My wife had knee surgery recently.* One of the great things about our then-current health insurer is that they provide complete data—list price, what they negotiated, what they paid, what you owe. Since we’re in the “doughnut hole,” I’m tracking more frequently than I usually would.
And the bills—possibly because we were moving to a new provider—were processed quickly. So what you see below is, in percent form, the amount of the list price (in relation to the whole) and the net benefit to the provider (ibid.).
As you can see, the surgeon’s list price isn’t even close to the level he received, while the hospital and, especially, the anesthesiologist, did relatively better.
There are multiple possible reasons for this, and I don’t pretend this is representative of what everyone—or even everyone with my now-sadly-former Insurance Provider—would receive. The key finding is that all of these contracts and negotiations were carried on by a single entity (my insurance carrier) with each provider. Promises were made—volumes, volume discounts, speed of processing, and whatever else was agreed—and contracts agreed between parties.
All before I get involved.
Which means that the final figures are set in stone. I don’t get to negotiate them. Maybe I get to negotiate a payment schedule, but the levels themselves are set. So even if I believe that the pie should be distributed differently—that the hospital (and maybe the anesthesiologist my wife didn’t want in the first place) should get a little less while the surgeon gets a bit more, for instance—I don’t get a say in that.
Nor do I get the information before choosing an insurer. (If I even get to choose, which I do not in the case of employer-provided health insurance.)
Short version: my choices have no direct effect. There is a “market” for health care, but patient usage and expenditures has no direct effect on it.
*This occurred just as the company was being acquired and therefore our health plan was being transferred from one provider to another, but that’s another story for another time.