Saum Sutaria, M.D.

Sure, but Peter, healthcare, the utility that people, again, using an economic term, the utility that people gain from interactions with different parts of the healthcare system vary greatly relative to the actual payments that are made. Another way to say what I said is this is why the American consumer trusts their doctor. When you ask much more than anybody else in the system,

Sure, but Peter, healthcare, the utility that people, again, using an economic term, the utility that people gain from interactions with different parts of the healthcare system vary greatly relative to the actual payments that are made. Another way to say what I said is this is why the American consumer trusts their doctor. When you ask much more than anybody else in the system,

Doctor and nurse. The next would be their hospital where they had their care. The least would be the insurance company. That doesn't mean the economics flow that way within that. But the utility, which obviously has a qualitative personal component, is somewhat disconnected from those payments.

Doctor and nurse. The next would be their hospital where they had their care. The least would be the insurance company. That doesn't mean the economics flow that way within that. But the utility, which obviously has a qualitative personal component, is somewhat disconnected from those payments.

Yeah, but I think that's a bit of a red herring. I think that when you say the cost, so now we have this complexity of you have cost, you have price, and you have charge. So let me explain this. And again, I think this has almost no bearing on macro healthcare costs. The cost of the gauze is what the manufacturer who makes gauze charges the hospital to buy it. It is not $16 for a piece of gauze.

Yeah, but I think that's a bit of a red herring. I think that when you say the cost, so now we have this complexity of you have cost, you have price, and you have charge. So let me explain this. And again, I think this has almost no bearing on macro healthcare costs. The cost of the gauze is what the manufacturer who makes gauze charges the hospital to buy it. It is not $16 for a piece of gauze.

Of course, it's super cheap, as is a Tylenol pill or whatever. The price is bundled into that group payment that I said. So you're not really getting paid that much more than cost for the thing.

Of course, it's super cheap, as is a Tylenol pill or whatever. The price is bundled into that group payment that I said. So you're not really getting paid that much more than cost for the thing.

The charge is this artificial construct created by the way in which we bill because of the way insurance billing is constructed that results in the perennial $16 gauze or $4 Tylenol pill or whatever the case may be. Nobody's being paid that amount.

The charge is this artificial construct created by the way in which we bill because of the way insurance billing is constructed that results in the perennial $16 gauze or $4 Tylenol pill or whatever the case may be. Nobody's being paid that amount.

It exists because every hospital by federal regulation is required to have a charge master. By the way, so is every doctor's office that has charges off of which the free market negotiates contracted rates and brings that $4 Tylenol down to 20 cents. Or the $16 gauze down to, I'm making it up because I don't know, whatever it is, cents. And that's what happens. This gets administrative costs.

It exists because every hospital by federal regulation is required to have a charge master. By the way, so is every doctor's office that has charges off of which the free market negotiates contracted rates and brings that $4 Tylenol down to 20 cents. Or the $16 gauze down to, I'm making it up because I don't know, whatever it is, cents. And that's what happens. This gets administrative costs.

The system has evolved certain ways in which the administrative costs support nonsense like this at the end of the day. Remember what I said about insurance. It's not insurance in healthcare. It's a discount card, meaning you're getting the value of group purchasing so you buy things at a lower cost.

The system has evolved certain ways in which the administrative costs support nonsense like this at the end of the day. Remember what I said about insurance. It's not insurance in healthcare. It's a discount card, meaning you're getting the value of group purchasing so you buy things at a lower cost.

If you apply that in this setting, if you come in to the hospital without insurance, you're not getting that group discount. That's the bargain made between insurers and providers that you're going to get a better deal. It's a discount card. So if you come in without insurance, uh-oh, you're going to be exposed to the $4 Tylenol or the $16 gauze.

If you apply that in this setting, if you come in to the hospital without insurance, you're not getting that group discount. That's the bargain made between insurers and providers that you're going to get a better deal. It's a discount card. So if you come in without insurance, uh-oh, you're going to be exposed to the $4 Tylenol or the $16 gauze.

And the reality is that's what turns into something that we never really talked about, which is bad debt. There's a lot of health care that's provided that has a charge associated with it. Nobody ever pays. Billions and billions of dollars. In fact, I think it's about $40 billion a year or more. And then there's, of course, underinsurance where people don't pay their portion of what they owe.

And the reality is that's what turns into something that we never really talked about, which is bad debt. There's a lot of health care that's provided that has a charge associated with it. Nobody ever pays. Billions and billions of dollars. In fact, I think it's about $40 billion a year or more. And then there's, of course, underinsurance where people don't pay their portion of what they owe.

And again, with those kind of prices, you can understand some of that.

And again, with those kind of prices, you can understand some of that.