"These prices" being price comparisons between insurers, and "here's why" because prices are sometimes much lower with other plans, or no insurance at all.
Aside from the clickbait title, this is interesting information.
Presumably you don't just mean the creation of healthcare companies in the US that are foreign-owned but still subject to the exact same current US system (because that would just be the same as now, essentially); presumably you mean something really innovative (or crazytown, depending on view!) like allowing a section of a US population to outright join a foreign system.
For example, Seattle decides to switch to the UK NHS, cuts a deal with the UK whereby everyone in Seattle pays into the UK treasury at the same rate UK citizens do towards the NHS, and the NHS takes on a responsiblity for universal healthcare in Seattle for Seattle citizens. Is this the kind of idea you mean? Certainly would be interesting and as a spitballing conversation piece, fun to discuss.
The problem with that is that, when it's an extra cost, the uptake may well skew towards those who are more dependent on healthcare with chronic conditions.
Single payer works because the risk pool is spread overy everyone in the entire country - and everyone has to pay (it's part of income taxes). That's why the ACA mandate was a thing.
Yes. It would have to be everybody in. All of Seattle pays in, no exceptions.
You say "the problem with that". Pitched another way, we could say "the benefit of that"...
when it's an extra cost
Would it necessarily be an extra cost? I understand that the amount typically paid in the US on health insurance, by the individual and employers, compares badly with the amount paid in many other systems that provide better healthcare for less money.
Then the healthy/richer people move to a suburb of Seattle. The reason nationwide taxpayer funded healthcare works is because it is not easy to move to another country.
It's not like they would be able to import the legal, regulatory and economic environments that foster their lower prices or better outcomes. I would assume that all they would really be able to bring to the table is brand recognition.
Legal, regulatory, and economic environments have been “imported” before. I’m not sure how well they actually work in practice but the Colón Free Trade Zone and the Kazakhstan Astana International Finance Center, come to mind as examples. Even Hong Kong, to some degree, started as an “imported” legal system.
Certificates of Need solve a very real problem that "free market" health care had. Having health care exposed to boom and bust cycles was unacceptable to people. You'll have to propose an alternative solution better than "well maybe you die" if you want to change that.
Any "foreign hospital" would have to abide by the same standards as "American ones". Furthermore, if it's for profit, I don't see why "foreign establishments" would have lower costs, they'd try to maximize their profit as much as "American ones".
Medical tourism is a more cost effective alternative, for dental care, eyesight, or even some heavy surgeries. The problem is the people who would likely benefit the most from that often don't even have a passport...
I made the same point about education cost in the rest of the west VS USA previously. Americans are entitled to travel or study in a lot of foreign countries without any hurdle, most of them don't ever take advantage of it for arbitrage.
not even mega Joint Venture could make any progress. they shut down .
"Haven was a not-for-profit, healthcare-focused entity created through a joint venture by American companies Amazon, Berkshire Hathaway and JPMorgan Chase. The entity's stated goals were to improve healthcare services and lower costs for the three companies' employees, while making primary care easier to access, making prescription drugs more affordable and rendering insurance benefits easier to understand."
There is nothing wrong with people bargaining for what they are worth. Especially for laborious jobs working around sick people.
I do not exactly see all my work from home friends who I know are working less than 40 hours a week Mon to Fri 9 to 5 clamoring to go help at the hospital right now even at current nurse's pay.
US healthcare is a giant cash making scam, where patient health and open pricing are unimportant. If the Federal government actually cared to force the issue, we might find a preference for a national unified system, in which of course the insurers and healthcare conglomerates would lose their profit. So no doubt they spend a fortune ensuring that no matter what rules appear for political reasons, they are not really enforced, and thus don't matter.
The book The Healing of America examines eight different national healthcare systems. Three of the best (France, Germany, Japan), in objective terms like health outcomes and percentage of GDP spent, have a lot in common with the ACA, with one big difference: a national price list for services.
Maybe a well-functioning market could accomplish the same thing but we certainly don't have that right now.
There is no such thing as a well-functioning market (or free market). It is repeated over and over as something that could be true, but it is like communism, nobody was ever able to get that working in reality.
I recently had a (potentially) post exposure rabies series of shots in the US.
3 shots of vaccine on day 1 + 1ml of human rabies immune globulin injected all around the exposed site. Then 1 follow up shot every 7 days for 3 weeks.
It’s the human rabies immune globulin that you hear the horror stories of people paying $20k for without insurance.
It’s strange that due to US medical billing and the uncertainty around it, I was trying weigh up the likely hood of actual infection from the animals saliva (protip for anyone visiting austin: there is actually a fair amount of rabies around).
If you develop symptoms, it’s usually too late and the survival rate is very low. That swung the needle in the direction of better to lose a car than be dead.
I’m not aware of any other country in the world - where getting those shots post exposure without insurance would have potentially cost that much.
Whenever I read about expensive (human) rabies treatment I wonder what the cost would be if the person had gone to a veterinarian instead. I’m assuming the treatment is more or less the same? But if my dog were bit by a rabid animal I’m certain it wouldn’t cost me $20,000+ for treatment.
I had the same experience while living in the US. Fortunately my insurance covered the shots (though there was no way to be sure of this at the time), so I “only” had to pay about $1000.
It’s worth noting that the survival rate for symptomatic rabies isn’t just “very low” but basically zero. There are one or two known cases of people who made miraculous recoveries, but there is no treatment protocol known to be even slightly effective once symptoms appear.
I was actually about to return to the UK when the incident occurred, and I got the final shots there (100% free, no questions asked).
My understanding here is that the post exposure treatment is recommended ASAP however unless multiple bites to head or neck, public health England guidance states administration can be next day.
I got a rabies shot in rural Cambodia when I almost certainly didn't need it just in case, and it was so cheap I can't even remember how much it was, well below a hundred bucks.
This particular point blew my mind, I didn't realise the US was getting screwed quite that hard when it came to healthcare costs.
I’m convinced that the single best way to improve the current private-insurance based system is that it should be illegal to charge two different patients a different price for the same test, drug, or procedure given at the same hospital.
I think implementing such a policy could be trivial for many things like labs and drugs and many procedures, and admittedly tricky to implement for complex / one-off procedures, but that shouldn’t stop us from trying.
Price transparency is important but eliminating price discrimination is I think the key way to shut down so much of the bloat and corruption currently in the system.
The last step would be to make it illegal to do any kind of rebating where patients are billed more than insurance ultimately pays. Charging less for one procedure taken by Patient A in exchange for charging more for another procedure taken by Patient B similarly should just be banned.
You end up with a system where the insurance companies and benefits managers have a lot less that they are able to do. Perhaps they would claim they are “hamstrung” but that’s exactly what they should be in this regard.
You can actually be lighter touch than that and still have things work. Just make it so that you can’t “pay with insurance.” You have to send the bill to the patient who files a claim, gets a cash payout, and pays the bill.
Offer senior discount, have a 30% off sales, have hot flash summer, whatever. But now pricing will be predictable because there are no back-room negotiations.
If you ever pay for medical services without insurance you’ll find that places can suddenly give you a straight price.
> If you ever pay for medical services without insurance you’ll find that places can suddenly give you a straight price.
I have tried many times to get a doctor’s office to give me a price in writing for a completely preventative visit where there could be no possibility of variance in service rendered, and I have always received an answer of no.
Edit: so now I just assume any healthcare I get will cost me up to my out of pocket maximum, and budget for that yearly.
It sounds like the US healthcare system financially incentivizes people to postpone or avoid preventive medical care for as long as humanly possible, worsening the inevitable health crises, thus suppressing population health and wellbeing in favor of corporate profit.
One of the bigger root causes for the price discrimination and lack of price transparency, and general convoluted-ness is that there is far greater demand for healthcare than there is supply, and this is how the US rations its healthcare.
Medicaid pays providers less than Medicare because, politically, the population that needs Medicaid (poor people) does not have the political power that Medicare (old people) does.
By paying providers less, there is less incentive to see Medicaid patients, and it effectively limits the amount of healthcare poorer people receive. However, the convoluted nature of the process gives politicians plausibly deniability, since people generally do not understand how care is being rationed.
Similarly, employees of large businesses get access to health insurance at pre tax prices, while employees of small businesses do not since businesses with less than 50 employees are not required to offer employer subsidized health insurance.
ACA did greatly assist with the price transparency by standardizing what health insurance has to cover though, and by creating healthcare.gov, so we are moving in the right direction.
However, the other end of this is that the government uses managed care organizations (MCOs, health insurers), to ration care by having different rules for approving who gets what care. For example, the government pays for both Medicaid and Medicare. But Medicaid is via state governments’, and each state will hire a certain MCO to implement the Medicaid plan’s rules for that state.
And the rules of that plan will state patient has to follow so and so healthcare regimen to get X treatment, and so doctors have to follow that specific course of treatment in order to get paid for that patient. So the state will have different rules for the Medicaid patient (more strict, less reimbursement) than the federal government will for Medicare and Tricare patients (less strict, more reimbursement.
Meanwhile, people will bitch at MCOs (insurers) not approving payment or doctors will complain about having to get pre authorizations for providing healthcare, when in reality, the rules are not being made by insurers, but rather by the government themselves who then contract with MCOs to implement those rules, and take the heat from the public for doing so.
It’s very late to reply, but I think a bunch of these claims are not entirely true, or at least not true universally across the US.
Medicaid has legal acceptance requirements that other insurance does not. I believe large hospitals in particular have to accept Medicaid because they lose other government subsidies if they don’t. In many ways Medicaid is the “best insurance that money can’t buy”.
Also, even small business employees can pay for health insurance with pre-tax dollars, although it may need to be claimed on a tax return.
Lastly, if a medical treatment is FDA approved and medically necessary typically a plan must cover it, or propose an equivalent treatment (i.e. generics)
The plan cannot prescribe a specific treatment regimen, although they can make reimbursement of one treatment contingent on trying something else (usually much cheaper option) first, as long as there isn’t a medical reason not to do so.
Reference based pricing is a simple, easy to pass (it can be framed as price caps) rule that would cut healthcare spending by 25%. However, part of the reason we spend so much is that we demand so much. We have urgent cares on every block. Someone has to pay for those facilities and staff to be there all the time.
I just googled reference-based pricing, so forgive me if I'm missing something, but isn't that basically state price controls?
The way I understand it, it can work if the state uses the right metrics to determine prices, but there's a ton of failure modes where prices are set too high or too low.
(Then again, it's more or less how we do healthcare in France, so I dunno)
Medical practitioners and private institutions are not required to follow the state set prices in France. It's the limit of how much the social security will cover so essentially anyone who sets prices above those limits is competing with "free".
Technically social security covers 70% of the state set price and insurance must at a minimum cover the other 30% but that's the general idea.
It wouldn't be state based. The federal government would pass a law that you can't charge more than Medicare +20%. This fixes some major rent-seeking costs in the current system. It gets rid of the need for brokers (which typically charge 5%) because there is no need to negotiate prices. It also gets rid of everything out of network, you know what the max is. You can't have anesthesiologist that are your only option in the hospital but they are not in network even though the hospital is. It would also push a lot of places to take a standard discount for cash at time of service, just pay Medicare rates. They take less but get it now. It does mean that health "insurance" companies would need to start differentiating on price, wellness plans and customer service instead of exploitative pricing deals.
This same proposal actually came up with drug pricing when Trump (and other before him) said the US should just reference the EU.
Many people’s first take is that it’s a terrible idea - it would result in spiraling prices reductions and damage R&D.
But what is really happening is you’re just forcing a single price across a wide group of customers. Prices in the US would fall, but they would go up everywhere else.
This actually happened in the US when Medicaid got “best price” passed - Medicaid has to get at least the best price offered to private insurers, if not lower.
Well when the law was passed, prices actually went up. The reason was that if you offer a price to mid-sized customer A and that forces they same (unacceptably low) price for massively huge customer B, well, you basically tell customer A “tough shit” and just price for customer B. And that’s what happened, prices went up for customer A so they didn’t have to also price the same for customer B.
So it would be an interesting approach - tell hospitals they can charge whatever they want, complete freedom, but it has to be the same price for everyone. They’d quickly find an equilibrium that’s likely lower for many customers and higher for a few.
Pricing is definitely an issue, I think one of other big issues that is often overlooked is that countries with some form of national or regulated health insurance have an incentive to encourage preventative care.
When everyone including healthy people are insured it makes sense to optimize for long term costs and that means keeping people healthy and dealing with health issues as early as possible to avoid letting them get worse and more expensive.
As an example, I've seen insurance proactively provide assistance to help people quit smoking. They don't have to pay for patches or whatever but they do because it's a lot cheaper than cancer treatment.
I don’t think that’s what that chart says. It’s combining Government and other compulsory expenses. I haven’t reviewed the report behind the chart but I’d expect the blue bar to include things like employer paid insurance premiums.
Looking at figures from two years ago, the US government was spending about $3600 per head and the UK government about $3000 per head. For the latter money everybody in the UK got free healthcare.
America is rich for many more reasons than Bretton Woods. For most of the 20th century it had by far the greatest real productive and manufacturing base of any country in the world. The USA has been visibly declining for about 45 years sure, and is no longer the world leader in manufacturing, but it still has a huge and well-diversified economy. Since dollars represent, among other things, claims on a share of that economic output, demand for them is quite real and not just an historical artifact.
And since no other country with a huge diversified economy is willing to run external deficits large enough to meet foreign demand for reserves, the dollar is pretty much the only good choice. There just isn’t enough gold to clear trade in a $80+ trillion global economy.
> For most of the 20th century it had by far the greatest real productive and manufacturing base of any country in the world. The USA has been visibly declining for about 45 years sure, and is no longer the world leader in manufacturing, but it still has a huge and well-diversified economy. Since dollars represent, among other things, claims on a share of that economic output, demand for them is quite real and not just an historical artifact.
This is merely viewing the same thing from a US-centric perspective. From a rest of the world perspective, the largest competitors in EU were destroyed in WW2 (deservedly so imo), China was nowhere and India was impeded first by British colonization and then by Bretton Woods which only focused on EU nations.
America is ahead but make no mistake that the gap is large only because WW2 destroyed other nations and Bretton Woods system was the first step in prevention of other nations from building up rapidly.
The obese and sedentary problem is one argument against public health care that made me really take pause on my beliefs.
In places where public healthcare exists, there is also a huge amount of voluntary personal health responsibility. People look after their health, and expect the same of their neighbors. The current state of Americans would be an unreasonable burden on public healthcare.
That being said, taxes pay so much for healthcare, that we'd probably still be able to pull it off.
In addition, my understanding is that most healthcare expenses are incurred trying to prolong life in its last few weeks/months. It’s difficult to not “try everything possible “ for a loved one, when the end is near. However, I feel that often such sentiments are taken advantage of in the name of profit.
There's no social framework to do anything other than treat an elderly person that breaks their hip, never mind a legal one.
That's a cost that is incurred towards the end of life without any 'trying to prolong life' involved, a surgery to do the repair is frequently going to immediately make the person more comfortable.
And there's all sorts of similar things that just happen more often to older folks.
My neighbor, who lived a very unhealthy lifestyle, underwent 4 heart surgeries and multiple other procedures before they literally couldn’t keep his body alive anymore. I’m not convinced he was treated humanely.
Most people in the UK certainly don’t ‘look after their health, and expect the same of their neighbo[u]rs’. I think we have the most extensive public healthcare system in Europe but also are some of the least healthy.
Don’t look to us for any ideas how to do your healthcare!
Let the government compete with private insurers, and that will be a step in the right direction. The further steps that meaningfully reduce per-capita spending... those are all way harder, which is saying something.
Not sure I understand that graph. How is “voluntary” expenditure such a small piece of the bar for the US? My insurance premiums are outrageously high…
For comparison, in 2019 the top four were (OECD data, in 2019 PPP-adjusted USD): USA - 11.1k, Switzerland - 7.7k, Norway 6.6k, Germany 6.6k. The next ten countries spent between 5k and 6k. The WHO data is similar. It's hard to get up-to-date number on healthcare outcomes, but the best countries seem to be spending in the range of 3k to 5k.
I agree very much with your last paragraph. I believe this to be true for pretty much most things in the U.S. The incentives in the system are mostly misaligned. A collapse is the most likely thing to occur before positive change happens.
Price transparency was one of the great accomplishments of the Trump administration. It's a good first step, but there remains a lot to be done to bring some sanity to US medical pricing. Next step is to pass a law making it illegal to charge different patients differing prices for the same service.
> making it illegal to charge different patients differing prices for the same service.
If a workplace or insurer says to a hospital “if all these people come for a checkup, what can you do in pricing?” Is that something that should be blocked?
Yes. What if your auto insurance company went to Ford and struck a deal, then you went to Ford to get a car and they said 'we don't know the price until you submit a claim'; you buy a car and submit a claim. It turns out your insurance company did a pretty lousy job negotiating and now you're stuck with the bill without any recourse. Ford makes out with a ton of money, so does your insurance company, and you lose.
If they were actually doing that, great! Unfortunately, as TFA clearly demonstrates, they are doing a crappy job of this sort of negotiations, because their profits are generally a % of total medical spend: more medical spend, more gross profit! So why would you want to limit it?
Hence the fact that, as the article documents, people routinely are getting charged more with insurance than the cash price they would be charged with no insurance. (If you tried to pay the cash price then it doesn't count against your deductible, so it would be rare to do that.)
There was a serious effort by health insurance to restrain medical spending with the HMO/limited medical network era of the early to mid-1990's, which led to a massive pushback from people who hated having to change doctors all the time. In large part because they were so widely hated that no one has tried to revive them (modern HMO's are not nearly as limited in networks) they also were the one period in the last 40 years when medical cost growth was held down.
At this point I have to say American that voted Dems old fool deserve what they getting or coming. Just like when voted Barry that spike up the insurance and medical bills. Already American got beaten in Agfhan. Wait and see a repeat of 911 (922?) now that those goat herders know American can be easily beaten simply by dragging it. Oh yeah, blame a President that did good for country back then. I am betting next 911 is somewhere on the westcoast.
The problem is intractable in no small part because most people are unwilling to acknowledge where the vast bulk of the money is going—-healthcare workers. They keep on looking for bad guys like insurance or drug company executives. There are some of these, and they do make a lot of money, but in the face of nearly $4 trillion in spending they don’t move the needle. The one million doctors do. The 3.8 million nurses do.
It just can't be that simple. Since there is a freer health market in the US than say in France, the staff costs would have come down with competition.
I think what we have there is a very expensive medical school system. And things snow ball. Especially given a doctor role. A doctor studies and goes through practical training a good 8 years. That's college/uni + health center fees that stack up with interest over a long period of time.
Doc then needs to make a living in accordance to his past effort, more than a living, get enough to earn the status he deserves. Now the thing is, taxes accounts for a lot given the high band income. So we could say the doctors are earning too much, but reality is 70% of their gross income goes to multiple tax tiers. 1/ income tax 2/ debt pay back 3/ insurer, continous training fees and other things that are sort of imposed on medical professional.
I'm not a doctor, but I couldn't figure out how even a surgeon could justify such high pay, in the million dollar per year in many US positions. But looking comprehensively as the taxes imposed on them, everything makes sense, all they have left is 200k per year. Cashiers and other clerks earn a quarter this amount, but that's for any less than what doctors are making not many would go through all these hops and be privileged enough to even take the risk of such a financial investment.
The argument that many doctors come from wealthy families doesn't invalidate the simple fact debt still exists and somehow needs to be paid back, and in most cases it does get paid back.
Solution? Get rid of income taxes, make medical schools optional to practice, just make exams open to any participant, affordable education channels will pop up by themselves. Don't regulate medical malpractice, practicians should rather have their lives ruined instead, it's actually a stronger incentive to proper practice than having a big insurer paying the millions in settlement cases.
The medical sector is far more tied to other industries and regulating costs than it looks. I only included 3 obvious contributors to high staff cost, there are numerous supply chains to look at to also account for other spendings that seem unavoidable but in reality pointless for health care.
The argument is against free market rules . Sorry if that wasn't made clear to you.
The premises are that in a rather laissez faire market, prices are obscured and tend on the over profiting side. With competition not actually leading to the outcome one would expect in a free market.
One pays 100 bucks,another pays 700 bucks. And an RMI shot ( decades old tech ) still costs thousands of dollars.
Edit: can't write proper English with auto correct.
> Solution? Get rid of income taxes, make medical schools optional to practice, just make exams open to any participant, affordable education channels will pop up by themselves. Don't regulate medical malpractice, practicians should rather have their lives ruined instead, it's actually a stronger incentive to proper practice than having a big insurer paying the millions in settlement cases.
All those make society worse. Alternatively:
- subsidize or cap education fees so that students don’t go into crushing debt
- reduce inefficiencies resulting from a for profit insurance system by switching to a single payer social insurance system
- cap malpractice claims and put in better controls against frivolous lawsuits
- doing all this also lower doctors wages
Subsidising? See what happens when we do. And it doesn't mean nobody pays, tax payers. And that would make the education and health sectors even worse than they are. We already have armies of people taking on studies that are dead ends, and medical services that are pure money making scams. You are advocating for more people being forced to contribute for unjustified expenses.
It doesn't need to be argumented against anyway, the economy cannot take much more tax levels, we are probably defaulting on paying taxes we are asked to pay at this point.
Capping is a common practice for medical services in European countries, but so many other aspect fall in-line with this, e.g more socialised research funding, public universities with research department colluding with the private sector. We could make a comparison in its entirety, no idea which is better, but capping prices is fundamentally incompatible with a near total free market. Which is the market discussed in this article.
In a free market. Cut the imposed taxes, and let people be judge of which service they want to purchase given clear pricing.
Society worse? See the handling of the pandemic, I don't think the source of the problem comes from lack of regulations.
Then that s about right isn't it?
Source for a rough estimate on what some arbitrary unqualified job pays in comparison to one of the most qualified job?
I say a quarter, the source is me. Based on commonly known compensation information. A cashier earns anything between 25k and 70k. That's common knowledge. Source : go check what brick and mortar shops would pay you for a full time position operating a till and saving Hello thank you good bye to customers. You will get minimum wage all the way up (or down) to over (or below) median wage in certain cities in particular shops, or simply generous (or greedy) owner who don't follow wage market trends.
The comments on this thread are interesting. Counter post are very pedantic rather than argue the substance of comments
When some rust belt county has healthcare employment as they only thing keeping it going at all, those workers are part of it.
The point is that there’s no magic bullet here. There’s no mustache twirling trillionare villain that we can shut down and get the UK’s spending numbers.
Cutting healthcare spending significantly, which I think we should do, would cause hardship for a huge number of people and entire regions on the country.
Which, if Andrew Yang is was correct in his thinking and sources, could be part of why there was a flood oxycontin & suicide cases, leading to Trump being highly favored by those regions... not going into the politics of trump being good or bad, but I think we can all agree human suffering and suicide are bad.
There’s real truth in the parable, but what it doesn’t get at is the transition costs in human misery of getting from an economy based on breaking and fixing windows to a better one.
Does their employment have any positive influence on Healthcare outcome? Protection rackets do have a positive influence on mafia members' financial outcomes, nobody's questioning that.
> The point is that there’s no magic bullet here. There’s no mustache twirling trillionare villain that we can shut down and get the UK’s spending numbers.
Yes there is actually. If there was political will to do it, simply cutting off the insurance companies out of the loop will bring costs nearly in line with the rest of the developed world. The insurance companies provide no value (they're not doctors), all they do is add their overhead to profit from the work of the doctors and nurses.
> “Cutting healthcare spending significantly, which I think we should do, would cause hardship for a huge number of people and entire regions on the country.”
And cutting healthcare spending would provide prosperity for many more.
There are 10s of thousands of bureaucratic office worker jobs in the US healthcare system that are basically just overhead.
A friend of mine used to work as an independent advocate for sick people in NYC. Basically people who were getting screwed by some aspect of the American healthcare system would pay her to do nothing but deal with bureaucratic red tape and bullshit. Like a healthcare lawyer almost. And of course she saved people more money than she cost, so she was constantly getting new clients. She only stopped because it was soul sucking work and incredibly depressing.
Now let's imagine a system that's so broken with bureaucratic BS that it makes sense to hire someone for this. All of the 'healthcare workers' that my friend would speak with on the phone for her clients were essentially overhead and only necessary because the system is geared more towards ripping people off than actually helping anyone.
We don't need any of these bureaucrats. They can all be fired.
> nurses make a ton more than I think, or some assumption above is incorrect.
It could be this - plenty of nurses make well over $100k, plenty of doctors make well over $500k. It varies a lot based on location, specialty, overtime, but there are some good livings being made.
Are there pensions and does this $4T figure include that?
If so, that could account for a lot of the "worker compensation".
But, the median wage for a medical doctor is <$250k in the US. I would be surprised if the pay amongst doctors is so unequal that the average is making >$500k.
That being said, there are a ton of people who work in hospitals beside just "doctors and nurses".
I wouldn't be surprised if all this factored in was close to 50% of the total pay.
Referring to the CDC link I posted above, physician and clinical services are 20% of total medical expenses. That's your primary care physician, nurses, labs, and specialists. (Hospital care is about 33% of the total.)
20% of $4T is $800 billion. There are ~209,000 primary care doctors in the US (https://www.ahrq.gov/research/findings/factsheets/primary/pc...), not counting specialists, etc. Each doctor therefore is responsible for ~$4M. Assuming for no reason whatsoever that specialists and outside labs, etc., take 50% of that, each doctor's practice gets $2M. Making ye olde "everybody costs $100,000 / year" assumption, that works out to 20 people including the doctor: nurses, receptionists, lab techs, janitors, etc.
Do you think doctors and nurses exhaust the category of health care workers? Do you think, perhaps, those sentences refer back to moving the needle rather than vast bulk?
Doctors and nurses are only a subset of workers who provide patient care in the US. There are a huge variety of technicians; basically one for every specialty. 9.8 million all-in, plus another 5.3 million other employees involved in less technical patient care (nursing assistants, non-bsn hospice workers, etc).
$2T/yr divided by just the 9.8 million = 204,081, which puts average comp in the 160s. Sounds right; around here your average nurse makes about $80k/yr with excellent benefits, and they are sort of the median employee.
And that's just the employees providing care. There's also an enormous bureaucracy.
This. My brother a highly educated health care worker wanted to move back to Canada. The only catch is he was offered $20usd/hr less working in Canada then where he is in Washington. Think about that. He basically would have to turn down my entire years wage to get a job here. He has so much more earning potential down south then here it is absurd. Or perhaps what is absurd is how much he is paid for his job. I’m leaving towards the paid too much.
Yes some salaries are absurd in US. Look at programmers, no other country pays that much. Look at CEOs, same thing. By not capping salaries with reasonable caps we just completely broke the system (edit: I wrote market but meant something more like system), and it will be hard to revert that. But it may not be bad to have doctors that care more about their patients than their money, I've met my share of absolutely inhumane doctors and MD students.
Paying someone more than what their counterparts in other countries get is not breaking the market.
Good luck incentivizing the smartest kids to go through the torture chamber that they have to in order to become a doctor without the high pay potential. I suspect, proportionally, many smart parents and kids have already chosen to avoid careers in medicine due to the coming squeeze in pay.
The better way to decrease labor costs is to increase labor supply. Make it so you do not have to sacrifice your 20s to become a doctor. Make it so kids are not looking at hundreds of thousands of dollars of debt by the time they are a doctor and in their early 30s when they need to be thinking about starting families.
There is no physical limitation why we cannot start preparing kids for careers halfway through high school and have them working by 25. Or why residency spots are so limited so there is a cap on how many doctors are added.
Why would we want the smartest kids to become doctors? Maybe the small fraction of doctors that are working on new or improved treatments, but most doctors treat one person at a time.
I’d rather have the smartest kids go into a field where they can do work that impacts millions or billions of people.
What field impacts millions and isn't currently being paid well enough? I think the point being made here is that most of the jobs that pay super well don't create the same amount of "value" (and I use this loosely, as it's a super subjective term) as a doctor.
It is not just the number of people but he impact on each of these single person. Saving a life has an impact on more than one person as it is what allows that person to benefit society (potentially) for many more years (ideally).
If you have one really smart person and she can either work for Ford improving safety features on all their vehicles to prevent accidents or be a really great trauma surgeon treating people that have been in accidents—-which one is likely to save more lives?
Probably the doctor. I'm serious. There are probably hundreds of people working at Ford on safety features. The number of auto deaths in the US seems to be pretty stable at around 35k the last few years. Say Ford single-handedly dropped that number by a few hundred over the period an engineer worked there (say 5 years). Then I guess that averaged out that engineer saved roughly one life due to the efforts. Of course all the numbers are just pulled out of my ass (well other than the 35k number which I got from Wikipedia), but even if it's off by 10x, a doctor could still easily save more people in that time frame.
Anyway my point isn't to prove you wrong (picking random numbers and doing random extrapolation won't do that), but just to say that your point, will reasonable on the surface, probably needs to a bit more analysis if one is to take it too seriously.
edit: I would really appreciate the downvoters' thoughts. I'm really failing to see the fault in my thought process here. Please enlighten me.
It’s not a bad point (I can’t and didn’t downvote you).
However, I stand by my original claim that most doctors aren’t doing the kind of work that we collectively would want the very brightest people to do, if we had the choice. It’s just not leveraged enough.
I understand your claim and don't find it unreasonable, but I think there are lower hanging fruit than doctors. Many of the brightest minds of our generation are putting their efforts to ads and manipulation in order to increase consumption. I'd pick the doctors over them.
Could be nominal, such as being paid less simply because you do not have another option. US pharmacists have had declining nominal pay and declining quality of life at work since at least 2016, and their pay had stagnated years before that. Check out the pharmacy forums on sdn or reddit, they are depressing.
Doctors, however, bring in money and can generate revenue. Their decrease in pay would probably be via quality of life at work. The biggest complaint I see lack of autonomy and being managed like a cog in the machine. Most likely, individual doctor will have no negotiating power with the people that pay them (governments and managed care organizations, aka insurers). Therefore, they will need to become part of a doctor group, usually as an employee. If you are at the bottom of the totem pole here, the employer is probably going to want to squeeze as much out of you as possible. Expect this to vary based on how desirable the area is you live in and how many competing doctors there are.
I also see many healthcare groups using nurse practitioners and physician's assistants far more than before. So when you go in for a healthcare visit, you will not actually see a doctor, but rather a PA/NP, who is (supposedly) under the purview of a doctor. But I am not aware of any standards that would prevent a doctor from having to be in charge of too many PA/NP that quality would start slipping, so I presume the workload will get higher and higher if doctors do not have much leverage with the employer. Again, probably will vary on how desirable the area the doctor is in and if the doctor's employer can choose to be picky or not.
In 2018, hospital care is about 33%. Professional services (physician and clinical services, 20%, dental services, and other) is about 26%. Retail medical products is 12% (prescription drugs, 9%).
Net cost of health insurance is 2.6%, which is "Difference between premiums earned and benefits incurred. This is the amount of health insurance spending attributed to nonmedical benefit expenses such as administrative costs, additions to reserves, rate credits and dividends, premium taxes, and profits. This category includes the net cost for private health insurance companies that insure enrollees in Medicare, Medicaid, CHIP, and workers’ compensation (health
portion only)."
It would be nice to have a breakdown of hospital budgets, but I cannot find any.
This is very interesting, however, I wonder how those numbers reconcile with wildly different prices based on insurer.
At a naive look, if insurance cost would be less than 10% of the final cost of a service (assuming that a generic service can represent health cost in general), one would expect the difference to be in that range - but the article shows a much higher variance.
How so? The article discussed differences in the prices paid by insurance (on uninsured patients) to the service providers. That is entirely unrelated to the aggregate amount of money the insurance companies pay to their staff, their profits, etc.
> where the vast bulk of the money is going—-healthcare workers
Any credible source for this?
Most of the cost is actually going to those who profit from the system without contributing any actual health care. That is, very much not the actual healthcare workers.
When you see a doctor for 15 minutes and get charged $300-$400, the vast majority of that money does not go to the actual doctor. It's the overhead people, the administrators and the insurance company who are taking most of the money.
I am a bit biased here, for I am married to an American Physician.
She works longer hours than I do. Her work is much more stressful (literally, life and death decisions almost every day). She can be sued for malpractice while I can only be fired for my screw ups. Her Medical education (undergrad + MD + medical residency) took three times as long as my Engineering degree with much larger student debt at the end.
And yet, as an SWE I make more money than she does. American doctors and nurses are not overpaid, certainly not if compared to the SWE crowd at HN.
American health care is a chaotic poorly organized mess with lots of money simply going to waste. Bringing an order to it (single payer system is one example) can restore some sanity, fairness and financial accountability.
> What does this look like? Is there money going into the system that’s not going to anyone / any company at all?
It means that money efficiency and productivity are low. A surgeon is idling because an OR is not setup because stuff is poorly organized, etc. It was mentioned in this thread already that with similar outcomes US healthcare costs are way higher than comparable systems in other countries. Low efficiency per dollar is a money waste.
The sums are so high we are in macroeconomic territory. There may be a few billionaires with private jets and yachts here and there but this is a detail, we are in the trillions here. It is money that moves around, making the livehood of millions of people, you may be one of them, and it it is not the case, probably one of your friends and relatives.
So what? Are doctors too well paid? Are health institutions inefficient? Are there too many useless medical procedures? Where is the money going where it shouldn't go? Or maybe it is just the price of really good health care.
Based on what US doctors have to go through to start earning that pay, I would not say they are paid too well given the alternatives available to a person smart and driven enough to become a doctor in the US. For example, I would advise my kids that finance/tech/law/engineering has better a better pay to lifestyle ratio than becoming a doctor. Giving up your 20s and early 30s is an enormous sacrifice.
>Or maybe it is just the price of really good health care.
I suspect this is the price of a small number of people getting really good care, while a somewhat larger number of people get decent care, and then a very large number of people get (or do not) get care, and when they do, it is with very high variance of quality.
Doctor’s salary only accounts for a small fraction of healthcare spending, so it certainly isn’t the cause.
However my wife is a doctor who is fellowship trained, so she didn’t start making real money until she was 32. But she made a good bit above the median salary for many years before that. She also doesn’t feel like she sacrificed her 20s. She had plenty of fun, although she says med school was much harder than her engineering degree.
And now she makes much more than I do as a principal engineer, and she works less than 30 hours a week.
She doesn’t have to worry about interview prep or job hopping. She has absolute job security in any economy. She gets paid for continuing education. She is highly respected (people are much more impressed that I married a doctor than that I’m a principal engineer lol).
There is a legal framework protecting her autonomy and decision making at work. Not even the CEO of the hospital can overrule her.
In short, she is almost completely above the rat race, and is a true professional in ways that we (software engineers ) are not.
I would 100% recommend our children become doctors.
What year did your wife start working? I expect doctors to get squeezed much harder in the coming years. It is go big or go home everywhere, so from the doctors I know, in order to compete you have to join healthcare group, where you will eventually become a cog in the machine frequently owned by PE groups. They are in turn competing with bigger MCOs, hospital groups, etc.
On the other side, politicians are doling out what responsibilities that were previously restricted to doctors to nurse practitioners and physician's assistance, effectively using 1 doctor's license (and liability) to increase the supply of healthcare (effectively lowering the quality of healthcare since you are no longer being seen by a doctor).
Seems like a problem across all sectors, as I get closer to staff at a FANNGy company I hear from others it’s getting harder or the bar is becoming higher as just more people technically qualified try for it.
2018. Those concerns are mainly dependent on subspecialty. If you’re in family medicine or internal medicine, it is harder to run your own practice these days. You still have much more autonomy than nearly every other employee in other professions.
But I wouldn’t recommend my kids go into family medicine. If you’re say a pediatric emergency medicine doctor, or a maternal fetal medicine doctor, there just aren’t enough of you to be just a cog.
Increasing the number of mid level practitioners has been happening for a while, but it hasn’t had much impact on salaries [1]. My wife isn’t concerned.
"Based on what US doctors have to go through to start earning that pay, I would not say they are paid too well given the alternatives available to a person smart and driven enough to become a doctor in the US. For example, I would advise my kids that finance/tech/law/engineering has better a better pay to lifestyle ratio than becoming a doctor. Giving up your 20s and early 30s is an enormous sacrifice."
I deal with surgeons from time to time through work. Maybe their training is hard but being a surgeon is pretty much an almost guaranteed ticket to becoming a multi-multi-millionaire. These guys are extremely well paid.
And maybe it is worth it if you have a high likelihood of becoming a multi multi millionaire (a decamillionaire?). But for a person capable enough to become a surgeon, there very well may be decent odds of success via a different route that allows them to work a Mon to Fri 8 to 5 job, maybe even work from home, and live in a popular city as opposed to living in a less popular area (many doctor's get paid more for living in less popular areas, for obvious reasons).
>But for a person capable enough to become a surgeon, there very well may be decent odds of success via a different route
There's a few issues here. First, surgery can have bad work life balance depending on the subspecialty. Some spend a lot of time on call, some basically work 9-5 or less.
Second, unlike basically every other very high paying profession, surgery requires working with your hands, and physical and mental stamina to endure hours of operating. Just getting through med school requires above average intelligence and hard work, but you don't need to be a super genius. The abilities that make someone a good surgeon don't necessarily translate to any other profession that is that highly paid.
Third, surgery is a very direct path to what most people would consider serious wealth for someone who is smart enough/hardworking enough to get into med school, but didn't necessarily get into one of the top tier schools that some of the other very high paying careers recruit from.
All that aside, surgery isn't the only specialty that is very highly paid.
> that allows them to work a Mon to Fri 8 to 5 job
Many very highly paid subspecialties work Mon to Fri 9-5 and some even less.
>maybe even work from home
Radiologists routinely work from home, and there are remote opportunities for other doctors as well.
>and live in a popular city as opposed to living in a less popular area (many doctor's get paid more for living in less popular areas, for obvious reasons).
That is only true for certain specialties and subspecialties. My wife's sub speciality requires her to live in cities with a population of at least 500k or so. Many of the very highly paid subspecialties are similar.
Even for family medicine the difference is only 5-10%.
US healthcare professionals at the top of the pile make 3-4x as much as equivalent posts in the EU IIRC. A huge amount is going in salary costs.
Another huge chunk is spent on the bureaucracy of administrating the payments system, with patients, hosptials, insurers and general practicioner offices all fighting over payments. This is a deadweight cost that other systems don’t have to carry.
Drug costs in the US are much higher than elsewhere, as (I understand it) medicare & medicaid are prevented from negotiating the prices they pay the in way national healthcare systems do in the EU & a myriad set of obfuscatory tactics are used by drug companies to maintain much higher prices that are achievable elsewhere.
& probably lots of other little things too. But those are the big three I think.
It's pretty futile to point out the one factor that makes US health care so expensive. The whole system is highly corrupt and obfuscated and allows doctors, administrators, investors, construction companies, insurances, pharma companies and multiple middlemen to make outrageous money.
I am not sure how to fix this but an important first step would be to mandate full transparency of all pricing. In addition the same service should cost the same for uninsured and insured patients. Same for in- and out-of-network billing.
Right now a patient basically has no way of navigating this. Even if you are insured there is a much greater than zero probability that you will get hit with some random charges you could not have anticipated. You just have to hope for the best when you go to a hospital.
The is almost no competition anywhere in Healthcare delivery. Drugs are under patent, doctors determine how many new doctors are allowed, you can't build a new hospital because there is already one serving that market. This all seems ripe for some sort of disruption.
Not certain about the collapse, but it will certainly take a reduction of political polarization and less "repeat the lines of the party or radio host" mentality. But things have changed radically in the past already, look at the ADA and the end of segregation. So all hope is not lost, organized America can be strong and work in its best interest sometimes.
I'm not from the US, but from what I could gather: Since 2014 (ACA) that chart includes most private insurance payment under government/compulsory.
You can see the same change in the WHO data [1]. Their database [2] lists for 2018 (per capita):
- $4,089 "Transfers from government domestic revenue" (Medicare & Medicaid ?)
Again, I'm not from the US so I don't know how to interpret those numbers. But it seems gov spending is >$4,089 which is already higher than most western countries with national health insurance.
It would be neat if there was https://www.levels.fyi/ (anonymously submitted developer salaries) for anonymous hospital / medical bills, complete with line items.
Or the government could just force health service providers to, you know, reveal the price of said services like every other vendor of goods and services, so that patients -- sorry, customers -- have a fighting chance to shop around or plan for medical bankruptcy.
I actually had this experience for an MRI, I called billing at the hospital at which my doctor was affiliated/recommended I take my MRI - I was floored to learn that if I paid cash, it was ~$1k and if I ran it through insurance it was $1.5k
I actually ended up running it through insurance as I wanted the amount to be applied to my deductible…
When I asked the (very nice) woman in billing how this made any sense - she told me (paraphrasing) that it’s basically a super complex optimization problem where several thousand products/services are being simultaneously negotiated, such that the hospital can maximize its gross margin, and the insurer can minimize its payments under insurance.
I had an MRI a little while ago. Then I ended up having to go in for minor brain surgery, and then a checkup with some high-precision head X-rays later.
I paid... about $100 for the hospital bed and food while recovering for two days, and about $15 for the taxi they arranged to take me home. Another $10 or so for some painkillers for the headache while recovering at home.
As someone with experience with the process, she’s basically right. People complain about the $20 tablet of Tylenol that insurance pays $0.50 for, the gross-net game has been played for decades. It’s just got ridiculous in the last 20 years or so.
Insurers have little interest in negotiating for every single procedure code, and why would they when it’s a handful of codes that drive most of the cost - more efficient to spend time on those.
And on the hospital side, they leverage what the can - if you’re the only acute trauma center in a 100 mile radius you’re dam right the insurer is going to pay whatever you ask - they don’t really have a choice.
So areas with multiple MRI providers often see pretty reasonable rate (not always though). The ones where there aren’t multiple provides see the 5x charges.
If you do have an MRI, skip the contrast. They describe it as a harmless dye when in fact it’s a toxic heavy metal known as Gadolinium injected straight into your bloodstream, and is retained indefinitely by your body and deposited in your bones and skull: https://www.fda.gov/drugs/drug-safety-and-availability/fda-d...
Upside: there are very few indications for an MRI with contrast, and epidemiological studies have shown current gadolinium-based contrast appears to be well-tolerated (i.e. very low risk of nephrogenic systemic fibrosis in patients with renal failure). Downside: if an MRI protocol calls for contrast, then it’s necessary to use contrast to obtain the information desired (i.e. there’s often little use getting a non-contrasted MRI of the protocol calls for contrast but there is a contraindication).
Could part of the reason that the cash price is often cheaper be that dealing with the insurance company for pre-approval and claims is time consuming and expensive?
I don't have anything to add, but I recently received a $701 bill for each my children's covid tests ($1402 total). We took them to their pediatrician, part of a hospital. Insurance covered $0.
If the insurance can decide not to pay, guess who else has that option?!
I came across Turquoise Health (https://www.turquoise.health/) recently, they're one of the early players that have built a search tool to look up the prices hospitals have negotiated with different insurance companies for procedures.
Many people's first thought will be "how does this help patients if they're rarely paying the cash price, their insurance is the one paying". The effects (in theory) will be more indirect than that.
Now that insurance companies can see what prices a hospital has negotiated with other insurances, they'll have hard, transparent data to show that those other insurance providers are getting a better deal, and can negotiate prices down.
This alone won't be the magical solution to healthcare costs to patients, but this level of price transparency will no doubt have a big impact. It's a great first step.
FYI, there is a similar effort going on that requires all health plans to host machine readable files containing negotiated rates by provider and procedure code by 2022-01-01: https://github.com/CMSgov/price-transparency-guide
This story is revealing an important point about the health care system, but it only tells half the story. The other part of how broken the system is, and why pricing varies so wildly, is due to bad faith negotiations on the insurers' side.
Many insurers negotiate with a hospital by saying: "We are only going to pay 25% any bill you send us." If the hospital doesn't play ball, the insurer kicks them out of their network, and effectively denies the hospital customers. The hospitals that can't afford to lose those customers is incentivized to quadruple their prices just to get the insurer to cover their costs.
However, if a second insurer comes along and negotiates the same way, but says they'll only pay 50% of the hospital's stated cost, the hospital makes a tidy profit on the insurer's dime. (Remember: quoted price = 4 * cost. If insurer pays (quoted price * 0.5), then the hospital makes a 100% profit on that insurance transaction.)
What's been created is effectively an endless positive feedback loop to negotiate prices upwards, fueled by rampant information asymmetry and profit motive.
We desperately need some kind of government intervention against this in the US. I'm convinced that single payer would fix this in a fucking jiffy.
The "insurers" (better referred to as managed care organizations - MCOs) are simply hired to implement the government's pricing and reimbursement policies, and to take the heat from vendors and the public.
> and the government is the one negotiating the prices
Where can I read about this? It runs counter to what you typically hear about how healthcare pricing works.
The government also pays costs that I don't think private insurers need to worry about. For example, if you can't pay, you don't have private insurance, so private insurers don't really need to worry about paying for the long term care of people in nursing homes. I also imagine that the elderly and poor are more likely to require expensive care than the population covered by private insurers in general. Especially since private insurers will happily say "no!" to customers that are not profitable.
So I'm not convinced that being "the majority of spending" is the same thing as being irresponsible with the money. I will also point out the private insurance on this document is a plurality of spending and makes up most of the administrative cost (complete waste, on other words).
>The government also pays costs that I don't think private insurers need to worry about. For example, if you can't pay, you don't have private insurance, so private insurers don't really need to worry about paying for the long term care of people in nursing homes. I also imagine that the elderly and poor are more likely to require expensive care than the population covered by private insurers in general.
This does not seem relevant to a discussion about government being a party in the price negotiations for healthcare services.
>Especially since private insurers will happily say "no!" to customers that are not profitable.
Health insurers have been forced to offer coverage to anyone under age 65 since ACA was passed in 2010.
>So I'm not convinced that being "the majority of spending" is the same thing as being irresponsible with the money.
I do not think anyone claimed this in this discussion.
>I will also point out the private insurance on this document is a plurality of spending and makes up most of the administrative cost (complete waste, on other words).
The insurance portion of the business (forecasting expenses, calculating premiums, other insurance business functions) are only a waste if you are starting with the assumption that the system should be completely taxpayer funded healthcare for everyone.
The managed care portion where doctors/pharmacists double check claims and monitor for waste/fraud would have to happen in a taxpayer funded healthcare too. Although it being replicated across multiple managed care organizations could be classified as waste.
> This does not seem relevant to a discussion about government being a party in the price negotiations for healthcare services.
My apologies, I thought you were implying with a cost breakdown that the government was working with an advantage since they set prices and somehow end up paying more (meaning the government is doing a worse job than private insurers on cost metrics), especially since your cost breakdown was in response to a comment about how government intervention is needed to bring down costs. I was trying to explain how that doesn't mean government as a single payer would necessarily be more expensive. I'm glad that's not what you were trying to say.
> Health insurers have been forced to offer coverage to anyone under age 65 since ACA was passed in 2010.
And the government compensates them for the additional costs this incurs, yes? I will admit that the ACA has muddied the waters of this conversation.
> are only a waste if you are starting with the assumption that the system should be completely taxpayer funded healthcare for everyone
There's not really any other way to look at it? If it doesn't have to exist, it's waste. Both systems will generate waste, one will generate more. I think we disagree on which one, but now I'm not sure because apparently we disagree on what's even relevant to the discussion.
Maybe let's take a step back. What is the takeaway you want people to have after reading the cost breakdown you shared?
>especially since your cost breakdown was in response to a comment about how government intervention is needed to bring down costs. I was trying to explain how that doesn't mean government as a single payer would necessarily be more expensive. I'm glad that's not what you were trying to say.
The link I shared was to show that the government is already intervening in the market by paying for over half of all healthcare and paying at least 45% of people.
>And the government compensates them for the additional costs this incurs, yes? I will admit that the ACA has muddied the waters of this conversation.
Technically, yes, but not directly. All other insurance subscribers compensate for the additional costs from increased premiums. But the government does provide subsidies to lower income people to pay for those premiums. But without the subsidies and the lower income people purchasing the insurance, the system would still result in the other insurance subscribers paying higher premiums to subsidize the costlier insurance subscribers, just like in any other insurance pool.
>I think we disagree on which one, but now I'm not sure because apparently we disagree on what's even relevant to the discussion. Maybe let's take a step back. What is the takeaway you want people to have after reading the cost breakdown you shared?
That the government is already heavily involved in price negotiations for healthcare in the US. Therefore the problem cannot be due to private insurers. I point out in another comment in this thread that I think this is all due to politics, and being able to disguise who is getting what portion of the limited supply of healthcare there is relative to the demand. The lack of political support for broad access to healthcare for everyone, and the incentive for certain tribes to ensure their fellow tribe members are prioritized in receiving a greater than equal allocation of the available healthcare is what would have to be addressed (which is a very hairy problem, and is going to veer into classism, ageism, and racism).
The sources you shared seemed to indicate that the government declares what it's willing to pay for particular services and only pays that. I'm not sure if that's the same as
> The "insurers" (better referred to as managed care organizations - MCOs) are simply hired to implement the government's pricing and reimbursement policies, and to take the heat from vendors and the public.
Could you perhaps quote a relevant portion that indicates private insurance operates at the pricing whims of the government?
>What's been created is effectively an endless positive feedback loop to negotiate prices upwards, fueled by rampant information asymmetry and profit motive.
And offered this as a solution:
>We desperately need some kind of government intervention against this in the US. I'm convinced that single payer would fix this in a fucking jiffy.
The fact that the US government is already intervening in over half of all healthcare spending, and for at least 45% of people, seems to be a relevant counterpoint that this problem is not caused due to a lack of government intervention and the way insurers negotiate with healthcare providers.
It is not the Doctors or nurses salaries, but the diagnostics costs are astronomical.
People are regularly billed for hundreds or thousands of dollars for something as simple as XRays. Other procedures are also almost 5-10 higher than what one would expect to pay anywhere else in developed world.
The emergency room charges are just out of the world. And extraordinarily large portion of the cost is not personnel costs.
I think a healthcare system based on the following model could work great:
* Federal government provides public health insurance to all taxpayers.
* Every healthcare provider submits a list of tests/procedures they offer, and the price that they charge for each test/procedure. The prices are public data. Providers can charge whatever price they want.
* When you need a test/procedure, you use a website provided by the public insurance system which looks up all providers within a reasonable distance (search radius would be algorithmically determined so that at least 3-5 providers are included in the comparison). The public insurance program covers the price of the cheapest option. Patients are free to choose any provider they want, but if they don't choose the cheapest, they need to pay the difference out of pocket.
When going to the US from France, I always take an insurance because even a doctor visit is going to be bat crazy expensive.
When an American comes to France and sees a doctor, they will pay 25€.
I have the feeling we are being royally screwed. By ourselves.
We should have monster prices for people who are not part of the EU, with the understanding that tourists should come insured.
(One should always take an insurance because a heart operation is going to be costly in France as well, but my point is that for minor stuff there is z huge imbalance)
185 comments
[ 4.6 ms ] story [ 227 ms ] threadAside from the clickbait title, this is interesting information.
For example, Seattle decides to switch to the UK NHS, cuts a deal with the UK whereby everyone in Seattle pays into the UK treasury at the same rate UK citizens do towards the NHS, and the NHS takes on a responsiblity for universal healthcare in Seattle for Seattle citizens. Is this the kind of idea you mean? Certainly would be interesting and as a spitballing conversation piece, fun to discuss.
Single payer works because the risk pool is spread overy everyone in the entire country - and everyone has to pay (it's part of income taxes). That's why the ACA mandate was a thing.
You say "the problem with that". Pitched another way, we could say "the benefit of that"...
when it's an extra cost
Would it necessarily be an extra cost? I understand that the amount typically paid in the US on health insurance, by the individual and employers, compares badly with the amount paid in many other systems that provide better healthcare for less money.
Google "certificate of need" and you'll see why these hospitals virtually have monopolies in so many counties.
US Healthcare nowhere close to a free market.
Medical tourism is a more cost effective alternative, for dental care, eyesight, or even some heavy surgeries. The problem is the people who would likely benefit the most from that often don't even have a passport...
I made the same point about education cost in the rest of the west VS USA previously. Americans are entitled to travel or study in a lot of foreign countries without any hurdle, most of them don't ever take advantage of it for arbitrage.
"Haven was a not-for-profit, healthcare-focused entity created through a joint venture by American companies Amazon, Berkshire Hathaway and JPMorgan Chase. The entity's stated goals were to improve healthcare services and lower costs for the three companies' employees, while making primary care easier to access, making prescription drugs more affordable and rendering insurance benefits easier to understand."
https://en.wikipedia.org/wiki/Haven_Healthcare
I do not exactly see all my work from home friends who I know are working less than 40 hours a week Mon to Fri 9 to 5 clamoring to go help at the hospital right now even at current nurse's pay.
Maybe a well-functioning market could accomplish the same thing but we certainly don't have that right now.
3 shots of vaccine on day 1 + 1ml of human rabies immune globulin injected all around the exposed site. Then 1 follow up shot every 7 days for 3 weeks.
It’s the human rabies immune globulin that you hear the horror stories of people paying $20k for without insurance.
It’s strange that due to US medical billing and the uncertainty around it, I was trying weigh up the likely hood of actual infection from the animals saliva (protip for anyone visiting austin: there is actually a fair amount of rabies around).
If you develop symptoms, it’s usually too late and the survival rate is very low. That swung the needle in the direction of better to lose a car than be dead.
I’m not aware of any other country in the world - where getting those shots post exposure without insurance would have potentially cost that much.
A vet is risking a lot to do that. If you find one, pay well.
Single shot isn't enough, 2 or 3 at one or two week intervals is what i've been told.
It’s worth noting that the survival rate for symptomatic rabies isn’t just “very low” but basically zero. There are one or two known cases of people who made miraculous recoveries, but there is no treatment protocol known to be even slightly effective once symptoms appear.
I was actually about to return to the UK when the incident occurred, and I got the final shots there (100% free, no questions asked).
This particular point blew my mind, I didn't realise the US was getting screwed quite that hard when it came to healthcare costs.
I think implementing such a policy could be trivial for many things like labs and drugs and many procedures, and admittedly tricky to implement for complex / one-off procedures, but that shouldn’t stop us from trying.
Price transparency is important but eliminating price discrimination is I think the key way to shut down so much of the bloat and corruption currently in the system.
The last step would be to make it illegal to do any kind of rebating where patients are billed more than insurance ultimately pays. Charging less for one procedure taken by Patient A in exchange for charging more for another procedure taken by Patient B similarly should just be banned.
You end up with a system where the insurance companies and benefits managers have a lot less that they are able to do. Perhaps they would claim they are “hamstrung” but that’s exactly what they should be in this regard.
Offer senior discount, have a 30% off sales, have hot flash summer, whatever. But now pricing will be predictable because there are no back-room negotiations.
If you ever pay for medical services without insurance you’ll find that places can suddenly give you a straight price.
I have tried many times to get a doctor’s office to give me a price in writing for a completely preventative visit where there could be no possibility of variance in service rendered, and I have always received an answer of no.
Edit: so now I just assume any healthcare I get will cost me up to my out of pocket maximum, and budget for that yearly.
Medicaid pays providers less than Medicare because, politically, the population that needs Medicaid (poor people) does not have the political power that Medicare (old people) does.
By paying providers less, there is less incentive to see Medicaid patients, and it effectively limits the amount of healthcare poorer people receive. However, the convoluted nature of the process gives politicians plausibly deniability, since people generally do not understand how care is being rationed.
Similarly, employees of large businesses get access to health insurance at pre tax prices, while employees of small businesses do not since businesses with less than 50 employees are not required to offer employer subsidized health insurance.
ACA did greatly assist with the price transparency by standardizing what health insurance has to cover though, and by creating healthcare.gov, so we are moving in the right direction.
However, the other end of this is that the government uses managed care organizations (MCOs, health insurers), to ration care by having different rules for approving who gets what care. For example, the government pays for both Medicaid and Medicare. But Medicaid is via state governments’, and each state will hire a certain MCO to implement the Medicaid plan’s rules for that state.
And the rules of that plan will state patient has to follow so and so healthcare regimen to get X treatment, and so doctors have to follow that specific course of treatment in order to get paid for that patient. So the state will have different rules for the Medicaid patient (more strict, less reimbursement) than the federal government will for Medicare and Tricare patients (less strict, more reimbursement.
Meanwhile, people will bitch at MCOs (insurers) not approving payment or doctors will complain about having to get pre authorizations for providing healthcare, when in reality, the rules are not being made by insurers, but rather by the government themselves who then contract with MCOs to implement those rules, and take the heat from the public for doing so.
Medicaid has legal acceptance requirements that other insurance does not. I believe large hospitals in particular have to accept Medicaid because they lose other government subsidies if they don’t. In many ways Medicaid is the “best insurance that money can’t buy”.
Also, even small business employees can pay for health insurance with pre-tax dollars, although it may need to be claimed on a tax return.
Lastly, if a medical treatment is FDA approved and medically necessary typically a plan must cover it, or propose an equivalent treatment (i.e. generics)
The plan cannot prescribe a specific treatment regimen, although they can make reimbursement of one treatment contingent on trying something else (usually much cheaper option) first, as long as there isn’t a medical reason not to do so.
The way I understand it, it can work if the state uses the right metrics to determine prices, but there's a ton of failure modes where prices are set too high or too low.
(Then again, it's more or less how we do healthcare in France, so I dunno)
Technically social security covers 70% of the state set price and insurance must at a minimum cover the other 30% but that's the general idea.
Many people’s first take is that it’s a terrible idea - it would result in spiraling prices reductions and damage R&D.
But what is really happening is you’re just forcing a single price across a wide group of customers. Prices in the US would fall, but they would go up everywhere else.
This actually happened in the US when Medicaid got “best price” passed - Medicaid has to get at least the best price offered to private insurers, if not lower.
Well when the law was passed, prices actually went up. The reason was that if you offer a price to mid-sized customer A and that forces they same (unacceptably low) price for massively huge customer B, well, you basically tell customer A “tough shit” and just price for customer B. And that’s what happened, prices went up for customer A so they didn’t have to also price the same for customer B.
So it would be an interesting approach - tell hospitals they can charge whatever they want, complete freedom, but it has to be the same price for everyone. They’d quickly find an equilibrium that’s likely lower for many customers and higher for a few.
When everyone including healthy people are insured it makes sense to optimize for long term costs and that means keeping people healthy and dealing with health issues as early as possible to avoid letting them get worse and more expensive.
As an example, I've seen insurance proactively provide assistance to help people quit smoking. They don't have to pay for patches or whatever but they do because it's a lot cheaper than cancer treatment.
We pay for socialized healthcare, and then some, it's just that most of us don't get it.
I view the problem as impossible to solve until there is a collapse.
[1] https://en.wikipedia.org/wiki/List_of_countries_by_total_hea...
And since no other country with a huge diversified economy is willing to run external deficits large enough to meet foreign demand for reserves, the dollar is pretty much the only good choice. There just isn’t enough gold to clear trade in a $80+ trillion global economy.
This is merely viewing the same thing from a US-centric perspective. From a rest of the world perspective, the largest competitors in EU were destroyed in WW2 (deservedly so imo), China was nowhere and India was impeded first by British colonization and then by Bretton Woods which only focused on EU nations.
America is ahead but make no mistake that the gap is large only because WW2 destroyed other nations and Bretton Woods system was the first step in prevention of other nations from building up rapidly.
In places where public healthcare exists, there is also a huge amount of voluntary personal health responsibility. People look after their health, and expect the same of their neighbors. The current state of Americans would be an unreasonable burden on public healthcare.
That being said, taxes pay so much for healthcare, that we'd probably still be able to pull it off.
That's a cost that is incurred towards the end of life without any 'trying to prolong life' involved, a surgery to do the repair is frequently going to immediately make the person more comfortable.
And there's all sorts of similar things that just happen more often to older folks.
Don’t look to us for any ideas how to do your healthcare!
See also: https://en.wikipedia.org/wiki/Health_system#International_co...
[1] https://www.commonwealthfund.org/publications/fund-reports/2...
[2] https://www.washingtonpost.com/world/2021/08/05/global-healt...
If a workplace or insurer says to a hospital “if all these people come for a checkup, what can you do in pricing?” Is that something that should be blocked?
Hence the fact that, as the article documents, people routinely are getting charged more with insurance than the cash price they would be charged with no insurance. (If you tried to pay the cash price then it doesn't count against your deductible, so it would be rare to do that.)
There was a serious effort by health insurance to restrain medical spending with the HMO/limited medical network era of the early to mid-1990's, which led to a massive pushback from people who hated having to change doctors all the time. In large part because they were so widely hated that no one has tried to revive them (modern HMO's are not nearly as limited in networks) they also were the one period in the last 40 years when medical cost growth was held down.
I think what we have there is a very expensive medical school system. And things snow ball. Especially given a doctor role. A doctor studies and goes through practical training a good 8 years. That's college/uni + health center fees that stack up with interest over a long period of time.
Doc then needs to make a living in accordance to his past effort, more than a living, get enough to earn the status he deserves. Now the thing is, taxes accounts for a lot given the high band income. So we could say the doctors are earning too much, but reality is 70% of their gross income goes to multiple tax tiers. 1/ income tax 2/ debt pay back 3/ insurer, continous training fees and other things that are sort of imposed on medical professional.
I'm not a doctor, but I couldn't figure out how even a surgeon could justify such high pay, in the million dollar per year in many US positions. But looking comprehensively as the taxes imposed on them, everything makes sense, all they have left is 200k per year. Cashiers and other clerks earn a quarter this amount, but that's for any less than what doctors are making not many would go through all these hops and be privileged enough to even take the risk of such a financial investment.
The argument that many doctors come from wealthy families doesn't invalidate the simple fact debt still exists and somehow needs to be paid back, and in most cases it does get paid back.
Solution? Get rid of income taxes, make medical schools optional to practice, just make exams open to any participant, affordable education channels will pop up by themselves. Don't regulate medical malpractice, practicians should rather have their lives ruined instead, it's actually a stronger incentive to proper practice than having a big insurer paying the millions in settlement cases.
The medical sector is far more tied to other industries and regulating costs than it looks. I only included 3 obvious contributors to high staff cost, there are numerous supply chains to look at to also account for other spendings that seem unavoidable but in reality pointless for health care.
"When reality doesn't confirm your axioms, double down on the axioms" puts the fundamentalist in market fundamentalism.
The argument is against free market rules . Sorry if that wasn't made clear to you.
The premises are that in a rather laissez faire market, prices are obscured and tend on the over profiting side. With competition not actually leading to the outcome one would expect in a free market.
One pays 100 bucks,another pays 700 bucks. And an RMI shot ( decades old tech ) still costs thousands of dollars.
Edit: can't write proper English with auto correct.
All those make society worse. Alternatively: - subsidize or cap education fees so that students don’t go into crushing debt - reduce inefficiencies resulting from a for profit insurance system by switching to a single payer social insurance system - cap malpractice claims and put in better controls against frivolous lawsuits - doing all this also lower doctors wages
It doesn't need to be argumented against anyway, the economy cannot take much more tax levels, we are probably defaulting on paying taxes we are asked to pay at this point.
In a free market. Cut the imposed taxes, and let people be judge of which service they want to purchase given clear pricing.
Society worse? See the handling of the pandemic, I don't think the source of the problem comes from lack of regulations.
I would like a source for that. The US median household income is ~$66k.
I say a quarter, the source is me. Based on commonly known compensation information. A cashier earns anything between 25k and 70k. That's common knowledge. Source : go check what brick and mortar shops would pay you for a full time position operating a till and saving Hello thank you good bye to customers. You will get minimum wage all the way up (or down) to over (or below) median wage in certain cities in particular shops, or simply generous (or greedy) owner who don't follow wage market trends.
The comments on this thread are interesting. Counter post are very pedantic rather than argue the substance of comments
I would get rid of government medical licensing and setup third party accreditation.
The point is that there’s no magic bullet here. There’s no mustache twirling trillionare villain that we can shut down and get the UK’s spending numbers.
Cutting healthcare spending significantly, which I think we should do, would cause hardship for a huge number of people and entire regions on the country.
There’s real truth in the parable, but what it doesn’t get at is the transition costs in human misery of getting from an economy based on breaking and fixing windows to a better one.
Yes there is actually. If there was political will to do it, simply cutting off the insurance companies out of the loop will bring costs nearly in line with the rest of the developed world. The insurance companies provide no value (they're not doctors), all they do is add their overhead to profit from the work of the doctors and nurses.
And cutting healthcare spending would provide prosperity for many more.
A friend of mine used to work as an independent advocate for sick people in NYC. Basically people who were getting screwed by some aspect of the American healthcare system would pay her to do nothing but deal with bureaucratic red tape and bullshit. Like a healthcare lawyer almost. And of course she saved people more money than she cost, so she was constantly getting new clients. She only stopped because it was soul sucking work and incredibly depressing.
Now let's imagine a system that's so broken with bureaucratic BS that it makes sense to hire someone for this. All of the 'healthcare workers' that my friend would speak with on the phone for her clients were essentially overhead and only necessary because the system is geared more towards ripping people off than actually helping anyone.
We don't need any of these bureaucrats. They can all be fired.
Half of $4T/yr is $2T/yr or over $415K/yr for the average nurse or doctor.
So, either “vast bulk” is well under half, nurses make a ton more than I think, or some assumption above is incorrect.
It could be this - plenty of nurses make well over $100k, plenty of doctors make well over $500k. It varies a lot based on location, specialty, overtime, but there are some good livings being made.
If so, that could account for a lot of the "worker compensation".
But, the median wage for a medical doctor is <$250k in the US. I would be surprised if the pay amongst doctors is so unequal that the average is making >$500k.
That being said, there are a ton of people who work in hospitals beside just "doctors and nurses".
I wouldn't be surprised if all this factored in was close to 50% of the total pay.
20% of $4T is $800 billion. There are ~209,000 primary care doctors in the US (https://www.ahrq.gov/research/findings/factsheets/primary/pc...), not counting specialists, etc. Each doctor therefore is responsible for ~$4M. Assuming for no reason whatsoever that specialists and outside labs, etc., take 50% of that, each doctor's practice gets $2M. Making ye olde "everybody costs $100,000 / year" assumption, that works out to 20 people including the doctor: nurses, receptionists, lab techs, janitors, etc.
Doesn't sound terribly unreasonable.
$2T/yr divided by just the 9.8 million = 204,081, which puts average comp in the 160s. Sounds right; around here your average nurse makes about $80k/yr with excellent benefits, and they are sort of the median employee.
And that's just the employees providing care. There's also an enormous bureaucracy.
Good luck incentivizing the smartest kids to go through the torture chamber that they have to in order to become a doctor without the high pay potential. I suspect, proportionally, many smart parents and kids have already chosen to avoid careers in medicine due to the coming squeeze in pay.
The better way to decrease labor costs is to increase labor supply. Make it so you do not have to sacrifice your 20s to become a doctor. Make it so kids are not looking at hundreds of thousands of dollars of debt by the time they are a doctor and in their early 30s when they need to be thinking about starting families.
There is no physical limitation why we cannot start preparing kids for careers halfway through high school and have them working by 25. Or why residency spots are so limited so there is a cap on how many doctors are added.
I’d rather have the smartest kids go into a field where they can do work that impacts millions or billions of people.
Anyway my point isn't to prove you wrong (picking random numbers and doing random extrapolation won't do that), but just to say that your point, will reasonable on the surface, probably needs to a bit more analysis if one is to take it too seriously.
edit: I would really appreciate the downvoters' thoughts. I'm really failing to see the fault in my thought process here. Please enlighten me.
However, I stand by my original claim that most doctors aren’t doing the kind of work that we collectively would want the very brightest people to do, if we had the choice. It’s just not leveraged enough.
Doctors, however, bring in money and can generate revenue. Their decrease in pay would probably be via quality of life at work. The biggest complaint I see lack of autonomy and being managed like a cog in the machine. Most likely, individual doctor will have no negotiating power with the people that pay them (governments and managed care organizations, aka insurers). Therefore, they will need to become part of a doctor group, usually as an employee. If you are at the bottom of the totem pole here, the employer is probably going to want to squeeze as much out of you as possible. Expect this to vary based on how desirable the area is you live in and how many competing doctors there are.
I also see many healthcare groups using nurse practitioners and physician's assistants far more than before. So when you go in for a healthcare visit, you will not actually see a doctor, but rather a PA/NP, who is (supposedly) under the purview of a doctor. But I am not aware of any standards that would prevent a doctor from having to be in charge of too many PA/NP that quality would start slipping, so I presume the workload will get higher and higher if doctors do not have much leverage with the employer. Again, probably will vary on how desirable the area the doctor is in and if the doctor's employer can choose to be picky or not.
I am very interested in your definition of the word “market”.
Linked from https://www.cdc.gov/nchs/fastats/health-expenditures.htm
In 2018, hospital care is about 33%. Professional services (physician and clinical services, 20%, dental services, and other) is about 26%. Retail medical products is 12% (prescription drugs, 9%).
Net cost of health insurance is 2.6%, which is "Difference between premiums earned and benefits incurred. This is the amount of health insurance spending attributed to nonmedical benefit expenses such as administrative costs, additions to reserves, rate credits and dividends, premium taxes, and profits. This category includes the net cost for private health insurance companies that insure enrollees in Medicare, Medicaid, CHIP, and workers’ compensation (health portion only)."
It would be nice to have a breakdown of hospital budgets, but I cannot find any.
At a naive look, if insurance cost would be less than 10% of the final cost of a service (assuming that a generic service can represent health cost in general), one would expect the difference to be in that range - but the article shows a much higher variance.
Any credible source for this?
Most of the cost is actually going to those who profit from the system without contributing any actual health care. That is, very much not the actual healthcare workers.
When you see a doctor for 15 minutes and get charged $300-$400, the vast majority of that money does not go to the actual doctor. It's the overhead people, the administrators and the insurance company who are taking most of the money.
Please be more specific. What fraction is spent on front line value add labor, like doctors and nurses, vs administrative flak?
She works longer hours than I do. Her work is much more stressful (literally, life and death decisions almost every day). She can be sued for malpractice while I can only be fired for my screw ups. Her Medical education (undergrad + MD + medical residency) took three times as long as my Engineering degree with much larger student debt at the end.
And yet, as an SWE I make more money than she does. American doctors and nurses are not overpaid, certainly not if compared to the SWE crowd at HN.
American health care is a chaotic poorly organized mess with lots of money simply going to waste. Bringing an order to it (single payer system is one example) can restore some sanity, fairness and financial accountability.
What does this look like? Is there money going into the system that’s not going to anyone / any company at all?
> What does this look like? Is there money going into the system that’s not going to anyone / any company at all?
It means that money efficiency and productivity are low. A surgeon is idling because an OR is not setup because stuff is poorly organized, etc. It was mentioned in this thread already that with similar outcomes US healthcare costs are way higher than comparable systems in other countries. Low efficiency per dollar is a money waste.
EDIT: formatting.
The sums are so high we are in macroeconomic territory. There may be a few billionaires with private jets and yachts here and there but this is a detail, we are in the trillions here. It is money that moves around, making the livehood of millions of people, you may be one of them, and it it is not the case, probably one of your friends and relatives.
So what? Are doctors too well paid? Are health institutions inefficient? Are there too many useless medical procedures? Where is the money going where it shouldn't go? Or maybe it is just the price of really good health care.
https://www.healthsystemtracker.org/health-spending-explorer...
>Are doctors too well paid?
https://www.medscape.com/slideshow/2020-compensation-overvie...
https://www.kaptest.com/study/mcat/doctor-salaries-by-specia...
Based on what US doctors have to go through to start earning that pay, I would not say they are paid too well given the alternatives available to a person smart and driven enough to become a doctor in the US. For example, I would advise my kids that finance/tech/law/engineering has better a better pay to lifestyle ratio than becoming a doctor. Giving up your 20s and early 30s is an enormous sacrifice.
>Or maybe it is just the price of really good health care.
I suspect this is the price of a small number of people getting really good care, while a somewhat larger number of people get decent care, and then a very large number of people get (or do not) get care, and when they do, it is with very high variance of quality.
However my wife is a doctor who is fellowship trained, so she didn’t start making real money until she was 32. But she made a good bit above the median salary for many years before that. She also doesn’t feel like she sacrificed her 20s. She had plenty of fun, although she says med school was much harder than her engineering degree.
And now she makes much more than I do as a principal engineer, and she works less than 30 hours a week.
She doesn’t have to worry about interview prep or job hopping. She has absolute job security in any economy. She gets paid for continuing education. She is highly respected (people are much more impressed that I married a doctor than that I’m a principal engineer lol).
There is a legal framework protecting her autonomy and decision making at work. Not even the CEO of the hospital can overrule her.
In short, she is almost completely above the rat race, and is a true professional in ways that we (software engineers ) are not.
I would 100% recommend our children become doctors.
On the other side, politicians are doling out what responsibilities that were previously restricted to doctors to nurse practitioners and physician's assistance, effectively using 1 doctor's license (and liability) to increase the supply of healthcare (effectively lowering the quality of healthcare since you are no longer being seen by a doctor).
https://www.nationalreview.com/corner/the-overproduction-of-...
But I wouldn’t recommend my kids go into family medicine. If you’re say a pediatric emergency medicine doctor, or a maternal fetal medicine doctor, there just aren’t enough of you to be just a cog.
Increasing the number of mid level practitioners has been happening for a while, but it hasn’t had much impact on salaries [1]. My wife isn’t concerned.
1. https://www.hindawi.com/journals/nrp/2012/671974/
Edit: I noticed that you already mentioned this in your other thread.
Also in the US physicians salaries are also directly paying for physician training thanks to large student loans unlike in many other countries.
I deal with surgeons from time to time through work. Maybe their training is hard but being a surgeon is pretty much an almost guaranteed ticket to becoming a multi-multi-millionaire. These guys are extremely well paid.
There's a few issues here. First, surgery can have bad work life balance depending on the subspecialty. Some spend a lot of time on call, some basically work 9-5 or less.
Second, unlike basically every other very high paying profession, surgery requires working with your hands, and physical and mental stamina to endure hours of operating. Just getting through med school requires above average intelligence and hard work, but you don't need to be a super genius. The abilities that make someone a good surgeon don't necessarily translate to any other profession that is that highly paid.
Third, surgery is a very direct path to what most people would consider serious wealth for someone who is smart enough/hardworking enough to get into med school, but didn't necessarily get into one of the top tier schools that some of the other very high paying careers recruit from.
All that aside, surgery isn't the only specialty that is very highly paid.
> that allows them to work a Mon to Fri 8 to 5 job
Many very highly paid subspecialties work Mon to Fri 9-5 and some even less.
>maybe even work from home
Radiologists routinely work from home, and there are remote opportunities for other doctors as well.
>and live in a popular city as opposed to living in a less popular area (many doctor's get paid more for living in less popular areas, for obvious reasons).
That is only true for certain specialties and subspecialties. My wife's sub speciality requires her to live in cities with a population of at least 500k or so. Many of the very highly paid subspecialties are similar.
Even for family medicine the difference is only 5-10%.
Another huge chunk is spent on the bureaucracy of administrating the payments system, with patients, hosptials, insurers and general practicioner offices all fighting over payments. This is a deadweight cost that other systems don’t have to carry.
Drug costs in the US are much higher than elsewhere, as (I understand it) medicare & medicaid are prevented from negotiating the prices they pay the in way national healthcare systems do in the EU & a myriad set of obfuscatory tactics are used by drug companies to maintain much higher prices that are achievable elsewhere.
& probably lots of other little things too. But those are the big three I think.
I am not sure how to fix this but an important first step would be to mandate full transparency of all pricing. In addition the same service should cost the same for uninsured and insured patients. Same for in- and out-of-network billing.
Right now a patient basically has no way of navigating this. Even if you are insured there is a much greater than zero probability that you will get hit with some random charges you could not have anticipated. You just have to hope for the best when you go to a hospital.
- $4,089 "Transfers from government domestic revenue" (Medicare & Medicaid ?)
- $3,642 "Compulsory prepayment" (ACA private insurance ?)
- $1,267 "Social insurance contributions"
- $1,626 "Other domestic revenues"
Again, I'm not from the US so I don't know how to interpret those numbers. But it seems gov spending is >$4,089 which is already higher than most western countries with national health insurance.
[1] https://apps.who.int/nha/database/country_profile/Index/en (select USA)
[2] https://apps.who.int/nha/database/Select/Indicators/en (in indicators select everything under 'Health Expenditure Data' > 'Revenues', country USA, all years, unit 'current US$ per capita')
I actually ended up running it through insurance as I wanted the amount to be applied to my deductible…
When I asked the (very nice) woman in billing how this made any sense - she told me (paraphrasing) that it’s basically a super complex optimization problem where several thousand products/services are being simultaneously negotiated, such that the hospital can maximize its gross margin, and the insurer can minimize its payments under insurance.
an MRI is typically a ~$500 cash / out of pocket diagnostic without insurance, outside a hospital.
I paid... about $100 for the hospital bed and food while recovering for two days, and about $15 for the taxi they arranged to take me home. Another $10 or so for some painkillers for the headache while recovering at home.
Which country did this happen in? If the USA, what sort of insurance was it under?
Insurers have little interest in negotiating for every single procedure code, and why would they when it’s a handful of codes that drive most of the cost - more efficient to spend time on those.
And on the hospital side, they leverage what the can - if you’re the only acute trauma center in a 100 mile radius you’re dam right the insurer is going to pay whatever you ask - they don’t really have a choice.
So areas with multiple MRI providers often see pretty reasonable rate (not always though). The ones where there aren’t multiple provides see the 5x charges.
(Note that if you have an allergic reaction to MRI dye, you can lose all your organs.)
You can get MRIs in the developing world for as low as $100, but bring an Rx from your local doctor for the right body location and MRI signal levels.
If the insurance can decide not to pay, guess who else has that option?!
https://www.hhs.gov/coronavirus/community-based-testing-site...
Many people's first thought will be "how does this help patients if they're rarely paying the cash price, their insurance is the one paying". The effects (in theory) will be more indirect than that.
Now that insurance companies can see what prices a hospital has negotiated with other insurances, they'll have hard, transparent data to show that those other insurance providers are getting a better deal, and can negotiate prices down.
This alone won't be the magical solution to healthcare costs to patients, but this level of price transparency will no doubt have a big impact. It's a great first step.
Many insurers negotiate with a hospital by saying: "We are only going to pay 25% any bill you send us." If the hospital doesn't play ball, the insurer kicks them out of their network, and effectively denies the hospital customers. The hospitals that can't afford to lose those customers is incentivized to quadruple their prices just to get the insurer to cover their costs.
However, if a second insurer comes along and negotiates the same way, but says they'll only pay 50% of the hospital's stated cost, the hospital makes a tidy profit on the insurer's dime. (Remember: quoted price = 4 * cost. If insurer pays (quoted price * 0.5), then the hospital makes a 100% profit on that insurance transaction.)
What's been created is effectively an endless positive feedback loop to negotiate prices upwards, fueled by rampant information asymmetry and profit motive.
We desperately need some kind of government intervention against this in the US. I'm convinced that single payer would fix this in a fucking jiffy.
The majority of healthcare spending in the US is by the government, and the government is the one negotiating the prices.
https://crsreports.congress.gov/product/pdf/IF/IF10830
The "insurers" (better referred to as managed care organizations - MCOs) are simply hired to implement the government's pricing and reimbursement policies, and to take the heat from vendors and the public.
Where can I read about this? It runs counter to what you typically hear about how healthcare pricing works.
The government also pays costs that I don't think private insurers need to worry about. For example, if you can't pay, you don't have private insurance, so private insurers don't really need to worry about paying for the long term care of people in nursing homes. I also imagine that the elderly and poor are more likely to require expensive care than the population covered by private insurers in general. Especially since private insurers will happily say "no!" to customers that are not profitable.
So I'm not convinced that being "the majority of spending" is the same thing as being irresponsible with the money. I will also point out the private insurance on this document is a plurality of spending and makes up most of the administrative cost (complete waste, on other words).
https://www.ama-assn.org/practice-management/medicare-medica...
https://www.ama-assn.org/about/rvs-update-committee-ruc/rbrv...
https://healthinformatics.uic.edu/blog/what-is-healthcare-re...
https://www.mcknights.com/blogs/guest-columns/understanding-...
>The government also pays costs that I don't think private insurers need to worry about. For example, if you can't pay, you don't have private insurance, so private insurers don't really need to worry about paying for the long term care of people in nursing homes. I also imagine that the elderly and poor are more likely to require expensive care than the population covered by private insurers in general.
This does not seem relevant to a discussion about government being a party in the price negotiations for healthcare services.
>Especially since private insurers will happily say "no!" to customers that are not profitable.
Health insurers have been forced to offer coverage to anyone under age 65 since ACA was passed in 2010.
>So I'm not convinced that being "the majority of spending" is the same thing as being irresponsible with the money.
I do not think anyone claimed this in this discussion.
>I will also point out the private insurance on this document is a plurality of spending and makes up most of the administrative cost (complete waste, on other words).
The insurance portion of the business (forecasting expenses, calculating premiums, other insurance business functions) are only a waste if you are starting with the assumption that the system should be completely taxpayer funded healthcare for everyone.
The managed care portion where doctors/pharmacists double check claims and monitor for waste/fraud would have to happen in a taxpayer funded healthcare too. Although it being replicated across multiple managed care organizations could be classified as waste.
My apologies, I thought you were implying with a cost breakdown that the government was working with an advantage since they set prices and somehow end up paying more (meaning the government is doing a worse job than private insurers on cost metrics), especially since your cost breakdown was in response to a comment about how government intervention is needed to bring down costs. I was trying to explain how that doesn't mean government as a single payer would necessarily be more expensive. I'm glad that's not what you were trying to say.
> Health insurers have been forced to offer coverage to anyone under age 65 since ACA was passed in 2010.
And the government compensates them for the additional costs this incurs, yes? I will admit that the ACA has muddied the waters of this conversation.
> are only a waste if you are starting with the assumption that the system should be completely taxpayer funded healthcare for everyone
There's not really any other way to look at it? If it doesn't have to exist, it's waste. Both systems will generate waste, one will generate more. I think we disagree on which one, but now I'm not sure because apparently we disagree on what's even relevant to the discussion.
Maybe let's take a step back. What is the takeaway you want people to have after reading the cost breakdown you shared?
The link I shared was to show that the government is already intervening in the market by paying for over half of all healthcare and paying at least 45% of people.
>And the government compensates them for the additional costs this incurs, yes? I will admit that the ACA has muddied the waters of this conversation.
Technically, yes, but not directly. All other insurance subscribers compensate for the additional costs from increased premiums. But the government does provide subsidies to lower income people to pay for those premiums. But without the subsidies and the lower income people purchasing the insurance, the system would still result in the other insurance subscribers paying higher premiums to subsidize the costlier insurance subscribers, just like in any other insurance pool.
>I think we disagree on which one, but now I'm not sure because apparently we disagree on what's even relevant to the discussion. Maybe let's take a step back. What is the takeaway you want people to have after reading the cost breakdown you shared?
That the government is already heavily involved in price negotiations for healthcare in the US. Therefore the problem cannot be due to private insurers. I point out in another comment in this thread that I think this is all due to politics, and being able to disguise who is getting what portion of the limited supply of healthcare there is relative to the demand. The lack of political support for broad access to healthcare for everyone, and the incentive for certain tribes to ensure their fellow tribe members are prioritized in receiving a greater than equal allocation of the available healthcare is what would have to be addressed (which is a very hairy problem, and is going to veer into classism, ageism, and racism).
> The "insurers" (better referred to as managed care organizations - MCOs) are simply hired to implement the government's pricing and reimbursement policies, and to take the heat from vendors and the public.
Could you perhaps quote a relevant portion that indicates private insurance operates at the pricing whims of the government?
>What's been created is effectively an endless positive feedback loop to negotiate prices upwards, fueled by rampant information asymmetry and profit motive.
And offered this as a solution:
>We desperately need some kind of government intervention against this in the US. I'm convinced that single payer would fix this in a fucking jiffy.
The fact that the US government is already intervening in over half of all healthcare spending, and for at least 45% of people, seems to be a relevant counterpoint that this problem is not caused due to a lack of government intervention and the way insurers negotiate with healthcare providers.
Mass General's annual revenue was 13.4 billion USD.
They'll just not pay the fines. It's literally not even a rounding error in their annual revenue!
The US healthcare system needs to be rebuilt from the ground up.
This is basically a racket
2) Create more doctors. Stop the boards from restricting the total counts of doctors created. Flood the system full of doctors and nurses.
3) All practices and procedure costs should be made public and upfront.
4) End all drug patents. Flood university researchers with government money instead.
5) Expand medicare to insure everyone in the united states.
People are regularly billed for hundreds or thousands of dollars for something as simple as XRays. Other procedures are also almost 5-10 higher than what one would expect to pay anywhere else in developed world.
The emergency room charges are just out of the world. And extraordinarily large portion of the cost is not personnel costs.
* Federal government provides public health insurance to all taxpayers. * Every healthcare provider submits a list of tests/procedures they offer, and the price that they charge for each test/procedure. The prices are public data. Providers can charge whatever price they want. * When you need a test/procedure, you use a website provided by the public insurance system which looks up all providers within a reasonable distance (search radius would be algorithmically determined so that at least 3-5 providers are included in the comparison). The public insurance program covers the price of the cheapest option. Patients are free to choose any provider they want, but if they don't choose the cheapest, they need to pay the difference out of pocket.
When an American comes to France and sees a doctor, they will pay 25€.
I have the feeling we are being royally screwed. By ourselves.
We should have monster prices for people who are not part of the EU, with the understanding that tourists should come insured.
(One should always take an insurance because a heart operation is going to be costly in France as well, but my point is that for minor stuff there is z huge imbalance)