I’ll admit I haven’t thought of all of the potential consequences, but this seemed like a good idea.
Medicare collects cost data from hospitals and uses it to set their DRG payments. They have the data.
You could make some law saying providers can’t charge more than X% of what Medicare rates are. You could even make it 200% (lots of room for higher reimbursement) and it would be a massive change. You won’t have one hospital charging $2000 for an MRI and another $15,000 (actual numbers I’ve seen - the payment insurers made!).
That would force hospitals and insurers to at least keep price somewhat closer to reality and they’d need to stop the game of “ill take an insurance payment below cost for X-rays but make it up in MRI reimbursment” which is what a lot of hospital do - they look at line of service finances not procedure costs (so they don’t care if X loses money if they make it up on Y).
Problem is, most hospitals have no clue what things cost (a friend worked at a major hospital and said they’ve never calculated what it costs, all in, for say an MRI).
It would be massively disruptive for a while but eventually contracts would be renegotiated and you’d end up with bills that are at least in the ballpark of actual costs.
Medicare collects cost data from hospitals and uses it to set their DRG payments. They have the data.
You could make some law saying providers can’t charge more than X% of what Medicare rates are. You could even make it 200% (lots of room for higher reimbursement) and it would be a massive change. You won’t have one hospital charging $2000 for an MRI and another $15,000 (actual numbers I’ve seen - the payment insurers made!).
That would force hospitals and insurers to at least keep price somewhat closer to reality and they’d need to stop the game of “ill take an insurance payment below cost for X-rays but make it up in MRI reimbursment” which is what a lot of hospital do - they look at line of service finances not procedure costs (so they don’t care if X loses money if they make it up on Y).
Problem is, most hospitals have no clue what things cost (a friend worked at a major hospital and said they’ve never calculated what it costs, all in, for say an MRI).
It would be massively disruptive for a while but eventually contracts would be renegotiated and you’d end up with bills that are at least in the ballpark of actual costs.