4 ms·

The problem with healthcare in America is insurance. When you are insured and insurance is paying for everything patients don't care how much anything costs. (S

by petilon 11y ago

The problem with healthcare in America is insurance. When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). And the drug companies charge $250 to $750 a pill or $14,000 for a years worth of drugs (recent cholesterol drugs Repatha and Praluent) to $250,000 (cancer drugs) and the drug companies justify it by saying insurance pays for it anyway. Drug companies are charging Americans 26,000% higher than in other countries (eg: Cuprimine, for which Valeant charges $260 per pill is available for $1 in other countries.) The net result is that insurance rates are rising rapidly, and even if you have insurance you may not be able to make the copay. As much as I hate socialism, the only solution appears to be Single Payer.

suneilp 11y ago
What does this have to do with socialism? How does drug companies charging for an arm and a leg or insurance companies paying for it and raising premiums relate to socialism?
- deleted 11y ago
  [deleted]
- petilon 11y ago
  Single-payer is socialized medicine.
  - CamperBob2 11y ago
    It's all socialized medicine. We all have the same bodies. The only question is whether we get what we pay for. In the US, we don't. The idea that "insurance" is somehow applicable to a scenario where essentially every participant will need to file multiple expensive claims is extremely silly.
- necessity 11y ago
  He wants the tax payer to pay for it instead of insurance owners.
- jjoonathan 11y ago
  Because single-payer systems have enough bargaining power to get much better deals from drug companies both theoretically and empirically. A few years ago when I was taking a health care policy class and actually looking through the stats, drugs cost ~2X in the US vs G20 averages. Not sure what it is now, but I would be very surprised if it had shrunk. It's one of the reasons for this: https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_%28PPP%29_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... Others: having one predominant type of insurance nationwide cuts down on administrative costs (figuring out different plans costs consumers and hospitals money, these costs aren't minimized by competition), the cost of 1/sqrt(n) risk, and "bandwagon" risk (if a market plan is particularly advantageous for any given group of people, those people all sign up and "sink the ship," whereas national boundaries largely prevent such movement).
refurb 11y ago
Drug costs are ~10% of total healthcare costs in the US. Are drug prices a problem? Yes. Are they the main cause of our outrageous healthcare spending? No.
- dikaiosune 11y ago
  How does that compare to each other little area of spending? If you have 100+ categories of spending to look at, 10% of the market in a single spending area can be some pretty low hanging fruit.
  - kgwgk 11y ago
    Spending in physician/nurse compensation is higher than spending in drugs. If reducing the price of drugs to European levels would result in big savings to the system, imagine the effect if the compensation of healthcare professionals was reduced to European levels.
  - refurb 11y ago
    Let's say we reduced US drug prices down to EU levels. Branded drug sales are about 80% of all US drug sales. Reduce that by 25% and we've reduced US healthcare spending by 2%. Decent, but certainly not enough to solve our healthcare spending problem.
pvnick 11y ago
Didn't a competitor introduce a better version of the $750 pill priced at $1? Isn't that proof of free market efficiency working? Indeed much of the rising insurance costs appear to be government-mandated purchasing of a highly-regulated service, a la affordable care act. That's just elementary economics. The FDA-imposed regulatory hurdles to medical innovation also drive up costs and protect the price gougers from competition.
vacri 11y ago
> As much as I hate socialism I think it's funny that people think insurance isn't a (distorted) form of socialism. It's small-scale socialism - you pay into a pool, and those who need resources get it. If you really hated socialism, you wouldn't have any insurance at all.
- mahouse 11y ago
  The only funny thing here is that most people who hate socialism just do so because they don't want to pay taxes.
  - Joof 11y ago
    I only want to pay insurance tax.
chimeracoder 11y ago
> As much as I hate socialism, the only solution appears to be Single Payer. The problem is, "How do we establish a market that provides medication to patients who may not be able to afford it while still generating enough profit to allow research and development of new drugs 10 years from now?" Establishing a monopsony doesn't actually solve this problem. It changes the flow of money slightly[0], but it doesn't actually solve the fundamental problem: in the aggregate, R&D costs more than patients are able to provide. Since we're talking about a national scale, we can't use the argument that adding external money to the system - taxpayer funds - would solve the problem, because the two sets - "Patients" and "Taxpayers" - are the same[1]. The funds are still coming from patients, whether they come in the form of insurance premiums or tax withholdings[2]. [0] but a lot less than most people think! Health insurance in the US already is much more like a monopsony than most people realize. [1] Technically not exactly the same, but close enough that, economically, they can be treated as one. [2] One might argue that taxes can vary with income. Aside from the fact that insurance premiums already can (and do) explicitly vary with income, this actually already is the current state: patients on private insurance (and especially the ones with very expensive, luxury health plans) already subsidize patients on public insurance. Changing the system so that we collect these subsidies through tax funds doesn't change the problem (though ironically, it does increase the risk that those funds will be diverted to other government budgets).
- jjoonathan 11y ago
  If the US bargained with drug companies on more even footing with other countries, we might not get stuck footing such a disproportionate fraction of the bill (R&D and otherwise). > Health insurance in the US already is much more like a monopsony than most people realize. Dead wrong, Medicare part D is hobbled so that the US is not even close to being a half-monopsony, let alone a full monopsony, in the drug market. > in the aggregate, R&D costs more than patients are able to provide. R&D is 10-20% of a typical pharma co's budget. Eroom's law says that in the limit you're correct (until we get over the genetic engineering bump), but there's plenty of room to speculate about constant factors. The pharma business is notoriously infested with rent-seeking shenanigans. See: OP.
  - 11y ago
seivan 11y ago
I probably hate Socialism more than you do but I've come to accept that Single Payer is probably the only thing that allows your population to not to succumb to insane debts for just living. I've also looked at https://en.wikipedia.org/wiki/Healthcare_in_Singapore https://en.wikipedia.org/wiki/Healthcare_in_Singapore
dragontamer 11y ago
> When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). Obamacare is the free market answer. It encourages HDHP plans which forces the individuals to pay for those pills. Now that consumers are fronting the costs below $1300 or so, they really do care about huge pill costs like this now. Before, consumers may have not cared. But now, people do care and people will pay attention.
maxerickson 11y ago
A competitor has stated that they are going to make an equivalent available for $1: http://www.nbcnews.com/health/health-news/competitor-offer-1-pill-after-turing-price-hike-outrage-n449661 http://www.nbcnews.com/health/health-news/competitor-offer-1...
astazangasta 11y ago
The problem is not insurance. First of all insurance companies are not that good at shielding patients from costs; most people have deductibles and out of network expenses if they even have insurance at all. Second, even with insurance medical bankruptcy is rampant (the main cause of bankruptcy). Third, insurance companies have an obvious incentive to lower costs, it means they make more profit. They just don't have the power. This is something that changed in the 90s, when attempts at managed care tried to use insurance companies to push down costs. Hospitals responded by consolidating into local monopolies (provider networks) that insurance could not out bargain. The problem is simply that providers have too much power. Doctors regulate the supply of their profession; doctors in the US make 2X the oecd average. Pharma companies and medical get patent monopolies; drugs cost $300 billion a year above their generic price. Hospitals have local monopolies and patients don't know how to bargain for cheaper care; MRIs cost thousands of dollars. Insurance takes home a few paltry percent of every dollar spent on health care. The real takers are the health care providers, but we are all too busy shutting on insurers to notice.
- deleted 11y ago
  [deleted]
- carbonatedmilk 11y ago
  This isn't a story of drug company overreach, it's about how your government has driven the costs of compliance so high that it's not worth making a drug unless you can extract monopoly rent from it. The drug (pyrimethamine) has been in the public domain for more than 30 years, but in the US the government imposed costs mean that it wasn't (until now) worthwhile for another manufacturer to go through the process of US certification for such a low volume, low margin drug. You can buy pyrimethamine for $0.10 a tablet in most of the rest of the world, but that's not thanks to the power of socialised medicine. It's because of less onerous government regulation that means you can manufacture your drug for $0.10, comply with regulations and still turn a profit.
  - astazangasta 11y ago
    This argument is hard to buy when pharma has been turning 20% profits in the US for decades, far and away above any industry. Boohoo, compliance is obviously so onerous for them, wah.
deleted 11y ago
[deleted]

by petilon 11y ago

suneilp 11y ago

What does this have to do with socialism? How does drug companies charging for an arm and a leg or insurance companies paying for it and raising premiums relate to socialism?

deleted 11y ago
[deleted]
petilon 11y ago
Single-payer is socialized medicine.
- CamperBob2 11y ago
  It's all socialized medicine. We all have the same bodies. The only question is whether we get what we pay for. In the US, we don't. The idea that "insurance" is somehow applicable to a scenario where essentially every participant will need to file multiple expensive claims is extremely silly.
necessity 11y ago
He wants the tax payer to pay for it instead of insurance owners.
jjoonathan 11y ago
Because single-payer systems have enough bargaining power to get much better deals from drug companies both theoretically and empirically. A few years ago when I was taking a health care policy class and actually looking through the stats, drugs cost ~2X in the US vs G20 averages. Not sure what it is now, but I would be very surprised if it had shrunk. It's one of the reasons for this: https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_%28PPP%29_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... Others: having one predominant type of insurance nationwide cuts down on administrative costs (figuring out different plans costs consumers and hospitals money, these costs aren't minimized by competition), the cost of 1/sqrt(n) risk, and "bandwagon" risk (if a market plan is particularly advantageous for any given group of people, those people all sign up and "sink the ship," whereas national boundaries largely prevent such movement).

refurb 11y ago

Drug costs are ~10% of total healthcare costs in the US. Are drug prices a problem? Yes. Are they the main cause of our outrageous healthcare spending? No.

dikaiosune 11y ago
How does that compare to each other little area of spending? If you have 100+ categories of spending to look at, 10% of the market in a single spending area can be some pretty low hanging fruit.
- kgwgk 11y ago
  Spending in physician/nurse compensation is higher than spending in drugs. If reducing the price of drugs to European levels would result in big savings to the system, imagine the effect if the compensation of healthcare professionals was reduced to European levels.
- refurb 11y ago
  Let's say we reduced US drug prices down to EU levels. Branded drug sales are about 80% of all US drug sales. Reduce that by 25% and we've reduced US healthcare spending by 2%. Decent, but certainly not enough to solve our healthcare spending problem.

pvnick 11y ago

Didn't a competitor introduce a better version of the $750 pill priced at $1? Isn't that proof of free market efficiency working? Indeed much of the rising insurance costs appear to be government-mandated purchasing of a highly-regulated service, a la affordable care act. That's just elementary economics. The FDA-imposed regulatory hurdles to medical innovation also drive up costs and protect the price gougers from competition.

vacri 11y ago

> As much as I hate socialism I think it's funny that people think insurance isn't a (distorted) form of socialism. It's small-scale socialism - you pay into a pool, and those who need resources get it. If you really hated socialism, you wouldn't have any insurance at all.

mahouse 11y ago
The only funny thing here is that most people who hate socialism just do so because they don't want to pay taxes.
- Joof 11y ago
  I only want to pay insurance tax.

chimeracoder 11y ago

> As much as I hate socialism, the only solution appears to be Single Payer. The problem is, "How do we establish a market that provides medication to patients who may not be able to afford it while still generating enough profit to allow research and development of new drugs 10 years from now?" Establishing a monopsony doesn't actually solve this problem. It changes the flow of money slightly[0], but it doesn't actually solve the fundamental problem: in the aggregate, R&D costs more than patients are able to provide. Since we're talking about a national scale, we can't use the argument that adding external money to the system - taxpayer funds - would solve the problem, because the two sets - "Patients" and "Taxpayers" - are the same[1]. The funds are still coming from patients, whether they come in the form of insurance premiums or tax withholdings[2]. [0] but a lot less than most people think! Health insurance in the US already is much more like a monopsony than most people realize. [1] Technically not exactly the same, but close enough that, economically, they can be treated as one. [2] One might argue that taxes can vary with income. Aside from the fact that insurance premiums already can (and do) explicitly vary with income, this actually already is the current state: patients on private insurance (and especially the ones with very expensive, luxury health plans) already subsidize patients on public insurance. Changing the system so that we collect these subsidies through tax funds doesn't change the problem (though ironically, it does increase the risk that those funds will be diverted to other government budgets).

jjoonathan 11y ago
If the US bargained with drug companies on more even footing with other countries, we might not get stuck footing such a disproportionate fraction of the bill (R&D and otherwise). > Health insurance in the US already is much more like a monopsony than most people realize. Dead wrong, Medicare part D is hobbled so that the US is not even close to being a half-monopsony, let alone a full monopsony, in the drug market. > in the aggregate, R&D costs more than patients are able to provide. R&D is 10-20% of a typical pharma co's budget. Eroom's law says that in the limit you're correct (until we get over the genetic engineering bump), but there's plenty of room to speculate about constant factors. The pharma business is notoriously infested with rent-seeking shenanigans. See: OP.
- 11y ago

seivan 11y ago

I probably hate Socialism more than you do but I've come to accept that Single Payer is probably the only thing that allows your population to not to succumb to insane debts for just living. I've also looked at https://en.wikipedia.org/wiki/Healthcare_in_Singapore https://en.wikipedia.org/wiki/Healthcare_in_Singapore

dragontamer 11y ago

> When you are insured and insurance is paying for everything patients don't care how much anything costs. (See Tragedy of the Commons). Obamacare is the free market answer. It encourages HDHP plans which forces the individuals to pay for those pills. Now that consumers are fronting the costs below $1300 or so, they really do care about huge pill costs like this now. Before, consumers may have not cared. But now, people do care and people will pay attention.

maxerickson 11y ago

A competitor has stated that they are going to make an equivalent available for $1: http://www.nbcnews.com/health/health-news/competitor-offer-1-pill-after-turing-price-hike-outrage-n449661 http://www.nbcnews.com/health/health-news/competitor-offer-1...

astazangasta 11y ago

The problem is not insurance. First of all insurance companies are not that good at shielding patients from costs; most people have deductibles and out of network expenses if they even have insurance at all. Second, even with insurance medical bankruptcy is rampant (the main cause of bankruptcy). Third, insurance companies have an obvious incentive to lower costs, it means they make more profit. They just don't have the power. This is something that changed in the 90s, when attempts at managed care tried to use insurance companies to push down costs. Hospitals responded by consolidating into local monopolies (provider networks) that insurance could not out bargain. The problem is simply that providers have too much power. Doctors regulate the supply of their profession; doctors in the US make 2X the oecd average. Pharma companies and medical get patent monopolies; drugs cost $300 billion a year above their generic price. Hospitals have local monopolies and patients don't know how to bargain for cheaper care; MRIs cost thousands of dollars. Insurance takes home a few paltry percent of every dollar spent on health care. The real takers are the health care providers, but we are all too busy shutting on insurers to notice.

deleted 11y ago
[deleted]
carbonatedmilk 11y ago
This isn't a story of drug company overreach, it's about how your government has driven the costs of compliance so high that it's not worth making a drug unless you can extract monopoly rent from it. The drug (pyrimethamine) has been in the public domain for more than 30 years, but in the US the government imposed costs mean that it wasn't (until now) worthwhile for another manufacturer to go through the process of US certification for such a low volume, low margin drug. You can buy pyrimethamine for $0.10 a tablet in most of the rest of the world, but that's not thanks to the power of socialised medicine. It's because of less onerous government regulation that means you can manufacture your drug for $0.10, comply with regulations and still turn a profit.
- astazangasta 11y ago
  This argument is hard to buy when pharma has been turning 20% profits in the US for decades, far and away above any industry. Boohoo, compliance is obviously so onerous for them, wah.

deleted 11y ago

[deleted]