Bargaining Down the Price of that CT Scan

Another letter from the healthcare dialogue referenced below...

Articles like this one miss the point entirely. The amount that doctors and hospitals charge for thier services would appear to make no sense because of its actual irrelevance in the marketplace. In today’s managed care era, doctors and hospitals are told how much they will be reimbursed for their services, an amount which has failed to account for inflation in remaining the same or even declining for years. A physician can charge $500 or $5,000 for a CT scan but 95% of the patients, covered by managed care and medicare, will be watching their third-party payer pay $200 if that. Physicians are not responsible for increased health care costs because frankly they have absolutely no input into what they are compensated for their services - this is done by managed care. The negotiation goes “here’s what we’ll pay the doctor, take it or leave it. But all the patients have already signed up with us.” These “negotiated” fees are often nowhere near the true market value of services (and have absolutely nothing to do with what the charge is for those services) which we’ll never know because medicine is forced to NOT be a part of the capitalist, supply-and-demand economy like everything else is.
When the entire country signs up with managed care and medicare, they ARE telling those third-party providers to “bargain” or negotiate for them, a negotiation that is entirely one-sided. How is it possible that United Health Care last year posted profits of $1.2 billion in the fourth quarter alone and yet six weeks later announced they were CUTTING fees to physicians and continues to raise the premiums they charge? Our country needs to understand that the vast majority of their health care dollars are going into the hands of large corporations and not getting anywhere near actual health care costs. Managed care allegedly did a great job of eliminating all the inefficiencies in the system, but now have become the biggest inefficiency themselves. As a result, instead of people’s health care dollars being put into inproving the quality of care and the way in which care is delivered, updating technologies and improving services, providers are forced to operate on a shoestring budget that prohibits the true possibilities from actually happening.
— Posted by Pete