Comment by dylan604
1 month ago
> "Rome said the companies seem to be maximizing prices while negotiating discounts behind the scenes with health and drug insurers and then setting yet another price for direct-to-consumer cash-pay sales."
This sounds like typical negotiating 101. You know you are going to be forced to lower from your starting position, so increase your starting position so when you do negotiate down you are closer to where you wanted to be.
It’s not only a logical negotiating position, it has legal implications.
Way back in the 50-60’s the government put in laws around “usual and customary price” in an attempt to rein in medical costs.
What providers were doing is charging cash customer $10, then when an insured patient came in (back when insurance paid 100%) they charged $100.
So a law was put into place to define what a “usual and customary price” is. The provider could not charge any customer more than this.
Like most well intentioned laws it created perverse incentives to jack up the public price as high as possible - if someone paid it, great, otherwise offer a discount.