5 ms·

And yet in countries with universal health care, the cost of health care in real total terms is much lower: https://en.wikipedia.org/wiki/List_of_countries_by_t

And yet in countries with universal health care, the cost of health care in real total terms is much lower: https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... Monopolies can dictate terms, which is why monopolistic companies are regulated. But if that monopoly is the state, then it actually works in the citizens favour if the monopoly presses down costs.

hueving 10y ago
So the question that comes up with this, if there is no free market like the US medical system, would it kill the incentive for biomedical startups and pharmaceutical research in general (which is largely based on the US now).
- vvvv 10y ago
  Is the R&D largely based in the US? Also, it's important to distinguish between true R&D aimed at developing actual cures and iterative R&D aimed at developing medicine that will get you hooked on long-term courses that maximise profits.
  - willvarfar 10y ago
    And R&D aimed at developing replacements for perfectly-fine drugs that are soon to go out of patent, or R&D that is put on a back burner until some other drug is about to go out of patent etc.
  - hueving 10y ago
    >Is the R&D largely based in the US? As far as I understand it, yes. http://www.xconomy.com/seattle/2014/09/02/which-countries-excel-in-creating-new-drugs-its-complicated/# http://www.xconomy.com/seattle/2014/09/02/which-countries-ex... As far as your claim about most drugs being a scam, I can't speak to that as I'm not familiar enough with the industry.
- snewk 10y ago
  I think its clear that the US medical system is specifically not a free market. It has become (and is continuing to become) increasingly subjected to regulatory capture.
  - AstralStorm 10y ago
    Corporate capture, not regulatory. Plain old corruption. Regulation just increases the barrier to enter for competition, which is beneficial to the status quo who can afford it.
    - hueving 10y ago
      >Regulation just increases the barrier to enter for competition, which is beneficial to the status quo who can afford it. Uh, that's precisely the point of regulatory capture. Ensure nobody else can compete but you.
- rogerdpack 10y ago
  My question is similar...is the US fitting most of the bill for R&D currently, since apparently we get ripped off for prescription drugs? (or are we getting ripped off? maybe it costs that much to develop the drugs dunno)
- tracker1 10y ago
  Just to clarify, the medical system in the US is far from a free market... the pharmaceutical industry itself is the opposite of a free market, inundated with incumbents and very strong patent protections without anything to force open generic production and licensing at a reasonable cost. Beyond the pharmaceuticals, is that the most expensive healthcare services are provided by hospitals that are mostly locked in by proximity.
- cmdrfred 10y ago
  GlaxoSmithKline spent 15 percent of revenue last year on R and D, 40 percent on marketing and sales. This is a myth. http://www.bizjournals.com/triangle/news/2016/07/19/where-gsk-ranks-in-r-d-spending-against-sales-and.html http://www.bizjournals.com/triangle/news/2016/07/19/where-gs...
winter_blue 10y ago
> monopoly presses down costs Yes, assuming the monopoly actually wants to keep its costs low. In the US, corporate-funded legislators made it so that Medicare is not allowed to negotiate drug prices. It willy-nilly pays whatever the private drug companies prices its drugs at.[1] This is why it's so profitable for companies to "purchase legislation". The return on investment is 10x or something insanely high, like in this case. Spend $10 million "donating" to the campaigns of a few unconscientious politicians, and soon you are milking an extra $100 million in profits from unwitting taxpayers. [1] http://healthaffairs.org/blog/2016/09/19/the-politics-of-medicare-and-drug-price-negotiation/ http://healthaffairs.org/blog/2016/09/19/the-politics-of-med...
- willvarfar 10y ago
  Bugs me to bits. I'm very glad I live in a much 'cleaner' country i.e. Sweden. Transparency could strip off lobbying. If we know who gets what money, and we know how people vote, a bit of clustering etc ought reveal patterns... What's needed is something gimmicky that gets popular appeal and covered on mainstream media for fifteen minute fame... E.g. an iphone app that you point at the live news on your TV and it OCRs the senator's name and queries opensecrets.org or something bigger and better and tells you how much money they got, from whom, and how this correlates with their voting record etc. Something that makes politicians accepting money very counterproductive.
  - tracker1 10y ago
    Don't underestimate the complacency of the public.. Most of this information (campaign funding information) is publicly available in the US as well... it's just that most of the population doesn't care... they're more worried about one of those damned (insert other party here) getting into office.
- gambiting 10y ago
  I'm from Poland, where we have 100% national healthcare, and it's literally illegal for people or companies to donate to politicians to do anything. Or fund their campaigns, or pay for their holidays, or whatever - politicians are straight up forbidden from taking money from companies/people no matter what reason. So basically, our healthcare system plays hardball with suppliers, basically saying that we can pay X, or we won't buy your product at all - because it simply can't afford to pay any more.
ThrustVectoring 10y ago
Monopsonies pressing down costs by exerting their sole-buyer power causes deadweight losses (compared to the free-market clearing price). Really the question is whether or not the redistribution from health care providers to the general population is worthwhile -- and if it is, you have to compare the monopsony against levying a specific tax to accomplish the same goal.
- AstralStorm 10y ago
  A specific tax that is pushed down to consumers? So that everyone actually pays more? Deadweight losses are a joke, if the sole buyer buys too much, they are at a loss. It just does not happen in this sector.
  - ThrustVectoring 10y ago
    Not too much, but too little. A monopsonist that buys at a lower price than where the market naturally clears will remove more producer surplus than the extra consumer surplus it extracts. In concrete terms, this means something like "the price of a doctors visit is low enough that a nearby clinic closes down. Even though you were happy to pay the higher price for the convenience, and they were happy to provide service at that price, we no longer get to have that experience."
colechristensen 10y ago
"Universal"-ness is just one dimension of health care costs. What about the malpractice liability environment in other countries, for example? What about the attitudes towards end-of-life medicine? What about medical tourism to America for advanced care? How much of the cost savings for universal health care is a result of saying no to procedures? Insisting that moving to a single-payer system is the only solution is very one-dimensional thinking. It can also be said that drug companies use Americans to make their profits and sell to other countries for the best they can get, we could well be paying for an unfair portion of the "real" cost and other countries are only doing better because we're paying the bill. --- I'll switch to talking about something entirely different to expand on the last point. You'll often see people arguing about how the US has the highest military budget, higher than the next N countries combined. The thing is, we're providing security for those next N countries, and the world as a whole. Many of those N countries are NATO allies who would have to spend a whole lot more if the US didn't. And also by making real war outside regional and civil conflicts impossible for the whole world with military dominance. In other words, in an American military spending blackout, the game would change and everyone else would be spending a whole lot more. We couldn't simply reduce our defense spending to something comparable without significant consequences.
- newjersey 10y ago
  > How much of the cost savings for universal health care is a result of saying no to procedures? My personal opinion is that we should absolutely say no to a lot of scenarios when it comes to single payer. That and we should absolutely stop providing care in the worst cases if there is a strong likelihood that the patient will not make it out alive. We spend way too much in the last six months of a patient's life holding on to every last bit of hope grasping to keep their heart beating. I've heard doctors express frustration about this as well. > In other words, in an American military spending blackout, the game would change and everyone else would be spending a whole lot more. We couldn't simply reduce our defense spending to something comparable without significant consequences. Consequences for us too. We have to keep spending to maintain the status quo. I mean I get that there are certain common goal costs that we contribute perhaps a little more than our tab but it isn't nice to point it out like this. At the end of the day, we aren't spending on our military prowess to be charitable. I'm not an expert so it is likely that some cost saving would be possible. I'd welcome efforts to do that. With medicine, I think a single payer should be able to negotiate with manufacturers and suppliers to keep costs low. We have to rethink end of life care for humans. I'm very willing to sign a medical release form that says pull the plugs if my treatment will cost over $10M regardless of who pays for it. But that's a different topic. This current issue with epippen is a simple issue of rent seeking. There is no way anyone could side with the company of this one. I hope that the spotlight means their efforts will fail. Are you suggesting we spend more than we can get away with hoping the slimeball companies will reinvest their profits into R&D?
lake99 10y ago
I don't think we can generalize from Wikipedia lists for complex issues when the lists contain very diverse countries. I have spent some time in Europe and in India. I have a couple of chronic conditions that requires daily medications. One of those conditions have generics available worldwide, the other one does not. My medication costed 5 times my montly European insurance premium in Europe. In India, insurance providers don't cover much beyond hospitalization and cancer. In India, the same non-generic medicine used to cost me about half of my European insurance cost, but I had to foot the bill myself. Now, there are generics of that available here, and I pay about one fifth of my European insurance premium for a month's worth of medication. I have to pay for doctors' visits off-pocket too, and the specialists I visit charge me about 3€ per visit. If I visit a local GP, they'd charge me about 1.5€ per visit. I pay for tests out-of-pocket too, but most of them cost in the range of single-euro-digit per test. Sorry about being vague, I don't want to give away too much about myself. Looking at per capita healthcare costs in India would be pointless, as the vast majority of people go without proper healthcare.
- richmarr 10y ago
  All well and good saying "you can't generalize" to dismiss criticism of US healthcare. Here's a generalisation for you: The US has lower life expectancy than most of the 'developed' world and yet spends twice as much (OECD 2007). See Meeker's USA Inc. slide 111 https://s3.amazonaws.com/kpcbweb/files/USA_Inc.pdf https://s3.amazonaws.com/kpcbweb/files/USA_Inc.pdf
  - lake99 10y ago
    No, the US healthcare is in serious trouble. My point was about a line of approach for the problem. In fact, India can give a few good pointers here, which you can see from how little I pay for my own, rather excellent, healthcare. Indian healthcare has its own can of worms, but since we are not talking about that, I won't open it.
titzer 10y ago
I think the problem is that the US healthcare system is a perfectly miscalibrated non-free market coupled with aggressive corporations pursuing unrealistic profit margins and hyper-growth, coupled with corporatism in government, coupled with a poorly design public system, employer-provided health insurance, and a general lack of information about real costs.
tracker1 10y ago
Unfortunately the "monopoly" in this case is as a result of our IP system.
rayiner 10y ago
What you're talking about is a monopsony and those are bad too. They undermine investment in a market because market participants can't get a normal ROI.
coredog64 10y ago
What you're missing is that those countries can (and do) use market mechanisms. I have direct experience with the French system, so I'll use that as an example. When you go to the doctor for an outpatient visit, you pay the whole bill right then and there. Your insurance company will then reimburse you for some significant percentage of the "reasonable and customary" cost of that visit. Do you need a shot as part of that visit? Guess what -- you have to go next door to the pharmacist and buy the dose. The doctor will then administer it. Inpatient is different (fully covered and no billing) and indigent patients are given a special card that directs the doctor to bill insurance directly. We could do that here in the US without universal health care and it would make a significant dent in our spend without a corresponding decrease in outcomes.

hueving 10y ago

So the question that comes up with this, if there is no free market like the US medical system, would it kill the incentive for biomedical startups and pharmaceutical research in general (which is largely based on the US now).

vvvv 10y ago
Is the R&D largely based in the US? Also, it's important to distinguish between true R&D aimed at developing actual cures and iterative R&D aimed at developing medicine that will get you hooked on long-term courses that maximise profits.
- willvarfar 10y ago
  And R&D aimed at developing replacements for perfectly-fine drugs that are soon to go out of patent, or R&D that is put on a back burner until some other drug is about to go out of patent etc.
- hueving 10y ago
  >Is the R&D largely based in the US? As far as I understand it, yes. http://www.xconomy.com/seattle/2014/09/02/which-countries-excel-in-creating-new-drugs-its-complicated/# http://www.xconomy.com/seattle/2014/09/02/which-countries-ex... As far as your claim about most drugs being a scam, I can't speak to that as I'm not familiar enough with the industry.
snewk 10y ago
I think its clear that the US medical system is specifically not a free market. It has become (and is continuing to become) increasingly subjected to regulatory capture.
- AstralStorm 10y ago
  Corporate capture, not regulatory. Plain old corruption. Regulation just increases the barrier to enter for competition, which is beneficial to the status quo who can afford it.
  - hueving 10y ago
    >Regulation just increases the barrier to enter for competition, which is beneficial to the status quo who can afford it. Uh, that's precisely the point of regulatory capture. Ensure nobody else can compete but you.
rogerdpack 10y ago
My question is similar...is the US fitting most of the bill for R&D currently, since apparently we get ripped off for prescription drugs? (or are we getting ripped off? maybe it costs that much to develop the drugs dunno)
tracker1 10y ago
Just to clarify, the medical system in the US is far from a free market... the pharmaceutical industry itself is the opposite of a free market, inundated with incumbents and very strong patent protections without anything to force open generic production and licensing at a reasonable cost. Beyond the pharmaceuticals, is that the most expensive healthcare services are provided by hospitals that are mostly locked in by proximity.
cmdrfred 10y ago
GlaxoSmithKline spent 15 percent of revenue last year on R and D, 40 percent on marketing and sales. This is a myth. http://www.bizjournals.com/triangle/news/2016/07/19/where-gsk-ranks-in-r-d-spending-against-sales-and.html http://www.bizjournals.com/triangle/news/2016/07/19/where-gs...

winter_blue 10y ago

> monopoly presses down costs Yes, assuming the monopoly actually wants to keep its costs low. In the US, corporate-funded legislators made it so that Medicare is not allowed to negotiate drug prices. It willy-nilly pays whatever the private drug companies prices its drugs at.[1] This is why it's so profitable for companies to "purchase legislation". The return on investment is 10x or something insanely high, like in this case. Spend $10 million "donating" to the campaigns of a few unconscientious politicians, and soon you are milking an extra $100 million in profits from unwitting taxpayers. [1] http://healthaffairs.org/blog/2016/09/19/the-politics-of-medicare-and-drug-price-negotiation/ http://healthaffairs.org/blog/2016/09/19/the-politics-of-med...

willvarfar 10y ago
Bugs me to bits. I'm very glad I live in a much 'cleaner' country i.e. Sweden. Transparency could strip off lobbying. If we know who gets what money, and we know how people vote, a bit of clustering etc ought reveal patterns... What's needed is something gimmicky that gets popular appeal and covered on mainstream media for fifteen minute fame... E.g. an iphone app that you point at the live news on your TV and it OCRs the senator's name and queries opensecrets.org or something bigger and better and tells you how much money they got, from whom, and how this correlates with their voting record etc. Something that makes politicians accepting money very counterproductive.
- tracker1 10y ago
  Don't underestimate the complacency of the public.. Most of this information (campaign funding information) is publicly available in the US as well... it's just that most of the population doesn't care... they're more worried about one of those damned (insert other party here) getting into office.
gambiting 10y ago
I'm from Poland, where we have 100% national healthcare, and it's literally illegal for people or companies to donate to politicians to do anything. Or fund their campaigns, or pay for their holidays, or whatever - politicians are straight up forbidden from taking money from companies/people no matter what reason. So basically, our healthcare system plays hardball with suppliers, basically saying that we can pay X, or we won't buy your product at all - because it simply can't afford to pay any more.

ThrustVectoring 10y ago

Monopsonies pressing down costs by exerting their sole-buyer power causes deadweight losses (compared to the free-market clearing price). Really the question is whether or not the redistribution from health care providers to the general population is worthwhile -- and if it is, you have to compare the monopsony against levying a specific tax to accomplish the same goal.

AstralStorm 10y ago
A specific tax that is pushed down to consumers? So that everyone actually pays more? Deadweight losses are a joke, if the sole buyer buys too much, they are at a loss. It just does not happen in this sector.
- ThrustVectoring 10y ago
  Not too much, but too little. A monopsonist that buys at a lower price than where the market naturally clears will remove more producer surplus than the extra consumer surplus it extracts. In concrete terms, this means something like "the price of a doctors visit is low enough that a nearby clinic closes down. Even though you were happy to pay the higher price for the convenience, and they were happy to provide service at that price, we no longer get to have that experience."

colechristensen 10y ago

"Universal"-ness is just one dimension of health care costs. What about the malpractice liability environment in other countries, for example? What about the attitudes towards end-of-life medicine? What about medical tourism to America for advanced care? How much of the cost savings for universal health care is a result of saying no to procedures? Insisting that moving to a single-payer system is the only solution is very one-dimensional thinking. It can also be said that drug companies use Americans to make their profits and sell to other countries for the best they can get, we could well be paying for an unfair portion of the "real" cost and other countries are only doing better because we're paying the bill. --- I'll switch to talking about something entirely different to expand on the last point. You'll often see people arguing about how the US has the highest military budget, higher than the next N countries combined. The thing is, we're providing security for those next N countries, and the world as a whole. Many of those N countries are NATO allies who would have to spend a whole lot more if the US didn't. And also by making real war outside regional and civil conflicts impossible for the whole world with military dominance. In other words, in an American military spending blackout, the game would change and everyone else would be spending a whole lot more. We couldn't simply reduce our defense spending to something comparable without significant consequences.

newjersey 10y ago
> How much of the cost savings for universal health care is a result of saying no to procedures? My personal opinion is that we should absolutely say no to a lot of scenarios when it comes to single payer. That and we should absolutely stop providing care in the worst cases if there is a strong likelihood that the patient will not make it out alive. We spend way too much in the last six months of a patient's life holding on to every last bit of hope grasping to keep their heart beating. I've heard doctors express frustration about this as well. > In other words, in an American military spending blackout, the game would change and everyone else would be spending a whole lot more. We couldn't simply reduce our defense spending to something comparable without significant consequences. Consequences for us too. We have to keep spending to maintain the status quo. I mean I get that there are certain common goal costs that we contribute perhaps a little more than our tab but it isn't nice to point it out like this. At the end of the day, we aren't spending on our military prowess to be charitable. I'm not an expert so it is likely that some cost saving would be possible. I'd welcome efforts to do that. With medicine, I think a single payer should be able to negotiate with manufacturers and suppliers to keep costs low. We have to rethink end of life care for humans. I'm very willing to sign a medical release form that says pull the plugs if my treatment will cost over $10M regardless of who pays for it. But that's a different topic. This current issue with epippen is a simple issue of rent seeking. There is no way anyone could side with the company of this one. I hope that the spotlight means their efforts will fail. Are you suggesting we spend more than we can get away with hoping the slimeball companies will reinvest their profits into R&D?

lake99 10y ago

I don't think we can generalize from Wikipedia lists for complex issues when the lists contain very diverse countries. I have spent some time in Europe and in India. I have a couple of chronic conditions that requires daily medications. One of those conditions have generics available worldwide, the other one does not. My medication costed 5 times my montly European insurance premium in Europe. In India, insurance providers don't cover much beyond hospitalization and cancer. In India, the same non-generic medicine used to cost me about half of my European insurance cost, but I had to foot the bill myself. Now, there are generics of that available here, and I pay about one fifth of my European insurance premium for a month's worth of medication. I have to pay for doctors' visits off-pocket too, and the specialists I visit charge me about 3€ per visit. If I visit a local GP, they'd charge me about 1.5€ per visit. I pay for tests out-of-pocket too, but most of them cost in the range of single-euro-digit per test. Sorry about being vague, I don't want to give away too much about myself. Looking at per capita healthcare costs in India would be pointless, as the vast majority of people go without proper healthcare.

richmarr 10y ago
All well and good saying "you can't generalize" to dismiss criticism of US healthcare. Here's a generalisation for you: The US has lower life expectancy than most of the 'developed' world and yet spends twice as much (OECD 2007). See Meeker's USA Inc. slide 111 https://s3.amazonaws.com/kpcbweb/files/USA_Inc.pdf https://s3.amazonaws.com/kpcbweb/files/USA_Inc.pdf
- lake99 10y ago
  No, the US healthcare is in serious trouble. My point was about a line of approach for the problem. In fact, India can give a few good pointers here, which you can see from how little I pay for my own, rather excellent, healthcare. Indian healthcare has its own can of worms, but since we are not talking about that, I won't open it.

titzer 10y ago

I think the problem is that the US healthcare system is a perfectly miscalibrated non-free market coupled with aggressive corporations pursuing unrealistic profit margins and hyper-growth, coupled with corporatism in government, coupled with a poorly design public system, employer-provided health insurance, and a general lack of information about real costs.

tracker1 10y ago

Unfortunately the "monopoly" in this case is as a result of our IP system.

rayiner 10y ago

What you're talking about is a monopsony and those are bad too. They undermine investment in a market because market participants can't get a normal ROI.

coredog64 10y ago

What you're missing is that those countries can (and do) use market mechanisms. I have direct experience with the French system, so I'll use that as an example. When you go to the doctor for an outpatient visit, you pay the whole bill right then and there. Your insurance company will then reimburse you for some significant percentage of the "reasonable and customary" cost of that visit. Do you need a shot as part of that visit? Guess what -- you have to go next door to the pharmacist and buy the dose. The doctor will then administer it. Inpatient is different (fully covered and no billing) and indigent patients are given a special card that directs the doctor to bill insurance directly. We could do that here in the US without universal health care and it would make a significant dent in our spend without a corresponding decrease in outcomes.