25 June 2009

Health Care Provider Price Discrimination

A comprehensive analysis of data hospitals report to Medicare shows that, on average, hospitals charge uninsured patients two-and-a-half times more than they charge insured patients and three times more than their actual costs. In some states mark-ups average four-fold. . . . private insurance payments [are] around 122% of hospital costs, while Medicare pays about 100%.

From here.

[A] 2008 survey by the Texas Medical Association found that while 58 percent of the state’s doctors took new Medicare patients, only 38 percent of primary care doctors did.

From here.

Medicaid pays less than Medicare to providers and is less widely accepted by providers, and that for many, individual health insurance is not an option. For example:

In Seattle . . . access to orthopedic surgeons is virtually nonexistent for uninsured people and Medicaid enrollees, because a single group of orthopedic surgeons has a virtual monopoly in the community and does not accept Medicaid or uninsured patients. . . . Findings from a survey of individual insurance shoppers show that 15% of people looking for insurance online were deemed ‘uninsurable’ for standard coverage by most insurance carriers.

A provider/health insurer industry sponsored study found that:

In 1999, there was approximately an 11.3 percentage point gap in operating margin between Medicare and commercial payers, and a 16.0 point gap between Medicaid and commercial. By 2006, this had widened to a 32.5 percentage point gap between Medicare and commercial, and 37.8 points between Medicaid and commercial.

While the general trend is hardly news, the specific quantitative measures of the differences are useful.

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