[aurelwu]

The statement from the hospital management boggles my mind: "In addition, there are different parts to a patient bill. One part is what the hospital charges the insurance company, one part is what the insurance company eventually pays [...]"

I can't think of any other business transaction where someone just puts a giant number on a bill and then is happy if someone pays ~25% of it. Such companies would be shunned by their customers and they'd go bankrupt. Is there any economic theory which explains how such odd of an system can emerge/survive?

[karatestomp]

Nothing about hospital billing would fly anywhere else. Bills just showing up after the fact with little ability to verify their accuracy, constant errors one can catch anyway (so how many are missed?), bills showing up months later from a half-dozen different sources when you only had one apparent "vendor", and so on.

I bet we received between 100 and 200 pieces of mail for each of our kids' births, including maternal care before the births. Probably averaged 40-60 hours dealing with billing and billing problems with each one, maybe more. And ours were all totally normal and about as easy as it gets, and we had insurance. I think we ended up missing some tiny bill we could easily have paid in each one (oh, yeah, they also like to give you very little time to pay) and had them go to collections.

[beckler]

I found a bill with a mistake on it, as one of my kids was charged twice for a single procedure. I called to get it fixed, but instead of dealing with it they just immediately sent it to collections.

[mitchdoogle]

Here is an overview of the economics of healthcare from a textbook: https://scholar.harvard.edu/files/mankiw/files/economics_of_...

[TheFiend7]

Awesome read.

[themagician]

A lot of businesses work like that. There is a retail price and then a discount is applied depending on who you are. That's kind of how all retail works, really.

Even working with Amazon or Walmart is kind of like that. You invoice them for one amount, but you get paid much less based on different deductions for things like discounts, co-ops, damage allowance, etc.

[mindslight]

> Is there any economic theory which explains how such odd of an system can emerge/survive?

It has nothing to do with economics, but rather with law. My first reaction upon seeing figures like $300 for ibuprofen or $750 for iodine (both elsewhere in this thread) is imagining I'd tell the hospital to fuck right off (ie respond with written notice disputing the validity of such charges), but clearly there are other details that pressure people into actually paying the nonsensical bullshit.

Regardless of single payer, private insurance, subsidies, out of pocket, etc, I do think much of healthcare could be solved if providers had to charge/publish uniform prices and couldn't post-facto bill, you know, like every other business. Imagine going to the grocery store, paying at the register, and then two months later receiving a bill in the mail for the cashier's time!