you’ve almost got it but you left out cost-shifting
It’s not uncommon for hospitals to have 3 levels of billing:
1) cash - billed at the highest rate possible (really overcharged)
2) insured - billed above medic-aid/medicare rates (overcharged)
3) medic-aid/medicare - billed at medicare rates (undercharged)
Because hospitals are locked into medicare rates, they overcharge the insured and cash people (uninsured) by cost-shifting. The more medic-aid/medicare they treat, the more costs transferred. (We’ve all heard the $4 aspirin in hospital!). Some hospitals in Florida are seeing 20 overdoses a day - crisis uninsured requiring ICU resources. Only a portion of those costs are reimbursed by the govt. Cost-shifting is probably the largest contributor to premium increases. Unnecessary diagnostics (MRI happy, for instance) is also up there as a contributor.
Hmmmm. Curious.
I needed a hernia operation and went first to the surgeon who did an umbilical hernia 7 years prior. I have no idea what his insured office visit is but the cash price was $386 just for the consultation. Going into his billing office for a pre-determination of costs, the person wrote down the Medicare billing codes with what the insured price would be as compared to the cash price. As I recall, the insured price for his portion was about $13000. If I paid cash it went to $4200.
Then I had to go to the Hospital’s billing room for the same. I gave the woman there the numbers and again was given the insured cost, I want to say it was over 37,000. The cash price would have been around $14,000. All of this is without whatever the gas-passer would have cost. I estimated the whole thing would have been over $60K for insured.
I was driving by a private surgical center and decided to call them to inquire.
For the same billing codes, a different surgeon, from the same surgical group, their facility fee and the gas-passer, $4200 total and that included the surgeons pre and post office visits. And this is in Jacksonville, FL.