A totally self interested article with little substance. big health insurance's biggest customers are not consumers but businesses who provide health plans to their employees
"Total individual market enrollment, measured on an average monthly basis, increased from 10.6 million in 2013 to a peak of 17.4 million in 2015, before declining to 13.8 million in 2018."Quoted from https://www.kff.org/private-insurance/issue-brief/data-note-...
Bingo. I'll say the unicorn is the group that can bend hipaa such that customer data can be more easily exchanged between providers. There is already a group making a product that most health insurance companies utilize for this and they dont know it.
Before I left the industry I saw many dropping third party analytics and building their own solutions in need of more m&a dollars from declining membership nationally.
What if you do not want your information exchanged?
Or recorded at all?
Information wants to be free so much that it leaks!
Given experian experiance, I would prefer the option to keep a thumbdrive with me. If I lose it? My fault. Exams can be redone. Printouts can be provided. But you can't fix a leak.
Healthcare providers are unwilling to plug in a thumbdrive from a patient because it could contain malware. Secure online exchange is the only practical approach to health information exchange. Most providers will allow patients to opt out, but this puts your health at risk. Doctors often need to see your historical chart in order to make an accurate diagnosis and prescribe effective treatment. You can't always just redo an exam, test, or imaging study.
I want to opt out of any collection of data - not just the exchange of data. Because the best way to make sure nothing will leak is to have no records in the first place.
I accept all the risk. But there is no freedom to do that - leaving the thumbdrive aside, by just bringing papers that I would keep - not them.
Healthcare providers have to keep records both to deliver effective care and protect themselves against malpractice liability. It is unreasonable of you to expect them not to do so. Those risks aren't yours to accept.
There is utterly nothing you can do to prevent the american heathcare apparatus from obtaining and sharing your heath data. It will be exchanged between your state agency, care provider and insurers constantly. Your insurer will likely de-identify data in the event of a leak. The other two may not (save regulatory requirements) I have first hand experience here.
I think it's happening. When a friend signed up with one hospital, their diagnoses & medicines subscribed showed up from other unrelated hospitals and clinics too. It wasn't a full import, but it was a lot!
Also with most lab work being done by quest & labcorp, I think that is pretty close to being portable for the %80 case too.
I think this is what apple health is also trying to do.
Maybe that is true now, but nearly every Democrat running for the White House has either a Medicare for All or public option plan that would essentially eliminate or reduce our dependence on employer based healthcare over time (some on a faster timeline than others).
Love how they frame it as WWI trench battles. Have said this before, but healthcare is the Afghanistan of tech. It's the graveyard of empires, where giant or well capitalized companies go in thinking they can solve and conquer it, then leave a decade later having made no progress, wondering what happened.
Have fun storming the castle!
The basic problem to solve in healthcare is identity for physicians, patients, circle of care, and all the service providers in between. Privacy is the effect of that.
The reason it's important is that dis-intermediation is only possible when you solve this problem. Every other solution is sustaining the business models of ensconced players, which just perpetuates how broken the system is, which is what makes it look like the graveyard of empires.
"It's the graveyard of empires, where giant or well capitalized companies go in thinking they can solve and conquer it,"
A lot of companies and individuals make a lot of money in the current system. They have no interest in changes. What does "solving" mean? Usually companies want to make money so the problem actually has been "solved". A lot.
Arms dealers do fantastically well in Afghanistan too. The unicorn technology solution would mean real improvements in service levels, costs, and outcomes for patients. A platform disintermediates (or reintermediates) a business. There is still no Walmart, Costco, Amazon, AirBnB, or Uber for healthcare. The players are protected and in effect collecting political rents.
The U.S. healthcare system does not resemble any other system in the world because it's an anomaly of perverse incentives and protectionism. It's unreasonable to ask any serious person to provide a moral defence of it, but in terms of investments, there are no sustainable multi-billion dollar startups that support the status quo because the status quo is an artifact of legislative market distortions. There is no growth in the current system. Unless you fundamentally break it, the upside isn't interesting.
> Keith Smith on Free Market Health Care
Nov 18 2019
Entrepreneur and Anesthesiologist Keith Smith of the Surgery Center of Oklahoma talks with host Russ Roberts about what it's like to run a surgery center that posts prices on the internet and that does not take insurance. Along the way, he discusses the distortions in the market for health care and how a real market for health care might function if government took a smaller role.
I see some startups trying to poke at it, but they are doing it from a premium service or tele-medicine providers. Such as forward, one medical, lyra, collective health, etc.
The private insurance system we have in the USA creates such a tightly-packed nightmare-maze of adverse incentives that the only non-government solution is for a company to grow so large it can fully vertically-integrate, from private medical schools all the way to hospitals, labs and clinics, then once it has a total monopoly, convert to a non-profit and slash prices across the board.
Anything else is a half-measure doomed to failure. The AMA limits how many doctors can graduate, medical schools charge enormous prices, limited supply and huge debt means doctors can command incredibly high fees, so hospitals send massive bills to insurance companies and sue the non-payers and yet remain barely solvent. Insurance companies add a profit margin and charge $10,000pp+ annual premiums to employers, who pass on some % to the employees.
Any one part of this is integrated with the whole and can't be easily fixed.
- Hospitals can't just charge less to insurance, because every part of care is so expensive.
- Care is expensive because doctors have debt to pay off, and we can't pay them less or else med-school enrollment will fall of a cliff because why rack up $400k in debt if you won't be earning 6 figures after you graduate? Not when FAANG will pay new grads $120k plus for half the school-time, and most of the students going to med school are smart+motivated enough to get those jobs.
- Insurance companies are making billions, so they aren't going anywhere anytime soon short of massive government policy shift
- Medical device and supply manufacturers make bank for the same reasons, American syringes can cost a fortune because all the prices for everything have been dialed up to 11.
On top of all of that, there's the infinitude of nitpicky soft and technical problems that would require a successful-startup's worth of effort and luck to solve, like HIPAA, coding nonsense, and many others.
Honestly sometimes it feels like the only way to "improve" the USA healthcare system really is just to pass Medicare for All and drop a bomb on the whole thing.
> Honestly sometimes it feels like the only way to "improve" the USA healthcare system really is just to pass Medicare for All and drop a bomb on the whole thing.
You mean use the system that has been used for decades in Developed countries and proven to work much better (better outcomes, cheaper, no body without coverage) ?
Unfortunately, great American capitalism will prevail, those making the money will keep buying legislation in their favor and selling fear of change via advertising.
If every supplier in a market has the same overhead, it will pass through to customers, because suppliers cannot compete to eliminate it.
See also: high prices in destination shopping. The landlord sets the rent and all stores have to pay the rent, so all stores will have the same high prices no matter how stiff the competition between them.
The way I understood it, prospective doctors are only tolerating huge college debt because they will be highly paid and be able to pay back huge college debt. If fees goes down, people will simply avoid being doctors and study something else which is cheaper or a profession which command higher fees.
Medical schools charge students a lot because doctors get paid a lot, and doctors have to be getting paid a lot to justify the enormous debts medical schools leave them with. It's a vicious circle that will never end without serious government intervention.
Doctors in Canada and Australia charge as much or more than US doctors (within the context of a universal healthcare system). This is the most absurd scapegoating. If you want to look for excessive expenditure, I encourage you to look at:
- The enormous glut of administrators including absurdly well paid CEOs which has expanded non-stop for the last 40 years.
- The absurd profit margins and profiteering by the medical insurance industry.
- The relentless rent-seeking by 'accreditation and certification' agencies like state medical licensing boards and subspecialty boards.
- And at this stage we don't even need to begin talking about pharma and device companies.
Back in health care policy class we did a breakdown comparison against systems in other developed countries. The US system was 2x as expensive, and the three heads of the hydra -- drug companies, insurance companies, and hospitals/doctors -- did a remarkably even job of sharing that factor of 2. While it would be unfair to say that the "step on the training pipeline" hustle was entirely responsible for our current situation, it would also be unfair to point at the other two heads of the hydra and say that they were entirely responsible.
Again, a more granular analysis will point you in the direction of the layers and layers of administration and profiteering in the hospital rank and file.
And again, very effective universal healthcare systems exist which remunerate physicians at the top end of the labour payment scale (and for good reason).
Now with nurse practitioners and other 'mid-level providers' creeping into all areas of clinical medicine, Americans are unfortunately likely to find out the hard way why appropriately remunerating people who operate on those nearest and dearest to you at their most critical times, is a good idea.
Also, there should be some limits to who gets to do highly specialized things. And I want those people to be highly incentivized.
One of my co-fellows was an IV league valedictorian and national level athlete. I'm pleased and grateful someone that talented, dedicated and driven to the point of obsession is diagnosing and treating neurological disease (and not, say, improving advertising algorithms for amazon or google).
Amen to this! Imagine if all the bright minds in SV, were looking to improve the world instead of enrich themselves and their overlords by any means necessary.
However I don't think we should limit the number of anything, if are qualified and knowledgeable enough to do brain surgery, you should be allowed to. Not just because your family was rich enough to fund education or you were willing to foot the debt. Taking less profit out of education might help fix the doctor shortage.
' I don't think we should limit the number of anything, if are qualified and knowledgeable enough to do brain surgery, you should be allowed to.'
Unfortunately that's just not how it works. I want the best people to do brain surgery(not everyone who can), just like if I'm running a formula one racing team, I really don't want every idiot who can barely drive a car cluttering the track.
Can I please ask you to consider the problems with the chart you have shared? The vertical axis is percent increase not actual increase. It is helpful to have that context before you load your argument on it.
1) That point is written very clearly just below the graph by the author.
2) It doesn't fundamentally change the argument. The rate of increase in the number of administrators has significantly outpaced the increase in physician numbers as costs have increased.
So you're going to have a nurse practitioner look after your kids rather than a pediatrician (based on some corporate hospital sponsored BS research)? Good luck with that.
The problem with this line of thought is sometimes patients arrive that look like they have routine conditions (ear infection) which turn out to be not so routine (otitis media with encephalitis or a nasopharyngeal carcinoma). Or do you think NPs know a lot about sub-speciality presentations based on their two years of training?
People forget that physicians are the actual expertise in the hospital (there's a reason its 4 years med school plus a residency plus fellowships).
It's very inefficient to have a physician do everything in a hospital. Their value is their knowledge and experience. So shunting off other parts of their work not requiring that full expertise to lower level providers will only lead to more people being treated effectively.
I think treating mid-level providers as corporate BS is very reductive and both underestimates these healthcare workers and overestimates physicians.
Canadian Doctors have less freedom to order tests, capped fees. So you see strange workarounds. One strange rule is a doctor can only bill for one medical issue per day. So if you go in with a broken arm and the flu you only get to treat one condition and are forced to make a second appointment.
So Canadian doctors order whatever tests they are allowed and don't order tests you actually need. It is 1000% easier to get a cat scan than an mri even when an mri would provide more details in certain cases.
If they are allowed a certain test than they will say it's extremely important. If you point out other tests that could helpful those ideas are not well received.
The whole thing has become some strange lineitem exercises where doctors are gaming the system because the government keeps changing the rules to pay them less so they find ways to fight back.
There was a strange case where a doctor would give patients a drug to induce labour and give birth early. This allowed them to get over the quota of deliveries per month but there was a rule if the patient gave birth early they could go over the quota. After hundreds of early births the death rate was much higher for this one doctor.. this doctor was working for his own interests.
Seems like people find a way to game everything. Yesterday I was reading elsewhere about what happens in long term care facilities where patients are kept around for unnecessary procedures until the insurance runs out and which point they are pushed back to the hospital under pretense of some emergency.
Yes, it's always the others that are the problem in the US system. If you went to any other of the groups you listed they would have the same list with the exception of themselves. In the end everybody makes too much money and is inefficient.
I think you need to check your numbers. See [1]. GPs in the US make WAY more than anywhere else. Specialists are on par with Australia, but significantly higher than Canada.
You make a good point. Insurance companies aren’t actually that profitable margin wise. They just are so massive that their 5-6% margins add up to huge numbers.
Yes, people always miss this, insurance companies do charge a lot, but their margins aren't high. They too are giving a lot of their income to attorneys, lobbyists, etc. When I see people simply blaming insurance it shows me they don't see the actual picture past the first layer.
If one were to view insurance providers as unnecessary, then any percentage margin can be seen as a leech on the systems.
Saying they are unnecessary would be a misunderstanding of our current system. But to say our current system can be altered to render insurance as we know it today unnecessary is a different thing.
Feels like though that tiny margin is to blame. I remember reading about some law that commands 80% or something of insurance premiums to be paid to care and administrative costs.
If that is the case, thr only way you can increase profits is to be ok with ridiculous pricing you keep getting...
My personal anectode is a genetic tests done for pregnant ladies. Natera, iirc, charged something like 8k$. I asked for cash price they said 230$. Go figure
Saw your comment, thanks for bringing that up. Insurance companies dont take the prize, its the brokers--distribution is where the lion's share of premium goes. Wrote about it here: https://news.ycombinator.com/item?id=21710050
The AMA doesn't limit how many doctors can graduate. The bottleneck is in residency slots. Every year students graduate from medical school but are unable to practice because they can't get matched to a residency program in a teaching hospital. We need more public funding for those programs.
^Totally agree with you. Single payer is the answer. The comments on this thread inspired this writeup--how the insurance distribution ecosystem itself sucks up a lot of the dollars https://news.ycombinator.com/item?id=21710050
As an European, I'd say that patients don't enter the health care system as consumers. You don't consume a stent because it's hip among friends. Also, you shouldn't get some medical treatment or not because you can afford it or not.
The article starts talking about patients but ends with consumers. Now, let's find the error.
Please stop viewing health care as one single entity. It is equal to saying that all IT is the same. It is a huge beast that quite often lacks margins.
A genuine revolution in so-called healthcare needs to fall outside of the fields of medicine and insurance.
It won't be easy to get traction because actually eating better and exercising etc get dismissed as "not really healthcare." Nevermind that study after study after study say diet and exercise play huge roles in many deadly medical issues, including heart disease and cancer.
It's vastly easier to get traction with insanely expensive orphan drugs (drugs for so-called orphan diseases) and organ transplants. If you have certain conditions, people are vastly happier to turn you into Frankenstein than to preserve the function of the organs you were born with.
It also is tough to become a unicorn. Stuff that actually gets you heathier tends to drive health-related expenses down. People looking to get rich quick hate that. This is part of why utterly insanely priced drugs and surgeries have so much more traction.
America doesn't need a unicorn, it needs universal health care. The health care market – contrary to cloud services, car transport or short-term accommodation – can never be free and businesses involved exploit that. More precisely, they exploit people who simply have no other choice but to use their services. Only the government can stand up to that greed and actually act in the interest of people's health instead of own profit, while limiting inefficiencies.
68 comments
[ 2.9 ms ] story [ 144 ms ] threadBefore I left the industry I saw many dropping third party analytics and building their own solutions in need of more m&a dollars from declining membership nationally.
Information wants to be free so much that it leaks!
Given experian experiance, I would prefer the option to keep a thumbdrive with me. If I lose it? My fault. Exams can be redone. Printouts can be provided. But you can't fix a leak.
I accept all the risk. But there is no freedom to do that - leaving the thumbdrive aside, by just bringing papers that I would keep - not them.
Also with most lab work being done by quest & labcorp, I think that is pretty close to being portable for the %80 case too.
I think this is what apple health is also trying to do.
Have fun storming the castle!
The basic problem to solve in healthcare is identity for physicians, patients, circle of care, and all the service providers in between. Privacy is the effect of that. The reason it's important is that dis-intermediation is only possible when you solve this problem. Every other solution is sustaining the business models of ensconced players, which just perpetuates how broken the system is, which is what makes it look like the graveyard of empires.
A lot of companies and individuals make a lot of money in the current system. They have no interest in changes. What does "solving" mean? Usually companies want to make money so the problem actually has been "solved". A lot.
The U.S. healthcare system does not resemble any other system in the world because it's an anomaly of perverse incentives and protectionism. It's unreasonable to ask any serious person to provide a moral defence of it, but in terms of investments, there are no sustainable multi-billion dollar startups that support the status quo because the status quo is an artifact of legislative market distortions. There is no growth in the current system. Unless you fundamentally break it, the upside isn't interesting.
0. http://www.econtalk.org/keith-smith-on-free-market-health-ca...
Anything else is a half-measure doomed to failure. The AMA limits how many doctors can graduate, medical schools charge enormous prices, limited supply and huge debt means doctors can command incredibly high fees, so hospitals send massive bills to insurance companies and sue the non-payers and yet remain barely solvent. Insurance companies add a profit margin and charge $10,000pp+ annual premiums to employers, who pass on some % to the employees.
Any one part of this is integrated with the whole and can't be easily fixed.
- Hospitals can't just charge less to insurance, because every part of care is so expensive.
- Care is expensive because doctors have debt to pay off, and we can't pay them less or else med-school enrollment will fall of a cliff because why rack up $400k in debt if you won't be earning 6 figures after you graduate? Not when FAANG will pay new grads $120k plus for half the school-time, and most of the students going to med school are smart+motivated enough to get those jobs.
- Insurance companies are making billions, so they aren't going anywhere anytime soon short of massive government policy shift
- Medical device and supply manufacturers make bank for the same reasons, American syringes can cost a fortune because all the prices for everything have been dialed up to 11.
On top of all of that, there's the infinitude of nitpicky soft and technical problems that would require a successful-startup's worth of effort and luck to solve, like HIPAA, coding nonsense, and many others.
Honestly sometimes it feels like the only way to "improve" the USA healthcare system really is just to pass Medicare for All and drop a bomb on the whole thing.
You mean use the system that has been used for decades in Developed countries and proven to work much better (better outcomes, cheaper, no body without coverage) ?
Yes, that would be a good idea.
Unfortunately, great American capitalism will prevail, those making the money will keep buying legislation in their favor and selling fear of change via advertising.
How does having a huge debt allow you to charge a higher fee?
Doesn’t a debt weaken your negotiating position - you have less freedom to walk away for example because you need to service your debt.
It doesn’t work that you can charge a higher fee just because you plead ‘but I have a debt!’
See also: high prices in destination shopping. The landlord sets the rent and all stores have to pay the rent, so all stores will have the same high prices no matter how stiff the competition between them.
They’re able to due to restricted supply.
Medical schools charge students a lot because doctors get paid a lot, and doctors have to be getting paid a lot to justify the enormous debts medical schools leave them with. It's a vicious circle that will never end without serious government intervention.
Doctors in Canada and Australia charge as much or more than US doctors (within the context of a universal healthcare system). This is the most absurd scapegoating. If you want to look for excessive expenditure, I encourage you to look at:
- The enormous glut of administrators including absurdly well paid CEOs which has expanded non-stop for the last 40 years.
- The absurd profit margins and profiteering by the medical insurance industry.
- The relentless rent-seeking by 'accreditation and certification' agencies like state medical licensing boards and subspecialty boards.
- And at this stage we don't even need to begin talking about pharma and device companies.
Again, a more granular analysis will point you in the direction of the layers and layers of administration and profiteering in the hospital rank and file.
Have you seen this graph?: https://investingdoc.com/the-growth-of-administrators-in-hea...
And again, very effective universal healthcare systems exist which remunerate physicians at the top end of the labour payment scale (and for good reason).
Now with nurse practitioners and other 'mid-level providers' creeping into all areas of clinical medicine, Americans are unfortunately likely to find out the hard way why appropriately remunerating people who operate on those nearest and dearest to you at their most critical times, is a good idea.
One of my co-fellows was an IV league valedictorian and national level athlete. I'm pleased and grateful someone that talented, dedicated and driven to the point of obsession is diagnosing and treating neurological disease (and not, say, improving advertising algorithms for amazon or google).
However I don't think we should limit the number of anything, if are qualified and knowledgeable enough to do brain surgery, you should be allowed to. Not just because your family was rich enough to fund education or you were willing to foot the debt. Taking less profit out of education might help fix the doctor shortage.
Unfortunately that's just not how it works. I want the best people to do brain surgery(not everyone who can), just like if I'm running a formula one racing team, I really don't want every idiot who can barely drive a car cluttering the track.
That limit exists. It is called supply and demand. There is no need to artificially limit this, if other people want to enter the market.
1) That point is written very clearly just below the graph by the author.
2) It doesn't fundamentally change the argument. The rate of increase in the number of administrators has significantly outpaced the increase in physician numbers as costs have increased.
The problem with this line of thought is sometimes patients arrive that look like they have routine conditions (ear infection) which turn out to be not so routine (otitis media with encephalitis or a nasopharyngeal carcinoma). Or do you think NPs know a lot about sub-speciality presentations based on their two years of training?
People forget that physicians are the actual expertise in the hospital (there's a reason its 4 years med school plus a residency plus fellowships).
I think treating mid-level providers as corporate BS is very reductive and both underestimates these healthcare workers and overestimates physicians.
So Canadian doctors order whatever tests they are allowed and don't order tests you actually need. It is 1000% easier to get a cat scan than an mri even when an mri would provide more details in certain cases.
If they are allowed a certain test than they will say it's extremely important. If you point out other tests that could helpful those ideas are not well received.
The whole thing has become some strange lineitem exercises where doctors are gaming the system because the government keeps changing the rules to pay them less so they find ways to fight back.
There was a strange case where a doctor would give patients a drug to induce labour and give birth early. This allowed them to get over the quota of deliveries per month but there was a rule if the patient gave birth early they could go over the quota. After hundreds of early births the death rate was much higher for this one doctor.. this doctor was working for his own interests.
It also allowed him to bill for Saturday deliveries which paid a higher rate. The story is well worth a read for anyone who missed it.
Edit: This article[1] just provides a summary. This article[2] was the original investigative reporting.
[1] https://www.thecut.com/2019/07/paul-shuen-toronto-medical-ma...
[2] https://torontolife.com/city/greed-betrayal-medical-miscondu...
[1] https://journal.practicelink.com/vital-stats/physician-compe...
Saying they are unnecessary would be a misunderstanding of our current system. But to say our current system can be altered to render insurance as we know it today unnecessary is a different thing.
If that is the case, thr only way you can increase profits is to be ok with ridiculous pricing you keep getting...
My personal anectode is a genetic tests done for pregnant ladies. Natera, iirc, charged something like 8k$. I asked for cash price they said 230$. Go figure
https://www.ama-assn.org/press-center/press-releases/ama-fun...
As an European, I'd say that patients don't enter the health care system as consumers. You don't consume a stent because it's hip among friends. Also, you shouldn't get some medical treatment or not because you can afford it or not.
The article starts talking about patients but ends with consumers. Now, let's find the error.
It won't be easy to get traction because actually eating better and exercising etc get dismissed as "not really healthcare." Nevermind that study after study after study say diet and exercise play huge roles in many deadly medical issues, including heart disease and cancer.
It's vastly easier to get traction with insanely expensive orphan drugs (drugs for so-called orphan diseases) and organ transplants. If you have certain conditions, people are vastly happier to turn you into Frankenstein than to preserve the function of the organs you were born with.
It also is tough to become a unicorn. Stuff that actually gets you heathier tends to drive health-related expenses down. People looking to get rich quick hate that. This is part of why utterly insanely priced drugs and surgeries have so much more traction.