There was a time when I actually believed that there was a functioning free market in US medical services. Experience has taught me that this is by no means the case.
I may have mentioned before that my wife is opening a primary care practice in Bolingbrook. It’s been a long haul but we’re finally open for business. One of the key matters in any business is setting prices. Here’s how it’s done these days in our “free market” us medical system.
1. Look up your Medicare geographic zone (set by the US Government)
2. Download the price list for that zone
3. Enter those prices in your billing software
There are all sorts of restrictions on price flexibility. Even if you don’t accept Medicare, even if you don’t accept Medicare assignment (ie, you’re not part of the program and the patient gets Medicare reimbursement at home after you’ve taken their money at the office), you still have a “limiting charge” that you’re not allowed to exceed if your patient is a Medicare participant.
You’re also not permitted to discount your prices under certain circumstances. If you accept insurance, cash patients are pretty much forced to pay the highest rates for your services even though they are your most preferred payers (you get your money quickest and with the least cost and fuss).
Clearly, if you can’t set your own prices but are largely cutting and pasting in numbers from a government provided spreadsheet, this situation is not a free market. Yet it’s also not socialized medicine. So what is it?