We have seen the future, and it sucks.

The Man Who Actually Had Health Insurance

31st August 2013

Dr Jeffrey Singer turns over a rock.

So we canceled the surgery and started the scheduling process all over again, this time classifying my patient as a “self-pay” (or uninsured) patient. I quoted him a reasonable upfront cash price, as did the anesthesiologist. We contacted a different hospital and they quoted him a reasonable upfront cash price for the outpatient surgical/nursing services. He underwent his operation the very next day, with a total bill of just a little over $3,000, including doctor and hospital fees. He ended up saving $17,000 by not using insurance

This process taught us a few things. First, most people these days don’t have health “insurance.” They have prepaid health plans. They pay premiums to take advantage of a pre-negotiated fee schedule arranged for and administered by a third party. My patient, on the other hand, had insurance.

Second, even with the markdown for upfront “cash-pay” patients, none of the providers was losing money on my patient. Otherwise they wouldn’t have agreed to the prices. With the third-party payer taken out of the picture, we got a better idea of the market prices for the services. It is the third-party payment system that interferes with true price competition, so “market clearing prices” can’t develop.

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