The best deals in cars and care may be found at the end of the month.

I have been a physician for almost 20 years, and my income has been going down- a lot.  With the rising cost of insurance premiums this might seem counter intuitive to many Americans.  However, there is an explanation, albeit a perverse one, that helps explain this disconnect.

There is no cost of care.

Unlike most markets, there is no fixed price for care.  What you pay depends on whether you have insurance, the terms of your insurance and  the rate that has been negotiated on your behalf. Different insurers negotiate different rates for the same service.  For instance, a CT scan or blood work may be paid at a factor that is 2 or 3 times more than another insurer.  In part this has to do with other services the insurer needs.   For example, access to specialty coverage may be offered by a care delivery network to an insurance company in exchange for higher reimbursement on other services.

Rather than bill everyone at the lowest negotiated rate, not surprisingly hospitals tend to bill at the highest one.  Everyone gets caught in the same net. The hospital don't want to miss out on the highest possible reimbursement for a particular procedure.  Unfortunately, the person least able to pay, the uninsured patient, gets billed for the largest amount as well.


Imagine if Walmart's everyday low price depended on your ability to pay?

   My salary is made up of a mix of payers- payment for the same CT scan can vary widely.  Lately, my practice has seen increasing volumes, some decrease in insurance reimbursement/case, and a large increase in the ability (or willingness) to pay for services by the uninsured.  Based on the mix (insured and uninsured) we now collect something like 28 cents for every dollar billed.  Imagine if Walmart collected 28 cents on the every dollar?  I am betting prices would go up.  This  isn't good for me, and it isn't good for the consumer.  

Given the large uninsured population of my downtown hospital, some analysts predict Obamacare may actually improve this 28% reimbursement.  This presumes reimbursement for each case will decline, but  the portion of charity cases will decline more- everyone will be insured.  However, with the same size pie, this will have short term issues for other segments of the market, and is not sustainable. 

Fair care at a fair price- the end of the month, cash may be king.

Like many things in American healthcare, the billing system is byzantine, kluged together with no real thought or roadmap.  Until we deal with this fundamental disorganization, I expect the general mistrust between patients, physicians and insurers to rise.  Insurance premiums are currently viewed as a surrogate for physician salaries.  This is simply not true.   Medical costs have gone to such extremes that the number of Americans with no insurance is rapidly expanding and now make up an increasing pool of reimbursement.  Ultimately, we have to pay for care if we want to have services moving forward.  I would far prefer to get paid a fair price by all patients.   When you are sick and most in need, adding financial pressures fundamentally seems wrong.  

Ideally each bill would be somehow be "patient centric."   However, today's financial tools do not allow this level of service.  What I can tell you is that hospitals and providers have a discounted price, one that is much closer to their cost of business.  Asking for a negotiated rate, particularly for the uninsured/self pay, will likely to be met with interest.  I am not sure what this rate is but it is something less than 100% and more than 28%.  And sadly, like car dealers, from what I have been told, the best deals may be found at the end of the month.