4 ms·

One of the things I do not understand is, the explanation given is that Obamacare fixes the donut hole where people who are not enrolled in company sponsored/me

One of the things I do not understand is, the explanation given is that Obamacare fixes the donut hole where people who are not enrolled in company sponsored/medicare could get insurance. This has just let the drug companies to raise the price without any backslash because the end user is "not" paying the price. However, the rising premiums and plans with high deductibles meant that the drugs are still not affordable even if you are covered by some insurance. What is the solution to this? Single-payer health care?

whatshisface 10y ago
If only insurance companies had some sort of pressure to reduce costs and prices. Some sort of... market.. pressure...
- mhurron 10y ago
  Because that's happened before? Or are you suggesting that the US system isn't laissez-faire enough?
- codegeek 10y ago
  They never have any reason to do that. Too much power. We need to get a system in place that gets rid of too much power away from the insurance companies, plain and simple. With the amount of money and lobbying they do, probably not likely in the near future unless the Congress grows some balls and do something real about healthcare and not just the usual talking points.
- ch4s3 10y ago
  How could that ever happen? Information asymmetry is as high as you could imagine. A doctor tells you to take x or you will die. X has a price set by Insurance Co. You have no medical training or pharmaceutical training, so how do you make a decision? If x is really required so that you don't die, demand is completely inelastic, you will literally pay anything you can afford, or you'll take out loans you can't afford. The only limiting factor on price would seem to be median income and credit availability.
- jandrese 10y ago
  They do in a way. By denying claims they can reduce demand for a specific drug or procedure and send a signal to the company that the price is too high. The slight complication is that people will die without their meds, but the market doesn't care about that. It's only concerned with money.
a_humean 10y ago
What literately every other country does: Old fashioned price controls. Government as a buyer or as a regulator puts a cap on the price through a process of negotiation, and be willing to say no when the price is too high and the benefits are too low. The UK's NICE body regularly rejects new products if they don't represent value. New cancer drug that extends life by two months but costs £10k per pill with a course of treatmeant costing £100k; no thanks. Its a market with inelastic demand - people will literately die if they don't buy the product. We, rightly, through regulation demand high quality assurance because if something is meant save someone from a quick death it better be reliable and not cause greater harm due to product defects. This means the entry barriers are quite high making competition difficult. Without price controls there is literately nothing but the CEO's conscience to keep from pushing the prices up. If the product will stop you from dying and nobody else can offer it, then there is basically no price you won't pay.
- anexprogrammer 10y ago
  There was a programme on R4 about NICE, drug companies and finance in health care a month or two back. I discovered two new (to me) things. First it's common for drug companies to tweak patent protected items suspiciously near end of patent - to find a new use, or reformulate a tablet as a capsule - to buy more patent period. Second in the case of off patent medicines, some are harder to make or not prescribed widely enough for the generic makers to bother with. These seem to be the things at risk of price gouging. There was an example of something off patent sold by Pfizer to another company who now charge 10x more, as there is no generic alternative. That's now at the competition authorities. So we mitigate a lot of this, but we apparently don't avoid it entirely. EDIT: Programme page with mp3: http://www.bbc.co.uk/programmes/b07j7j6m http://www.bbc.co.uk/programmes/b07j7j6m

whatshisface 10y ago

If only insurance companies had some sort of pressure to reduce costs and prices. Some sort of... market.. pressure...

mhurron 10y ago
Because that's happened before? Or are you suggesting that the US system isn't laissez-faire enough?
codegeek 10y ago
They never have any reason to do that. Too much power. We need to get a system in place that gets rid of too much power away from the insurance companies, plain and simple. With the amount of money and lobbying they do, probably not likely in the near future unless the Congress grows some balls and do something real about healthcare and not just the usual talking points.
ch4s3 10y ago
How could that ever happen? Information asymmetry is as high as you could imagine. A doctor tells you to take x or you will die. X has a price set by Insurance Co. You have no medical training or pharmaceutical training, so how do you make a decision? If x is really required so that you don't die, demand is completely inelastic, you will literally pay anything you can afford, or you'll take out loans you can't afford. The only limiting factor on price would seem to be median income and credit availability.
jandrese 10y ago
They do in a way. By denying claims they can reduce demand for a specific drug or procedure and send a signal to the company that the price is too high. The slight complication is that people will die without their meds, but the market doesn't care about that. It's only concerned with money.

a_humean 10y ago

What literately every other country does: Old fashioned price controls. Government as a buyer or as a regulator puts a cap on the price through a process of negotiation, and be willing to say no when the price is too high and the benefits are too low. The UK's NICE body regularly rejects new products if they don't represent value. New cancer drug that extends life by two months but costs £10k per pill with a course of treatmeant costing £100k; no thanks. Its a market with inelastic demand - people will literately die if they don't buy the product. We, rightly, through regulation demand high quality assurance because if something is meant save someone from a quick death it better be reliable and not cause greater harm due to product defects. This means the entry barriers are quite high making competition difficult. Without price controls there is literately nothing but the CEO's conscience to keep from pushing the prices up. If the product will stop you from dying and nobody else can offer it, then there is basically no price you won't pay.

anexprogrammer 10y ago
There was a programme on R4 about NICE, drug companies and finance in health care a month or two back. I discovered two new (to me) things. First it's common for drug companies to tweak patent protected items suspiciously near end of patent - to find a new use, or reformulate a tablet as a capsule - to buy more patent period. Second in the case of off patent medicines, some are harder to make or not prescribed widely enough for the generic makers to bother with. These seem to be the things at risk of price gouging. There was an example of something off patent sold by Pfizer to another company who now charge 10x more, as there is no generic alternative. That's now at the competition authorities. So we mitigate a lot of this, but we apparently don't avoid it entirely. EDIT: Programme page with mp3: http://www.bbc.co.uk/programmes/b07j7j6m http://www.bbc.co.uk/programmes/b07j7j6m