The reason the cost of healthcare is so high is because medicare pays roughly 15% of a bill, others are somewhere between 20-50% of a bill depending. That is to say if the doctor charges you $40,000 you pay your 10% co-pay of $4,000 and the insurance then only pays maybe another $8,000.
Also, just so everyone knows, it's pretty easy to negotiate down your bill. The reason healthcare is so expensive is so many people don't pay it. If you are willing to pay say 40% of your bill it's already 25% better than medicare.
This. My Dad is a surgeon and the stories I hear are incredible. Once he operated on a child whose insurance was out of network. So the insurance company writes the parents a check to give to my father. Instead, the parents decide to cash it and never pay for the surgery. So, the parents literally make a few thousand bucks from having their child operated instead of paying that.
You, or an agency on your behalf can then have the unpaid amount due as a collection account appear on their credit report, and after that (7 years of no activity) it is supposed to come off. Some unscrupulous collection companies will modify the last account change date to keep it on, but that can be challenged.
You can also take the person to court and have a declaratory judgement, which will stick around on said credit report until paid.
There are also specific laws regarding where the involved parties are as local state laws apply too. It gets a little complicated.
I have two bills on my credit report with agencies that refused to negotiate... and I had an auto loan that was charged off (they repossessed my truck after they broke the payment arrangements that were made when I lost my job, and I refused to pay), after 8 years the collection company had changed the dates several times, I pointed out to the credit reporting agencies that the amount was the charged off amount for over 8 years, and had it successfully removed.
YMMV.
From everything I've seen, it's a very difficult job, and any mistake -- or not even a mistake per se, just coding something in a way that disagrees with the particular quirks of a given insurance company -- can have a drastic impact on whether and how much we actually get paid for a particular line item on a bill.
Another reason is the supply of doctors is artificially restricted by the AMA.
As long as we require physicians to be US trained and to have completed a US residency, the bottleneck will be GME funding. To fix that, the AMA or any other concerned citizen can lobby Congress for an increase.
[1]: http://jama.jamanetwork.com/article.aspx?articleid=182532
If hospitals can afford to give their executives seven figure compensation packages, they can afford to fund a few residents.
I was referring to medical school accreditation itself.
That help may explain extremly high nominal prices, but it doesn't explain the fact that the median price paid is also really high (The $12,000 in your example). Nor do cross subsides explain the high costs.
Both bottom up analysis looking at the amounts paid by various insurance companies for procedures and top down analysis of overall per capita health care spending reveal a system that is far, far more expensive than any other health care system in the world.
Its not so much a system as dozens of different systems with completely different premises and extraordinary complex interactions which have to deal with each other.
Which is why it is so expensive.
