> Assuming that was under the deductible, so the ambulance provider did not get paid anything else
Hm? The insurer would've paid the difference (minus some additional discounts depending on the size of the insurer and its bargaining power). That the patient paid $500 does not in the slightest bit indicate that the insurer negotiated the rate down to that pricepoint.
Even at $500 (and let's assume that was an hour-long ride, for easy math that's maximally generous to your argument), EMTs on average make around $20/hour at best, and maybe double that for a nurse - so a fully staffed ambulance would run around $80/hour for labor. Round it up to $100 to be generous and that still leaves $400 for the ambulance itself. Ambulance itself costs up to $150,000, so earmarking another $100 would pay it off after 1,500 hours of service - so less than a year, even if it's only running for 40 hours a week. Maybe it's really fuel-inefficient and breaks down frequently, so we'll say another $100 for fuel and maintenance. Throw in another $100 to pay off $150,000 worth of equipment and medical supplies.
So of that $500 price the patient pays, we're left with $100. At the price billed to the insurer, that's an eye-watering $11,600 of what appears to be pure profit. Maybe there's some excuse for that, but to me it's pretty obvious that something's way out of whack. $500 or even a bit more than that would be reasonable if EMTs and nurses were being paid better, but they largely ain't.
I doubt the $12k that was billed was paid by insurance company. Typically, the provider bills a ludicrous amount, and then they apply a ridiculous “adjustment” for being a subscriber to the insurance plan, and then you pay per your deductible/coinsurance/out of pocket maximum situation.
I have no idea how much ambulances and personnel cost, but I do know that whatever the costs are, they have to be distributed amongst the emergency events.
An ambulance and redundant staffing is paid to be available 24/7, but there might only be 3 or 4 or 10 trips per day.
I assume there are also considerable liabilities and hence insurance costs.
> I doubt the $12k that was billed was paid by insurance company. Typically, the provider bills a ludicrous amount, and then they apply a ridiculous “adjustment” for being a subscriber to the insurance plan, and then you pay per your deductible/coinsurance/out of pocket maximum situation.
That doesn't make the fact that they bill such a ridiculous amount in the first place any less unacceptable.
It is a well established practice in the US that billed prices have no bearing on reality and if you are insured, you have no liability to pay them, hence out of context for the purpose of discussing the reasonableness of the insurance negotiated price (which is well established to be real).
> It is a well established practice in the US that billed prices have no bearing on reality and if you are insured, you have no liability to pay them
And if you're uninsured? Or your insurance refuses to cover it? Or it does, but with a high deductible?
My point is that the "well established practice" in question is useless at best and outright detrimental (to say the least) on society. Why even bother throwing out that number unless there's an expectation that someone would pay it?
Hm? The insurer would've paid the difference (minus some additional discounts depending on the size of the insurer and its bargaining power). That the patient paid $500 does not in the slightest bit indicate that the insurer negotiated the rate down to that pricepoint.
Even at $500 (and let's assume that was an hour-long ride, for easy math that's maximally generous to your argument), EMTs on average make around $20/hour at best, and maybe double that for a nurse - so a fully staffed ambulance would run around $80/hour for labor. Round it up to $100 to be generous and that still leaves $400 for the ambulance itself. Ambulance itself costs up to $150,000, so earmarking another $100 would pay it off after 1,500 hours of service - so less than a year, even if it's only running for 40 hours a week. Maybe it's really fuel-inefficient and breaks down frequently, so we'll say another $100 for fuel and maintenance. Throw in another $100 to pay off $150,000 worth of equipment and medical supplies.
So of that $500 price the patient pays, we're left with $100. At the price billed to the insurer, that's an eye-watering $11,600 of what appears to be pure profit. Maybe there's some excuse for that, but to me it's pretty obvious that something's way out of whack. $500 or even a bit more than that would be reasonable if EMTs and nurses were being paid better, but they largely ain't.