To me, this seems to be one of the major problems with healthcare. Do they really believe that some who can't afford insurance can afford to pay ten times the cost for service? Now there must be a reason and the only thing that I come up with is that unpaid services end up being submitted back and the government helps cover the cost. How far am I off? Why is this the case? Should the cost be the cost?
Well, first of all, I hope your surgery was minor and you're on the mend, buddy! Please let me know.
What you experienced is par for the course and one of the main reasons that healthcare is in such a mess. Hospitals have "charges" for patients and they have "reimbursements" from insurance. Your $30K bill represents the hospital's charges, but their charges are not calculated with any sense of sanity. Those charges are arbitrarily established, usually by simply marking-up federal Medicare/Medicaid reimbursement rates by 300% - 500%. In the rest of the business world, like Apple for example, products are priced according to "Cost of Production + Margin". The goal is to minimize the cost of production and establish a margin that is reasonable for the market, meets shareholder goals, and achieves sustainability of the company. Hospitals have no understanding of their true Cost of Production...they are generally clueless in that regard. They understand Cost of Operation, but that’s not the same as Cost of Production—that is, how much does it cost for healthcare to produce high quality health, in your case, a successful surgery, or a healthy diabetic or newborn baby?
So there you have it, brother. The mess of charges and reimbursements that we tolerate in healthcare, we would never tolerate in the rest of our lives. We can't take the status quo any longer and the good news is, I truly believe that we’ve reached a tipping point of major and permanent change.