I'll take that in a heartbeat. I have a Canadian friend who complained to me that they had to get their operation in a hospital 30 miles away, instead of one in the same city. They said Canadian medicine sucked, even though the operation went fine. I asked them how much they paid for it, since I had had the same operation and I had very good insurance, but the copays, out of network costs (which you can't foresee when your doctor decides to get a friend to pop in to consult while you're unconscious) and deductibles killed me. When my friend told me what they paid, I nearly fainted. I bragged that my operation was in a hospital only 3 miles from me, and I only had to pay about a thousand times more than they did lol. My deductibles and copays came out to over 13K, and that's with good insurance. For some reason, that friend isn't complaining about Canadian medicine anymore, hehe.
As a senior citizen I'm on Medicare. And a Medicare Supplemental from a well know insurance company. In our system Medicare pays 80% of whatever medical problems I have addressed. My Supplemental policy pays the other 20% I've had 2 surgeries, one to put a stent in my artery, one for a non-malignant cancer tumor, I've been to 8 specialists for all kinds of things, 16 physical therapy sessions, 6 MRI's 1 PET Scan, and all the other doctor office visits necessary for follow up and so on. In the years I've been doing this I received a bill on only one thing: for $17. That's it. The problem with our system in the US for senior citizens, of whom I know many very, very well, is that when you retire they offer you one of two (well, they generally offer only one of them, you have to ask about the other) types of "medigap" coverage. One is free or very low cost --$25 or less. Almost all of them also offer you dental and eye (which my set up doesn't). When I sat down and asked my broker which of the many plans he would recommend he went on and on about how the Advantage plan is so cheap. When I heard it was $25 and that, on top of that I would get credit for $25 of pharmacy goods a month I almost jumped. But as I've always said to my many students: "If you don't know how they are making their money, run!"
So I asked, "if the premiums are so little how do they make any money?" He looked at me, shocked, and then shrugged. "I don't know but they do. They all make plenty of money." So before signing up I found out.
1) They negotiate huge reductions in the price of the thing. A 1,000 procedure costs them next to nothing because they tell the hospitals two things. First, if you want our business this will be the price. With only a few companies serving any area, it's pretty easy to get them to play ball. And since the price to Medicare isn't the same -- but the list price minus the standard discount for Medicare the price comes down to 600-$700 per $1,000. And since Medicare pays up to 80% the actual cost to the insurance company becomes either 0 or a few dollars. Medicare pays their share, and the total the hospital/doctor receives is usually near or more than the price negotiated by the insurance company. That $1,000 procedure is paid in full by Medicare and the insurance company walks away with no loss. But that's not all.
In addition, all those office visits, procedures and all that? All those copays, etc? The money they take in from that is often pooled and split between the hospitals, insurance companys, doctors, etc. Everybody gets a cut. It may not sound like much but here's one example of how it adds up. I had surgery in a hospital. My friend had the same. In addition to a daily fee for being in the hospital (I think he paid $50) there was a deductible of $500 for the surgery. AND, get this, another $500 deductible for his trip to the "recovery room" to be watched while he recovered from the surgery. This, on top of, of course, the deductible for the doctor's attention and so on. The surgery itself was about 50K for both of us. Over time and with all the various visits and procedures, he paid nearly 10K. I paid nothing.
The difference is he has the same insurance company as I. Same network. Same hospital and even same GP. He has Medicare Advantage. I have Medicare Supplemental.
I have interviewed six hospital billing administrators over the last three years. All six will answer the following question with "Nobody knows." The questions? "How come this surgery costs this much?" The "formula" has not been to calculate the price based upon costs, but to use the Federal numbers for inflation in the medical field to set next years price. The actual cost to the hospital can't be computed as they don't know.
Yeah, the American health care is broken. But it's breakage is our own fault because we hear "free" and don't ask the next question: "If it's free, how do they make any money?"
Sadly, almost every US Senior citizen will be buried under a mountain of medical bills before they die. All because they got greedy and let greedy insurance plans offer them cake they were told they could eat both now and later.
Just my (I know, extended) thoughts.
AJ