The entire healthcare system is broken, not just health insurance companies(sensible-med.com)
sensible-med.com
The entire healthcare system is broken, not just health insurance companies
https://www.sensible-med.com/p/the-entire-healthcare-system-is-broken
87 comments
We need to move to a capitated payment system. The current fee for service system incentivizes everyone to consume more than necessary. Doctors prescribe more because they get paid more, insurance gets a fixed percentage of revenue as profit so they want to spend more too. The systems has evolved into tons of make work bs because as the amount of money sloshing around grows so does profit for everyone. Capitated payment encourages everyone to save money as profit is just the left overs after everyone is treated. If you spend less than the provider next door without outcomes suffering you make more money, so innovation is encouraged and waste eliminated. Also fixes the "insurance denying coverage" issue as all prescription decisions are made by the provider.
Socialized healthcare is also failing all around the world. Have you seen the situation in the UK recently? Or Canada?
The cause of the malaise seems to be the same everywhere. See the biggest shift in the US healthcare system over the last 50 years for example:
There was a 3,200 percent increase in the number of healthcare administrators between 1975 and 2010, compared to a 150% increase in physicians, due to an increasing number of regulations:
https://www.athenahealth.com/knowledge-hub/practice-manageme...
>Supporters say the growing number of administrators is needed to keep pace with the drastic changes in healthcare delivery during that timeframe, particularly change driven by technology and by ever-more-complex regulations. (To cite just a few industry-disrupting regulations, consider the Prospective Payment System of 1983 [1]; the Health Insurance Portability & Accountability Act of 1996 [2]; and the Health Information Technology for Economic and Clinical Act of 2009.) [3]
In contrast, the fields of medicine in the US less affected by this surge in government intervention; cosmetic and laser eye surgery, have seen prices increase at below the rate of inflation. [4]
[1] https://www.cms.gov/medicare/payment/prospective-payment-sys...
[2] https://www.hhs.gov/hipaa/for-professionals/privacy/laws-reg...
[3] https://www.hhs.gov/hipaa/for-professionals/special-topics/h...
[4] https://healthblog.ncpathinktank.org/why-cant-the-m
The cause of the malaise seems to be the same everywhere. See the biggest shift in the US healthcare system over the last 50 years for example:
There was a 3,200 percent increase in the number of healthcare administrators between 1975 and 2010, compared to a 150% increase in physicians, due to an increasing number of regulations:
https://www.athenahealth.com/knowledge-hub/practice-manageme...
>Supporters say the growing number of administrators is needed to keep pace with the drastic changes in healthcare delivery during that timeframe, particularly change driven by technology and by ever-more-complex regulations. (To cite just a few industry-disrupting regulations, consider the Prospective Payment System of 1983 [1]; the Health Insurance Portability & Accountability Act of 1996 [2]; and the Health Information Technology for Economic and Clinical Act of 2009.) [3]
In contrast, the fields of medicine in the US less affected by this surge in government intervention; cosmetic and laser eye surgery, have seen prices increase at below the rate of inflation. [4]
[1] https://www.cms.gov/medicare/payment/prospective-payment-sys...
[2] https://www.hhs.gov/hipaa/for-professionals/privacy/laws-reg...
[3] https://www.hhs.gov/hipaa/for-professionals/special-topics/h...
[4] https://healthblog.ncpathinktank.org/why-cant-the-m
A significant fraction of healthcare administrators are there to deal with insurers, both to negotiate pre-approval and then to get paid afterward.
That's what happens when you have thousands of insurance companies, each negotiating their own individual prices for everything. On top of that, you have to deal with insurers that will deny pre-approvals for medically necessary treatments on first request as a matter of course, then deny the first claim afterwards despite acquiescing to the pre-approval. And finally, patients may have primary, secondary, tertiary, and even quaternary insurers to ensure they're fully covered, so you have to figure out which fraction of the procedure each will pay.
Rather than doctors spending their entire days haggling with insurers, they've hired administrators to offload the work so they can get back to being doctors. Unfortunately, the byzantine structure which is privatized health insurance has only continued to grow in size and complexity, necessitating a growing number of administrators to handle the interface between the two.
That's what happens when you have thousands of insurance companies, each negotiating their own individual prices for everything. On top of that, you have to deal with insurers that will deny pre-approvals for medically necessary treatments on first request as a matter of course, then deny the first claim afterwards despite acquiescing to the pre-approval. And finally, patients may have primary, secondary, tertiary, and even quaternary insurers to ensure they're fully covered, so you have to figure out which fraction of the procedure each will pay.
Rather than doctors spending their entire days haggling with insurers, they've hired administrators to offload the work so they can get back to being doctors. Unfortunately, the byzantine structure which is privatized health insurance has only continued to grow in size and complexity, necessitating a growing number of administrators to handle the interface between the two.
A point, part of the reason insurance companies deny claims isn't because they think they can get out of paying. It's because doctors don't get paid for dealing with insurance. So they tie doctors up so doctors can't see more patients and generate billing.
The current share of healthcare spending that occurs through government and private insurers is due to government intervention. Out of pocket spending constituted the vast majority of spending in the 1950s before these government interventions were enacted.
In contrast, cosmetic and laser eye surgery have mostly escaped the effects of these interventions, and are consequently the only fields of medicine where 1. most spending is out of pocket, and 2. prices have increased at below the rate of inflation.
As for the socialized health care panacea, if you look at the health care systems of other countries where they have fully socialized expenses, you see huge problems, not exactly the same as the U.S.'s, but absolute disasters nonetheless. Health care as a centralized institution doesn't work.
In contrast, cosmetic and laser eye surgery have mostly escaped the effects of these interventions, and are consequently the only fields of medicine where 1. most spending is out of pocket, and 2. prices have increased at below the rate of inflation.
As for the socialized health care panacea, if you look at the health care systems of other countries where they have fully socialized expenses, you see huge problems, not exactly the same as the U.S.'s, but absolute disasters nonetheless. Health care as a centralized institution doesn't work.
The UK and Canada are the perfect example of trying to run healthcare minimizing costs.
https://slatestarcodex.com/2020/05/12/studies-on-slack/
https://slatestarcodex.com/2020/05/12/studies-on-slack/
I'm a pretty conservative person, and this is the one view I break with hardliners completely with - I agree completely.
The funny thing is, most people you talk to on either side of the aisle are for it. The healthcare lobby is so large as to buy politicians to make it seem like a wedge issue, but even a ton of conservatives agree with single payer in principle.
I'd wager if you put it to a national vote, it'd break something like 80-20 for.
The funny thing is, most people you talk to on either side of the aisle are for it. The healthcare lobby is so large as to buy politicians to make it seem like a wedge issue, but even a ton of conservatives agree with single payer in principle.
I'd wager if you put it to a national vote, it'd break something like 80-20 for.
I think the core ideas of the ACA with the public option was originally Gingrich, in response to Hillary Clinton’s much more aggressive proposal for single payer, right? And then before the federal ACA, “Romneycare” was implemented in Massachusetts (without a public option, but with preexisting condition protection and not allowing separate high risk pools) by Republican Governor Mitt Romney. I think the discourse ended up polarized because Obama presented it that it seemed really partisan but the person that killed the public option in a Herculean commitment to insurance company profiteering was none other than liberal centrist Senator Joe Lieberman. This is not a partisan issue. There are obviously going to be ideological pockets in the extremes but outside of that, for the most part, the only people that are stepping up to defend the insurance companies are in their goddamned pockets.
You're right, but there are people on both sides who toe the party line blindly(and stupidly, if I might add).
I'll never forget Trump being cornered, and him saying he's not going to let people die in the streets, and his audience booing. He claimed they were all donors and lobbyists taking the audience seats, and despite his typical theatrics, I now believe that to be the truth.
Either way, today it is a leftist idea I think, so there will exist some people who oppose it out of spite.
I don't know a single person happy with the system today, which is damning. Just look at the reaction from recent events...
I'll never forget Trump being cornered, and him saying he's not going to let people die in the streets, and his audience booing. He claimed they were all donors and lobbyists taking the audience seats, and despite his typical theatrics, I now believe that to be the truth.
Either way, today it is a leftist idea I think, so there will exist some people who oppose it out of spite.
I don't know a single person happy with the system today, which is damning. Just look at the reaction from recent events...
Fair enough. It is rather telling and should be extremely concerning to the insurance industry that in our extremely polarized political culture of late, this has been a the largest patch of common-ground many of us have stood on in a long time. Obviously not a total common ground issue, but I can’t think of anything bigger recently.
I disagree with Medicare for all and single payer.
The role of govt is a catch 22 - it is by design a monopoly, and monopolies are usually inefficient, so too much govt power gets monopoly capture but too little means govt can’t break the monopolies.
The largest issue with US healthcare is lack of price-quality transparency and competition.
This means tons of middle player monopolies e.g PBMs.
I can’t go shop around for a procedure on a marketplace and pay out of pocket, the same rates an insurer would.
I can’t deal directly with service provider or the labs. It has to be intermediaries.
The # of medical licenses are capped, they’re not growing in proportion to population.
Demand-supply dynamics, the basis of capitalism is wildly inefficient in US.
Get rid of employer given insurers, make a law that insurers cannot negotiate a lower price than out of pocket price. Every procedure price should be openly put on an easily searchable marketplace.
Make it easy to start new practices, more doctors and nurses and hospitals.
The prices will come down.
Single payer is a bandaid fix. It does nothing to fix the supply problem.
The role of govt is a catch 22 - it is by design a monopoly, and monopolies are usually inefficient, so too much govt power gets monopoly capture but too little means govt can’t break the monopolies.
The largest issue with US healthcare is lack of price-quality transparency and competition.
This means tons of middle player monopolies e.g PBMs.
I can’t go shop around for a procedure on a marketplace and pay out of pocket, the same rates an insurer would.
I can’t deal directly with service provider or the labs. It has to be intermediaries.
The # of medical licenses are capped, they’re not growing in proportion to population.
Demand-supply dynamics, the basis of capitalism is wildly inefficient in US.
Get rid of employer given insurers, make a law that insurers cannot negotiate a lower price than out of pocket price. Every procedure price should be openly put on an easily searchable marketplace.
Make it easy to start new practices, more doctors and nurses and hospitals.
The prices will come down.
Single payer is a bandaid fix. It does nothing to fix the supply problem.
this argument comes up every time and it always ignores a critical aspect of medicine: not all procedures can be “shopped for”.
If I have cancer and I need to start treatment as soon as possible I’m not going to waste precious time comparing rates of infusion centers, especially given that one may be able to take me in for treatments 2 weeks sooner. That two weeks could make all the difference
If I have a heart attack, stroke, car accident, etc, that incapacitates me, I am simply incapable of shopping around for the best price. I am going to be taken in for emergency care and treated to the point of stabilization (or better, depending on whether I have a guardian who can approve more. Said guardian could theoretically shop around at this point but it is difficult given the potential emotionality involved and danger in moving someone who is critically injured)
Increasing provider supply is certainly a huge part of fixing things, if it’s done correctly. If you merely lower standards you just increase supply with substandard practitioners that overall worsen outcomes
If I have cancer and I need to start treatment as soon as possible I’m not going to waste precious time comparing rates of infusion centers, especially given that one may be able to take me in for treatments 2 weeks sooner. That two weeks could make all the difference
If I have a heart attack, stroke, car accident, etc, that incapacitates me, I am simply incapable of shopping around for the best price. I am going to be taken in for emergency care and treated to the point of stabilization (or better, depending on whether I have a guardian who can approve more. Said guardian could theoretically shop around at this point but it is difficult given the potential emotionality involved and danger in moving someone who is critically injured)
Increasing provider supply is certainly a huge part of fixing things, if it’s done correctly. If you merely lower standards you just increase supply with substandard practitioners that overall worsen outcomes
What percentage of the money spent on healthcare is the type of emergency you're talking about?
5%? 10%?
I'm not saying stuff like that doesn't happen but insurance for healthcare in this country is totally insane. If car insurance worked the same way Geico would be paying for my gas and oil changes. Heck they'd be paying to have the car cleaned once a month.
5%? 10%?
I'm not saying stuff like that doesn't happen but insurance for healthcare in this country is totally insane. If car insurance worked the same way Geico would be paying for my gas and oil changes. Heck they'd be paying to have the car cleaned once a month.
well my insurance company just doubled the rate on my 2009 clunker because i had the audacity to move to a low-income neighborhood, so i find these terms acceptable.
most people spend a lot of money on healthcare as they age. Many times this is emergency stuff that’s unplanned and not possible to shop for, or it’s just flat out expensive to care for. Stuff like falling at home and breaking a hip, cancer, heart attack, dementia care, etc. Once you’re admitted into the hospital it’s game over. You think someone is going to shop around while in a hospital bed connected to IV’s? That’s crazy talk.
A little boo boo or an urgent care visit can be shopped for, sure, but that’s all cheap stuff compared to emergency or end of life care! That’s the stuff people actually stress about in my opinion. So why not fix that?
Another example: a mother “shops around” to find a cheap place to deliver her baby. Great! But maybe she’s unlucky and needs emergency C-section or another emergency intervention. What good is shopping around if it’s not actually practical?
A little boo boo or an urgent care visit can be shopped for, sure, but that’s all cheap stuff compared to emergency or end of life care! That’s the stuff people actually stress about in my opinion. So why not fix that?
Another example: a mother “shops around” to find a cheap place to deliver her baby. Great! But maybe she’s unlucky and needs emergency C-section or another emergency intervention. What good is shopping around if it’s not actually practical?
People who are over 65 are covered by Medicare.
People expecting children are exactly the type of people who should be able to shop around. Even in the case of an emergency delivery it's an event that you have what, 6 months to plan for?
People expecting children are exactly the type of people who should be able to shop around. Even in the case of an emergency delivery it's an event that you have what, 6 months to plan for?
touché on the medicare!
I see you conveniently ignored the fact that any emergency before age 65 is hard to shop around for. From a hospital bed and all that…
Anyway i simply think the idea of “shopping around” for medical care is barbaric. As a concept. We’re talking about peoples lives here. I think as a country we should have some actual pride and treat our citizens well. Not like an inconvenience.
just my opinion, as a lucky person with great health insurance.
I see you conveniently ignored the fact that any emergency before age 65 is hard to shop around for. From a hospital bed and all that…
Anyway i simply think the idea of “shopping around” for medical care is barbaric. As a concept. We’re talking about peoples lives here. I think as a country we should have some actual pride and treat our citizens well. Not like an inconvenience.
just my opinion, as a lucky person with great health insurance.
The vast majority of healthcare can be shopped for. Emergency care is only a few percent of total spending.
As somebody having once "shopped for healthcare" in the US: It's pretty high on my list of all-time most frustrating and stressful situations, and that was for a relatively minor dental issue. I can't begin to imagine how it must be for somebody facing a major life-threatening (but not urgent in the emergency room sense) condition.
I'd gladly "overpay" a few (or even many) percent if that's what it takes to get systematic protection from being a pawn in a game of 10d chess between doctors needing to overtreat to recoup their enormous investments, insurers pushing back by possibly declining to pay for what I actually need to get done, and medical administration and billing companies, and industry for the size of which I have yet to hear a compelling economic argument.
I'd gladly "overpay" a few (or even many) percent if that's what it takes to get systematic protection from being a pawn in a game of 10d chess between doctors needing to overtreat to recoup their enormous investments, insurers pushing back by possibly declining to pay for what I actually need to get done, and medical administration and billing companies, and industry for the size of which I have yet to hear a compelling economic argument.
It's actually easier to shop for medical care than dental. Health plans are now required to give members an online price comparison tool. You can just log on to your insurance company's member portal and search for the care you need to see prices for network providers in your area. Unfortunately, the same rule doesn't apply to dental insurance.
https://www.cms.gov/healthplan-price-transparency/consumers
https://www.cms.gov/healthplan-price-transparency/consumers
That's great to know, thank you!
Still, a problem at least as big as finding various options and their prices seems to be finding somebody incentivized to give an honest evaluation of whether a given treatment is medically necessary at all.
Sometimes I wonder if it wouldn't make sense to have a doctor "on a retainer" that just gets a fixed yearly compensation for advising what to do, and what to better decline, but there's probably tons of ways this could go wrong in either direction (overtreatment vs. missing important issues) as well.
Still, a problem at least as big as finding various options and their prices seems to be finding somebody incentivized to give an honest evaluation of whether a given treatment is medically necessary at all.
Sometimes I wonder if it wouldn't make sense to have a doctor "on a retainer" that just gets a fixed yearly compensation for advising what to do, and what to better decline, but there's probably tons of ways this could go wrong in either direction (overtreatment vs. missing important issues) as well.
You are essentially describing "concierge medicine". This can be a good option for affluent patients who can afford the monthly fee but it's not a scalable solution for the systemic problems in the US healthcare system. A lot of the people who take advantage of it are what is known in the industry as the "worried well" — rich hypochondriacs willing to pay for personal reassurance whenever they have a tummy ache.
https://www.webmd.com/a-to-z-guides/what-is-a-concierge-doct...
https://www.webmd.com/a-to-z-guides/what-is-a-concierge-doct...
The public option in 2009 would have helped, let the profit-skimmers compete with the government program and prove that they really can deliver better service while taking their 20-30% cut. But the "free market" captains of industry are liars, they say that they want competition but they don't, they want market manipulation and safe cozy profit margins.
It's funny (not funny haha) how Democrats always seem to have a few undercover sabotagers in their ranks that get elected having lied to voters and then undermine Democrat's agenda, Lieberman, Manchin, Sinema, now Fetterman.
It's funny (not funny haha) how Democrats always seem to have a few undercover sabotagers in their ranks that get elected having lied to voters and then undermine Democrat's agenda, Lieberman, Manchin, Sinema, now Fetterman.
> national single payer Medicare/Medicaid for all.
Barack Obama himself said in an interview that this option wouldn't be on the table, because it would kill millions of jobs. When there is great inefficiency in a system, remember that the "wasted" money is going to someone. Some voting districts in the eastern USA rely heavily on jobs in medical payment administration.
Barack Obama himself said in an interview that this option wouldn't be on the table, because it would kill millions of jobs. When there is great inefficiency in a system, remember that the "wasted" money is going to someone. Some voting districts in the eastern USA rely heavily on jobs in medical payment administration.
I don’t follow. What happens when they need care themselves? I read about layoffs in American auto manufacturers all the time. How does the value added by this paper-pushing bloc outweigh our collective health?
The senate and house never had the votes for that.
Obamacare was always a compromise between what the democrats wanted and what the centrists and republicans would allow.
Obamacare was always a compromise between what the democrats wanted and what the centrists and republicans would allow.
Am I right in reading that this guy's message is "this is a systemic problem", but primarily just complaining that spending is too high, and that somehow healthcare spending will collapse society? High healthcare spending that was effective would be great! A healthy population is a productive population, not to mention the moral benefits. The problem is not at all that we spend too much, it's that we toss the money at a loosely regulated market that captures the value rather than using it to deliver excellent results. This is the predictable outcome of any market that can push costs onto externalities or that defeats competition. Some markets are incompatible with competition, and the best you can do in those cases is nationalization with oversight. You can't meaningfully vote with your wallet when you're willing to pay anything for treatment, so at the cost of the optimizing force of markets we fall back to voting with our actual votes for the policy we want. This doesn't guarantee a perfect healthcare system, but it does give better outcomes than what we get by trying to force it into a marketplace.
> High healthcare spending that was effective would be great!
There's still obvious limits. Imagine everybody spending 80% of their income on healthcare, of which 100% goes to doctors performing effective and required procedures: Society would still collapse, since people do have needs other than healthcare.
There's still obvious limits. Imagine everybody spending 80% of their income on healthcare, of which 100% goes to doctors performing effective and required procedures: Society would still collapse, since people do have needs other than healthcare.
My wife and I recently applied to receive a breast pump covered by insurance because why not? She is pregnant and while it is not certain she will need it, it’s better to be safe than sorry right?
We got the breast pump, some Chinese product that, on Amazon, retails for no more than 50$. Given the quality I was frankly surprised to see that the health insurance had been charged 300$. Not even the iPhone of breast pumps in the market would cost that much.
It was vendored to us by some organization that is no doubt making a living from selling cheap Chinese produced breast pumps and charging a 600% markup.
This is the exact same thing that is happening to Tylenol, a 50 cent drug that is marked up to 79$ when given at a hospital. To ambulance trips. To routine checkups. To medical exams. To X-rays and to cat scans.
Literally everything that is covered by insurance is enjoying exorbitant mark ups. Buyers can’t vote with their wallets because there is no choice. The illusion of choice is barely even there, as difference health insurance coverage covers the same things only at different price points.
As a buyer of health insurance you can’t not pay for the 300$ breast pump, or the 79$ Tylenol. There is no choice you can choose to avoid that.
And since I bought the $300 dollar breast pump, I contributed to the bloated premiums by causing the expenses for breast pumps to be much higher than it needs to be. So I should apologize to you all. But of course I have no option except to make premiums higher for all of you because I want my wife to have a breast pump.
There is no other way to fix any of this nonsense except to socialize healthcare completely.
We got the breast pump, some Chinese product that, on Amazon, retails for no more than 50$. Given the quality I was frankly surprised to see that the health insurance had been charged 300$. Not even the iPhone of breast pumps in the market would cost that much.
It was vendored to us by some organization that is no doubt making a living from selling cheap Chinese produced breast pumps and charging a 600% markup.
This is the exact same thing that is happening to Tylenol, a 50 cent drug that is marked up to 79$ when given at a hospital. To ambulance trips. To routine checkups. To medical exams. To X-rays and to cat scans.
Literally everything that is covered by insurance is enjoying exorbitant mark ups. Buyers can’t vote with their wallets because there is no choice. The illusion of choice is barely even there, as difference health insurance coverage covers the same things only at different price points.
As a buyer of health insurance you can’t not pay for the 300$ breast pump, or the 79$ Tylenol. There is no choice you can choose to avoid that.
And since I bought the $300 dollar breast pump, I contributed to the bloated premiums by causing the expenses for breast pumps to be much higher than it needs to be. So I should apologize to you all. But of course I have no option except to make premiums higher for all of you because I want my wife to have a breast pump.
There is no other way to fix any of this nonsense except to socialize healthcare completely.
This is the kind of thing that confuses me. When insurance companies deny claims I actually understand that; I'm honestly open to the idea that they might be doing it for good reasons. That there are some procedures which might be done and should not be.
The $300 breast pump and $79 Tylenol is harder to understand. Why can't insurance companies step in and say this is crazy we're not paying for it?
Is it like the $3000.00 hammer? i.e. we want the jet fighter to come in under a certain cost so there are bundled items that are ridiculously expensive. The hospitals or some other 3rd party somehow put the insurance company in a posistion where they can't say no even though they want to?
Or is there some perverse incentive? Insurance companies benefit from an expensive breast pump / Tylenol? If that's the case why do they ever deny claims?
Is the amount too small in grand scheme of things?
Do they get some kick back for some types of care that make eating this cost still worthwhile?
The $300 breast pump and $79 Tylenol is harder to understand. Why can't insurance companies step in and say this is crazy we're not paying for it?
Is it like the $3000.00 hammer? i.e. we want the jet fighter to come in under a certain cost so there are bundled items that are ridiculously expensive. The hospitals or some other 3rd party somehow put the insurance company in a posistion where they can't say no even though they want to?
Or is there some perverse incentive? Insurance companies benefit from an expensive breast pump / Tylenol? If that's the case why do they ever deny claims?
Is the amount too small in grand scheme of things?
Do they get some kick back for some types of care that make eating this cost still worthwhile?
The article makes a claim that it is in the insurance companies best interest to make the overall cost of healthcare to go up so they can get a bigger profit.
While I somewhat agree with that claim, I suspect that there are many systemic policies designed into healthcare by policy makers that create these inefficiencies in the first place.
1) why can’t an insurance offer a lower cost option? It’s because of the policy of what they are required to provide.
2) why do hospitals charge so much markup for everything? It’s probably because there is a lot that they can’t charge you for, they can’t charge you by hour by doctor and nurse quantity. So they have to charge arbitrary markups on random items. This allows for hidden profits esp by savvy financial data people.
3) what incentives are there to give cost effective services in the medical field? There are none. Customers will pay regardless, and insurance will cover regardless. Game theory wise, it is in the best interest for insurance companies a to cooperate with with medical service companies to push larger and larger bills to consumers.
While I somewhat agree with that claim, I suspect that there are many systemic policies designed into healthcare by policy makers that create these inefficiencies in the first place.
1) why can’t an insurance offer a lower cost option? It’s because of the policy of what they are required to provide.
2) why do hospitals charge so much markup for everything? It’s probably because there is a lot that they can’t charge you for, they can’t charge you by hour by doctor and nurse quantity. So they have to charge arbitrary markups on random items. This allows for hidden profits esp by savvy financial data people.
3) what incentives are there to give cost effective services in the medical field? There are none. Customers will pay regardless, and insurance will cover regardless. Game theory wise, it is in the best interest for insurance companies a to cooperate with with medical service companies to push larger and larger bills to consumers.
Some hospitals certainly engage in abusive billing and collections practices. But most of the stories you see about a $79 Tylenol are based on a misunderstanding of how institutional claims work. Those are typically billed based on DRG codes with negotiated rates so the line items have no relationship to the actual amount paid by insurers or patients.
https://www.cms.gov/medicare/payment/prospective-payment-sys...
https://www.cms.gov/medicare/payment/prospective-payment-sys...
Thor explains this a little in this short:
https://www.youtube.com/shorts/b43iUJI4_Ms
https://www.youtube.com/shorts/b43iUJI4_Ms
The device itself probably cost $50 to manufacture, but it's a medical device which is strictly regulated. You're also paying for the additional quality control, the regulatory approval, the post-market surveillance studies etc. There is a lot of legally required overhead when you do business in regulated industries. Some of it necessary, other things maybe not so much. It will be interesting to see if DOGE/Musk/Trump will actually change any of this.
Agreed about the absurdity of the Tylenol though.
Agreed about the absurdity of the Tylenol though.
https://a.co/d/63gQ3Kl
I sympathize with strict regulation but the market sells the exact same “medical device” at much lower cost and my point stands - there is no option to pay market price for a breast pump instead of the insurance hiked price, regardless of whether it is a 3rd party pocketing the margin or if the margin is the cost of additional regulation.
I sympathize with strict regulation but the market sells the exact same “medical device” at much lower cost and my point stands - there is no option to pay market price for a breast pump instead of the insurance hiked price, regardless of whether it is a 3rd party pocketing the margin or if the margin is the cost of additional regulation.
Agreed!
Why on Earth would reducing regulatory overhead decrease medical device/drug costs? That would only be the case if competition had already driven costs down as much as possible and margins were thin. If companies are currently able to charge high margins and their costs are lowered why would they choose to pass on any savings to buyers? Surely they would just maintain their prices and capture more profit.
To be honest I didn't think about the price changes. Having been in the medical devices industry I'm just curious if the regulations are actually going to change.
> I have no option except to make premiums higher for all of you because I want my wife to have a breast pump.
> There is no other way to fix any of this nonsense except to socialize healthcare completely.
No offense, but you also had the option to just buy a breast pump for $50. That option would have the cost of the goods just between the entity selling the pump and you. No one else need be involved, no one else needs to share in paying for your transaction.
But…you got to save $50.
No offense, but you also had the option to just buy a breast pump for $50. That option would have the cost of the goods just between the entity selling the pump and you. No one else need be involved, no one else needs to share in paying for your transaction.
But…you got to save $50.
Respectfully, I paid for my health insurance so I probably overpaid for the breast pump, all things considering.
Game theory wise, I’m forced to pay money to then be given the “choice” between spending 50$ or spending 0$ for the exact same outcome. Even if I was a values driven person and chose the 50$ option out of principles, the system is designed so that everyone would choose the 0$ option.
So it is a choice, in the sense that I could choose to give you the 50$ instead. But there is no logical reason to take that option.
Game theory wise, I’m forced to pay money to then be given the “choice” between spending 50$ or spending 0$ for the exact same outcome. Even if I was a values driven person and chose the 50$ option out of principles, the system is designed so that everyone would choose the 0$ option.
So it is a choice, in the sense that I could choose to give you the 50$ instead. But there is no logical reason to take that option.
Yes, you are paying your premium and you should take advantage of what that provides you, so it’s the obvious choice. I would have made the same choice too.
The deeper philosophical question here is not insurance paid vs socialized medicine…it’s why are we making a $50 breast pump a medical benefit at all?
Even under a socialized healthcare system if we are going to wrap a bureaucracy around an inexpensive anything …costs will inflate.
The deeper philosophical question here is not insurance paid vs socialized medicine…it’s why are we making a $50 breast pump a medical benefit at all?
Even under a socialized healthcare system if we are going to wrap a bureaucracy around an inexpensive anything …costs will inflate.
He pays insurance premiums to get health care. Why should he pay out of pocket for health care that is covered?
This does not change the point that the insurance company, physician, and medical device company are all complicit in a scam that jacks up the cost of healthcare for everyone.
This does not change the point that the insurance company, physician, and medical device company are all complicit in a scam that jacks up the cost of healthcare for everyone.
> This does not change the point that the insurance company, physician, and medical device company are all complicit in a scam that jacks up the cost of healthcare for everyone.
You should probably describe how that works exactly…cause I don’t see collusion here.
- Insurance companies negotiate almost all of their costs upfront…they don’t want to pay more. It’s not in their best interest, there job is to not spend more than $.01 more than they have to on anything they do So if they are actually paying $300 for a $50 item, it’s because it’s probably costs an additional $250.01 for them to somehow fulfill that $50 item to you through another provider.
- The doctor generally (beyond occasional pharma dinners) has no kickback for prescribing any device or drug from the sale of that product.
- The pharma company or device manufacturer certainly wants to maximize their revenue, but will they try and soak the folks prescribing and paying? Probably not for long.
You should probably describe how that works exactly…cause I don’t see collusion here.
- Insurance companies negotiate almost all of their costs upfront…they don’t want to pay more. It’s not in their best interest, there job is to not spend more than $.01 more than they have to on anything they do So if they are actually paying $300 for a $50 item, it’s because it’s probably costs an additional $250.01 for them to somehow fulfill that $50 item to you through another provider.
- The doctor generally (beyond occasional pharma dinners) has no kickback for prescribing any device or drug from the sale of that product.
- The pharma company or device manufacturer certainly wants to maximize their revenue, but will they try and soak the folks prescribing and paying? Probably not for long.
American medicine has a tendency to pay for things that are fantastically expensive, but aren’t really what the patient actually needs. I found this blog post about this phenomenon a few years ago:
Which Interventions Can Be Paid For: The Explanatory Power of “Prasad’s Law” (hcrenewal.blogspot.com) - https://news.ycombinator.com/item?id=21728864
I had lots of experiences with people who weren’t helped by the money that was spent on their behalf.
Which Interventions Can Be Paid For: The Explanatory Power of “Prasad’s Law” (hcrenewal.blogspot.com) - https://news.ycombinator.com/item?id=21728864
I had lots of experiences with people who weren’t helped by the money that was spent on their behalf.
America also spends far far too much on end of life care. Most people dont need months of full time hospice care.
I think most people agree that it’s not heroic to assasinate CEO’s. It’s just that if there’s someone responsible for some deaths, the CEO of the largest for profit health insurer that has an awful reputation has taken actions that have resulted in the death of innocent people and we don’t find it disturbing the way that murdering the ceo of walmart might be.
I fear this post's argument incorrectly assumes that the cap on insurance provides as 20% percent of revenue is the limiting factor on insurance company profits. In fact, it mentions cases where insurance company profits are below the cap! Their interest is not obviously to grow healthcare spending. So I'm not sure to what extent they truly endeavor to deny care so as to increase profit in the long run, and not just smooth a turbulent market.
sort of ... other than the amazing revolutions in medicines, therapies and support that have happened in the last 20 years. The issue is education about preventative care, diet, and exercise to prevent negative health events.
Eat less (alot less), Eat healty (alot healthier), Move more (Pick weight up, put it down.. then go walk for a while)
PBS is the problem - everyone should know healthcare is first and foremost their problem. Most healthy lifestyle people dont need healthcare.
When they do, we (the US) have an amazing system and amazing access to therapies to help them deal with the issues as they arise.
AI will help people from diagnosis to outcomes in amazing ways.... ask Claude what to do if youve just been diagnosed with MS. It profound how it will help a patient navigate the next steps.
Eat less (alot less), Eat healty (alot healthier), Move more (Pick weight up, put it down.. then go walk for a while)
PBS is the problem - everyone should know healthcare is first and foremost their problem. Most healthy lifestyle people dont need healthcare.
When they do, we (the US) have an amazing system and amazing access to therapies to help them deal with the issues as they arise.
AI will help people from diagnosis to outcomes in amazing ways.... ask Claude what to do if youve just been diagnosed with MS. It profound how it will help a patient navigate the next steps.
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the healthcare (hellcare) system bieng broken is a symptom of a societal disease.
Hospitals were designed and built for short term
emergency and intensive care, they were run by and only by doctors and nurses who could handle anything, having survived the grueling initiation.
And that system worked It was self sustaining and effective.Then came the lawsuits and the ergonomic furniture and critiques of a surgeons "bed side manner" Therein began cancell culture.
Now we still need emergency medicine, but also
mental health crisis, and drug overdose, and nonmedical elective surgeries, and long term "medical" care for invalids, and palitive care facilities, each with specific physical building
design characteristics, and very different decision making and management requirements.
Oh and maternity and pediatrics need another way of doing things ,see the Cuban model for maternity
and pediatrics done right, they are head and shoulders above anyone else.
We should be ashamed of our selves for the nasty
mess we have built and just refuse to face.
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Markets are inevitable: create an arbitrarily oppressive prison and you will watch some “black” market emerge: markets grow like weeds: it’s just silly to argue that we should have markets or not.
But markets are not a-priori useful to the broader society just by being markets! A necessary (but not sufficient) condition for a market to be useful is that it substantially avoids lasting and structural market failures.
Market failures are almost as common and ubiquitous as markets! They vary in duration and consequence.
The ultimate market failure is to have costs which include a profit margin but little or no competition to get the benefits of a market.
Healthcare like other mandatory purchases (you can buy an ambulance ride and six figures of hospital while unconscious!) is especially prone to market failure.
The United States especially (though late neoliberal “capitalism” to some degree generally) and HN/SV/EA especially now go so far as to actively endorse induced market failure as the goal.
Fuck that. Fuck everyone who is on board with it.
This is your goblin brainchild @pg: renounce it.
https://youtu.be/3Fx5Q8xGU8k?si=0lnuIjUZNHYjYuxg
But markets are not a-priori useful to the broader society just by being markets! A necessary (but not sufficient) condition for a market to be useful is that it substantially avoids lasting and structural market failures.
Market failures are almost as common and ubiquitous as markets! They vary in duration and consequence.
The ultimate market failure is to have costs which include a profit margin but little or no competition to get the benefits of a market.
Healthcare like other mandatory purchases (you can buy an ambulance ride and six figures of hospital while unconscious!) is especially prone to market failure.
The United States especially (though late neoliberal “capitalism” to some degree generally) and HN/SV/EA especially now go so far as to actively endorse induced market failure as the goal.
Fuck that. Fuck everyone who is on board with it.
This is your goblin brainchild @pg: renounce it.
https://youtu.be/3Fx5Q8xGU8k?si=0lnuIjUZNHYjYuxg
If you’re deeply in favor of capitalism as a principle (like I am) then this clique of underendowed aspiring monopolist fascists is your sworn enemy (like it’s mine).
I’m sorry but didn’t we fix this in 2008?
I always find it funny that doctors never think their huge salaries are part of the problem. Doctors in other countries earn way less than doctors here. That helps keep costs lower.
Huge salaries are not the direct problem, high cost of schooling in the US and the requirement to have an undergrad are.
Other countries allow you to go straight from high school to medical school, plus other countries have free schooling.
Other countries allow you to go straight from high school to medical school, plus other countries have free schooling.
I'm all for lowering the cost of higher education but I'm skeptical that would bring down the cost of healthcare. Doctors who have long since paid off their student loans don't seem to be volunteering to take lower salaries; rather the opposite.
One approach could be to expand the availability of accelerated Baccalaureate-MD programs. Those cut education time by up to two years but are currently available at only a few schools.
https://students-residents.aamc.org/medical-school-admission...
One approach could be to expand the availability of accelerated Baccalaureate-MD programs. Those cut education time by up to two years but are currently available at only a few schools.
https://students-residents.aamc.org/medical-school-admission...
No, the issues is that the AMA convinced congress to limit the number of residencies available, which acts as a hard cap on the supply of doctors.
A bunch of doctors do recognize the issue. Just like every other group there are a diverse set of opinions.
Except in this case, the main group of doctors (the AMA) convinced congress to cap the number of residencies available to med school graduates explicitly to prevent the “over supply of physicians”.
Yes, the AMA did that but they have since reversed their position and have been lobbying Congress to increase the number of residency slots. So far Congress hasn't acted.
https://savegme.org/node/1
https://savegme.org/node/1
It sounds like they want to increase the cap, not remove it entirely. This is, again, likely self serving. If there aren’t enough anesthesiologist, for instance, surgeons can’t perform surgery.
But, honestly, good for them. I wish other white collar ICs understood the power of banding together to lobby for your professions interests.
But, honestly, good for them. I wish other white collar ICs understood the power of banding together to lobby for your professions interests.
Yeah, there are varying opinions. Thank you for restating what I said.
Hmm I guess when I see a single, unified viewpoint codified into law by the singular professional association representing the entirety of doctors in America, I don’t really think “hmm l, those doctors really have varying viewpoints on this issue.”
I’m very skeptical that there are many doctors that support removing the supply cap. Of course, many doctors understand that the supply cap increases their salaries and thus the cost of care. But that’s different from actively supporting policies that will lower their salaries.
I’m very skeptical that there are many doctors that support removing the supply cap. Of course, many doctors understand that the supply cap increases their salaries and thus the cost of care. But that’s different from actively supporting policies that will lower their salaries.
>I’m very skeptical that there are many doctors that support removing the supply cap
Well you should find out before arguing from your absolute.
Well you should find out before arguing from your absolute.
Or you should provide some evidence? What’s your source, “trust me bro?” It’s already a well established fact that the AMA lobbied congress to impose residency quotas, a position they continue to support. Therefore, the only logical conclusion is that the (likely vast) majority of doctors support this.
The AMA no longer supports that position. They have been lobbying Congress to fund more residency slots for several years.
https://savegme.org/
And the AMA isn't the only organization representing physicians. Many of them aren't even members. It's not like a union or something.
Even today there is no legal quota limit on residencies. There's only a cap on slots funded by the federal government through Medicaid. Other organizations are free to fund as many slots as they want. If you have the means you could go to your local non-profit teaching hospital and donate money to expand their program.
https://savegme.org/
And the AMA isn't the only organization representing physicians. Many of them aren't even members. It's not like a union or something.
Even today there is no legal quota limit on residencies. There's only a cap on slots funded by the federal government through Medicaid. Other organizations are free to fund as many slots as they want. If you have the means you could go to your local non-profit teaching hospital and donate money to expand their program.
You made the first unsubstantiated claim first. You've since moved onto this second less absolute statement about the AMA and I see you again pushing another unsubstantiated claim.
My claims were entirely substantiated.
Original claim: doctor salaries are part of the problem.
Substantiation: Doctors in the U.S. earn way more than doctors elsewhere. It logically follows that higher salaries lead to higher healthcare costs. For reference, the average doctor in the U.S. earns over $360K. In Germany, that number is around 85K euros.
Then you claimed that some doctors think this is a problem.
I responded by saying that the AMA lobbied to artificially restrict the supply of doctors. This is a well known fact. It’s literally in the introduction (with sources) on their Wikipedia page: https://en.m.wikipedia.org/wiki/American_Medical_Association
> the AMA has frequently lobbied to restrict the supply of physicians, contributing to a doctor shortage in the United States.[10][11][12][13] The organization has also lobbied against allowing physician assistants and other health care providers to perform basic forms of health care. The organization has historically lobbied against various forms of government-run health insurance.[8]
So all that is left unsubstantiated is your claim that “a bunch of doctors do recognize the issue.” Ok, which ones? How widespread is this belief? Why is the AMA acting against these beliefs?
Original claim: doctor salaries are part of the problem.
Substantiation: Doctors in the U.S. earn way more than doctors elsewhere. It logically follows that higher salaries lead to higher healthcare costs. For reference, the average doctor in the U.S. earns over $360K. In Germany, that number is around 85K euros.
Then you claimed that some doctors think this is a problem.
I responded by saying that the AMA lobbied to artificially restrict the supply of doctors. This is a well known fact. It’s literally in the introduction (with sources) on their Wikipedia page: https://en.m.wikipedia.org/wiki/American_Medical_Association
> the AMA has frequently lobbied to restrict the supply of physicians, contributing to a doctor shortage in the United States.[10][11][12][13] The organization has also lobbied against allowing physician assistants and other health care providers to perform basic forms of health care. The organization has historically lobbied against various forms of government-run health insurance.[8]
So all that is left unsubstantiated is your claim that “a bunch of doctors do recognize the issue.” Ok, which ones? How widespread is this belief? Why is the AMA acting against these beliefs?
Sorry, you've lost any credibility in my eyes with this constant goal post moving; I'm not reading all that.
What else did every doctor tell you?
Rather than cutting salaries we should expand the ability earn an MD. But expanding medical school causes shrieks of hysterical anger from doctors. Same with importing foreign doctors. My pearls
A friend of mine is an opthalmic surgeon. He does complex corneal transplants and cataract surgery etc.
He had 12 years of training before he could so his first surgery. Once he invited me to observe a couple of operations that he did, which was super interesting. He told me afterwards that smart people with steady hands could probably be trained in 3 months to do the routine surgical work.
He had 12 years of training before he could so his first surgery. Once he invited me to observe a couple of operations that he did, which was super interesting. He told me afterwards that smart people with steady hands could probably be trained in 3 months to do the routine surgical work.
Bartenders used to also dabble in dentistry and medical care. So much nonsense involved between someone needing care, and being able to pay someone to implement the care.
Won't that be demand / supply issue ?
Ultimately yes, but in healthcare, demand is fixed (to a large extent) and supply is tightly controlled as the education takes super long and hospitals only have limited residencies available.
It is a supply issue. And supply is artificially limited by the AMA by limiting the number of residencies available.
Not really. Demand for healthcare is effectively infinite. Limiting the supply of doctors is one technique that governments use to control overall healthcare system costs. If patients have to wait months for a specialist appointment or elective surgery then that means fewer claims coming in.
Generally speaking the supply and demand curves taught in Econ 101 don't apply to healthcare.
Generally speaking the supply and demand curves taught in Econ 101 don't apply to healthcare.
Supply and demand curves need not apply here sounds like special pleading. I think we'd get a lot further treating healthcare like every other good/service then saying it's sui generis.
Here’s a Canadian man who had to wait many hours in the ER, went home instead, died https://www.newsweek.com/adam-burgoyne-death-aneurysm-canada...
He would have been saved in the US. If health insurers ration care in the US, they are just replacing the role of bureaucrats in socialized medicine countries. You can’t solve the problem of too much demand and too little supply without a free market. Yet everyone keeps trying (and pretending) in the medical care field
He would have been saved in the US. If health insurers ration care in the US, they are just replacing the role of bureaucrats in socialized medicine countries. You can’t solve the problem of too much demand and too little supply without a free market. Yet everyone keeps trying (and pretending) in the medical care field
> once they made sure I wasn't dying I was thrown out into the waiting room and 6 hours later I said f*ck it and went home.
Have you been to an "emergency" room in the US? The ones I'm familiar with have those same kind of waiting times. Our healthcare system basically has both the worst aspects of "government" (extremely bureaucratized, top-down command, and no market dynamics) plus the worst aspects of "private" (profit skimming and no democratic accountability).
Personally I think we need to start with reform focused on the provider side - like why the fuck can providers just send you a bevy of bills with fraudulent charges, making it your responsibility to sort out? In any other industry, that would be considered plain fraud. But this doesn't mean I'm going to shout down other people's ideas of where they think reform should start by bringing up failures from other systems as some imagined contrast where our system is at all effective.
Have you been to an "emergency" room in the US? The ones I'm familiar with have those same kind of waiting times. Our healthcare system basically has both the worst aspects of "government" (extremely bureaucratized, top-down command, and no market dynamics) plus the worst aspects of "private" (profit skimming and no democratic accountability).
Personally I think we need to start with reform focused on the provider side - like why the fuck can providers just send you a bevy of bills with fraudulent charges, making it your responsibility to sort out? In any other industry, that would be considered plain fraud. But this doesn't mean I'm going to shout down other people's ideas of where they think reform should start by bringing up failures from other systems as some imagined contrast where our system is at all effective.
Uh, health insurers in the US do actually ration care. You can consult the seething masses for the care denied to themselves or loved ones by your free market paragon. Besides, the article isn’t even advocating socialized healthcare.
Socialize it all; call in the military doctors to provide care that's missing. Train up more. Break the education cartel and '(evil/dark) company' style hazing of new grads in grueling 12-36 hour deathmarch shifts. Train enough doctors to fulfill society's needs.