorite Tio!
Actually, it's the manufacturers of devices and such. I work at a hospital in supply chain and I see all of our purchases that come in. I'm a analyst here. There are GPOs that Hospitals are members of that drops the price of devices by tremendous amounts. It's basically the corporate version having a membership at Costco. That said, this shyt is still expensive, no way around that. Right now, I'm doing a project on Bone Cement
and if I were to compare what we pay based on our contract vs. an internet storefront, there is a 25% difference as far as savings. All we can do is receive payment from insurances for what they are willing to pay. Medicare especially stipulates how much they will give us based on their fee schedules. I do understand your sentiment though.
I think materials purchase isn't a huge problem as it was a few years ago. I think GPOs and 3PLs like Cardinal Health have worked hard to reduce cost. I think a lot of the issue has to do with the fragmented nature of healthcare coordination and the fact many health system simply don't know how much the cost of care is. We know how much we get paid but we don't know the cost of it. Also to a smaller degree, we over treat and over use health resources. For example, 50% of all ER cases are probably deem worthy enough for primary care or urgent care more than an ED setting. That raises the prices of the hospital and the patients.
That's cool! I'm trying to get into supply-chain in healthcare, where should I look for an entry level? I'm currently getting my MHA/MBA right now.
iceberg_is_on_fire
Wearing Lions gear when it wasn't cool
Always down to help a healthcare breh! What is your MHA/MBA concentrated in? I have my MBA in healthcare management. Rule of thumb, know Excel and Access like the back of your hand. Learn VBA so that you can code your own stuff too!
:belifoh:
88m3
Fast Money & Foreign Objects
Made Myself A Boss
#Trolltruck
Man, I used to work at a hospital inpatient pharmacy.. If you only knew how much drugs cost compared to what they actually charge. And how much shyt that goes to waste in a hospital 
shyt should be illegal
shyt should be illegal
^ Govt. money and waste? 
I dont believe a word of it...
I dont believe a word of it...
88m3
Fast Money & Foreign Objects
^ Govt. money and waste?
Enron, Adelphia, WorldCom, Chiquita, Lehman Brothers, Rite Aid and I could go on say hello!
you mean in overpriced stuff? or going to waste?
if overpriced thats how everything is
they always charge more than it actually costs to make it 
you mean in overpriced stuff? or going to waste?
if overpriced thats how everything is
yeah they'll charge like 20+ dollars for aspirin
not at target only $5 per generic prescription
Yeah I saw some report about how Pittsburghs medical center was charging shyt like that for basic pain meds and other trivial stuff. It's crazy those dudes upstairs are paid.