A 50% discount off double the price doesn’t sound like much of a deal. A 60% discount off triple the price sounds even worse. How about an 80% discount off quadrupled the price?
Discounts don’t work unless there’s a markup.
In health care financing a 50% discount equals the average PPO allowed amount while a 90% discount equals the average Medicare allowed amount. Cash pricing averages somewhere close to Medicare allowed amounts and is often less than Medicare allowed amounts.
An EOB documents the practice. It is a useful propaganda tool. It is the product of a conspiracy between managed care partners in a calculated scheme to convey the illusion of the buying power of insurance.
Such is the nature of American health care finance.
