Yeah, US hospital billing is based on the idea that the patient has insurance and won't really care about what their insurer gets charged. (The wider implications of this are left to the reader.)
For the uninsured this sort of thing is actually really common. Had an online friend who had to get emergency treatment and they sent him a bill for $20k. His response was, "lol I'm uninsured and don't give a fuck about my credit score, so, fuck you basically." The bill was revised to $500, which he paid just to not have that debt on his record.
>The wider implications of this are left to the reader.
IMHO, it's actually worse than we realize. The Medical Loss Ratio requirement is good because it requires insurance companies to spend 80% or 85% of premiums on health care. It's bad because one way for insurance companies to make more money is to have inflated health care prices to justify increasing premiums so they can get 80% of a bigger pie. It also gives them incentives to provide care themselves so they can capture some of that 80% spend.
> For the uninsured this sort of thing is actually really common. Had an online friend who had to get emergency treatment and they sent him a bill for $20k.
I experienced this personally with my own insurance. My bill was over $20k, and it took a year to convince the insurance company that removing a few feet of my intestines was actually emergency surgery. I ended up paying $800. My roommate in the hospital had no insurance and ended up not paying anything (which I did not begrudge them at all, since the reason for no insurance was debilitating back pain that led to unemployment)
Or, the likelier explanation, is that health insurance prices are highly regulated and have to get their prices approved by a government official(s), and B) they don't have a lot of pricing power due to the competition and they are not colluding.
See almost any of the proxy filings and you will see much of the compensation is based on hitting targets other than just revenue, and most of the compensation itself is equity:
> since another insurance company would just steal their customers by having lower
LOL. Meanwhile, in real-life America, there are only four or five major carriers that control the market, and none of them are incentivized to do this "competition" thing you speak of by engaging in damaging price wars. Why would they when continuing to be part of the problem makes them more and more profits each year? See also: military contracting. Do you see them constantly undercutting each other? No, they buy each other, reducing the number of bidders on every contract.
And in real-life America, the only people health insurance companies engage in price wars with is the state insurance regulator who gets to deny requested price increases.
Fascinating observation, thanks for challenging my assumptions here. Just seems to further point out how useless health insurers are, even to their shareholders.
My most sincere wish is that all insurers would be nationalized, every last employee summarily fired, and their HQs all imploded and replaced with memorials to all the people whose lives they have cut short over the years. Not a thing of value would be lost IMO. Worse than paying people to dig holes and fill them in again.
Four or five competitors is plenty for a healthy market.
Where I live, they do compete on price - prices vary by about 30% for similar coverage. They can't engage in the kind of price war you're thinking of since insurance companies, by law, have to maintain a fund able to cover costs, have to get rate changes approved by regulators and are largely banned from price discrimination.
I understand the desire to shift blame entirely onto insurance companies rather than providers. After all, one is all about money and the other is seemingly all about healing.
Heck, when a provider does bill people directly because an insurance company refused to pay, we blame insurance companies - even when the charges on those bills are highway robbery - like those in the article itself.
The fact is, the net cost of health insurance was about $279 billion in 2022. Meanwhile, $3.7 trillion went to healthcare providers, pharmacies and the like for care. The ones who stand the most to gain from higher prices are providers.
Frankly, decades of lobbying from the healthcare provider lobby to enrich themselves should have made it this obvious, but sadly, people see doctors as selfless angels and it blinds them.
Aren't they doing some kind of turf non compete agreement like isps do?
I had read that comcast won't go into century link territory and viceversa, and something along those lines for the major isps, in order be local monopolies and set prices as they like.
I used to live with a guy from Guatemala, who at some point or another wound up at the ER. At the time his insurance apparently had some huge deductible for ER visits so he got the whole bill in excess of $1000. He was going to pay it, so I suggested he just call and tell them he was planning to leave the country and not come back. I told him to tell them there was no way he could pay the full amount, but didn't want to leave a debt out there like this. They lowered the bill to $150 after a few minutes on the phone.
Many years ago, I managed to stab my face with a screwdriver (not my proudest moment), and had to go to the ER. After the stitches, I was asked whether I wanted to pay with insurance. If I did, it was something like $2,000. If I didn't, there was a 75% discount off MSRP. My deductible was like 25%, so it ended up basically being the same out of pocket either way.
The fact that there seems to be a 4x markup means makes me think insurance companies are in bed with these hospitals. If you can mark up prices arbitrarily high, the insurance "discount" is fake.
From what I heard, doctors’ bonuses rates per unit of work are entirely calculated based on the specific hospital’s revenue from medical insurance claims; smaller hospitals can’t get as many patient payouts so their rates are lower and so are not as attractive to doctors compared to hospitals that can scalp well. So the prices do relate somewhat to what the hospital must spend on personnel, even if it’s arbitrarily engineered in the first place.
At Costco Pharmacy I stopped using my insurance plan as the co-pay was more than the no claim cash price. I learned later that my health insurance company owns its own pharmacy and they design the claims process to bias you toward their own pharmacy. Since medical loss ratio must exceed 85% on employer health plans they realize their excess profits by jacking up prices at their pharmacy subsidiary and using their pharmacy benefit manager subsidiary and insurance product to steer you toward overpaying if you just take their suggestion (e.g. $100 if you use OptumRX mail order Pharmacy for the "savings" versus $20 cash price from Costco).
> Yeah, US hospital billing is based on the idea that the patient has insurance and won't really care about what their insurer gets charged. (The wider implications of this are left to the reader.)
Don't leave out the part where the consumer doesn't even shop (or sometimes pay) for the insurance policy either, it is determined by their place of work.
So the consumer of healthcare is doubly shielded from any price signals the market might supply.
I know a couple that avoided marriage so she could negotiate the childbirth bill on the basis that she was an uninsured single mom who didn't own property, etc, etc.
Health Care Sharing Ministries (HCSMs) are an interesting loophole in healthcare regulations that excepts uninsured people that participate in an HCSM from paying the tax penalty.
HCSMs are membership organizations in which people with common religious or ethical beliefs share medical expenses with one another. They are not the same as traditional health insurance.
Because patients are considered "self-pay", they negotiate their own prices with providers and they are likely to get an 80% or more discount on "list price" for the service. They are reimbursed by the HCSM if the HCSM approves the reimbursement.
As of 2025, approximately 1.7 million Americans participate in Health Care Sharing Ministries (HCSMs), which amounts to about 0.5% of the U.S. population. In Colorado alone, HCSM enrollment (at least 68k) is equivalent to 30 percent of Obamacare enrollment.
Because HCSMs often exclude essential health services and are therefore more attractive to people who are relatively healthy, enrollment of this size, relative to marketplace enrollment, may increase premiums for marketplace plans.
I am not promoting HCSMs but I did research it when I lost my COBRA coverage a few years ago. I do find it an interesting alternative approach to paying for healthcare. We really do need to explore options in this country.
I can definitely see AI being applied in the HCSM context.
Warning! As grotesque as health insurance companies are, in theory they are obligated to pay valid claims under your policy. Health sharing ministries can exercise discretion to deny payment because they disagree with your lifestyle choices. Or for any reason or no reason given at all. They are subject to far fewer regulations and audits and in some extreme cases the administrators just pocketed the money.
More and more states are auditing them. But yes it's a faith thing. And definitely not insurance. Works better for tight-knit communities where there is trust.
> Yeah, US hospital billing is based on the idea that the patient has insurance and won't really care about what their insurer gets charged.
Not quite: US hospital billing is based on the idea that the insurance company does the haggling for you.
Insurance companies negotiate (cough) "the best rate that the hospital has to offer," therefore: What the insurance company pays is confidential, and the official unnegotiated price is highly inflated. That's why hospitals will always negotiate with uninsured patients, because they're deliberately inflating their fees.
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In 2011 I had surgery. The first bill was for $100,000, which was sent to the insurance company. Then the insurance company got a letter (cough) "reminding" the hospital of the negotiated rates. The next bill was $20,000. On a follow-up visit, they did an X-ray, and sent me the bill. I sat on it, and then called my insurance company. The insurance company called the hospital to (cough) "remind" them that the negotiated rate for that kind of X-ray was $0.
A large portion of the US economy is based on this entire grift pipeline (settling before getting to court). And it's very costly and pushes up insurance costs and costs in general for everyone else.
When people talk about government inefficiency, I always think of how prevalent these kinds of shenanigans really are. I think they are more costly than inefficient government.
It's incredibly costly, and I think it's also incredibly costly in difficult to measure ways. The main method that the average American (read as: not incredibly wealthy person who has lawyers retained) uses to deal with the early stages of this pipeline is engaging in interminably long phone calls, going back and forth between multiple stakeholders, and trying to negotiate as to what actually needs to be paid or done individually. The incentives are aligned for various members of this process to make it a complicated and frustrating experience for customers, because they often benefit from increasing friction for the insured party. I think if you measured working hours lost or impacted by this it would be startlingly high.
Pretty much every 4+ figure civil violation, fine, etc, etc, is assessed on the basis of "what's the most we can get away with that won't have them taking us to court where it'll get knocked down or cause a public outcry if they tell the news"
Having to settle because court cases take too long to resolve is due to inefficient government.
Not only does the actual court case and appeals process take years, but even after you “win”, the collection process takes years after it has already been determined who owes what.
See Alex Jones for a ridiculous example. He should have been homeless and shirtless a long time ago.
While you're not wrong that most "justice" processes are expensive, I think the parent-poster is referring to a different kind of "government inefficiency", things like:
1. Single-payer health insurance.
2. Laws that insurance-companies must actually use X% of their premiums on payouts.
3. Laws requiring disclosure of negotiated prices, to encourage competition via free-market forces.
this looks like shopping in Moroccan bazaar with no price labels. But here you bargaining not for couple fruits but for your health and price range is in thousands. WTF :)
Yeah at this point this is more like a cultural ritual. You know like howin some cultures you have to refuse a gift 5 times with increasingly stubborn facial expressions, and the gift giver has to insist through it all, and then accept and say thanks. As the default.
Or where you as a guest announce that you now go home, and the hosts have to insist you stay for some more tea or whatever and then you have to again and again say you're now going really and they insist you stay so you chat more in the hallway etc. And it's just how it always is and it would be super rude to just leave or if the host didn't demand that you stay.
Similarly the US developed this traditional ritual that the first bill is outrageously expensive and everyone knows that everyone know, but the ritual protocol say you gotta start with that, we are civilized people, we say hello, so in Healthcare the hello is the huge price, and the interaction always ends in a lowered rate, because that's also part of the protocol.
It’s worse than that. In a bazaar there are only 2 participants and they are looking out for their own interests. Most Americans don’t choose their own insurance their _employers_ do.
The insurance company has no reason to make the health recipient happy and the health recipient has little agency in pricing.
In a bazaar you can examine the fruit or rug yourself.
An average person cannot call up $750K in a year to pay for cancer treatment. But for-profit businesses (and any organization for that matter) treat you much better if keep the carrot of another payment in front of their face. If you've forked over the whole wad of cash upfront they immediately de-prioritize keeping you satisfied.
For the uninsured this sort of thing is actually really common. Had an online friend who had to get emergency treatment and they sent him a bill for $20k. His response was, "lol I'm uninsured and don't give a fuck about my credit score, so, fuck you basically." The bill was revised to $500, which he paid just to not have that debt on his record.