What '60 Minutes' Didn't Tell You: Hospitals Will Charge You More Under Obamacare

Forbes ^ | January 12, 2015 | By Avik Roy

[wally_bert]

Thanks.

I popped an Aleve for pain around 4 in the morning and until yesterday didn’t need any pain pills.

It’s been 15 years or so since the last one.

[wally_bert]

I got the survey in the mail today. I was expecting the bill and will probably have a heart attack (sarc) when I see it.

[Zhang Fei]

What does he want Obama to do? Set price controls? Look at the empty shelves of Venezuela super markets to see how well that works.

The reason you'll get that for grocery items is because the value chain provides very few opportunities for savings. Profit margins in grocery stores are minimal, maybe 1%-2%. Groceries and household supplies themselves are not high profit margin, averaging 5% to 10% net, with a best of breed player like P&G getting 14%. Grocery chain personnel make minimum wage, so you can't exactly reduce that.

In contrast, up and down the value chain, health care is larded with opportunities for savings. Hospital profit margins aren't great, but they pay medical personnel big salaries, to the point that foreigners from around the world (including other Western countries) move stateside to get a piece of the action. Medical equipment is high margin, with minnows like Resmed and Varian making 22% and 13% net respectively. Then there's drugs, where Eli Lilly and Pfizer both routinely post net margins over 20%.

Bottom line is that there's plenty of opportunity to reduce healthcare margins without running into the results of Venezuela's attempt to get blood from a stone in groceries. The trade-off will be increased wait times and a much slower rate of innovation.

[Trailerpark Badass]

My son had a minor fracture in his arm, near the wrist. Went to the ER and got a bill for $1300 from the PA for squeezing his wrist and asking, “does this hurt?” And reading an x-Ray and ordering a splint.