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>What’s the difference?

The difference is that one is completely optional and you can spend as much time as you want comparing options, while the other you're forced to do on a whim at whatever place is closest. You can't shop around when you're bleeding out, as in the article. And such emergency health care constitutes most of these surprise bill situations.

You’re missing two key element of the process - the willingness to exploit, and the lack of alternatives.

Basically what I said in my last paragraph?!?

Centralized hospital and clinics in certain locations. Don't allow building healthcare based on maximized spread. When there are multiple alternatives next to each other, it generates not just competition for customers (patients) but also doctors/nurses employments. Also build fully government subsidized hospitals in each of this location to force the private pricing not escalating. Then every hospital admins will need to undergo 6mths IRS audit. This force the job extremely undesirable and reduce the demand for it.

Really any healthcare procedure that is not typically covered by insurance has seen costs go down over time. Things like lasik eye surgery, or orthodontics are great examples in addition to the ones you've already mention. The service and technology gets better while the price continues to go down.

> The service and technology gets better while the price continues to go down.

What did you think the farmer who was charged $6,589.77 for 6 stitches might have to say about that proposition?

"I wish stitches were done on a fee for service model like shooting lasers into people's eyes is."

That was still a FFS model. The difference is whether the procedure is typically covered by insurance.

I don't see how it's fee for service if nobody can tell you what it's going to cost upfront.

The uncertainty comes from not knowing exactly what services will be performed, who will be performing them, and how much the insurance company will cover (which has a ton of variables, many of which aren't known until everything is settled).

In my opinion, getting away from the fee for service model is one of the routes we ought to be taking to address healthcare spending in the US (if you're charging per service, you're incentivized to perform as many services as possible in a given encounter).

In other professions if you make a bid and fail to capture required work, you eat it generally speaking.

Contractors, many of whom are small businesses or individuals, do this all the time. They also give estimates like "If we find mold behind the wall, it will be an extra ten thousand".

Medicine is also odd in that you have to pay for the doctors mistake. If the doctor prescribes a less effective drug, it has no effect and then after doing your own research find a better drug and get the doctor to prescribe that instead. You still have to pay for the first visit. If a plumber decides to go from plastic to copper pipe mid job, he doesn't get paid for the work he ripped out.

Multi billion dollar hospital groups, full of highly educated professionals apparently can't pull this off but the guy who poops in a bucket on the job site can.

The most insane part are the out of network professionals. It's like you have a deal with the plumber to fix tout kitchen for $100. But in the middle of the fix, you hear a surprise ring in a front door and it's a helper of the plumber that comes an does something. And the next day the plumber notifies you that you must pay an additional $500 for the other guy.

The hospital is reimbursed on a fee for service basis. Most (all?) countries use a fee for service model, but most countries also don't have for-profit payers that are incentivized to drive up the cost of care.

GP is talking about:

> any healthcare procedure that is not typically covered by insurance

Which I (not American) assume stitches in the emergency room are.

Yeah that doesn’t preclude the farmer from having an opinion about the proposition.

Why do you think this discrepancy occurs?

Sure the farmer can have an opinion, but I’m not sure how

> who was charged $6,589.77 for 6 stitches

is relevant when OP was talking about procedures NOT covered by insurance.

> Really any healthcare procedure that is not typically covered by insurance has seen costs go down over time.

Health "insurance" companies are incentivized to raise the cost of care. Why? Their profits are capped to a percentage of the cost of care. The only way for them to make more money is to have more revenue -- which they do by increasing the cost of care!

Bakeries are also incentivized to raise the cost of bread, in spite they have no official cape of the profit (unless you consider 100%?).

The difference is that if a bakery tries to charge you a ridiculous price, you can politely decline tu buy, or buy and promise never to return.

The difference is that the customer pays 100% of the entire price. The industry doesn’t have a plan where you pay $0.10 for an eggs benedict brunch, or 10% a year after spending $100, and then get to charge your employer or your fellow citizens massive sums.

Let say you go and pick up a loaf of bread from the store. You don't pay, however. Instead, you have the bakery send a bill to your "buyer." Your buyer then negotiates the price. One thing about your buyer: the more revenue that flows through them, the more money they get to make. The bakery tells the buyer that the cost for the loaf of bread is $500. However, the buyer wants to keep you happy, so they reject the price, and come back with a lower price: $350. The bakery rejects the $350 price, and eventually, the two parties agree that the price should be $400. (Note, that other bakeries, where you buy directly, charge $4 for a loaf of bread.)

The buyer gets to say they negotiated. The baker doesn't have to look you in the eye when they gouge you.

It gets a little more complicated,though. Instead of just paying $400 for the loaf of bread, the buyer bundles the cost of all the purchases together, and then charges a monthly fee, based on the previous year's overall revenue. They then tack on 20%. So, it turns out, with that extra 20% you're actually paying almost $500 for the loaf of bread anyways.

Is it a scam?

Yes, it's a scam.

And someone can start a competing bakery across the street that doesn't over charge. You can't do that with healthcare.

Exactly the same situation is in rest of the world, no patient is shopping around. just goes usually to closest/biggest hospital. Yet we don't have this tragic mess US has. So its not about shopping around, rather some other reason like regulations, wrong dynamics between hospitals and insurances etc.

You don't have better equipment nor doctors in US compared to biggest hospitals in Switzerland for example. Yet we have fraction of the costs as patients, and its not due to low doctors/staff salaries. Equipment is also top notch everywhere, new machines in all departments.

I believe that in the end, it boils down to culture, with all the regulatory dysfunction and market dynamics acting as intermediary.

In the US getting wealthy seems to be almost implicitly well respected, no matter how you got there. At least if it's not obviously illegal. You found a tweak to squeeze more money from health insurances? Good for you, let them suffer for their apparent weakness. There's apparently still a threshold of where even success cannot vindicate the way to get there (that Oxycotin family comes to mind) but that threshold is super high. I believe that this threshold is much lower almost everywhere else on earth and that this has an influence on individual decisions on all levels. It doesn't even remotely make people elsewhere angels or something like that, but it's a little bit of friction in every decision towards "take what you can"

I believe that "closest/biggest hospital" is a choice in emergency. Or when it's something unimportant. Otherwise people tend to choose a doctor and clinic based on reviews or recommendations, or maybe years of experience. Even with a free healthcare you still have a paid private medicine and a free public one. And they have to compete which leads the price going down, because one side is always zero or close to it. Not like it's in the US where the direction is opposite as you don't have a zero side but only "unbelievable high price" side.

Even in relative emergencies. I'm in the UK. Years ago, my ex fell towards a glass door, and trust her arm through a thick glass pane, getting a nasty cut down her lower arm that exposed her tendons (I saw them... Not a pleasant anatomy lesson). After she was stabilised by the ER/A&E, she was told to come back in the morning (her arm was still open, but bandaged) to get properly patched up. Instead of going back to the nearest hospital, the following morning we went to the A&E of one an hour away with a good reputation for cosmetic surgery.

A&E can't turn you away. It gave her a few days of waiting in hospital (she was not a high risk patient, but they did want her available and under observation), but it gave her a leading specialist on hand surgery. And we walked out with no bill.

(and you're right - there'd still be the private options too, but in this case the NHS option had some of the best surgeons in the country in that field anyway)

Switzerland is #2 in per capita healthcare costs after the US. US is $11k per capita and Switzerland is $7k per capita.

Countries like Finland (4.2k) and New Zealand ($4.1k) show Switzerland could be doing way better.

Maybe the pot shouldn’t call the kettle black?

https://data.oecd.org/healthres/health-spending.htm

Dentistry is paid for by insurance and is relatively cheap either way. Healthcare in the US is expensive for several reasons. Excessive paperwork and bureaucracy, unpaid bills, required service, 24/7/365 services, complex diagnosis, lawsuits, medical school, regulatory capture, etc etc.

Changing any one of them isn’t going to fix pricing. We really need to change several pieces at the same time and the industry really doesn’t want lower prices as that reduces their income.

I’m pretty sure most of this is also what, say, EU has to deal with. They most certainly have bureaucracy, unpaid bills, 24/7/365 services, complex diasnosises…

Single payer largely avoids unpaid bills and a great deal of bureaucracy around billing. This is true even in the US, just look at the VA’s costs. The VA is serving a very expensive population and it does so relatively cheaply for the US. At least in terms of services rendered rather than just per person.

The 24/7 comment was in comparison to dentistry. It’s tempting to compare getting stitches to getting a filling but inherent overheads are associated with an ER which must be added to the bill.

Some big differences: Without the equivalent of AMA lobbying Europe has a lot more primary care doctors per capita than the US. No long history of trying to get everyone healthcare without using taxation resulting in a pile of Rude Goldberg regulations that nobody understands. Regular use of cost-benefit analysis in deciding what procedures or drugs to pay for, now that the FDA has approved aducanumab it's going to be available to people even though it probably doesn't work and is breathtakingly expensive.

The United States leads the way in treatments and medical tech, but this gives me the impression that the US society is not benefiting as it could from that.

This seems poignant. The cost/benefit analysis does not seem to be aligned with the market. I suspect it’s driven purely by lack of qualified practitioners.

It's not. Physician reimbursement has been going down year over year since the late 90s. Each unit of physician work (relative value units, RVUs) is worth 50% of what it was in 1998 for Medicare at least, and most insurers peg their reimbursement at a specific multiple of the Medicare rate. Sorry, the insurance companies, PBMs, and hospital administration is to blame for the high cost of care, not the physicians who don't control how much they are reimbursed for each office visit or procedure.

Medicare and Medicaid are at best 50% of reimbursable amounts in most sub industries.

Also, while $/CPT code can go down, you can see more patients/day or alter your staffing ratios and other operating metrics to more than compensate.

Healthcare has some of the most "woo woo" hand wave-ey financial metrics around. Do a private equity quality asseatment on quality of earnings on "gross earnings" in most health care settings. Other than the Enron consolidations there can't be a more bullshit financial metric (heck entire area) under US GAAP than gross earnings. With that level of obfuscation (purposefull or not) it's no wonder you have almost full opacity into the cost chain.

If that’s true then why have physicians wages continued to increase for most specialties? Some have stagnated, but I wouldn’t say physicians are underpaid.

As someone who used to work for a company trying to get insurance to pay for medical technology, the US was typically the easiest and fastest country to get coverage in for both private and public insurance.