Some tests are legitimately expensive, some are “priced for insurance”, and some are a complicated middle ground where you could reasonably argue either way. Like, an MRI isn’t a cheap machine, nor is it devoid of ongoing costs, and the facility requirements to operate one are also extensive. The actual cost to run a single MRI scan though is materially cheap, ignoring labor costs. About the cost in electricity to power a house for a day. Less than $10 dollars.
On the one hand, taking those upfront, ongoing maintenance, and facilities costs and spreading them out over the cost of each scan seems reasonable. Without that money they can’t actually buy and run the machine. It can add up to $500-$10,000 per scan.
On the other hand, if you don’t get the test and the machine is just idle during the time, their costs only go down $10. You could reasonably argue that they should take any offer more than $10 if they have more idle capacity available than is needed for emergency usage.
Some genetic and nuclear testing just intrinsically involves expensive materials. They’re not done often and the materials are difficult to get together safely. Given the nature of the show, those are going to be represented more often. It’s not nearly as fun to watch the rogue doctor fail to charge $75 for an automated metabolic panel as it is to watch him jam a hamster gall bladder full of neptunium up someone’s urethra while spinning them like a rotisserie in an fmri.
In the same way you said hospitals “price for insurance”, I wouldn’t be surprised if medical equipment manufacturers were doing the same, but to hospitals.
They definitely do, but for different reasons.
Hospitals increase prices they send to insurance so that the reduced rate the insurance pays covers their cost+profit. The insurance company wants to spend as little money as possible from their risk pool, and they want to advertise their “massive negotiation powers” to their big customers who have enough members to self fund (the insurance company just manages the money and billing, so zero risk on their part).
GE and the hospital have a much more traditional business to business relationship. GE is actually providing them with a very delicate piece of machinery that is enormous, filled with liquid helium, that produces a preposterous magnetic field and is safe enough to stick a squishy person into.
Their extra markup comes from the certifications that tell you that you can trust that it’s safe for those squishy people. It’s an intangible value add, sometimes legally mandated (FDA approval), sometimes an assurance of quality (all those ISO certifications attesting to quantifiable defect rates).
They’re not charging you more so when you pay less they still make a profit. They’re charging more because there’s only a handful of companies that can actually sell the damn things, and they all also have the same intangible costs.
Medical equipment is expensive because the price jump between “works” and “you can trust it with someone’s life” is a very expensive one. The paper documenting it even more so.
Most of the tests themselves aren’t expensive to run, but the equipment is often really expensive and maintenance, repair and software licenses needed use the equipment add expenses. Trained tech time isn’t cheap either, but yeah the costs are still massively inflated in for-profit hospitals.
Are most of these tests actually expensive for the hospital, or is it mostly the hospital overcharging for them?
Some tests are legitimately expensive, some are “priced for insurance”, and some are a complicated middle ground where you could reasonably argue either way. Like, an MRI isn’t a cheap machine, nor is it devoid of ongoing costs, and the facility requirements to operate one are also extensive. The actual cost to run a single MRI scan though is materially cheap, ignoring labor costs. About the cost in electricity to power a house for a day. Less than $10 dollars.
On the one hand, taking those upfront, ongoing maintenance, and facilities costs and spreading them out over the cost of each scan seems reasonable. Without that money they can’t actually buy and run the machine. It can add up to $500-$10,000 per scan.
On the other hand, if you don’t get the test and the machine is just idle during the time, their costs only go down $10. You could reasonably argue that they should take any offer more than $10 if they have more idle capacity available than is needed for emergency usage.
Some genetic and nuclear testing just intrinsically involves expensive materials. They’re not done often and the materials are difficult to get together safely. Given the nature of the show, those are going to be represented more often. It’s not nearly as fun to watch the rogue doctor fail to charge $75 for an automated metabolic panel as it is to watch him jam a hamster gall bladder full of neptunium up someone’s urethra while spinning them like a rotisserie in an fmri.
In the same way you said hospitals “price for insurance”, I wouldn’t be surprised if medical equipment manufacturers were doing the same, but to hospitals.
They definitely do, but for different reasons.
Hospitals increase prices they send to insurance so that the reduced rate the insurance pays covers their cost+profit. The insurance company wants to spend as little money as possible from their risk pool, and they want to advertise their “massive negotiation powers” to their big customers who have enough members to self fund (the insurance company just manages the money and billing, so zero risk on their part).
GE and the hospital have a much more traditional business to business relationship. GE is actually providing them with a very delicate piece of machinery that is enormous, filled with liquid helium, that produces a preposterous magnetic field and is safe enough to stick a squishy person into.
Their extra markup comes from the certifications that tell you that you can trust that it’s safe for those squishy people. It’s an intangible value add, sometimes legally mandated (FDA approval), sometimes an assurance of quality (all those ISO certifications attesting to quantifiable defect rates).
They’re not charging you more so when you pay less they still make a profit. They’re charging more because there’s only a handful of companies that can actually sell the damn things, and they all also have the same intangible costs.
Medical equipment is expensive because the price jump between “works” and “you can trust it with someone’s life” is a very expensive one. The paper documenting it even more so.
Most of the tests themselves aren’t expensive to run, but the equipment is often really expensive and maintenance, repair and software licenses needed use the equipment add expenses. Trained tech time isn’t cheap either, but yeah the costs are still massively inflated in for-profit hospitals.
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