/biz/ - Business & Finance

That's what happens when the "pursuit of profit" is the main economic theory.

>>19432214
They don't. The bill gets settled by insurance for pennies on the dollar.

>>19432302
But why charge such a stupid amount in the first place? It's not like your local grocery store charges $3 trillion for a candy bar and then expects to be negotiated down.

It's almost like this is a shithole country or something.

>>19432353
To scare people into buying insurance.

My local hospital actually had the gal to ask for donations to combat the corona virus and meanwhile they were strapping poor saps with 10's of thousands of dollars worth of debt and receiving federal aid. Fuck this for profit scam of a medical system.

I work in consulting for hospital billing and accounts receivables. The prices hospitals charge are driven by a combination of insurances squeezing them in their contractual reimbursements, and it being illegal to charge different prices based on insurances.

The average insurance will write off 40-70% of a charge before even beginning to reimburse, according to their contract. Of the 30-60% of the original charge that they’re even considering paying, they’ll probably only pay 30-60% of that.

>$10000 charged for 1.5 hours of operating room time and equipment
>insurance says they’ll only even consider the charge to be $4500
>insurance pays $1800

There is a 37% chance that the hospital will recoup even half of the $2700 that the patient now owes out of their own pocket. As the balance ages beyond 60 days due, that drops to 15% on average. Most people do not end up paying hospital debts, and get sent to collection agencies. These agencies will huff and puff to try and collect so they can get a cut, but they have no legal recourse to threaten in the collections process.

The hospital knows that it’s only going to get paid $1800-2000 for a charge listed at $10k. They jack it up to squeeze more out of the insurance. The trouble is that they cannot charge a different price, legally speaking, to someone with a different insurance. Even paying out of your own pocket is technically considered an insurance in the eyes of the law. So they stick you with the $10k balance and try to get as close to that $1800-2000 before they even consider writing the remaining balance off as uncollectible or charity

>>19432353

Because insurance negotiates down and the hospitals are forced to carry the costs for people who can't pay, as in everyone on the medicare program.

>>19432214
I mean it is obvious, you just don't pay, right?