Could somebody please explain to me the rationale behind this statement:
“Medicare has systematically been underpaying for services,†said Dr. Denis A. Cortese, the chief executive of the Mayo Clinic, the highly regarded health system in Minnesota. If more patients are enrolled in a Medicare-like program, he predicted, “your very best providers will go out of business†or stop seeing patients covered by the government plan.
What I’m asking is how does Dr. Cortese know that Medicare payments don’t serve as a price support rather than systematic underpayment? How is price discovery done under our current system in healthcare services?
Greens fees + boat payments + alimony divided by number of procedures = price.
I can see you’ve worked in the restaurant business, Michael, and I’ve made a similar point myself.
“What I’m asking is how does Dr. Cortese know that Medicare payments don’t serve as a price support rather than systematic underpayment?”
He doesn’t. The inference implicit in your qestio is correct.
“How is price discovery done under our current system in healthcare services?”
The single biggest problem that exists. Advancing and expensive technology is interesting. Practicing defensive medicine is interesting. But we have absolutely lost price discovery and discipline.
He who is on an expense account eats steak, not hamburger.