We talked about the high cost of healthcare. When people talk about how the US healthcare system is “broken” they are mostly complaining about cost. Getting costs down is tricky, and it’s a problem that was caused by government interference.
The Medicare Physician Fee Schedule is a 1,348-page document, and the final rule for hospital inpatient payment systems is 773 pages long. For some services, it’s impossible to know how many pages of regulations and price controls there are. For example, The Centers for Medicare & Medicaid Services (CMS) does not condense the Medicare payment rules for ambulances into a single, definitive document. The regulations for ambulance charges are spread across multiple manuals and chapters, all of which are constantly being updated and revised. A definitive page count for the rules does not exist, because no one knows for sure what all of the rules are.
All of this adds to the cost, as medical providers have to hire entire departments just to take a guess at what they can and should charge you, and even then, they often get it wrong, because the rules are contradictory.
Every time the government steps in to fix it, they add pages and chapters to the manual, but instead of fixing things, they make it more complex with carve-outs, backdoor deals that kickback money to big donors, and the need for an even larger hospital billing department.
I do want to respond to one comment, where someone said that reading a CT scan shouldn’t cost $1500 because it only takes an experienced radiologist 30 minutes or so to do it. Remember that you aren’t just paying for the radiologist. You are also paying for his malpractice insurance, the costs of compliance with government electronic charting and recordkeeping, the costs of his staff to include the billing department, and other associated administrative overhead. That radiologist is only getting a small fraction of that money, in many cases, less than a fifth of it.
- Malpractice insurance for a radiologist is around $25,000 per year
- Costs for electronic health records: for a smaller practice, you are looking at around $400,000 for initial costs, plus another $50,000 per year. In the case of radiologists, it will be even more to integrate with the output of proprietary CT machines.
- Plus staff and administrative costs
- So a radiologist is paying $200k or so a year just to read those CT scans. If he isn’t charging that kind of money, he might as well go be a plumber.
Keep in mind that an hour’s work from a plumber costs about the same as that radiologist is going to cost you.
24 Comments
C · September 6, 2025 at 6:12 am
A CT Scan shouldn’t really cost $1500. However your queue in the line is really what determines that price. Not so much the malpractice insurance, records, etc. The average cost for a CT scan or MRI at an outpatient practice here is $500. Urgent Care or Emergency Department? $1500-4000. Don’t want to pay through the nose? Unless it’s really an emergency, suck it up and deal with it for a little while longer.
Divemedic · September 6, 2025 at 8:08 am
Be careful on saying what things SHOULD cost. We all know that price controls don’t work. Or you should if you have been reading this blog for any length of time.
C · September 6, 2025 at 9:00 pm
Then let me rephrase. The market here says the cost is $500 if you schedule an outpatient CT or MRI. It’s $1500-4000+ depending on if you go through urgent care or the ED. The customer picks the price based on either how serious the injury or how stupid they are. I’d say 90% of the patients admitted into the local ED don’t need to be there. Unfortunately they’re either too stupid or irresponsible to use outpatient services for primary care.
Joe Blow · September 6, 2025 at 6:16 am
I’ve never wished and prayed for a competent Radiologist before….
(rimshot)!
I totally agree with you.
While I understand EVERYTHING is a business these days, something happened when medical care took a back-seat to finance. I don’t think it happened at/in the Drs. office – it’s the apparatus that surrounds the field. The insurance that’s needed because lawyers sue for stupid shit (and people legit make mistakes from time to time)… it’s got nothing to do w/ providing actual medical care to the patient, but b/c everything is a business, it’s a necessary expense, added into the cost (like packaging costs are buried in the price of the product).
You can dive into the minutia of all the different systems that take away from the care (or add to the expense, depending how you view it), but its all the ancillary junk needed to operate a business that’s causing the costs to rise. The Bureaucracy, and all the people it employ’s are the root of the problem. Same in government, schools, manufacturing, everywhere. It’s the Kulak. They control the proles Commies love this shit, because they hide their malevolence and malice behind systems and methods, and inch by inch, your freedom is taken from you, as a frog slowly boils on the stove. Ahhh, it wasn’t me you see, the department of government somethingorother did it. Now, in the boxcar please.
All by design, and people think it’s just a chance coincidence.
Divemedic · September 6, 2025 at 8:13 am
It’s always been about money in everything. Farming, medicine, manufacturing. Without money, none the things that make a society work is possible.
Michael · September 6, 2025 at 8:57 am
Not sure your definition of Kulak but here’s Websters:
ku·lak
[ko͞oˈlak, ko͞oˈläk]
noun
historical
a peasant in Russia wealthy enough to own a farm and hire labor. Emerging after the emancipation of serfs in the 19th century the kulaks resisted Stalin’s forced collectivization, but millions were arrested, exiled, or killed.
If this was a current thought, I’d be a Kulak as I hire help running my mostly hobby farm so I can still work in the EMS medical services.
Most small businessmen could also fit into the Kulak mode.
Government at best is a necessary evil but like cancer grows if unrestrained.
Jay Dee · September 6, 2025 at 6:26 am
Here’s a thought. Government isn’t free. Every page of that Medicare Physician’s Fee Schedule requires money to create and money to administer. I know a certain amount of process is required but I think we’ve let this get away from us. Like kudzu, it soon envelopes everything.
Skeptic · September 6, 2025 at 7:35 am
The cost of government is the biggest cost in health care, as with many other things in our society. In health care, you can add in the costs of the legal system. As you noted, the actual cost of the provider is a small cut.
SiG · September 6, 2025 at 7:48 am
Exactly. The other big problem with the transparency of pricing is what I call the change from rule of law to rule by lawyers.
Malpractice insurance.
Everywhere I’ve been in Florida and even into the SE US, we’re constantly barraged by ads for the same ambulance chasers who constantly brag about how much money they got for accident victims as if it’s all about making millionaires. The general population seems content to think there is zero risk in life and if anything happens to them, it’s somebody’s fault and that person should be punished.
Do doctors, nurses, technicians make mistakes? Of course they do. Should they be held responsible? Likewise, of course. When there’s an entire industry dedicated to “making them pay” things might have gotten a little out of hand.
Divemedic · September 6, 2025 at 8:12 am
Even as a nurse, my malpractice insurance is over $200 a year, but that is because I only need a million bucks in coverage, and I am partially covered by the hospital’s insurance. Doctors pay far, far more. OB/GYN is the highest, with them paying more than $300,000 a year for malpractice insurance, and neurosurgery is the second highest with $250,000 a year in costs.
lynn · September 6, 2025 at 3:11 pm
I thought that the anesthesiology doctors were the highest malpractice insurance ?
Divemedic · September 6, 2025 at 8:34 pm
I believe it is ob/gyn, because so many of them get sued for problems in childbirth. From Google AI:
lynn · September 6, 2025 at 3:19 pm
Not in Texas. The damages in Texas are limited to actual damages plus $250,000 max in pain and suffering.
SoCoRuss · September 6, 2025 at 12:10 pm
DM, do you have to keep your insurance after you retire? My Sis in law said when she retired that she has to keep hers until statue of limitations expires?
Divemedic · September 6, 2025 at 8:32 pm
That would be the wise thing to do, to ensure coverage until you can no longer be successfully sued.
Grumpy51 · September 6, 2025 at 11:24 pm
Depends on the type of insurance. I’m copying from AI here as it did a decent job of explaining the two types (IMO).
Claims Made vs Occurrence
The primary difference between claims-made and occurrence insurance policies lies in the timing that triggers coverage.
An occurrence policy covers incidents that happen during the policy period, regardless of when a claim is made against the insured. This means that even if a claim is filed years after the policy has expired, it will still be covered as long as the incident occurred while the policy was active.
This provides long-term protection and eliminates the need for additional “tail” coverage, offering peace of mind, especially for businesses or professionals facing potential long-latency claims. However, occurrence policies typically have higher upfront premiums because the insurer assumes the risk of future claims.
In contrast, a claims-made policy covers claims that are both made and reported to the insurance company during the policy period. The incident that led to the claim can have occurred at any time, but the claim itself must be reported while the policy is in force. This type of policy is often less expensive initially, as the insurer’s exposure is limited to claims reported during the policy term. However, if the policy is canceled or not renewed, the insured is left without coverage for claims arising from incidents that occurred during the policy period but are reported later, creating a “tail exposure”. To mitigate this risk, the insured can purchase tail coverage (also known as an extended reporting period), which provides protection for claims made after the policy ends, though this can be costly, sometimes exceeding 200% of the last annual premium.
The choice between the two depends on factors like business type, risk profile, budget, and the likelihood of delayed claims. For instance, professionals in fields with high potential for long-latency claims, such as medicine or construction, may prefer occurrence policies for their comprehensive, long-term protection, despite higher costs. Conversely, businesses seeking lower initial premiums may opt for claims-made policies, provided they plan to maintain continuous coverage or are willing to pay for tail coverage when switching or canceling.
I ONLY carry occurrence liability, for the very reasons noted above.
Honk Honk · September 6, 2025 at 1:27 pm
I thought the immaculate Chicago messiah (THE ONE!) fixed healthcare?
Dan · September 6, 2025 at 6:18 pm
Very few radiologists own their own CT machine. Tha vast majority are in hospitals or free standing imaging.centers…which a radiologist may be a partner in. For 95% of scanners the costs involved are borne by the hospital/imaging center. The rad only has to cover his own expenses…which does include expensive malpractice insurance. Most CT scans can be read in 5-10 minutes. Less for a simple normal head scan. Occasionally a difficult case may take longer. Rads charge a lot because they know a lot. And it takes many years of practice to do what they do. However the typical professional fee is less than $1K per exam read. Want to cut the massive cost of healthcare? Address the elephant in the room. The cost of keeping dying old people alive and extra six months. The majority of costs most people incur for care occurs in the last six months to a year of life as we try to prevent the inevitable…death. End those costs and it would make a huge difference. End the money wasted on illegals and self destructive behavior and the savings would be almost incalculable.
Divemedic · September 6, 2025 at 8:39 pm
According to the NIH, medical expenditures for the elderly (65 years old or older) over the last year of life constituted 22 percent of all medical, 26 percent of Medicare, 18 percent of all non-Medicare expenditures, and 25 percent of Medicaid expenditures.
One of the issues that come up with this, is exactly what MAID in Canada has caused. “Your insurance doesn’t cover treatment for this. It does, however, cover euthanasia.”
Danny · September 6, 2025 at 6:32 pm
My health insurance changed from Aetna to Humana for 2025. I had an appointment scheduled with my GP for early May. But the practitioner that was caring for me wasn’t in network. My appointment was cancelled. That was it — no attempt to move me to a different Doctor or NP.
Fortunately I’m healthy as a mule. I guess now I need a different practice.
Divemedic · September 6, 2025 at 8:41 pm
Same thing happened to me earlier this year.
Jester · September 6, 2025 at 7:23 pm
Don’t forget figure in on your costs the building itself that houses the equipment and the cost of that CT scanner as well. And the upkeep of those machines, buildings.. the upgrades to all of them as well. Go ahead and do a bit of googling around for the costs of these things devices that are used. Being on the admin side of a hospital that’s closely tied in to this stuff and seeing the costs that are being reviewed for purchases in the VA system, shall we say the device cost itself is staggering. And that’s doing the market research to find the most cost effective devices. Figure that in to your equations of cost beyond just staffing the fucking machines that do all the things you pay your health care partner to read and tell you whats going wrong with you.
Divemedic · September 6, 2025 at 8:43 pm
I wasn’t counting that, because the hospital bill is separate from the bill from the doctors.
JimmyPx · September 6, 2025 at 9:14 pm
Radiology is a complex system WAAAY beyond just the CT scanners or MRIs.
I’ll give you an example of the system at the large hospital system that I work at.
First, you have the ct scanner, then you have the modalities that are the computers that collect all of the data from the scanners and send it on. From there the data goes to servers in the data center. There are multiple servers some that are used as a cache for the images coming and going and using ALOT of high speed flash storage. The data is then sent to a medium speed storage array called a NAS that is a specialized storage array that serves out thousands of Windows and Unix shares. The data is then sent to the long term archive that utilizes the S3 protocol and it could be in the Amazon cloud or it can be on premesis (ours is on premesis).
Once this is done it is sucked into our EMR system called EPIC that basically runs the hospital. There are TONS of servers running EPIC and I could write a 3 page document describing them all but it is complex and very expensive. Also all of these servers are times 2 at data centers more than 30 miles away from each other for disaster recovery and safety so everything is always up and disaster can’t take the data out.
Finally the radiologist is sitting in front of a VERY high end PC with a high end graphics card and monitor so they can drill down into the scan using the EPIC system and a specialized viewing software that plugs into all of this. This system also allows any doctor but also the radiologist to press a button and compare scans.
All of this to say that while radiology makes good money for the hospital, the systems behind it are complex and expensive. There are 10s of millions of dollars of gear involved and a bunch of highly paid people running it all.
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