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Why is healthcare so expensive in the states? People seem to focus on private Heath insurance vs Obama care. But neither should be so expensive. Why are other c

by xupybd 10y ago

Why is healthcare so expensive in the states? People seem to focus on private Heath insurance vs Obama care. But neither should be so expensive. Why are other countries able to provide way cheaper care?

ozzy6009 10y ago
1. The USA has the best doctors and hospitals. The marginal benefit to having better doctors and hospitals is completely dwarfed by their higher prices. Would you be willing to pay 2x to have a 5% better chance of no complications on a surgery for a rare condition? Well the USA does exactly that. 2. The USA subsidizes drug development for the rest of the world. All the R&D happens here, and the only reason so much money is spent on this R&D is because the drug companies can charge maximum price to Americans. Other countries negotiate as a block to lower prices. This is great for those countries (cheaper drugs) and the drug companies (marginally expanded markets), but it increases the fraction of money from the US going to that R&D.
- iainmerrick 10y ago
  2 is a good point, but I don't think 1 is correct. I've heard that Cuba has the best doctors, and they often play a crucial role in emergency aid to other countries. For quality of health care overall, the US is just a solid middle ranker when it comes to life expectancy: https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy https://en.wikipedia.org/wiki/List_of_countries_by_life_expe... That's only one metric, of course, but it seems like an important one. It seems like the US pays about 3x more (see 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...) for moderately worse outcomes.
  - tropo 10y ago
    Cuba has people in a different climate, with a different culture, and different inherent susceptibility to disease. If we were to supply Cuba with bacon double cheeseburgers and unlimited soda refills, that life expectancy would not be so hot. Also, give them all desk jobs. Healthcare is better in the USA. We just like to do bad things to ourselves.
    - iainmerrick 10y ago
      Canada, then. They have a very similar culture, and I don't think anyone would call their climate substantially more hospitable. They spend half as much on healthcare and live three years longer. Their approach (publicly funded, free at the point of use) would seem to be much more effective than the US approach. I mentioned Cuba because I've heard many anecdotes about how skilled and well-trained their doctors are -- they don't have the money and resources for lots of modern drugs and equipment, so they invest in their workforce instead. I'm not saying Cuba is in great shape overall, just that I have heard they have excellent doctors. (I don't have data to back that up, though)
iainmerrick 10y ago
It seems to me that the system is just very inefficient. There's a huge amount of bureaucracy, and not a lot of serious competition between healthcare and insurance providers. It's hard to switch providers and the pricing structures are very confusing. Similar to broadband and mobile phone services, the free market hasn't been able to drive prices down as effectively as it theoretically should. I think it's because the incumbent providers have successfully lobbied for a network of regulations that protect their monopolies. What's actually needed is better regulations (a la net neutrality) to level the playing field. Or alternatively, just run it as a free public service like many other countries do. That approach works pretty well.
- talmand 10y ago
  It's a feedback loop that started because of government intervention in the free market and it continues simply because of government intervention in the free market. There are many examples of this, such as your broadband and mobile phone markets, and university tuition loans.
  - iainmerrick 10y ago
    Well, hang on now, wouldn't you agree that the free market has sometimes left us stuck with cartels and monopolies? (In the US, look at the railroads and telephone network.) Sometimes you need regulations to break out of those traps.
    - jessaustin 10y ago
      The telephone network hasn't had anything to do with a free market since 1934 at the latest. The Justice Department chose a monopolist winner in 1913. The USA freight rail system exhibited some monopoly through the 1880s, but since has been quite regulated. Perhaps the current level of regulation may not be ideal, but since the USA freight rail system is the best in the world it would seem foolish to tamper with it.
      - iainmerrick 10y ago
gozur88 10y ago
In a lot of countries people find it perfectly reasonable for the doctor to say something like "Your father is old, and we can operate to remove his tumor, but he's not going to live much longer no matter what we do. We don't have unlimited resources so we're not going to operate." People in the US aren't use to making those kinds of tradeoffs, which is why we spend half of our medical dollars on the last year of people's lives. We might decide not to operate, but financial considerations won't enter into the decision. That's why I will be surprised if anything the government does short of rationing care will affect the cost of medicine in the US. It's about expectations.

by xupybd 10y ago

ozzy6009 10y ago

1. The USA has the best doctors and hospitals. The marginal benefit to having better doctors and hospitals is completely dwarfed by their higher prices. Would you be willing to pay 2x to have a 5% better chance of no complications on a surgery for a rare condition? Well the USA does exactly that. 2. The USA subsidizes drug development for the rest of the world. All the R&D happens here, and the only reason so much money is spent on this R&D is because the drug companies can charge maximum price to Americans. Other countries negotiate as a block to lower prices. This is great for those countries (cheaper drugs) and the drug companies (marginally expanded markets), but it increases the fraction of money from the US going to that R&D.

iainmerrick 10y ago
2 is a good point, but I don't think 1 is correct. I've heard that Cuba has the best doctors, and they often play a crucial role in emergency aid to other countries. For quality of health care overall, the US is just a solid middle ranker when it comes to life expectancy: https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy https://en.wikipedia.org/wiki/List_of_countries_by_life_expe... That's only one metric, of course, but it seems like an important one. It seems like the US pays about 3x more (see 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...) for moderately worse outcomes.
- tropo 10y ago
  Cuba has people in a different climate, with a different culture, and different inherent susceptibility to disease. If we were to supply Cuba with bacon double cheeseburgers and unlimited soda refills, that life expectancy would not be so hot. Also, give them all desk jobs. Healthcare is better in the USA. We just like to do bad things to ourselves.
  - iainmerrick 10y ago
    Canada, then. They have a very similar culture, and I don't think anyone would call their climate substantially more hospitable. They spend half as much on healthcare and live three years longer. Their approach (publicly funded, free at the point of use) would seem to be much more effective than the US approach. I mentioned Cuba because I've heard many anecdotes about how skilled and well-trained their doctors are -- they don't have the money and resources for lots of modern drugs and equipment, so they invest in their workforce instead. I'm not saying Cuba is in great shape overall, just that I have heard they have excellent doctors. (I don't have data to back that up, though)

iainmerrick 10y ago

It seems to me that the system is just very inefficient. There's a huge amount of bureaucracy, and not a lot of serious competition between healthcare and insurance providers. It's hard to switch providers and the pricing structures are very confusing. Similar to broadband and mobile phone services, the free market hasn't been able to drive prices down as effectively as it theoretically should. I think it's because the incumbent providers have successfully lobbied for a network of regulations that protect their monopolies. What's actually needed is better regulations (a la net neutrality) to level the playing field. Or alternatively, just run it as a free public service like many other countries do. That approach works pretty well.

talmand 10y ago
It's a feedback loop that started because of government intervention in the free market and it continues simply because of government intervention in the free market. There are many examples of this, such as your broadband and mobile phone markets, and university tuition loans.
- iainmerrick 10y ago
  Well, hang on now, wouldn't you agree that the free market has sometimes left us stuck with cartels and monopolies? (In the US, look at the railroads and telephone network.) Sometimes you need regulations to break out of those traps.
  - jessaustin 10y ago
    The telephone network hasn't had anything to do with a free market since 1934 at the latest. The Justice Department chose a monopolist winner in 1913. The USA freight rail system exhibited some monopoly through the 1880s, but since has been quite regulated. Perhaps the current level of regulation may not be ideal, but since the USA freight rail system is the best in the world it would seem foolish to tamper with it.
    - iainmerrick 10y ago

gozur88 10y ago

In a lot of countries people find it perfectly reasonable for the doctor to say something like "Your father is old, and we can operate to remove his tumor, but he's not going to live much longer no matter what we do. We don't have unlimited resources so we're not going to operate." People in the US aren't use to making those kinds of tradeoffs, which is why we spend half of our medical dollars on the last year of people's lives. We might decide not to operate, but financial considerations won't enter into the decision. That's why I will be surprised if anything the government does short of rationing care will affect the cost of medicine in the US. It's about expectations.