6 ms·

The real issue here is not perks for physicians but the corrupt, inefficient, self-serving system that insurance companies and hospital bureaucrats have devised

The real issue here is not perks for physicians but the corrupt, inefficient, self-serving system that insurance companies and hospital bureaucrats have devised for the American public.

joelx 10y ago
Ever wonder why the cost of healthcare is so ridiculously expensive in this country? The American Medical Association (the AMA is the most powerful union in history) has pushed through laws to protect its members from competition, making it extraordinarily difficult to provide low cost healthcare. Basically, all entrepreneurs who don’t join the union are shut off the health care industry. This is why you pay so much money in insurance & for simple doctors visits. Do you think if a fresh entrepreneur opened a hospital you would pay $8,000 per day for a room? I very much doubt it.
- chimeracoder 10y ago
  > The American Medical Association (the AMA is the most powerful union in history) has pushed through laws to protect its members from competition, making it extraordinarily difficult to provide low cost healthcare This is a common misconception. I've posted about this many times before, but in short, it's the AAMC, not the AMA, that used to medical school spots. They are no longer the bottleneck anymore, however; the issue is that we don't have enough residency slots, and the funding for those comes through Medicare[0]. That said, this isn't really a driver of costs anyway, because providers themselves are responsible for only 10-15% of spending. > Basically, all entrepreneurs who don’t join the union are shut off the health care industry. This is why you pay so much money in insurance & for simple doctors visits. Do you think if a fresh entrepreneur opened a hospital you would pay $8,000 per day for a room? No, the reason that you pay so much is because of the convoluted way that Medicare reimbursements work (even if you're not on Medicare). In short, Medicare doesn't cover its own costs, so private insurers and uninsured patients are overcharged in order to cover the difference[1] [0] https://news.ycombinator.com/item?id=8122377 https://news.ycombinator.com/item?id=8122377 [1] https://news.ycombinator.com/item?id=10479398 https://news.ycombinator.com/item?id=10479398
  - msabalau 10y ago
    Oh, so there is free movement of foreign medical staff to the US, so that medical professionals have to compete on the same basis as a working class manufacturing employees?
    - carbocation 10y ago
      They have to get re-licensed according to US regulatory standards, which are burdensome for everyone (whether from the US or not), but sure, they can (and do) come practice here regularly. And, regardless, if physician pay went to 0, US healthcare costs would drop by only 10%.
      - maxerickson 10y ago
        Isn't it pretty highly likely that we need to do 20 or 25 different things that average dropping the price by 2%? If we consider them in isolation, shrug and say the cut won't fix the problem, we won't fix the problem.
        carbocation 10y ago
        This is true. I'm biased, of course, but to me the administrative costs are what's breaking the back of medicine. The roles of physicians and nurses are essential (I'm not saying that they can't eventually be automated, just that they have to be done). Those of administrators generally are not. But the growth in administration has been astounding: http://image.slidesharecdn.com/pnhplongsetweisbartversion-121221105916-phpapp01/95/pnhp-long-setweisbartversion-52-638.jpg?cb=1356087906 http://image.slidesharecdn.com/pnhplongsetweisbartversion-12... So, sure, we can cut physician salaries and nursing salaries (nursing pay collectively is about the same as physician pay). But I don't see a downside to trying to reduce the administrative burden as a means of cost reduction.
        maxerickson 10y ago
        FWIW, when I think about cutting physician pay, I think about incentivizing new supply, as it is likely the most effective way to do it and also probably the fairest. I definitely have lots of concerns about the mega institutions that are swallowing hospitals. It's hard to believe that they really do much to improve outcomes for patients (and it's pretty observable that they haven't done any good for prices).
- riahi 10y ago
  ...Calm down the conspiracy theories. The AMA only represents at BEST 15% of American physicians [1]. If you want ANYONE to blame, it's Medicare/Medicaid, Insurers, and Hospitals. CMS and Insurance regulations mean you cannot charge different prices to different people. Eg. I can't charge a poor person less and still bill the full Medicare allowable for other patients. I either charge the low rate for all or none. Insurers have similar language in their individual contracts. They even go so far as barring us from discussing our reimbursement rates / charge list to allow patients to comparison shop. The only real innovations in "price transparency" come when you reject Medicare patients. Surgery Center of Oklahoma [2] is a frequently cited example of a successful model of price transparency; however, they MUST explicitly opt out of Medicare billing else they are in violation of the law. I have considered opening a Radiology practice with an imaging center that offers flat rate charges for people to price shop, but a LOT of patients who require imaging are Medicare patients and I'm pretty sure they aren't going to fork over $1-2000 for their every 3 month head-to-toe restaging scans, especially when it's a PETCT. Perhaps if I marketed to young people and focused on MSK MRI I could pull it off, but the market of people who are looking to comparison shop for imaging prices is smaller than all the people who rant about healthcare think it is. 1. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3153537/ http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3153537/ 2. http://surgerycenterok.com http://surgerycenterok.com
  - spdustin 10y ago
    Can you help me understand, if charging differing rates to the insurers is verboten, why a "cash only" patient can often (and easily) receive a substantial discount off their medical bills just by asking for it? I'm not being adversarial, I honestly don't understand it, and would like to. It seems to me that the "cash" rate is what the "market will bear", which makes the hospital administration complicit in defrauding taxpayers and the general insured by overcharging for procedures and consumables when an insurer is the one receiving the bill. I suspect there's more to it, though, and I've never been able to figure out what it is.
    - gleb 10y ago
      I believe such self-pay discount is given "under the table." I.e. the provider is breaking Medicare rules, but expects not to get caught. Which is why you cannot get large providers to do this.
- carbocation 10y ago
  If physicians were the primary driver behind high healthcare costs, I would expect physician income to be a larger fraction of healthcare expenditure. Currently, physician pay represents about ~10% of US healthcare spending. This is dwarfed by administrative costs, which represent 25% of US healthcare spending. If the AMA/AAMC are to blame, then it seems likely to be implicitly: by keeping entrepreneurs out of the hospital administration game so they can't reduce inefficiency. But you don't have to be a physician to be a hospital administrator, so this doesn't make sense to me. Reducing physician salaries to 0 only reduces healthcare costs by <10%, and entrepreneurs can become hospital administrators without becoming physicians. So, I think that the ire directed at the AMA is misplaced, but I'd be interested to hear more (and I'm an obviously interested party, though I'm not an AMA member). The regulatory bodies are most likely what you have concerns about.
  - firebird84 10y ago
    Do you have a source for those percentages? I'm genuinely curious.
    - carbocation 10y ago
      There are a few sources, mostly behind paywalls. Here is one example (just a press release, however): http://www.jacksonhealthcare.com/media-room/news/md-salaries-as-percent-of-costs/ http://www.jacksonhealthcare.com/media-room/news/md-salaries...
  - joelx 10y ago
    Medical professionals are the highest paid profession in America - http://www.businessinsider.com/top-paying-jobs-in-america-2015-9 http://www.businessinsider.com/top-paying-jobs-in-america-20.... 16 of the 30 jobs and all of the top 5 on this list are in the medical profession. The high pay in these professions is simple economics: supply is tightly constricted through the number of residencies allowed. Those in the profession have a strong interest in continuing to restrict the number of people in their field and so they have trade organizations that do this. The line of defense they use is that consumers are too stupid to select a good healthcare provider without their intervention. I believe consumers would be very good at selecting the best provider, and would love to see all of the regulations dropped to open free competition into the marketplace.
chimeracoder 10y ago
> The real issue here is not perks for physicians but the corrupt, inefficient, self-serving system that insurance companies and hospital bureaucrats have devised for the American public. I agree with what you're saying, but if anyone's responsible for it, it's actually Congress, not the insurance companies and hospital bureaucrats. Private insurers and hospitals actually hate the status quo even more than you do, trust me. I've written about this in more detail on HN previously[0][1][2], and I'm on my phone, so forgive me if I just link to those instead of typing it out again. [0] https://news.ycombinator.com/item?id=8122377 https://news.ycombinator.com/item?id=8122377 [1] https://news.ycombinator.com/item?id=10479398 https://news.ycombinator.com/item?id=10479398 [2] https://news.ycombinator.com/item?id=12026273 https://news.ycombinator.com/item?id=12026273
- discardorama 10y ago
  > I agree with what you're saying, but if anyone's responsible for it, it's actually Congress And by Congress, it really means YOU, the (American citizen) reader, who keeps voting for the same crooks.
  - jjoonathan 10y ago
    Right, I'll just choose the non-crook option next time! A foolproof plan.
    - toomuchtodo 10y ago
      Getting involved in politics is hard, but necessary, if we want change.
- gleb 10y ago
  Do you know of a study that shows real cost breakdown of medical care by payer type, including these cross subsidies to Medicare? Somebody must have put this together.
  - slsii 10y ago

The real issue here is not perks for physicians but the corrupt, inefficient, self-serving system that insurance companies and hospital bureaucrats have devised for the American public.

joelx 10y ago

Ever wonder why the cost of healthcare is so ridiculously expensive in this country? The American Medical Association (the AMA is the most powerful union in history) has pushed through laws to protect its members from competition, making it extraordinarily difficult to provide low cost healthcare. Basically, all entrepreneurs who don’t join the union are shut off the health care industry. This is why you pay so much money in insurance & for simple doctors visits. Do you think if a fresh entrepreneur opened a hospital you would pay $8,000 per day for a room? I very much doubt it.

chimeracoder 10y ago
> The American Medical Association (the AMA is the most powerful union in history) has pushed through laws to protect its members from competition, making it extraordinarily difficult to provide low cost healthcare This is a common misconception. I've posted about this many times before, but in short, it's the AAMC, not the AMA, that used to medical school spots. They are no longer the bottleneck anymore, however; the issue is that we don't have enough residency slots, and the funding for those comes through Medicare[0]. That said, this isn't really a driver of costs anyway, because providers themselves are responsible for only 10-15% of spending. > Basically, all entrepreneurs who don’t join the union are shut off the health care industry. This is why you pay so much money in insurance & for simple doctors visits. Do you think if a fresh entrepreneur opened a hospital you would pay $8,000 per day for a room? No, the reason that you pay so much is because of the convoluted way that Medicare reimbursements work (even if you're not on Medicare). In short, Medicare doesn't cover its own costs, so private insurers and uninsured patients are overcharged in order to cover the difference[1] [0] https://news.ycombinator.com/item?id=8122377 https://news.ycombinator.com/item?id=8122377 [1] https://news.ycombinator.com/item?id=10479398 https://news.ycombinator.com/item?id=10479398
- msabalau 10y ago
  Oh, so there is free movement of foreign medical staff to the US, so that medical professionals have to compete on the same basis as a working class manufacturing employees?
  - carbocation 10y ago
    They have to get re-licensed according to US regulatory standards, which are burdensome for everyone (whether from the US or not), but sure, they can (and do) come practice here regularly. And, regardless, if physician pay went to 0, US healthcare costs would drop by only 10%.
    - maxerickson 10y ago
      Isn't it pretty highly likely that we need to do 20 or 25 different things that average dropping the price by 2%? If we consider them in isolation, shrug and say the cut won't fix the problem, we won't fix the problem.
      - carbocation 10y ago
        This is true. I'm biased, of course, but to me the administrative costs are what's breaking the back of medicine. The roles of physicians and nurses are essential (I'm not saying that they can't eventually be automated, just that they have to be done). Those of administrators generally are not. But the growth in administration has been astounding: http://image.slidesharecdn.com/pnhplongsetweisbartversion-121221105916-phpapp01/95/pnhp-long-setweisbartversion-52-638.jpg?cb=1356087906 http://image.slidesharecdn.com/pnhplongsetweisbartversion-12... So, sure, we can cut physician salaries and nursing salaries (nursing pay collectively is about the same as physician pay). But I don't see a downside to trying to reduce the administrative burden as a means of cost reduction.
        maxerickson 10y ago
        FWIW, when I think about cutting physician pay, I think about incentivizing new supply, as it is likely the most effective way to do it and also probably the fairest. I definitely have lots of concerns about the mega institutions that are swallowing hospitals. It's hard to believe that they really do much to improve outcomes for patients (and it's pretty observable that they haven't done any good for prices).
riahi 10y ago
...Calm down the conspiracy theories. The AMA only represents at BEST 15% of American physicians [1]. If you want ANYONE to blame, it's Medicare/Medicaid, Insurers, and Hospitals. CMS and Insurance regulations mean you cannot charge different prices to different people. Eg. I can't charge a poor person less and still bill the full Medicare allowable for other patients. I either charge the low rate for all or none. Insurers have similar language in their individual contracts. They even go so far as barring us from discussing our reimbursement rates / charge list to allow patients to comparison shop. The only real innovations in "price transparency" come when you reject Medicare patients. Surgery Center of Oklahoma [2] is a frequently cited example of a successful model of price transparency; however, they MUST explicitly opt out of Medicare billing else they are in violation of the law. I have considered opening a Radiology practice with an imaging center that offers flat rate charges for people to price shop, but a LOT of patients who require imaging are Medicare patients and I'm pretty sure they aren't going to fork over $1-2000 for their every 3 month head-to-toe restaging scans, especially when it's a PETCT. Perhaps if I marketed to young people and focused on MSK MRI I could pull it off, but the market of people who are looking to comparison shop for imaging prices is smaller than all the people who rant about healthcare think it is. 1. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3153537/ http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3153537/ 2. http://surgerycenterok.com http://surgerycenterok.com
- spdustin 10y ago
  Can you help me understand, if charging differing rates to the insurers is verboten, why a "cash only" patient can often (and easily) receive a substantial discount off their medical bills just by asking for it? I'm not being adversarial, I honestly don't understand it, and would like to. It seems to me that the "cash" rate is what the "market will bear", which makes the hospital administration complicit in defrauding taxpayers and the general insured by overcharging for procedures and consumables when an insurer is the one receiving the bill. I suspect there's more to it, though, and I've never been able to figure out what it is.
  - gleb 10y ago
    I believe such self-pay discount is given "under the table." I.e. the provider is breaking Medicare rules, but expects not to get caught. Which is why you cannot get large providers to do this.
carbocation 10y ago
If physicians were the primary driver behind high healthcare costs, I would expect physician income to be a larger fraction of healthcare expenditure. Currently, physician pay represents about ~10% of US healthcare spending. This is dwarfed by administrative costs, which represent 25% of US healthcare spending. If the AMA/AAMC are to blame, then it seems likely to be implicitly: by keeping entrepreneurs out of the hospital administration game so they can't reduce inefficiency. But you don't have to be a physician to be a hospital administrator, so this doesn't make sense to me. Reducing physician salaries to 0 only reduces healthcare costs by <10%, and entrepreneurs can become hospital administrators without becoming physicians. So, I think that the ire directed at the AMA is misplaced, but I'd be interested to hear more (and I'm an obviously interested party, though I'm not an AMA member). The regulatory bodies are most likely what you have concerns about.
- firebird84 10y ago
  Do you have a source for those percentages? I'm genuinely curious.
  - carbocation 10y ago
    There are a few sources, mostly behind paywalls. Here is one example (just a press release, however): http://www.jacksonhealthcare.com/media-room/news/md-salaries-as-percent-of-costs/ http://www.jacksonhealthcare.com/media-room/news/md-salaries...
- joelx 10y ago
  Medical professionals are the highest paid profession in America - http://www.businessinsider.com/top-paying-jobs-in-america-2015-9 http://www.businessinsider.com/top-paying-jobs-in-america-20.... 16 of the 30 jobs and all of the top 5 on this list are in the medical profession. The high pay in these professions is simple economics: supply is tightly constricted through the number of residencies allowed. Those in the profession have a strong interest in continuing to restrict the number of people in their field and so they have trade organizations that do this. The line of defense they use is that consumers are too stupid to select a good healthcare provider without their intervention. I believe consumers would be very good at selecting the best provider, and would love to see all of the regulations dropped to open free competition into the marketplace.

chimeracoder 10y ago

> The real issue here is not perks for physicians but the corrupt, inefficient, self-serving system that insurance companies and hospital bureaucrats have devised for the American public. I agree with what you're saying, but if anyone's responsible for it, it's actually Congress, not the insurance companies and hospital bureaucrats. Private insurers and hospitals actually hate the status quo even more than you do, trust me. I've written about this in more detail on HN previously[0][1][2], and I'm on my phone, so forgive me if I just link to those instead of typing it out again. [0] https://news.ycombinator.com/item?id=8122377 https://news.ycombinator.com/item?id=8122377 [1] https://news.ycombinator.com/item?id=10479398 https://news.ycombinator.com/item?id=10479398 [2] https://news.ycombinator.com/item?id=12026273 https://news.ycombinator.com/item?id=12026273

discardorama 10y ago
> I agree with what you're saying, but if anyone's responsible for it, it's actually Congress And by Congress, it really means YOU, the (American citizen) reader, who keeps voting for the same crooks.
- jjoonathan 10y ago
  Right, I'll just choose the non-crook option next time! A foolproof plan.
  - toomuchtodo 10y ago
    Getting involved in politics is hard, but necessary, if we want change.
gleb 10y ago
Do you know of a study that shows real cost breakdown of medical care by payer type, including these cross subsidies to Medicare? Somebody must have put this together.
- slsii 10y ago