Re: The Surgery - What Happened

On Oct 31, 8:25 am, rkshul...@xxxxxxxxxxxxxxxxx wrote:
David Friedman <d...@xxxxxxxxxxxxxxxxxxxxxxxxx> wrote:

I'm a little puzzled.

The insurance company is paying the bill, or at least part of it. So
marking up items, if it affects the insurance company at all (i.e. if
they are covered), results in the insurance company making less money,
not more.

AFAIK the insurance companies have a negotiated rate for everything
that's covered so marking the prices up has no effect on them. The
hospital can bill anything they want for Kleenex but they're going to
settle for the agreed on amount. It's the people without insurance who
get slammed, so markups might make insurance more attractive and
increase the number of policies written.

Last time I went to a hospital (emergency room for an alergic
reaction) I later got a statement in the mail.

Summary:
Debit: Services rendered: $800

Credits:
Your payment at the time: $50
Your insurance payment: $300

Amount due: $0

Odd arithmatic that.

So I have personal experience indicating that insurance companies
sometimes DON'T pay the same inflated prices they want uninsured to
pay and that the hospital payment schedule doesn't actually cost the
insurance companies the full amount "due".

Not only does this encourage people to buy insurance, but it also
presumably subsidizes the hospital in ways that reduce cost to other
customers, which may well include insurance companies.

DougL

.

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