J Patrick Rooney is considered by many to be the Father of Margin Based Pricing better known these days as Reference Based Pricing. Many believe his conclusion of what the “sweet spot” reference point should be still holds true today.
“While Rooney acknowledges that hospitals may need to charge more than Medicare will pay, he contends that authoritative research shows that Medicare plus 25 percent is the reasonable amount for hospitals to charge….” – Wikipedia
Rooney believed that people need tools to defend themselves. ‘They need to know how to deal with the hospital and the evidence is if they deal with the hospital correctly almost all the time the hospital will forgive the bill … The hospital is only entitled to collect a reasonable fee. There is case law exactly on this subject.”
“When they enter the hospital, if they sign an unconditional commitment it’s generally not binding because they’re under duress.’
Rooney emphasizes that talking people through the process of dealing with hospitals requires patience, stamina and verbal skills. ‘A sick person is not in a position to adequately defend themselves, but that doesn’t mean they can’t be defended.’”
HOMEWORK READING ASSIGNMENT:
The Great Aldeeni Opines On RBP
If Hospitals Lose Money on Medicare Why Do They Take It?
“MedPAC has indicated that a reasonably efficient hospital should be able to operate overall pretty close to Medicare. With that, you’d say, ‘well, why are plan sponsors being charged up to five times Medicare, then?’ And of course, no one knew the answer to that. Now I think we do: we’re just getting price gouged, effectively, in the pricing because they can,” said Thompson. “Plan sponsors as plan fiduciaries have to take action. They can’t just stand for it.” – How Employers Can Achieve a Fair Price in Hospital Negotiations
