The profit-obsessed monster destroying American emergency rooms(vox.com)
vox.com
The profit-obsessed monster destroying American emergency rooms
https://www.vox.com/health-care/374820/emergency-rooms-private-equity-hospitals-profits-no-surprises
161 comments
> It would be more efficient to pay for it using taxes, both income and sales taxes, rather than letting some groups—the poor and the elderly—off the hook arbitrarily.
I don't think this is true. Some countries with public healthcare are far more efficient than our system.
But there are countries that have systems similar to ours that are far more efficient as well.
We just have a really shitty system, and who pays for it isn't going to change that. It's a hard technocratic problem that doesn't have any easy answers. (Besides increasing the number of residency slots, removing the bachelor degree requirements and allowing foreign physicians to practice which are basically freebies.)
I don't think this is true. Some countries with public healthcare are far more efficient than our system.
But there are countries that have systems similar to ours that are far more efficient as well.
We just have a really shitty system, and who pays for it isn't going to change that. It's a hard technocratic problem that doesn't have any easy answers. (Besides increasing the number of residency slots, removing the bachelor degree requirements and allowing foreign physicians to practice which are basically freebies.)
> But there are countries that have systems similar to ours that are far more efficient as well
Typically, those countries have BOTH a public system and a private sector. This means the private sector actually has to be really competitive, because they're competing with "free" (or close to it). This isn't the case in the US, there's no competition.
Typically, those countries have BOTH a public system and a private sector. This means the private sector actually has to be really competitive, because they're competing with "free" (or close to it). This isn't the case in the US, there's no competition.
> But there are countries that have systems similar to ours
Really? Which ones are they?
Really? Which ones are they?
Israel, Switzerland, and the Netherlands all rely on private insurance as well and still have vastly better systems than our own.
Netherlands has a mostly public system with heavily subsidized mandatory non-profit insurance under government oversight: Health insurers receive compensation for high risk individuals from the government,[5] and government subsidies pay about 75% of insurance costs. https://en.wikipedia.org/wiki/Healthcare_in_the_Netherlands
Israel also has a public healthcare system in practice. Mandatory participation in 1 of 4 non profit insurance programs looks like private insurance but … https://en.wikipedia.org/wiki/Healthcare_in_Israel For the health tax, wage-earners and the self-employed must pay 3.1% of their monthly salary up to 60% of the average prevailing market wage (appx. NIS 6,300 in 2020), and 5% of anything earned above it.[25] Employers are legally obligated to deduct insurance contributions from their employees' salaries, while the self-employed must arrange payment on their own. Pensioners have contributions deducted from their pensions, as do those receiving unemployment benefits. Those who are not working but have income must pay 5% of their income in health tax, while those who are not working and have no income must pay NIS 104 a month.
Switzerland has a similar system with mandatory participation and non profit insurance programs. https://en.wikipedia.org/wiki/Healthcare_in_Switzerland
Israel also has a public healthcare system in practice. Mandatory participation in 1 of 4 non profit insurance programs looks like private insurance but … https://en.wikipedia.org/wiki/Healthcare_in_Israel For the health tax, wage-earners and the self-employed must pay 3.1% of their monthly salary up to 60% of the average prevailing market wage (appx. NIS 6,300 in 2020), and 5% of anything earned above it.[25] Employers are legally obligated to deduct insurance contributions from their employees' salaries, while the self-employed must arrange payment on their own. Pensioners have contributions deducted from their pensions, as do those receiving unemployment benefits. Those who are not working but have income must pay 5% of their income in health tax, while those who are not working and have no income must pay NIS 104 a month.
Switzerland has a similar system with mandatory participation and non profit insurance programs. https://en.wikipedia.org/wiki/Healthcare_in_Switzerland
Yes health care is very different in every country in the world. There are a 1000 ways to do it well but the US is unique in having insane healthcare costs. Having non profit insurance companies isn't the difference, having mandatory health insurance isn't the difference. It's not that easy to fix.
Each of things individually is lowering healthcare costs. Medical billing is a significant multiplier for US healthcare costs, and going to a highly regulated nonprofit only system would help.
There’s other factors like our obesity rate, but we’re basically intentionally shooting ourselves in the foot when it comes to healthcare costs because cost savings is lost profits for someone else.
There’s other factors like our obesity rate, but we’re basically intentionally shooting ourselves in the foot when it comes to healthcare costs because cost savings is lost profits for someone else.
The unifying factor of ~all other developed-world systems is price controls, de facto (e.g. government monopsony or [near-]monopoly) or de jure (outright pricing sheets)
Seems like you’re misrepresenting these countries in stating that they “rely” on private insurance (these are countries with public healthcare).
Are you able to point to a completely private system that is insurance based and works well?
Or what do you think public systems that also include private insurance add to the table that is missing from the US market?
Are you able to point to a completely private system that is insurance based and works well?
Or what do you think public systems that also include private insurance add to the table that is missing from the US market?
In what sense does the Netherlands or Switzerland have public healthcare?
> It's not that easy to fix.
Medicare for everyone seems like an "easy" fix but we have too many red state neanderthals in the US who oppose policies that clearly benefit them claiming "personal responsibility" though they oddly still think schools, police, fire departments, etc. are just fine...
Medicare for everyone seems like an "easy" fix but we have too many red state neanderthals in the US who oppose policies that clearly benefit them claiming "personal responsibility" though they oddly still think schools, police, fire departments, etc. are just fine...
Medicare for everyone fixes the under and uninsured problem. It doesn't fix the cost problem, only moves it from paying private insurance companies to the government. It's true Medicare pays less per procedure but that is not because those procedures are more efficient it's because relies on pricing power. Many hospitals would go out of business or have to layoff a significant amount of their staff if they were exclusively paid Medicare rates.
NL may be better than what's in the US but it's quickly deteriorating after the 2006 reforms. We've got dozens of competing health insurance companies big and small, but their base coverage package is the same because that's legally required. So the main thing they differentiate is with nonsense; minor differences between competitors, but mainly marketing, bullshit apps, etc. That is, a nontrivial portion of health insurance payments is spent on marketing.
Then there's the other big problem. Base insurance, which btw goes up to €150 / month next year (per adult), only covers cheap generics whose purchase prices are negotiated by the government (or something like that). The consequence now is that the manufacturers are not willing to pay the import fees for their generics, because the profit margins are too slim. Thousands of types of medications are now no longer available, difficult to get, or will only be available again in X months. This is stuff like basic painkillers, adhd, diabetes, etc.
The system is failing, is all I'm saying.
Then there's the other big problem. Base insurance, which btw goes up to €150 / month next year (per adult), only covers cheap generics whose purchase prices are negotiated by the government (or something like that). The consequence now is that the manufacturers are not willing to pay the import fees for their generics, because the profit margins are too slim. Thousands of types of medications are now no longer available, difficult to get, or will only be available again in X months. This is stuff like basic painkillers, adhd, diabetes, etc.
The system is failing, is all I'm saying.
US population is 300M, whereas Israel/Switzerland/Netherlands population is about 10M.
You would expect healthcare cost to scale pretty linearly with population size, I think? Number of doctors, hospitals, drug prescriptions etc. are entirely population-driven.
Medications also don't cost more or less based on population size. Although in a single-player market monopoly, I suspect a larger country should have greater cost negotiation power, so this should actually benefit a larger country like the U.S.
A greater factor than population size may be demographics. Countries with older and less healthy citizens would have a larger cost burden.
A poorly designed government structure could also disadvantage a large country like the U.S. This has been observed in the U.K., where successive Conservative governments have centralized the healthcare system over the last two decades, reducing efficiency and increasing cost. Not sure about Switzerland, which is also a federation of states (cantons).
Medications also don't cost more or less based on population size. Although in a single-player market monopoly, I suspect a larger country should have greater cost negotiation power, so this should actually benefit a larger country like the U.S.
A greater factor than population size may be demographics. Countries with older and less healthy citizens would have a larger cost burden.
A poorly designed government structure could also disadvantage a large country like the U.S. This has been observed in the U.K., where successive Conservative governments have centralized the healthcare system over the last two decades, reducing efficiency and increasing cost. Not sure about Switzerland, which is also a federation of states (cantons).
Switzerland has a private insurance model IIRC. Israel and the Netherlands, too, according to Wikipedia.
Switzerland has individually mandated, state-approved, non-profit private insurance.
Totally unlike the US's private insurance in every way that matters.
Totally unlike the US's private insurance in every way that matters.
It’s kind of like Obamacare without a huge number of compromises
> non-profit private insurance
Only base/minimum coverage, the same companies still offer extended/supplemental plans with no such limitations.
Also is the for profit part really that important? Profit margins are capped and even if all insurance companies became non profit and costs went down went down by another 5-10% or so at most, would that fundamentally change anything? The extreme inefficiency seems like a mich bigger issue.
> non-profit private insurance
Only base/minimum coverage, the same companies still offer extended/supplemental plans with no such limitations.
Also is the for profit part really that important? Profit margins are capped and even if all insurance companies became non profit and costs went down went down by another 5-10% or so at most, would that fundamentally change anything? The extreme inefficiency seems like a mich bigger issue.
And people in the Netherlands are paying more and more for their healthcare.
There is the idea of elite over production. We have private health insurance in order to create a couple thousand upper class jobs. With a half dozen billionaires running things.
I live in north Texas, and the situation here is pretty much on par with the article.
Urgent Care & Emergency Room combos are here on every corner. It’s a lucrative business, so it makes sense that private equity firms are gobbling it up. But I think the more interesting problem here is one level up. Why are there so many of them? I see two possible reasons:
1. Anytime one of my family members gets sick, it’s rather hard to make an appointment with the primary care provider. They are usually booked, and it takes a day or two to get in.
2. Bills from the primary care providers tend to be significantly higher than a bill from urgent care. Anytime I go to a doctor, it’s around $300 for a basic consultation visit. Any problem easily adds $50-100 to it. My typical bill from an urgent care visit for sickness is around $150.
Both places are in-network. Anyway, that’s my experience.
Urgent Care & Emergency Room combos are here on every corner. It’s a lucrative business, so it makes sense that private equity firms are gobbling it up. But I think the more interesting problem here is one level up. Why are there so many of them? I see two possible reasons:
1. Anytime one of my family members gets sick, it’s rather hard to make an appointment with the primary care provider. They are usually booked, and it takes a day or two to get in.
2. Bills from the primary care providers tend to be significantly higher than a bill from urgent care. Anytime I go to a doctor, it’s around $300 for a basic consultation visit. Any problem easily adds $50-100 to it. My typical bill from an urgent care visit for sickness is around $150.
Both places are in-network. Anyway, that’s my experience.
3. Demand for immediate care is high.
The next "one level up" might explore how much is because the community is quite morbid and unwell, because modern culture has displaced traditional home/self care with consumerized services, or because of other things.
There are people I know who are largely healthy and who consult paid medical services many times per year for everyday disturbances, and others who take decades to overcome procrastination to even get a physical. The demand for commercialized health services is very much a cultural thing, especially for everyday wellness, and that culture has been evolving quite dramatically.
Meanwhile, there's no ignoring that obesity and sedentary living are rampant, that a recent pandemic spooked people about infectious disease and its possible consequences, etc.
You're thinking about the pocketbook economics, here, but looking at it through these other lenses might provide further perspective too.
The next "one level up" might explore how much is because the community is quite morbid and unwell, because modern culture has displaced traditional home/self care with consumerized services, or because of other things.
There are people I know who are largely healthy and who consult paid medical services many times per year for everyday disturbances, and others who take decades to overcome procrastination to even get a physical. The demand for commercialized health services is very much a cultural thing, especially for everyday wellness, and that culture has been evolving quite dramatically.
Meanwhile, there's no ignoring that obesity and sedentary living are rampant, that a recent pandemic spooked people about infectious disease and its possible consequences, etc.
You're thinking about the pocketbook economics, here, but looking at it through these other lenses might provide further perspective too.
It's a shame that we have not preserved more local, "community medicine" that you mention. Unfortunately, the reason is that we have destroyed the community by moving to a model where advanced technology is our primary aid instead of other human beings.
> traditional home/self care
Not sure what you mean by this? If I have a broken bone, I'm not going to set it myself at home and take a few aspirin. Same if I'm puking my guts out.
If you just mean getting exercise and eating healthy then I fully agree with you. But, when you're actually sick, and need to see a professional, that is the right time for "consumerized services".
Not sure what you mean by this? If I have a broken bone, I'm not going to set it myself at home and take a few aspirin. Same if I'm puking my guts out.
If you just mean getting exercise and eating healthy then I fully agree with you. But, when you're actually sick, and need to see a professional, that is the right time for "consumerized services".
You're welcome to take it as foolish pre-modern ignorance if it strikes you that way, but actually yes: many people do not think to go to a doctor for minor bone injuries or vomiting, and many more than that wouldn't think to do so for more common everyday illnesses like a familiar sore throat, rash, nosebleed, fever, etc
For some, this is rooted in a confidence in their own personal-community care, for others its an insight into what few actions a doctor might take themselves for these issues, etc
There's lots of ways to explain it, and certainly many of them can be easily criticized by people who see professionalized medicine differently, but you may as well let go of the idea that everybody out there approaches it in the same way that you do. It's probably not even all that consistent among your own circle of family, friends, and acquaintences.
We're still only in the beginning of what seems to be a sweeping cultural transformation around how people see health and medicine and the perspectives people bring are still quite diverse.
At the same time, the overall direction in recent decades is definitely towards seeking commercial medical care for more concerns as well asserting that this is an entitlement that all people should have access to.
For some, this is rooted in a confidence in their own personal-community care, for others its an insight into what few actions a doctor might take themselves for these issues, etc
There's lots of ways to explain it, and certainly many of them can be easily criticized by people who see professionalized medicine differently, but you may as well let go of the idea that everybody out there approaches it in the same way that you do. It's probably not even all that consistent among your own circle of family, friends, and acquaintences.
We're still only in the beginning of what seems to be a sweeping cultural transformation around how people see health and medicine and the perspectives people bring are still quite diverse.
At the same time, the overall direction in recent decades is definitely towards seeking commercial medical care for more concerns as well asserting that this is an entitlement that all people should have access to.
I haven’t heard of some of this and it raises a whole lot of questions. Can you tell us more? What is a “minor bone injury?” What sort of alternative healthcare do they use instead to treat it?
Maybe give us an example of some people who do this?
Maybe give us an example of some people who do this?
Well, to make an example that doesn't stretch into ethnic traditions and stays within the contemporary and modern experience that you and I probably share:
Consider two non-professional runners who develop a stress fracture. It's a fairly common injury for distance runners who push themselves too far. It presents as a certain kind of pain and that pain becomes aggravated under certain conditions. It's generally easy to self-diagnosis, and more serious fractures are generally evident because they're far more disabling and intensely painful.
One goes to a doctor, who quickly has a strong guess as to the problem. Nonetheless, they send the runner for an x-ray to confirm, then take another appointment to review the results and prescribe a treatment. That treatment will amount to rest and patience, and (with some doctors) some prescription for the pain. Total cost billed to someone is probably on the order of $1000.
The other is pretty confident in their self-diagnosis and can't fathom the time demands, financial cost, and social resource consumption of bringing in a industrial apparatus just to confirm that diagnosis and be told to take it easy on their affected leg for a few months.
Both examples play out everyday, and there's essentially no difference in health outcome for the vastly most common case. It's true that the latter is at higher risk of missing a more serious complication, but it's also true that the former invites costs, consequences, and risks of their own.
Consider two non-professional runners who develop a stress fracture. It's a fairly common injury for distance runners who push themselves too far. It presents as a certain kind of pain and that pain becomes aggravated under certain conditions. It's generally easy to self-diagnosis, and more serious fractures are generally evident because they're far more disabling and intensely painful.
One goes to a doctor, who quickly has a strong guess as to the problem. Nonetheless, they send the runner for an x-ray to confirm, then take another appointment to review the results and prescribe a treatment. That treatment will amount to rest and patience, and (with some doctors) some prescription for the pain. Total cost billed to someone is probably on the order of $1000.
The other is pretty confident in their self-diagnosis and can't fathom the time demands, financial cost, and social resource consumption of bringing in a industrial apparatus just to confirm that diagnosis and be told to take it easy on their affected leg for a few months.
Both examples play out everyday, and there's essentially no difference in health outcome for the vastly most common case. It's true that the latter is at higher risk of missing a more serious complication, but it's also true that the former invites costs, consequences, and risks of their own.
Okay, thanks for clarifying!
I kicked a table and am 90% sure I broke my pinky toe which turned black and doubled in size. I didn’t go to doctor because I knew they wouldn’t do anything. A month later it’s back to normal.
A friend did the same but got a doctor scan; they confirmed it was broke but did nothing else.
A friend did the same but got a doctor scan; they confirmed it was broke but did nothing else.
So, I don't agree with GP, but my grandmothers (on both side of the family weirdly) had IV bags for the longest time for when people were 'puking their guts out'. I even was the lucky recipient of one when I came back _extremely_ hangover from a party at ~19yo. Both had nurse training (one because she was one, the other because she was trained by the church to work at a mission before she met my grandfather)
They mean you take aspirin and hope it goes away.
I suppose I’m guilty of the demand for immediate care too. Not because I go to the doctor immediately after I get a symptom, but because I try to get better on my own until I reach a point where I think I need help, and at that point, I no longer want to wait.
I cannot just schedule an appointment for 3 days ahead because “late” cancellation costs $$ too.
I cannot just schedule an appointment for 3 days ahead because “late” cancellation costs $$ too.
You also have Insta-clinic in chains like CVS. Not sure it's a bad thing. Came back from a trip with minor but persistent cough symptoms that were a LOT like the time I had COVID even though I tested negative. Got an appointment the next day at a clinic with a nurse practitioner who prescribed me an inhaler and said it was a "virus" after listening to my chest, etc. I think I maybe had a $40 bill.
Told my primary care at my next appointment and she basically said she'd have done the exact same thing.
Told my primary care at my next appointment and she basically said she'd have done the exact same thing.
It's funny, my first job out of college was machine learning for a company processing medical bills to detect fraud on the part of hospitals. It was a very eye-opening process for me as to how American health care is perhaps the worst designed system conceivable by man -- as in, it's genuinely difficult to imagine how the various regulations, incentives etc could be made worse from any perspective (left or right) or measure (human care, cost, equality, whatever). Medical diagnoses are systematized in a rigorous manner through a series of codes (ICD9s, CPTs, DRGs etc), but there is no real set or expected pricing for each code apart from Medicare and these strange agreements between particular insurance providers and particular hospitals (i.e. what defines "in-network" or "out-of-network", where pricing is more or less random). Bills also have an explicit location type (Inpatient, Outpatient, Emergency room, Ambulance etc) and Urgent/Emergency Room care is significantly and consistently the most expensive to the insurer (most American insurance is, after all, high deductible emergency insurance) and thus one of the major vectors of fraud was passing bills off as such. One of the real aspects of madness in the whole system is the pricing disconnect and lack of transparency between all participants: hospitals ask an agreed upon price to insurers who pay it with few questions asked, as hospital pricing drifts up insurers raise premium prices, employers keep paying premiums, and individuals either pay something contractually determined by their insurance company or an essentially random price if uninsured.
TLDR; it isn't at all surprising to me that yet another vulture on American health care expenditure has discovered how profitable emergency rooms can be and that we see such a mad proliferation of urgent care facilities on every corner.
TLDR; it isn't at all surprising to me that yet another vulture on American health care expenditure has discovered how profitable emergency rooms can be and that we see such a mad proliferation of urgent care facilities on every corner.
The FTC really should put a stop to labeling community ERs as Urgent Care when they aren't subject to the same billing regulations and are just an excuse for a predatory money grab.
From what I see around me, they advertise that they are both Urgent Care and Emergency Room. UC hours of operation end in the evening, and coming in past the COB automatically puts you to ER billing and pricing.
But if you come in during UC hours and the procedures are outside of UC, you can still end up being billed as an ER customer. The difference is usually in thousands.
But if you come in during UC hours and the procedures are outside of UC, you can still end up being billed as an ER customer. The difference is usually in thousands.
$300 is your part of a regular doctor visit? Or the total bill?
Do you have one of those high-deductible plans designed to discourage people from seeking any healthcare?
Do you have one of those high-deductible plans designed to discourage people from seeking any healthcare?
When I was covered by an employer plan, a lot of people seemed to gravitate towards high deductible plans because they were cheaper so long as you didn't consume a lot of healthcare. (Personally, I never did but a lot of people were adamant that you saved money that way.)
I’ve long been a proponent of high deductible plans. The part you’re missing is that you also get the opportunity to contribute pre-tax money to a Health Savings Account, which is money that you get to keep (and even invest) over the long term. You can spend that HSA money on medical expenses but if you save it, it turns into another tax-advantaged savings account like your IRA and 401(k).
I agree. I think I just had a very conservative mindset with respect to medical insurance which led me to a traditional plan. HSA would certainly have been a better choice in retrospect given that deductibles were never really an issue.
HSA contributions max at $8300 for a family.
If you require care for chronic medical issues, that often not even one treatment. So, the annual numbers might work out, but you're still left with a massive cash-flow issue at the beginning of every year (because there hasn't been time to fund the HSA, you have to float the deductible + co-pays/% up to your max OOP).
And that's assuming your income supports the max HSA contribution in the first place. Maybe after a few years, it balances out a bit, if you're lucky.
If you require care for chronic medical issues, that often not even one treatment. So, the annual numbers might work out, but you're still left with a massive cash-flow issue at the beginning of every year (because there hasn't been time to fund the HSA, you have to float the deductible + co-pays/% up to your max OOP).
And that's assuming your income supports the max HSA contribution in the first place. Maybe after a few years, it balances out a bit, if you're lucky.
> The part you’re missing is that you also get the opportunity to contribute pre-tax money to a Health Savings Account
Post-ACA, high-deductible and HSA-compatible are not the same thing anymore. In my state, for example, there are no longer any HSA-compatible insurance plans but there are several high deductible ones.
Post-ACA, high-deductible and HSA-compatible are not the same thing anymore. In my state, for example, there are no longer any HSA-compatible insurance plans but there are several high deductible ones.
That's unfortunate.
HSAs can be wonderful, but you absolutely have to have a good one. Some of them still pay less than 1% interest and charge monthly fees. The ones which can be invested and have no fees are an amazing savings tool.
Indeed—the people who get by far the most benefit out of them are those who can afford to pay for everything without taking money out of the HSA, then claim those expenses much later in retirement (when you can also just start taking money out). To them, it’s another tax-advantaged retirement account, significantly raising their max annual contribution limits.
But--most importantly--it's a retirement account that you can spend early, if you have to, if you have unexpected medical expenses (which is the main reason an otherwise financially responsible person would have unexpected expenses). And in that scenario it's a much appreciated buffer for needing to withdraw money from another retirement account.
But frankly, even if you are spending the money on medical expenses in the same year, you're also getting a lot of benefit out of spending pre-tax rather than post-tax money.
But frankly, even if you are spending the money on medical expenses in the same year, you're also getting a lot of benefit out of spending pre-tax rather than post-tax money.
This is true, but you can always roll over an HSA from a bad provider to a better one.
It's kind of silly they tie these together. Why can't I also open an HSA if I'm on a traditional PPO plan? Or if I have no health insurance as all.
Because a healthcare plan isn’t insurance. You used the correct term. If you want a prepaid healthcare plan that’s fine, just stop calling it insurance since it’s not.
Totally agree it should be available for cash pay.
Totally agree it should be available for cash pay.
It's insurance in the sense you have annual out-of-pocket maximums--which is really the key feature for a lot of people. I can cover $5K or $10K for a year but not, say, $100K or more.
You really need to look at how the employer funds it but often those are cheaper no matter what.
I won't argue. I'd have saved a lot of money over the years with a high deductible plan.
not if you have a chronic illness. my wife hits her deductible every year just getting the annual MRI she's required to get.
My high deductible maximum out of pocket is lower than the available other plan's premiums+deductible with equivalent care policies. I save money on a high deductible plan no matter what happens to me medically.
> high-deductible plans designed to discourage people from seeking any healthcare
This is in fact not the purpose of those plans.
They try to actually be insurance (ie, in case of unexpected high expenses) rather than a combination of insurance plus pre-payment of typical expenses.
This is in fact not the purpose of those plans.
They try to actually be insurance (ie, in case of unexpected high expenses) rather than a combination of insurance plus pre-payment of typical expenses.
But do they actually have that result? Or do they simply put people off of all early care
as they say on the internet .. por que no los dos?
1. they do (post-ACA) function as effective bankruptcy insurance
2. they likely deter the people enrolled to avoid early/minor/preventive medical visits.
1. they do (post-ACA) function as effective bankruptcy insurance
2. they likely deter the people enrolled to avoid early/minor/preventive medical visits.
It may not be the intent of those plans, but if it's the result, then that's what matters.
High deductible plans are great. They are designed to allow you to take pretax money out and use it to either invest like an IRA or spend it on healthcare.
In other words they are actually insurance. Not a prepaid healthcare plan. No one should be using “insurance” to cover every day expected expenses like random doctor visits for the flu.
They are a small fight against the massive principal agent problem which is the sole issue anyone should be focusing on if they care about healthcare costs.
In other words they are actually insurance. Not a prepaid healthcare plan. No one should be using “insurance” to cover every day expected expenses like random doctor visits for the flu.
They are a small fight against the massive principal agent problem which is the sole issue anyone should be focusing on if they care about healthcare costs.
"No one should be using 'insurance' to cover every day expected expenses like random doctor visits for the flu."
If it was like $20, sure, but when a "routine doctor visit" costs $300 I'd rather use insurance than deal with the mental load of deciding if it's worth the money. I wonder how many people develop more serious conditions because their high deductible tips the calculus towards avoiding the doctor.
If it was like $20, sure, but when a "routine doctor visit" costs $300 I'd rather use insurance than deal with the mental load of deciding if it's worth the money. I wonder how many people develop more serious conditions because their high deductible tips the calculus towards avoiding the doctor.
> No one should be using “insurance” to cover every day expected expenses like random doctor visits for the flu.
The inhabitants of just about developed industrial/post-industrial society other than the USA seek to differ.
The inhabitants of just about developed industrial/post-industrial society other than the USA seek to differ.
That's largely how, e.g. dental works. You (outside of certain company insurance) pay for dental on your own which is also sanely priced.
I was referring to the total bill, in both cases. Sadly, yes, I do have a high deductible plan.
The $300+ bill usually gets adjusted to about 50% by the insurance (I’m in network), and then I pay my share, depending on the state of my deductible and out-of-pocket expenses. (So in my case, 90% before deductible is met, then 10%, until I reach my OOP max.)
UC bill is processed in a similar fashion, and my actual responsibility tends to be less than from my primary care doctor.
The $300+ bill usually gets adjusted to about 50% by the insurance (I’m in network), and then I pay my share, depending on the state of my deductible and out-of-pocket expenses. (So in my case, 90% before deductible is met, then 10%, until I reach my OOP max.)
UC bill is processed in a similar fashion, and my actual responsibility tends to be less than from my primary care doctor.
These pain points are present in the UK as well; a ton of people have to go to A&E and wait for hours there because their primary caregiver / GP is booked full. 1-2 days wait up to a week for non-urgent care sounds fine to me, but at $300 it's a bit ridiculous.
People end up getting worse and cost the system more, so the cycle continues.
People end up getting worse and cost the system more, so the cycle continues.
Triage is hard. People may be mis-judging which is the appropriate service provider for their needs. If they don't know what's wrong they may worry that they stumble into a GP, and he just calls the ambulance/steers you to the ER anyway.
The thing that doesn't get mentioned much in these conversations that I've personally seen play a big role is the regulation. When you have highly complex regulations, you end up consolidating practices. As regulations increase, the number of distinct providers/owners decrease. Many individuals don't want to run their own practice due to the complexities (insurance, etc) that exist beyond the work (treating people). It doesn't make a lot of sense to deal with the insurance, billing, recordkeepeing, etc for a single physician or two. They wouldn't be able to compete with the larger and more effiecent practices that have more bargaining power with insurance companies anyways.
> The thing that doesn't get mentioned much
This gets mentioned every time. The regulation boogeyman always shows up. If only there were fewer rules... everyone could make more money, the little guy would be able to enter and play fast and loose, and nobody would do the wrongdoing those rules were meant to correct/prevent. Yes, there are regulations in health care. There are regulations in almost every industry, and yes, they can be a pain to deal with. Yet people still start businesses, make money, grumble endlessly about those regulations, and society marches on. As part of the general public, who are often the victims of business's negative externalities, I'm grateful that our government still manages to regulate businesses.
This gets mentioned every time. The regulation boogeyman always shows up. If only there were fewer rules... everyone could make more money, the little guy would be able to enter and play fast and loose, and nobody would do the wrongdoing those rules were meant to correct/prevent. Yes, there are regulations in health care. There are regulations in almost every industry, and yes, they can be a pain to deal with. Yet people still start businesses, make money, grumble endlessly about those regulations, and society marches on. As part of the general public, who are often the victims of business's negative externalities, I'm grateful that our government still manages to regulate businesses.
Then maybe the government (i.e. the public) should pay for more of these regulations, as opposed to unfunded mandates, which small operators cannot afford.
In the example of the individual doctor's office, perhaps the government should provide software and billing systems to adhere to their mandated processes, inspectors, fund regulatory agencies, legislative support, etc.
Otherwise regulatory capture can drive out much of the competition, potentially leaving us worse off than we could be otherwise.
In the example of the individual doctor's office, perhaps the government should provide software and billing systems to adhere to their mandated processes, inspectors, fund regulatory agencies, legislative support, etc.
Otherwise regulatory capture can drive out much of the competition, potentially leaving us worse off than we could be otherwise.
Tell me you don't know anything about healthcare without telling me...
Sheesh.
Doctors are medical technicians, not lawyers, and the more you bury them in (largely billing) regulations, the worse care you get and the less time with that doctor you get, and the more money you pay for worse healthcare.
Sheesh.
Doctors are medical technicians, not lawyers, and the more you bury them in (largely billing) regulations, the worse care you get and the less time with that doctor you get, and the more money you pay for worse healthcare.
>Yet people still start businesses, make money, grumble endlessly about those regulations, and society marches on.
One such regulation is "certificate of need" laws, where you effectively need to ask the incumbent for permission to open your would-be competitor.
https://spn.org/articles/certificate-of-need-laws/
One such regulation is "certificate of need" laws, where you effectively need to ask the incumbent for permission to open your would-be competitor.
https://spn.org/articles/certificate-of-need-laws/
Or maybe regulation is in fact a problem. In my country there is less regulation in healthcare services. I can walk into multiple private facilities in my town, get full blood panel with almost everything you can think of included (hormones, vitamins/mineral levels, liver markers etc) for around 100$. The results are going to be available online the same day (with the exception of those that require more lab time). This is fully private enterprise which has nothing to do with "universal healthcare" my country has.
I don't need prescription or doctor recommendation to get it done. I can also take my own urine/hair/swabs, walk into a lab, pay and have the requests results online in a few days.
If I need MRI I can usually schedule it for the next day in multiple private points and again the results are going to be there the same day. The price is around 200 bucks for say cervical spine.
How is it in your country? Do you know how much is required to get those basic services in other countries?
I don't need prescription or doctor recommendation to get it done. I can also take my own urine/hair/swabs, walk into a lab, pay and have the requests results online in a few days.
If I need MRI I can usually schedule it for the next day in multiple private points and again the results are going to be there the same day. The price is around 200 bucks for say cervical spine.
How is it in your country? Do you know how much is required to get those basic services in other countries?
In the US you can have similar labs done at Labcorp or Quest. Prices are similar or slightly higher. MRIs are prescription only and higher priced. One main difference is that most labs here require a prescription, which means you need to go to a different provider just to get the piece of paper and pay them. Of course these providers are both massive chains. Not sure if either are PI owned.
Quest and Labcorp have started doing many tests for a direct fee. You just pay upfront and get it done, no prescription/insurance needed.
It’s not all the tests I think, but many.
It’s not all the tests I think, but many.
Exactly what I was saying. The majority of tests still need a prescription, but there a a few dozen out of the few hundred total.
200 dollars for an MRI with no referring reason is inexpensive for sure. Where is that?
Poland. For all the faults of my country healthcare is actually run pretty well. There is a public option where you have to wait but people are free to run private practices/labs/facilities.
Because the public option exists they can't run the prices up however they want so it's usually very competitive.
Because the public option exists they can't run the prices up however they want so it's usually very competitive.
Which country are you in?
"This gets mentioned every time."
No, this gets mentioned in other healthcare conversations but rarely in PI takeover conversations.
No, this gets mentioned in other healthcare conversations but rarely in PI takeover conversations.
> Yet people still start businesses, make money, grumble endlessly about those regulations, and society marches on.
But that's the problem, isn't it? They don't. The smaller providers actually do go out of business or get bought up by private equity and then the quality of care suffers -- which is the thing the regulations were sold as improving.
But that's the problem, isn't it? They don't. The smaller providers actually do go out of business or get bought up by private equity and then the quality of care suffers -- which is the thing the regulations were sold as improving.
Everyone knows the US healthcare system sucks. But the United states medical system is not uniquely under regulated compared to the rest of the world. It's uniquely poorly regulated.
Many individuals don't want to run their own practice due to the complexities (insurance, etc) that exist beyond the work (treating people).
It’s interesting that the one specific thing you mention is insurance. That particular complexity doesn’t come from regulation. It comes from the immoral insurance industry.
It’s interesting that the one specific thing you mention is insurance. That particular complexity doesn’t come from regulation. It comes from the immoral insurance industry.
The widespread need for medical insurance only exists because regulation has introduced many artificial inefficiencies within the health care sector that in turn severely distort the pricing of medical services and medical products.
We'd see far more reasonable pricing, and much less need for something like medical insurance, without the regulations that artificially limit the supply of practitioners and clinics, that prevent competition, and that introduce unnecessary costs, among other distortions.
We'd see far more reasonable pricing, and much less need for something like medical insurance, without the regulations that artificially limit the supply of practitioners and clinics, that prevent competition, and that introduce unnecessary costs, among other distortions.
The fact that healthcare is far cheaper in every European country that has universal healthcare suggests that you are wrong.
Healthcare is cheaper in every country everywhere regardless of whether they have public or private coverage. This implies that the difference isn't public vs. private, it's some other regulatory differences which are driving up costs in the US.
… it's some other regulatory differences which are driving up costs in the US.
It suggests regulatory capture and/or lack of proper governmental oversight.
It suggests regulatory capture and/or lack of proper governmental oversight.
"Regulatory capture" is the regulations the people complaining about regulations are complaining about.
"Lack of government oversight" almost never leads to high consumer prices. It can lead to externalities, but if there are no regulations preventing anyone else from competing with the incumbents, it's very hard to sustain monopoly rents.
"Lack of government oversight" almost never leads to high consumer prices. It can lead to externalities, but if there are no regulations preventing anyone else from competing with the incumbents, it's very hard to sustain monopoly rents.
Most people in the U.S. think regulations are bad in and of themselves. Regulations as a concept are the wrong target.
Lack of government oversight and regulations almost always leads, eventually, to cartel pricing and/or monopolistic type pricing.
Lack of government oversight and regulations almost always leads, eventually, to cartel pricing and/or monopolistic type pricing.
> Most people in the U.S. think regulations are bad in and of themselves. Regulations as a concept are the wrong target.
Regulations as a concept are the category of thing which is causing the problem. You then have to look into which specific regulations are contributing to the problem, but there are 10,000 of them. You can name some of them, like Certificate of Need laws, but that's just a representative example rather than an exhaustive list of every problematic regulation. So people say "regulations" or "inefficient regulations" because what else are they supposed to call them?
Hardly anybody thinks the ban on leaded gasoline is a bad regulation.
> Lack of government oversight and regulations almost always leads, eventually, to cartel pricing and/or monopolistic type pricing.
Only if you're specifically talking about lack of antitrust regulations, which is the exception rather than the rule in the overall category of regulations.
Most regulations simply increase costs. This is true whether they're good or bad. The ban on leaded gasoline increases the price of gasoline; lead is a cheaper stabilizer than what they use now. The ban on circumventing DRM increases the price of playback devices (or reduces quality at the same price); device makers have to pay to license the stupid DRM and it impairs competition by preventing anyone from making a device with features Hollywood doesn't like. But the ban on leaded gasoline is a good regulation because it's preventing a major externality, whereas the ban on circumventing DRM is a bad regulation because it doesn't do what it was sold as doing and instead is used by the studios to capture the market for playback devices.
Getting rid of bad regulations improves efficiency and lowers prices.
Regulations as a concept are the category of thing which is causing the problem. You then have to look into which specific regulations are contributing to the problem, but there are 10,000 of them. You can name some of them, like Certificate of Need laws, but that's just a representative example rather than an exhaustive list of every problematic regulation. So people say "regulations" or "inefficient regulations" because what else are they supposed to call them?
Hardly anybody thinks the ban on leaded gasoline is a bad regulation.
> Lack of government oversight and regulations almost always leads, eventually, to cartel pricing and/or monopolistic type pricing.
Only if you're specifically talking about lack of antitrust regulations, which is the exception rather than the rule in the overall category of regulations.
Most regulations simply increase costs. This is true whether they're good or bad. The ban on leaded gasoline increases the price of gasoline; lead is a cheaper stabilizer than what they use now. The ban on circumventing DRM increases the price of playback devices (or reduces quality at the same price); device makers have to pay to license the stupid DRM and it impairs competition by preventing anyone from making a device with features Hollywood doesn't like. But the ban on leaded gasoline is a good regulation because it's preventing a major externality, whereas the ban on circumventing DRM is a bad regulation because it doesn't do what it was sold as doing and instead is used by the studios to capture the market for playback devices.
Getting rid of bad regulations improves efficiency and lowers prices.
We tried the no regulation method after the Civil War. It lead to robber barons and an overall shitty country. Regulations as in the concept is not the problem. Bad oversight and governance is.
I honestly don't understand why someone can't say "we should get rid of these bad regulations which are causing problems" without someone hearing "we should get rid of all laws of any kind whatsoever".
Because for 40 years now the Republican party has demonized regulations as a concept. So now we are in a situation where people like you write:
Regulations as a concept are the category of thing which is causing the problem.
No sensible person thinks regulations as a concept is bad but, well, roughly 1/3 of the U.S. population is not sensible on this topic. No sensible person thinks all regulations are good. Regulation is not the thing to talk about since the issue isn't regulation but bad governance and oversight. The issue is politicians in the pockets of insurance companies. The issue is that we live in a country where profit is the holy of holies that must not be messed with.
Regulations as a concept are the category of thing which is causing the problem.
No sensible person thinks regulations as a concept is bad but, well, roughly 1/3 of the U.S. population is not sensible on this topic. No sensible person thinks all regulations are good. Regulation is not the thing to talk about since the issue isn't regulation but bad governance and oversight. The issue is politicians in the pockets of insurance companies. The issue is that we live in a country where profit is the holy of holies that must not be messed with.
But not sure americans would be okay with the limits on healthcare you got in europe. I'm from sweden and here you often have to wait several months to see a doctor if it isnt "im dying right now"-urgent. And if you got something complicated that isnt easy to diagnos but isnt killing you they will just not do anything about it.
The healthcare is good if you got something well defined and urgent like a hearth attack or cancer (but less good than cancer treatment in the US). But if you got something less urgent then you are kind of screwed.
The healthcare is good if you got something well defined and urgent like a hearth attack or cancer (but less good than cancer treatment in the US). But if you got something less urgent then you are kind of screwed.
The healthcare outcomes in most European countries are better than in the U.S. The wait time of someone without access to the healthcare system is infinity. In all healthcare systems there is rationing of care. In the U.S. we ration in an immoral way.
I think the causality runs the other direction. Europe has an efficient system so they can easily afford to give everyone health care. We have a very expensive system so we don't.
Medicare costs do not look like the rest of the world. Medicare has slightly lower costs than private insurance but that's mostly bargaining power not any increases in efficiency. They free ride a little off money made off private insurance.
Medicare costs do not look like the rest of the world. Medicare has slightly lower costs than private insurance but that's mostly bargaining power not any increases in efficiency. They free ride a little off money made off private insurance.
High costs are certainly present in socialist medical systems, they're just somewhat obscured.
I'm more familiar with Canada's taxpayer-funded, "universal" provincial health care systems than the European ones, so I'll describe the costs we typically see with them.
Government health care spending makes up a huge portion of the provincial budgets each year. This results in costs like high tax rates, and significant government debt. (Those, in turn, introduce other costs, such as the stifling of business development and employment, among others.)
Another significant cost is the poor quality of service. Long delays are the norm. This can mean single-digit hours-long waits for emergency service, double-digit hours-long waits for semi-emergency situations, and weeks to months for routine diagnostics and specialist appointments.
A lot of Canadians don't have a family doctor, and walk-in clinics are typically quite busy and have relatively short hours, so people end up going to emergency rooms even for relatively minor health issues. That only exacerbates the problems there.
Even once you're finally seen by a practitioner, there is little incentive for them to do a good job because there's pretty much no competition, and no punishment for providing poor service. Don't expect a favourable outcome, especially for anything requiring in-depth investigation or long-term treatment.
Common dental, vision, and pharmaceutical costs often aren't covered by the provincial systems, which results in many Canadians paying even more money for costly private medical coverage on top of the "universal" coverage they've already paid for via taxation and public debt.
It's very revealing that despite paying a lot for the local health care systems, Canadians with the means to do so will often seek treatment in the US anyways. Even if they have to travel and pay a lot more money to do that, at least it tends to result in much faster, and much higher quality, service than they would ever have received in Canada.
I'm more familiar with Canada's taxpayer-funded, "universal" provincial health care systems than the European ones, so I'll describe the costs we typically see with them.
Government health care spending makes up a huge portion of the provincial budgets each year. This results in costs like high tax rates, and significant government debt. (Those, in turn, introduce other costs, such as the stifling of business development and employment, among others.)
Another significant cost is the poor quality of service. Long delays are the norm. This can mean single-digit hours-long waits for emergency service, double-digit hours-long waits for semi-emergency situations, and weeks to months for routine diagnostics and specialist appointments.
A lot of Canadians don't have a family doctor, and walk-in clinics are typically quite busy and have relatively short hours, so people end up going to emergency rooms even for relatively minor health issues. That only exacerbates the problems there.
Even once you're finally seen by a practitioner, there is little incentive for them to do a good job because there's pretty much no competition, and no punishment for providing poor service. Don't expect a favourable outcome, especially for anything requiring in-depth investigation or long-term treatment.
Common dental, vision, and pharmaceutical costs often aren't covered by the provincial systems, which results in many Canadians paying even more money for costly private medical coverage on top of the "universal" coverage they've already paid for via taxation and public debt.
It's very revealing that despite paying a lot for the local health care systems, Canadians with the means to do so will often seek treatment in the US anyways. Even if they have to travel and pay a lot more money to do that, at least it tends to result in much faster, and much higher quality, service than they would ever have received in Canada.
> artificial inefficiencies
To be clear, the "artificial inefficiencies" here include treating poor people, treating elderly people, and treating people regardless of their conditions.
The alternative, which we have lived, is those people just dying. We, as a collective society, decided these features are "non-negotiable". Hence, the US has a semi-socialized system in the form of insurance.
The reason your premiums are so high is because some homeless man somewhere is getting Narcan as we speak. Your woes of a communist future have come to fruition, but it has been packaged in such a way that the average American does not realize it. We have the worst of both worlds - the sheer greed of the private sector, with the burdens of a public policy.
If we seek efficiency, as you say, the answer is obvious. Abolish insurance, and provide single-payer healthcare. Delete the middle men on top of middle men.
To be clear, the "artificial inefficiencies" here include treating poor people, treating elderly people, and treating people regardless of their conditions.
The alternative, which we have lived, is those people just dying. We, as a collective society, decided these features are "non-negotiable". Hence, the US has a semi-socialized system in the form of insurance.
The reason your premiums are so high is because some homeless man somewhere is getting Narcan as we speak. Your woes of a communist future have come to fruition, but it has been packaged in such a way that the average American does not realize it. We have the worst of both worlds - the sheer greed of the private sector, with the burdens of a public policy.
If we seek efficiency, as you say, the answer is obvious. Abolish insurance, and provide single-payer healthcare. Delete the middle men on top of middle men.
"That particular complexity doesn’t come from regulation."
Considering the ACA requires insurance, it indirectly does. While there are cash-only doctors, it's very rare.
Considering the ACA requires insurance, it indirectly does. While there are cash-only doctors, it's very rare.
You would be onto something if the ACA was the cause. The status quo ante was an equally complex mess that covered far fewer people. The ACA more or less kept the same system in place but now covers more people.
The federal government is one of the largest insurers, and dealing with them entails a lot of effort and expense.
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Regulations for healthcare exist are complex in every developed country, but in most everything works fine for a fraction of the cost, so I don’t think that’s the main issue
Ironically this statement glosses over the indisputable issue of the specifics of the paperwork volume, and the change in it over time. "Regulations exist everywhere" is far to general an argument to be meaningful in my opinion. Humans are forever limited by time and their labor capacity within it.
Regulation is where protectionism and corruption manifest.
Regulation is a tool that can be used for many ends. It's not very helpful to speak about them collectively.
Regulation is a tool that can be used for many ends. It's not very helpful to speak about them collectively.
But they obviously aren't the exact same set of regulations everywhere.
Measuring burdensomeness of regulation by number of laws is an incredibly poor measure. Though I'd still be surprised if many countries healthcare laws were as complex as our own.
For example
All doctors require 1 year of schooling 2 year 5 years 10 years 20 years.
Each is 1 law but has each also has very different level of burdensomeness.
For example
All doctors require 1 year of schooling 2 year 5 years 10 years 20 years.
Each is 1 law but has each also has very different level of burdensomeness.
I'd actually be in favour of deregulating a lot of healthcare, but probably not for the same reasons as you. I think a cheap but unverified device/consultation/surgery is better than none at all (where only an unaffordable regulated option exists). But that's miles away from how society, even American society, functions. Without some mechanism to manage trust you can just remove the safeguards. It's actually quite possible to keep the safeguards and run a half-decent healthcare system, and this is surely much easier than finding a way to let people take calculated risks without causing mass deaths and a collapse in social cohesion.
It's not just regulation. You have electronic health record systems and the like that are often beneficial for consumers. My personal experience is that a lot of older docs, one doc practices, and the like hate this sort of thing. But I personally love the modern systems that a recent merger brought to my local hospital system. It's no longer about (maybe) faxes getting to the local lab for tests after calling them a week before the physical.
There are one or two doctors here who operate individual cash-based practices. They don't deal with insurance companies or their paperwork. The seem to mostly focus on services that insurance is unlikely to cover anyway: weight loss, hormone therapy, but also still run a general/family practice.
They stay in business so the model seems to be viable, but perhaps only because there are so few of them doing it.
They stay in business so the model seems to be viable, but perhaps only because there are so few of them doing it.
You're being downvoted but I wish you weren't.
I've worked in healthcare, and pretty much my whole family does in all the professional roles you can think of.
I have mixed feelings about this article and others like it because the motivation to strip the system of everything until profit is left is a serious problem throughout US healthcare. However, it's not unique to private equity — private regional monopolies, or even privately owned clinics and hospitals, can have a similar effect. These articles then have a way of shifting the focus away from the underlying administrative practices that result in these problems, and toward private equity per se.
The regulation problem is real too, and I can give lots of examples. It's unlike a lot of other fields too in the scope and how ingrained it is in the system. EHRs are just one example: although well-intended, they were mandated with no "organic" roll-out, and pulled what was in-house staff and services and pushed it outside into large monopolies like EPIC (who are now the subject of an antitrust lawsuit IIRC). This happens over and over with all sorts of aspects of US healthcare.
I also have problems with the focus of these types of articles — for whatever reason, they often start with or are centered around this kind of wistful new physician (or very old physician near retirement) longing for the romanticized old days where physicians were in charge and ran everything. Should that be the case though? Do we really need MDs to do and approve of everything? Aren't there things that are done as well by PAs, DNPs, and other types of providers that don't even exist yet because of how calcified the healthcare system is? Can't patients do more at home without a middleperson — e.g., needing to approve of some medication that the person has taken for decades without incident and is really truly pretty harmless in the grand scheme of things?
The problem you described is very real. It's overregulated, in ways that incentivize large monopolies, either of clinic and hospital owners, or provider rent seeking guilds, infrastructure providers, etc.
I guess I feel like these types of articles point to one type of problem, but then tend to implicitly suggest the solution is to just roll back time to some earlier era, not recognizing that that earlier era had a smaller patient population, with less regulation, less monopoly where there was no need to scrutinize whether a certain type of degree is really necessary, where there weren't huge hidden overhead costs of all these monopolies permeating down to the patient.
Fixing US healthcare is going to require a bunch of things that collectively will cause pain for a lot of entrenched players: lots of antitrust lawsuits and laws, lots of deregulation aimed at giving patients more choice and self-care options, more public payer options, lots of eliminating or restructuring licensing requirements to create more types of providers, and so forth. They don't map on easily onto current US political party platforms either.
I've worked in healthcare, and pretty much my whole family does in all the professional roles you can think of.
I have mixed feelings about this article and others like it because the motivation to strip the system of everything until profit is left is a serious problem throughout US healthcare. However, it's not unique to private equity — private regional monopolies, or even privately owned clinics and hospitals, can have a similar effect. These articles then have a way of shifting the focus away from the underlying administrative practices that result in these problems, and toward private equity per se.
The regulation problem is real too, and I can give lots of examples. It's unlike a lot of other fields too in the scope and how ingrained it is in the system. EHRs are just one example: although well-intended, they were mandated with no "organic" roll-out, and pulled what was in-house staff and services and pushed it outside into large monopolies like EPIC (who are now the subject of an antitrust lawsuit IIRC). This happens over and over with all sorts of aspects of US healthcare.
I also have problems with the focus of these types of articles — for whatever reason, they often start with or are centered around this kind of wistful new physician (or very old physician near retirement) longing for the romanticized old days where physicians were in charge and ran everything. Should that be the case though? Do we really need MDs to do and approve of everything? Aren't there things that are done as well by PAs, DNPs, and other types of providers that don't even exist yet because of how calcified the healthcare system is? Can't patients do more at home without a middleperson — e.g., needing to approve of some medication that the person has taken for decades without incident and is really truly pretty harmless in the grand scheme of things?
The problem you described is very real. It's overregulated, in ways that incentivize large monopolies, either of clinic and hospital owners, or provider rent seeking guilds, infrastructure providers, etc.
I guess I feel like these types of articles point to one type of problem, but then tend to implicitly suggest the solution is to just roll back time to some earlier era, not recognizing that that earlier era had a smaller patient population, with less regulation, less monopoly where there was no need to scrutinize whether a certain type of degree is really necessary, where there weren't huge hidden overhead costs of all these monopolies permeating down to the patient.
Fixing US healthcare is going to require a bunch of things that collectively will cause pain for a lot of entrenched players: lots of antitrust lawsuits and laws, lots of deregulation aimed at giving patients more choice and self-care options, more public payer options, lots of eliminating or restructuring licensing requirements to create more types of providers, and so forth. They don't map on easily onto current US political party platforms either.
Healthcare is essentially a creature of regulation. It owes its beginnings to the requirement that care must be effective.
I know a surgeon who had their employer bought up by private equity. It's a disaster; the paperclipification of care
I have said this a million times and I will say it again: anyone who thinks the US healthcare system isn’t a flaming train wreck hasn’t used it much. Or is rich enough enough not to care.
This is also due to inequality which leads to more and more of the same. There just aren't many ways entrepreneurs can add value. It is easier to capture it from assets needed by lower classes. Get a wealth tax to fix this or at least tax the wealth out of the rich.
Is there anything that private equity doesn't decimate? Is there any industry that is made better by these rent-seekers?
Private equity is no longer doing its job, to the extent if ever had one.
If there were a poorly run company, private equity could use its own money to acquire it, restructure it to be more efficient and valuable, and capture cash flow while owning it and profit from taking it public again. They would make money, the economy would be improved, and a healthy new public company would build more public wealth.
This is a bit idealized, but something closer to this really did happen.
Now they use raise money from rich people and operate more as alternative investment management, take over efficient operations, strip them, use leverage in the opposite direct (acquisition targets take loans and transfer the money back to PE). We end up with worse services, unsustainable and over-leveraged businesses, money transfer from the public to the wealthy from increased welfare and bankruptcies, and a worse economy because of changes to the velocity wealth returns to the economy from private fortunes.
This stinks when it is the Office Depot or Friendly's, but it is a massive problem for residential real estate, delivery of medical care, medicine, and basic food production.
You would think that the brilliant folks at KKR, Carlysle, Blackstone, and others would read their classics and know the story of the ancien régime and Romanovs.
If there were a poorly run company, private equity could use its own money to acquire it, restructure it to be more efficient and valuable, and capture cash flow while owning it and profit from taking it public again. They would make money, the economy would be improved, and a healthy new public company would build more public wealth.
This is a bit idealized, but something closer to this really did happen.
Now they use raise money from rich people and operate more as alternative investment management, take over efficient operations, strip them, use leverage in the opposite direct (acquisition targets take loans and transfer the money back to PE). We end up with worse services, unsustainable and over-leveraged businesses, money transfer from the public to the wealthy from increased welfare and bankruptcies, and a worse economy because of changes to the velocity wealth returns to the economy from private fortunes.
This stinks when it is the Office Depot or Friendly's, but it is a massive problem for residential real estate, delivery of medical care, medicine, and basic food production.
You would think that the brilliant folks at KKR, Carlysle, Blackstone, and others would read their classics and know the story of the ancien régime and Romanovs.
> Private equity is no longer doing its job, to the extent if ever had one.
Private equity's job is to take a slowly failing company, extract the value, and turn it into a suddenly failed company.
See department stores in the 90s, Circuit City, ToysRUs and restaurant chains more recently.
This is a win for the former owners who get cash for their business and can blame the failure on PE, rather than admit it was on a path to fail slowly. This is a win for PE, because they can often extract enough value to make a good profit. It's a win for Spirit stores, because they get great locations like the old Circuit City that still has those maroon tiles up in 2024 and the old ToysRUs that still has the R up.
When a sector of business is being bought by PE left and right, it's a sign of unhealthy businesses and the owners want out.
Private equity's job is to take a slowly failing company, extract the value, and turn it into a suddenly failed company.
See department stores in the 90s, Circuit City, ToysRUs and restaurant chains more recently.
This is a win for the former owners who get cash for their business and can blame the failure on PE, rather than admit it was on a path to fail slowly. This is a win for PE, because they can often extract enough value to make a good profit. It's a win for Spirit stores, because they get great locations like the old Circuit City that still has those maroon tiles up in 2024 and the old ToysRUs that still has the R up.
When a sector of business is being bought by PE left and right, it's a sign of unhealthy businesses and the owners want out.
I had an interesting experience in the ER lately that caused me to do some research.
The average ER wait time across DC was 5 hours and 29 minutes. That's across all hospitals.
The average ER wait time across DC was 5 hours and 29 minutes. That's across all hospitals.
Median is better here. Average wait includes homeless people who use the waiting room for a warm nights sleep and similar outliers. They quickly get triaged and a free sandwich
Not so sure the median would be so far off here. Just earlier this week I spent about 4.5 hours in the ER in a Bay Area hospital. Not DC, but 5.5 hours doesn’t seem crazy to me.
> Meanwhile, to minimize costs, private equity-owned staffing firms often replaced more expensive physicians with nurse practitioners and physician associates. It was a move likely to worsen patient care: While these professionals do highly skilled work in a variety of clinical settings, the emergency department is one place where care outcomes are more likely to suffer if a doctor isn’t involved.
Using more PAs and NPs seems like it could potentially be beneficial, since 1) they are cheaper than physicians (this could be attractive to patients if it lowered the bill for treatment), 2) the supply of physicians is more constrained (due to limits in med school and residency slots to avoid "oversupply", as well as longer training time), and 3) NPs and PAs may be well positioned to take care of many non-emergency patients in the ER, urgent care, non-life-threatening cases, etc. What might be helpful is a higher tier of ER-specialist NPs and PAs, as well as an adequate supply of ER physicians to treat the emergency patients in the ER who really need them.
Using more PAs and NPs seems like it could potentially be beneficial, since 1) they are cheaper than physicians (this could be attractive to patients if it lowered the bill for treatment), 2) the supply of physicians is more constrained (due to limits in med school and residency slots to avoid "oversupply", as well as longer training time), and 3) NPs and PAs may be well positioned to take care of many non-emergency patients in the ER, urgent care, non-life-threatening cases, etc. What might be helpful is a higher tier of ER-specialist NPs and PAs, as well as an adequate supply of ER physicians to treat the emergency patients in the ER who really need them.
I hate private equity they bought our company and proceeded to nickel and dime it -
How can I avoid an ER run by private equity?
Odds are you probably can't, at least not when you need the care most, which is the exact issue the article decries. Systems like Kaiser Permanente are not, but Kaiser is a vertically integrated HMO and structured very differently (disclosure: worked for Kaiser as a hospital per-diem for a number of years). Your best option is to make sure you know what EDs are actually in-network for you so at least you're less likely to get nailed if you have a little time to work with and aren't being transported by EMS.
Vote for politicians who support a single payer health care system
Does a single payer healthcare system change this? Presumably that would change who pays the healthcare provider - not who owns the healthcare provider, right?
It's a collective-action problem. Nobody likes the current healthcare system, but what can we do? Ask the ambulance to shop around while we're bleeding out in the back?
But as the single payer, the government would have the incentive and power to address the problem systematically and deliberately.
But as the single payer, the government would have the incentive and power to address the problem systematically and deliberately.
You literally cannot, or you are misusing emergency care. If you have a medical emergency you may need immediate care from EMTs in an ambulance followed by time sensitive follow up treatment. You may be trying to cope with the medical emergency of yourself or a family member in profound pain, cognitively impaired from hypoxia, drugged, or even unconscious. At best you will be unable to do anything other than dial 911 and hope or pray.
You can try to live in a state or region that where emergent care is available that isn't owned by PE, or you can live in a country other than the US. Neither of those are a guarantee that your circumstances won't change.
You can try to live in a state or region that where emergent care is available that isn't owned by PE, or you can live in a country other than the US. Neither of those are a guarantee that your circumstances won't change.
Avoid the healthcare establishment as much as you can in general. They are a business, and their motive is profit, they don't care about making you better. Same thing is true of elder care, assisted living, etc. it's all centered on draining old people of their wealth before they die.
Do not go to the ER for a runny nose or a sore throat. You have an immune system. Go to bed and let your body recover.
Take on responsibility for your own health: eat better, get to a healthy weight, exercise. If you have chronic conditions that must be managed medically, shop around, find practices that are still locally owned. They are out there.
Do not go to the ER for a runny nose or a sore throat. You have an immune system. Go to bed and let your body recover.
Take on responsibility for your own health: eat better, get to a healthy weight, exercise. If you have chronic conditions that must be managed medically, shop around, find practices that are still locally owned. They are out there.
The ER is to some extent a fictitious entity. Politicians took to blaming the poor for abusing their access to ER's. But healthcare is anything if not statistical. They can figure out how many patients walk into an ER, who could be served in an urgent care setting, and provide those services on site. In fact, the ER closest to my house works in exactly this way.
A key question is why the free market does not work in this case. Many business are "profit obsessed", yet it does not mean they won't provide quality products or services at increasingly lower prices. What's different in the health care?
Likely because some core components of health care cannot be comoditised via technology, there's still vast human involvement from diagnosis to surgery, all the way to social support of the aged. Everything is getting stretched at the edges by aging populations in most of the developed world meaning medical and technological advances don't even touch the sides.
I'm in the UK (NHS), I don't see a bright future for systems like the NHS or mostly private systems like the US. There's an extreme core cost which "systems" cannot make disappear.
I'm in the UK (NHS), I don't see a bright future for systems like the NHS or mostly private systems like the US. There's an extreme core cost which "systems" cannot make disappear.
It’s not a free market
Wow, doctors being treated like ... employees? That is outrageous! Don't these private equity firms know that docs are in a privileged social class, not touchable by menial rules like something having to be done in 25 minutes?
The US Healthcare System is a cruel and unusual punishment.
Sell everything in the US and move to a cheaper country like India. You will have free health care.
I have aging parents in India, and I can tell you firsthand—healthcare there is far from cheap. In fact, prices have surged, and many people are now accustomed to the higher costs, thanks to rampant price gouging during the COVID pandemic.
For anyone looking for more information about the game dynamics of the “profit-obsessed monster” and why it is inevitable in our current economic system, I highly recommend the following Scott Alexander piece: https://www.slatestarcodexabridged.com/Meditations-On-Moloch
MBAs will turn everyone into The Joker.
MBAs and similar types are the Western capitalist equivalent of the Soviet apparatchik:
https://en.wikipedia.org/wiki/Apparatchik
Entities like PE or conglomerates are a lot like Soviet bureaus: giant bastions of bureaucrats appointed to run things they have no direct expertise in running.
The underlying issue here is what I call the "big dumb money problem." You get entities with more resources to deploy than intelligence or expertise to deploy them efficiently.
A major argument for things like anti-trust and some degree of progressive taxation is to avoid what I call "Soviet Kapitalism" -- which the top of the economy ends up dominated by big dumb money and bureaucratic monopolies. When this happens a market economy starts looking indistinguishable from the USSR. In a way you could say a totalitarian state like the USSR is just an extreme version of this with the state acting like one giant monopoly mega-corp.
Money needs to be redistributed so the ratio of dollars to brain cells is more balanced.
https://en.wikipedia.org/wiki/Apparatchik
Entities like PE or conglomerates are a lot like Soviet bureaus: giant bastions of bureaucrats appointed to run things they have no direct expertise in running.
The underlying issue here is what I call the "big dumb money problem." You get entities with more resources to deploy than intelligence or expertise to deploy them efficiently.
A major argument for things like anti-trust and some degree of progressive taxation is to avoid what I call "Soviet Kapitalism" -- which the top of the economy ends up dominated by big dumb money and bureaucratic monopolies. When this happens a market economy starts looking indistinguishable from the USSR. In a way you could say a totalitarian state like the USSR is just an extreme version of this with the state acting like one giant monopoly mega-corp.
Money needs to be redistributed so the ratio of dollars to brain cells is more balanced.
> Money needs to be redistributed so the ratio of dollars to brain cells is more balanced.
It will likely do that naturally unless something gets in the way in the name of progress.
It will likely do that naturally unless something gets in the way in the name of progress.
Money and greed naturally get in the way. Is that not obvious? People are finding any way to game the system just to get more money
You're thinking of using money as a measure but everyone else is using it as a target...
You're thinking of using money as a measure but everyone else is using it as a target...
No, greed (or wanting money) is one of the reasons some people with brains get paid better. if they can think of things or ways of doing things that save money or create value, or both, then they will get paid lots. They could still agree with their employer that they get paid the equivalent of a postgrad stipend, but they probably don't. You don't need to game a system for that to happen.
So why does a PhD university professor make less than a wall st trader frat bro
The answer is a wealth tax. The inequality grows leading into a need for investments like these. If all other assets weren't so inflated then we could at least wish PE wouldn't need to do things like this but this is what will happen. Excess capital keeps buying up assets lower classes need due to lack of options otherwise.
I'm still an advocate of the old-school top income tax bracket of 85-100% i.e. a maximum income. A general wealth tax always seems like double-dipping; today I take $1 out of your $10, and a year from now I take 90¢ from your remaining $9. It's more of a motivation for one to continue accumulating (a floor, even) just to tread water.
Property taxes are different, because more services get provided to people with more property. Income taxes are fine because we take it as a given that the state has the ability to regulate every aspect of domestic financial transactions and financial lives, at least in our currency (even if we don't or shouldn't, we of course can.)
A yearly individual income cap means at the least people would have to put money in more hands. Being corrupt on a large scale would hopefully require a larger conspiracy.
I'm fine with arbitrary wealth taxes and taxes on capital, with arbitrary justifications, so I'm probably not saying much here; but I'm not in support of a revolving wealth tax.
Property taxes are different, because more services get provided to people with more property. Income taxes are fine because we take it as a given that the state has the ability to regulate every aspect of domestic financial transactions and financial lives, at least in our currency (even if we don't or shouldn't, we of course can.)
A yearly individual income cap means at the least people would have to put money in more hands. Being corrupt on a large scale would hopefully require a larger conspiracy.
I'm fine with arbitrary wealth taxes and taxes on capital, with arbitrary justifications, so I'm probably not saying much here; but I'm not in support of a revolving wealth tax.
I wonder what would happen if private equity firms all threw their money into planting trees?
Indeed MBAs helped sell American USA) industrial production out to first Mexico and later to China. Sometimes a little knowledge can be a dangerous thing.
In Ricardo's simple economic model of "comparative advantage" an entire generation of CEOs and MBAs found justification to sell out corporate capital (everything except the labor, which was laid off) for billions.
A deeper understanding of the economy (not of economic theory necessarily, but of our economy) might have suggested that such a rapid and total sell-off might be very destructive to society.
But greed prevailed and now a generation passed before the full scope of the oversight was realized by most. Society took that long to realize a course correction was required.
Capitalism is be a formidable mechanism for good but pure unfettered capitalism usually has bad "side" effects. That's why we regulate businesses. Sometimes it works.
In Ricardo's simple economic model of "comparative advantage" an entire generation of CEOs and MBAs found justification to sell out corporate capital (everything except the labor, which was laid off) for billions.
A deeper understanding of the economy (not of economic theory necessarily, but of our economy) might have suggested that such a rapid and total sell-off might be very destructive to society.
But greed prevailed and now a generation passed before the full scope of the oversight was realized by most. Society took that long to realize a course correction was required.
Capitalism is be a formidable mechanism for good but pure unfettered capitalism usually has bad "side" effects. That's why we regulate businesses. Sometimes it works.
Capitalism is ruining America. We're headed to where everything is buried behind oligarchical institutions.
Isn’t huge profits the definition of success in capitalism? As a capitalist society shouldn’t there be cheers instead of complaining? This part I don’t understand about American culture.
I think Americans were always happy with profit because they got a share, they had jobs, etc. it was good for everyone.
Now they’re learning first hand what happens when it escalates to outright greed and hoarding, and that life gets pretty shitty for the very vast majority when this happens to the basic needs of a decent life (groceries, education, healthcare, safety, roads, transit)
Now they’re learning first hand what happens when it escalates to outright greed and hoarding, and that life gets pretty shitty for the very vast majority when this happens to the basic needs of a decent life (groceries, education, healthcare, safety, roads, transit)
Huge profits mean a lot of value is being captured. That can be because of a large amount of value being created, which is successful capitalism, but it can also mean a lot of rent is being extracted from an existing value stream.
Not saying this is the later case, but when people are critical of large profits they usually are critical of the later, where they believe that the value being created has not really gone up, it’s just being funneled away to rent seekers now.
This is especially true for things that are seen as “essentials” where buying is fairly mandatory and so prices are inelastic, like housing, food and medical care. If these markets become uncompetitive consumers can’t just walk away from rising prices.
So rising profits + the same value being generated point to the market being uncompetitive and are not celebrated in the way rising profits + new value are.
Not saying this is the later case, but when people are critical of large profits they usually are critical of the later, where they believe that the value being created has not really gone up, it’s just being funneled away to rent seekers now.
This is especially true for things that are seen as “essentials” where buying is fairly mandatory and so prices are inelastic, like housing, food and medical care. If these markets become uncompetitive consumers can’t just walk away from rising prices.
So rising profits + the same value being generated point to the market being uncompetitive and are not celebrated in the way rising profits + new value are.
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This is because its the profit focus of capitalism that is exactly the problem
Its a disconnect powered by propaganda of the definition of "success"
Its a disconnect powered by propaganda of the definition of "success"
The success of capitalism is to allow basic trade in smaller communities. Once it scales to the anonymity of the large corporation and the specialist of wealth extraction, it becomes malignant.
"Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other" said John Adams. In other words, the government is not going to impose religion, morals, or values it expects the people to have those on their own.
People who run businesses that extract wealth from the sick, the old, the dying, or people in other situations where they are not really able to make free choices, are vile and a cancer on our society.
People who run businesses that extract wealth from the sick, the old, the dying, or people in other situations where they are not really able to make free choices, are vile and a cancer on our society.
> In other words, the government is not going to impose religion, morals, or values it expects the people to have those on their own.
That is right. But it doesn't mean something cannot be done, such as a general uprising with organized morals against the prevailing winds of profit above all else. Slavoj Žižek said it best when he said that we are conditioned to believe that anything is possible scientifically, but we are highly doubtful of any social change. We need to reverse that: to believe that we can change the world sociall rather than technologically, or perhaps despite the technological changes.
That is right. But it doesn't mean something cannot be done, such as a general uprising with organized morals against the prevailing winds of profit above all else. Slavoj Žižek said it best when he said that we are conditioned to believe that anything is possible scientifically, but we are highly doubtful of any social change. We need to reverse that: to believe that we can change the world sociall rather than technologically, or perhaps despite the technological changes.
It would be great to see some real solutions to the menace of private equity, or at least to see these solutions discussed in the mainstream public discourse. Which is a good reason to vote third party, if you're in the US: they might never win, but if they get enough votes, eventually their ideas will be heard (unless and until they too get co-opted by lobbyists from Vanguard and Blackrock).
Funeral homes and anything else not run by a single professional has had this treatment. This is due to inequality. The wealthy have nowhere left to invest but things like this which raise costs for the lower classes. Taxing wealthy far more is the only solution but people have a hard time voting in their interests. We're doomed.
There’s a variety of weird examples of this mixed system:
>Poor people use ERs for every day healthcare, usually they get away with paying nothing, no insurance
>Working people with insurance pay more to enable this access for the destitute (or criminal) portion of the population
>Old people are sort of entitled to free healthcare. They get medicare, but if they want everything, they have to pay for “supplements.”
>Young people pay for the old people’s healthcare twice, on their payroll taxes and in the form of higher premiums. A 25 year old male should absolutely not have a $300/mo health premium. But he does, because his premium is paying for other’s care.
This is a system pretending to be private, but it’s actually just inefficiently public. It would be more efficient to pay for it using taxes, both income and sales taxes, rather than letting some groups—the poor and the elderly—off the hook arbitrarily.
Alternatively, abolish health insurance altogether—a notoriously inefficient and exploitative industry that does not suit the classic purpose of insurance (boat accidents and fires)—and see what happens. This is obviously a rather unpalatable option due to the chaos that would ensue, but it’s probably the best option.