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Comment by Shivetya | Hacker News Reader

Because the government can force a cost upon a hospital that is not sustainable? Which in turn requires the hospital to recoup the costs elsewhere. One of the claims opponents have to ACA is that it will force private insurance out because the government will mandate its costs forcing private payers; companies and individual alike; to pick up the tab through higher billing from service providers.

Still one has to flinch when you see the pay some NON doctors get. Then again, its the same in education too. Some of the highest paid people in public and college education are not educators.

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But you also see absurd discounts with private insurance companies - - eg you get testing done by Quest and get an $1000 bill, and then the insurance discount is $900 before the insurer even pays anything. That's not the government forcing unsustainable pricing, that's simply nonsense.

In no other industry is there such a difference between the sticker price and "discount", where those who can least afford to pay have to pay the most.

The article addresses that.

The real question is why new hospitals don't open up and charge less than these hyper-inflated retail rates and compete on price?

I'm only on page 3, maybe that's addressed too - but I doubt it.

I am going to go out on a limb and suggest barriers to entry.

You don't just get a group of skilled doctors together and say, "let's make our own hospital!"

Rent-seekers + regulation agencies = regulatory capture = barriers to entry = no competition.

You essentially cannot, in the United States, get a group of doctors together to form a hospital as of the passage of Obama's healthcare reform act. (Technically, you can, but that facility cannot become Medicare certified, which is usually a death knell.) [1]

[1] = http://www.ama-assn.org/amednews/2010/06/28/gvsa0628.htm

> Because the government can force a cost upon a hospital that is not sustainable? Which in turn requires the hospital to recoup the costs elsewhere.

Is this accurate? It was my understanding that payment practices with insurance providers is what causes the high sticker price of any given medicine or service in hospitals, even though insurance companies and programs like Medicare do not pay those prices, only those who pay out of pocket do.

Medicare and Private insurers are two separate things.

Insurance companies negotiate rates with hospitals/doctors/etc. Medicare _dictates_ rates which providers can either accept or reject.

The reason the Medicare cost of an Xray is ~$20 is because it was decreed to be that expensive. It has no bearing on the cost to provide the service since the hospital had no input in the reimbursement decision.

You can search and easily find reports about how doctors restrict the number of medicare patients they see because the reimbursement rates for care are too low.

Except that the hospitals themselves say that the Medicare cost is typically around 10% less than the cost of the service/product.

The solution to a 10% shortfall is not to gouge those not responsible for that for at least a 150% minimum profit (up to 800%).

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