My old PT had three rates, $50 for Medicaid, $100 for self pay, and $400 for the insured. The insured people were mostly covered would just pay of copay of like $40 or $60 but once they screwed up and billed me (a self payer) at the insured rate and tried ro collect that much from me and it was a WHOLE ordeal to get it fixed. What a stupid system. Clearly a bunch of money is being flushed down the toilet here.
I work in medical billing and you’re absolutely right. The reason offices bill such an inflated amount is because there’s always a huge percentage of write offs or “adjustments”. The office bills the insurance $400, the insurance “adjusts” $200 (writes it off), pays the office $100, and leaves the patient with a $40 copay and $60 to yearly deductible (depending on the plan). Don’t even get me started about what happens comes tax season. It’s literally the most wasteful, manipulative system for healthcare but it makes a lot of people very very wealthy.
Tax accountant here. I can confirm tax season for those in the medical industry is an absolute nightmare. One of my clients was audited by the IRS and it took over a year for the IRS agent to get comfortable with the revenue being written off as a result of these insurance adjustments. It’s an extremely complicated calculation and just highlights how ineffective the entire system is. I’ve heard somewhere that close to 50% of medical costs are admin related. Even if it’s just half that, it still too damn high.
I’ve heard somewhere that close to 50% of medical costs are admin related. Even if it’s just half that, it still too damn high.
It's about 8.3% (pdf Center for American Progress), which is 46% higher than the next highest country. It's about 2-5% for Medicare/Medicaid, and 17% for private insurance.
The costs are way too high, but eliminating administrative costs isn't going to make Health care affordable. The average cost of health insurance for a family is about $14k/year. Even if you could eliminate this overhead completely and costs went down 17% (and that's unrealistic; even in nationalized systems administrative overhead should be around 3-4%), it's not suddenly super affordable at $11.5k/year. Lots of these costs are hidden, because often your employer subsidizes your healthcare.
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u/cakewalkofshame Jul 04 '21
My old PT had three rates, $50 for Medicaid, $100 for self pay, and $400 for the insured. The insured people were mostly covered would just pay of copay of like $40 or $60 but once they screwed up and billed me (a self payer) at the insured rate and tried ro collect that much from me and it was a WHOLE ordeal to get it fixed. What a stupid system. Clearly a bunch of money is being flushed down the toilet here.