I think there is an important point for people to remember: The cost of a procedure, like a CT scan, is not the cost of the procedure. The amount you are getting charged is the Chargemaster rate.
The Chargemaster rate is the same no matter who you are, the different is what people pay from the chargemaster bill. Let's say you are given tylenol and the charge master is $50. The reason why this is so high is because medicare will then say that they pay , say, 20% the chargemaster rate, and thus elderly patients pay $10. This is why elderly patients are seen as great patients for revenue: They all actually can pay something, even if its only a fraction of the chargemaster. A gold plated insurance patient will pay Medicare+30%, and thus the gold plate insurance pays $20. The patient with no insurance then is also billed $50 because they don't have an agreement with the hospital. Thus, what likely happens is that they pay $0 and goes bankrupt, or more likely, these patients don't have any net worth at all. This creates a weird situation where the homeless, destute, and people with no net worth essentially get infinitely free healthcare. These patients tend to be very high volume healthcare users (homeless patients that take $5000 ambulance rides as taxis because they know they will never actually pay a penny, despite having millions of dollars of charges.). This is what the Affordable Care act tried to prevent: by making people pay something, you were actually decreasing costs for all because you remove free riders who present the majority of sunk costs in the healthcare system. Very few people if ever pay for the full cost of a procedure or chargemaster. The chargemaster is a negotiation tactic. Not a final bill.
That is why a CT Scan costs thousands of dollars. Because everyone knows you'll only end up paying a fraction of that if you have insurance. And if you pay cash, its only a few hundred bucks, because thats how much people get paid anyways.
Source: I'm an ER Doc.I do research in healthcare and billing
What do, for example, tourists pay? When I buy a plane ticket to the US, there is travel insurance, but I have never needed to use it and do not know how it would work.
The Chargemaster rate is the same no matter who you are, the different is what people pay from the chargemaster bill. Let's say you are given tylenol and the charge master is $50. The reason why this is so high is because medicare will then say that they pay , say, 20% the chargemaster rate, and thus elderly patients pay $10. This is why elderly patients are seen as great patients for revenue: They all actually can pay something, even if its only a fraction of the chargemaster. A gold plated insurance patient will pay Medicare+30%, and thus the gold plate insurance pays $20. The patient with no insurance then is also billed $50 because they don't have an agreement with the hospital. Thus, what likely happens is that they pay $0 and goes bankrupt, or more likely, these patients don't have any net worth at all. This creates a weird situation where the homeless, destute, and people with no net worth essentially get infinitely free healthcare. These patients tend to be very high volume healthcare users (homeless patients that take $5000 ambulance rides as taxis because they know they will never actually pay a penny, despite having millions of dollars of charges.). This is what the Affordable Care act tried to prevent: by making people pay something, you were actually decreasing costs for all because you remove free riders who present the majority of sunk costs in the healthcare system. Very few people if ever pay for the full cost of a procedure or chargemaster. The chargemaster is a negotiation tactic. Not a final bill.
That is why a CT Scan costs thousands of dollars. Because everyone knows you'll only end up paying a fraction of that if you have insurance. And if you pay cash, its only a few hundred bucks, because thats how much people get paid anyways.
Source: I'm an ER Doc.I do research in healthcare and billing