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One of the major problems with the current healthcare system is the way that reimbursement rates are determined for medical services. These rates are set in the contracts established between medical providers have with major insurance companies. The rates are based to a large extent on a percentage of the “reasonable and customary” for the services. So it is in the medica providers interest to establish these R&C charges as high as possible and to continually drive them higher. If those of you who have insurance look at the details of your claim payments, you will see that it is quite common for a doctor to charge $120 for an office visit and be reimbursed $50 (plus your co-pay if you have one).. All well and good for the insured, but the uninsured will be asked to pay the full $120 up front and are victims of this sham. Additionally, how many of you would happy to pay discounted fee if you could forgo that part of your insurance. It could be a win for you, but it certainly is a win for the doctor if everyone did this as he now has no need for half his office staff that deal with insurance. A similar but more skewed situation exists with medical diagnostics. I personally have seen invoices over $500 that were settled for less than $50, there is obviously something wrong. There has been a push to require medical professionals to post their pricing. The problem is that this fee is what they would like to receive not what they are prepared to receive. A better way would be for the doctors to post the acceptable cash price for services so that the customer can make an informed choice.

Hospitals have the same practices, but they are dealing with much higher costs. If any of you have had a large hospital bill and been slow to pay it you will find that the hospitals are prepared to negotiate. If you balk at the cost they are easily pushed to accept 50c on the dollar. Hold out more and they will sell the debt to a collection service who will go as low as 10c on the dollar. And don’t worry, medial debts do not impact your credit rating. The credit rating companies know that it is a scam.

But the problem with hospitals is that they are relatively expensive even at their best prices and most people do not have funds set aside to deal with the unexpected. If you have good insurance, you are probably going to have to pay $1K for a stay. If you are on one of the Obamacare no frills plan it could be as high as $15K. But there are ways to cut those costs to the overall market. One such idea that has been successfully tried in the US is to require all patients to have a living will which outline you wishes in the event of a hospital stay. These wills can be found on line and there cover multiple scenarios. Example: “You have been diagnosed with terminal XYZ and have 3 months to live”: “Options 1) Do everything possible to keep me alive . 2) Keep me comfortable and no heroics 3. Pull the plug”. Similarly, ‘ You have been involved in an accident and are now a quadriplegic ….. Hospital stats tell you that the majority of hospital costs are incurred in the last month of life. Lowering these costs through up front personal choices allows costs to be reduced for other treatments that non life threatening : like the broken leg and cracked skull when you fell off your bike.

Obamacare prevented discrimination based on pre-existing condition, and that seems reasonable, everyone should have access. But the cost of that access should be based on up front choices of how you want to be treated. Do it through a uniform catastrophic coverage plan that everyone would have, just like no fault car insurance. Add to that an optional life insurance plan for those who want the best terminal coverage and need the bills to be paid
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