10 ms·

Why Medical Bills Are Killing Us (2013) [pdf]

71 points by ScottBurson 10y ago

ScottBurson 10y ago
I came across this last night and stayed up too late reading it. It's a fascinating exposé of where at least a good part of the money is going -- the extra money that we Americans spend on health care that doesn't bring us any better outcomes. I think it's relevant to HN because a lot of us with families and/or in middle age can't risk quitting our jobs to start startups without assurance that we'll be able to buy adequate health insurance at a price we can afford -- and every dollar counts in a startup. I know I've seen people post here that Obamacare was an enabling factor for them, and it's now obviously at risk. So the policy discussion about what it should be replaced with is very relevant to us. This piece, along with others I've read recently, suggests to me the following overview of the problem: () The market for health care services is highly distorted. Not only is there no price transparency, but patients don't even have the authority to make purchase decisions on their own behalf -- that's done for them by the doctors. To the extent patients have any say in the matter, they are unlikely to be in an emotional state conducive to hard-nosed negotiating, if there is any urgency to the matter at all. () Multiple special interest groups have gotten themselves politically entrenched. The service providers may be the most successful of these, but there are also the insurance companies and the malpractice lawyers. The amount of money flowing through the system supports armies of lobbyists, who have compromised legislators of both parties. () There are no easy solutions here, no free lunches. You can’t have all the good parts of an unregulated insurance market (freedom to buy what you want, when you want, with market pricing) without the bad parts (steadily rising premiums and insurance that is unaffordable for people who are old and sick). At the same time, you can’t have all the good parts of a socialized system (universal coverage at affordable prices) without freedom-reducing mandates and regulations and large doses of subsidies from some people to other people. [0] So, HNers, what's the solution? Would love to hear people's thoughts. Personally I can't resist fantasizing that Trump will come to the same conclusion I have: single payer is the only solution. It would be like Nixon going to China. Trump (whose election I vigorously opposed) is unencumbered by considerations of who donates how much to which Congressional campaigns. And for all his flaws, he's a hell of a salesman. If he gets it into his head that this is the solution, it could really happen. A pipe dream, I know. But would you like to see it? If not, what do you think would be better? [0] https://www.washingtonpost.com/news/wonk/wp/2016/11/12/donald-trump-is-beginning-to-face-a-rude-awakening-over-obamacare/ https://www.washingtonpost.com/news/wonk/wp/2016/11/12/donal...
- woofyman 10y ago
  I'm for single payer but it will never happen until Democrats get the White House and congress. Paul Ryan is planning on privatizing Medicare asap
  - ScottBurson 10y ago
    I don't know that Paul Ryan's opinion matters too much at this point. I also am not sure the Democrats could do single-payer even if they had the White House and Congress. They take plenty of money from the special interests too.
    - wernercd 10y ago
      The democrats couldn't do it when they had WH and Congress... they had to go with Plan B - "Obamacare". Personally, I believe that Plan B was written to fail. Government creates problems. How do you solve the problem? More government. Obamacare, imho, was created as the groundwork for single payer. I just don't think they expected it to fail so hard and so fast. I have no faith in single payer... for example, look at the VA. Months of wait times for those who need the help... while those at the top get lavish bonuses.
      - ubernostrum 10y ago
        Single payer works well in many places other than the US. People on private insurance plans in the US die or suffer while waiting for care their plans allegedly offer, while executives of those private insurance companies get "lavish bonuses".
        AznHisoka 10y ago
        the people who die, i assume are the ones that cant afford that care and need to knoww beforehand its going to be completely covered?
        10y ago
no_protocol 10y ago
Why did the patient in the first story absolutely need to travel from Ohio to Texas for treatment? Isn't medical knowledge shared between providers? Some of the blame in many of these situations should fall upon the patients for choosing the care they did. Especially when it is a planned operation. I haven't finished reading the whole article, but so far it doesn't seem to be considering this point. I don't wish to defend the existing system in any way, but these providers just seem to be giving people what they ask for.
- rch 10y ago
  I used to work at M.D. Anderson and I can attest to their quality of care. People travel from around the world to receive treatment, for good reason. Also, my mother was a patient there. She started treatment just a couple of months after I got my job actually. She's still doing well years later, and is glad she waited an extra month to get into M.D Anderson. The decision to wait was excruciating though.
  - caycep 10y ago
    But...Ohio has Cleveland Clinic, Case Western University Hospital, Ohio State Medical Center...it is not like it is a total medical backwater. Cynically, Cleveland Clinic has an InterContinental hotel inside the hospital for visiting dignitaries/medical tourists...
    - SOLAR_FIELDS 10y ago
      Definitely not - but in cases where healthcare is involved, especially cancer, people are motivated to travel to what is considered the best. In cancer's case, it's the big three: MD Anderson, Sloan-Kettering, or the Mayo Clinic.
      - bryan11 10y ago
        One more data point: Our pediatrician has always been great and keeps up with new treatments and such. When her husband was diagnosed with cancer, she said immediately they were leaving Iowa to get better cancer care. That said a lot.
peter303 10y ago
The examples in the article are before ACA. Both prices and insurance availability have changed since then.
- deleted 10y ago
  [deleted]
- theandrewbailey 10y ago
  No doubt, prices have gone up even more.
nradov 10y ago
These debates about insurance and payment models are important, but still ignore the biggest issue. US healthcare expenses increasingly go to treating conditions caused by poor lifestyle choices: obesity, substance abuse, and sedentary lifestyles. Certainly there are ways to cut waste and shift costs around more equitably but unless we can improve those root cause factors we're only going to be kicking the can down the road. At some point we just won't be able to provide effective care to everyone regardless of who's paying or how much providers cut prices. Even countries with socialized medicine are going to run into the same issue. Canada and the UK are only slightly better off in those lifestyle choice factors than the US, and their trends are moving in the wrong direction.
- paulcole 10y ago
  >US healthcare expenses increasingly go to treating conditions caused by poor lifestyle choices: obesity, substance abuse, and sedentary lifestyles. Nice rhetoric, but source?
- Zigurd 10y ago
  Victim blaming and false. End of life medical treatment (I wouldn't call it "care") is an enormously expensive and often ghoulish practice.
- orangecat 10y ago
  The root cause is aging. You can exercise religiously and never touch sugar, and at best that will result in racking up huge medical bills in your eighties rather than your sixties.
  - voxic11 10y ago
    Also if you die in your 80s you will have collected way more social security money then if you die in your 60s. I wouldn't be surprised if things like smoking which tend to kill you right before retirement age actually saves us money as a society.
- bryan11 10y ago
  Current insurance plans don't help much with preventative care. While a yearly 'physical' involving an 8 minute talk with a doctor is covered, insurance only pays 10% of lab work and a basic blood panel would cost me $900. Checking things like vitamin D levels aren't covered at all.
joggery 10y ago
Check out healthcare costs by age: http://blogs-images.forbes.com/danmunro/files/2014/04/hccostsbyage.png http://blogs-images.forbes.com/danmunro/files/2014/04/hccost... Hence the importance of research into life extension technology combined with provision of assisted suicide for those who wish to die.
- maxerickson 10y ago
  That's spending though right? Part of what the article is saying is that spending isn't a great proxy for cost.
mmel 10y ago
If anyone is interested, you can look up what single payer costs[1] are for various procedures in Australia, you can pay more than what is listed if you go private, but it still isn't anywhere near the cost of what procedures cost in the USA. [1] http://www.mbsonline.gov.au/internet/mbsonline/publishing.nsf/Content/45CBF3F97BA64FBDCA257FD5000E6666/$File/201607-MBS.pdf http://www.mbsonline.gov.au/internet/mbsonline/publishing.ns...
- james0001 10y ago
  Can you get a private MRI without a doctor's requisition in Australia? I know in Canada they try to burn you at the stake if you do that.
  - distances 10y ago
    Why would one get a private MRI without doctor's orders?
    - cardiffspaceman 10y ago
      Because you don't have claustrophobia and you're interested in what the MRI might show.
      - nomel 10y ago
        Why should curiosity be covered? A similar scenario involving car insurance, and curiosity of "what's inside", would surely be considered fraud.
        james0001 10y ago
        It doesn't need to be covered just don't try to restrict me from diagnosing my own health when doctors have shown their shit at diagnostics
WalterBright 10y ago
Here's an in-depth article explaining it: http://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/307617/ http://www.theatlantic.com/magazine/archive/2009/09/how-amer... tl,dr: it's because people who incur the costs are not the people who pay for it.
- ScottBurson 10y ago
  That's a thoughtful piece, with some interesting suggestions toward the end. Your "tl;dr" is not inaccurate, but I hope people will read the whole thing.
FussyZeus 10y ago
Speaking as an extremely pro-Capitalist person, this is the kind of area where Government interventions are required. Capitalism and fair markets require a few basic things: - Informed consumers (most consumers of healthcare either don't know enough about it to make any solid judgement) - Competition (most hospitals in any given area are grouped together and rarely compete, if at all) - Choice (if you're in an ambulance, you can't exactly instruct the EMTs to take you to 'the better hospital'), plus when it comes to niche treatments like chemo, there often aren't any choices, just the closest one to you that offers the service you need. And again as a Capitalist: You take a high value, required product, mix with a group of consumers who don't have a choice whether or not to buy, and a business minded person with no ethical compass whatsoever and you'll have record profits and screwed customers. Simple as that.
- yummyfajitas 10y ago
  As a person who consumes capitalist medicine in India, I don't see how any of your issues are fundamental to capitalist medicine. There is plenty of competition among hospitals. You can choose which one to go to (from an ambulance or any other time). Customers are strongly price sensitive and prone to comparison. There are plenty of choices as to where to go. Assuming I'm well enough to travel, I'll always fly to capitalist India to have my medical work done. And again as a Capitalist: You take a high value, required product, mix with a group of consumers who don't have a choice whether or not to buy, and a business minded person with no ethical compass whatsoever and you'll have record profits and screwed customers. Simple as that. So do you believe that Indian doctors/other medical types are just vastly more ethical than the (very often Indian) doctors in the US?
  - FussyZeus 10y ago
    I can't comment on India's medical system, never used it and never really researched it. However: > You can choose which one to go to (from an ambulance or any other time). In theory, yes, in practice, it's a little harder. I mean if you were just in a car crash it's not a guaranteed thing that you're going to be capable of speech, let alone coherent enough to make your choice. And more importantly you shouldn't have to, your concern at that moment should be "put my head back together please" not "is this lifesaving treatment going to cost me my home." > So do you believe that Indian doctors/other medical types are just vastly more ethical than the (very often Indian) doctors in the US? This is not American doctors doing this (or at least, not the topic of this article): This is American businessmen who have no background in medicine that are making these decisions.
ainiriand 10y ago
It is good to live in a country where I only spend 50 euro per month in taxes for all the care I could need! Its great to be in the first world!
- finid 10y ago
  What's the country?
  - awesomerobot 10y ago
    Most of Europe
    - Freak_NL 10y ago
      Monthly rates vary though. In the Netherlands you pay €90 or so a month for (mandatory) health insurance, with a €350 a year deductible. Low income households do get partly subsidized by the government of course.
      - _pr 10y ago
        The Netherlands spends ~$5200/pp on healthcare[1]. Where does the rest of the money come from? [1]: http://www.who.int/countries/nld/en/ http://www.who.int/countries/nld/en/
        Freak_NL 10y ago
        Taxes withheld from salary, just like ainiriand mentioned. In The Netherlands (and most other European countries) you pay for insurance directly (which here includes a mandatory basic plan that can be expanded to include things like full dental) and via taxation of income.
  - ainiriand 10y ago
    Spain. https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000 https://en.wikipedia.org/wiki/World_Health_Organization_rank...
Retric 10y ago
I think MRI's are a great example of the costs. An MRI machine used on average 10 times a day for 10 years can do 36,500 scans at the cost of ~3 million for the machine. 3,000,000 / 36500 ~= 82$ for the machines time. (Clearly more if it's used less often, but also clearly not 500+$.) This is a case where the actual cost has almost nothing to do with the machine it's all about manpower + some consumables. So, what's the manpower actually doing? A huge chunk of time in the US is simply billing aka waste.
- gbrs 10y ago
  Does that $3 million also include the expertise needed to operate and maintain the machine? You also need to account for the money the hospital needs to save to buy a new one when the one they have becomes outdated. Still might not add up to the actual cost they charge for a scan but it would look a bit more reasonable. My guess is the different negotiated rates for insurance plus the low income policies make everything convoluted and add a decent amount of overhead. I wish they would stop this negotiating crap and charge whatever it costs for them to do a scan. At least then I will know how much it will cost upfront.
  - maxerickson 10y ago
    It's perhaps more stark with the CT scanners mentioned in the article. They pay off the capital cost in 1 year. If you figure they need two imaging technicians on site 24 hours a day, the labor to staff the machine is roughly 6 * $200,000, or $1.2 million per year. If they average 1 scan per hour (a scan can take as little as 5 minutes), the labor cost of those techs is $140 per scan. If it costs more than $1 million dollars to service the machine per year (the machines cost less than that new), the service cost is $140 per scan. Hospitals routinely charge $2000+ for CT scans.
clifanatic 10y ago
That link was confusing - I was expecting some research from UTA (The University of Texas at Arlington), but apparently it's an article from Time magazine that a UTA professor published on his personal web site.

71 points by ScottBurson 10y ago

I came across this last night and stayed up too late reading it. It's a fascinating exposé of where at least a good part of the money is going -- the extra money that we Americans spend on health care that doesn't bring us any better outcomes. I think it's relevant to HN because a lot of us with families and/or in middle age can't risk quitting our jobs to start startups without assurance that we'll be able to buy adequate health insurance at a price we can afford -- and every dollar counts in a startup. I know I've seen people post here that Obamacare was an enabling factor for them, and it's now obviously at risk. So the policy discussion about what it should be replaced with is very relevant to us. This piece, along with others I've read recently, suggests to me the following overview of the problem: () The market for health care services is highly distorted. Not only is there no price transparency, but patients don't even have the authority to make purchase decisions on their own behalf -- that's done for them by the doctors. To the extent patients have any say in the matter, they are unlikely to be in an emotional state conducive to hard-nosed negotiating, if there is any urgency to the matter at all. () Multiple special interest groups have gotten themselves politically entrenched. The service providers may be the most successful of these, but there are also the insurance companies and the malpractice lawyers. The amount of money flowing through the system supports armies of lobbyists, who have compromised legislators of both parties. () There are no easy solutions here, no free lunches. You can’t have all the good parts of an unregulated insurance market (freedom to buy what you want, when you want, with market pricing) without the bad parts (steadily rising premiums and insurance that is unaffordable for people who are old and sick). At the same time, you can’t have all the good parts of a socialized system (universal coverage at affordable prices) without freedom-reducing mandates and regulations and large doses of subsidies from some people to other people. [0] So, HNers, what's the solution? Would love to hear people's thoughts. Personally I can't resist fantasizing that Trump will come to the same conclusion I have: single payer is the only solution. It would be like Nixon going to China. Trump (whose election I vigorously opposed) is unencumbered by considerations of who donates how much to which Congressional campaigns. And for all his flaws, he's a hell of a salesman. If he gets it into his head that this is the solution, it could really happen. A pipe dream, I know. But would you like to see it? If not, what do you think would be better? [0] https://www.washingtonpost.com/news/wonk/wp/2016/11/12/donald-trump-is-beginning-to-face-a-rude-awakening-over-obamacare/ https://www.washingtonpost.com/news/wonk/wp/2016/11/12/donal...

woofyman 10y ago
I'm for single payer but it will never happen until Democrats get the White House and congress. Paul Ryan is planning on privatizing Medicare asap
- ScottBurson 10y ago
  I don't know that Paul Ryan's opinion matters too much at this point. I also am not sure the Democrats could do single-payer even if they had the White House and Congress. They take plenty of money from the special interests too.
  - wernercd 10y ago
    The democrats couldn't do it when they had WH and Congress... they had to go with Plan B - "Obamacare". Personally, I believe that Plan B was written to fail. Government creates problems. How do you solve the problem? More government. Obamacare, imho, was created as the groundwork for single payer. I just don't think they expected it to fail so hard and so fast. I have no faith in single payer... for example, look at the VA. Months of wait times for those who need the help... while those at the top get lavish bonuses.
    - ubernostrum 10y ago
      Single payer works well in many places other than the US. People on private insurance plans in the US die or suffer while waiting for care their plans allegedly offer, while executives of those private insurance companies get "lavish bonuses".
      - AznHisoka 10y ago
        the people who die, i assume are the ones that cant afford that care and need to knoww beforehand its going to be completely covered?
        10y ago

no_protocol 10y ago

Why did the patient in the first story absolutely need to travel from Ohio to Texas for treatment? Isn't medical knowledge shared between providers? Some of the blame in many of these situations should fall upon the patients for choosing the care they did. Especially when it is a planned operation. I haven't finished reading the whole article, but so far it doesn't seem to be considering this point. I don't wish to defend the existing system in any way, but these providers just seem to be giving people what they ask for.

rch 10y ago
I used to work at M.D. Anderson and I can attest to their quality of care. People travel from around the world to receive treatment, for good reason. Also, my mother was a patient there. She started treatment just a couple of months after I got my job actually. She's still doing well years later, and is glad she waited an extra month to get into M.D Anderson. The decision to wait was excruciating though.
- caycep 10y ago
  But...Ohio has Cleveland Clinic, Case Western University Hospital, Ohio State Medical Center...it is not like it is a total medical backwater. Cynically, Cleveland Clinic has an InterContinental hotel inside the hospital for visiting dignitaries/medical tourists...
  - SOLAR_FIELDS 10y ago
    Definitely not - but in cases where healthcare is involved, especially cancer, people are motivated to travel to what is considered the best. In cancer's case, it's the big three: MD Anderson, Sloan-Kettering, or the Mayo Clinic.
    - bryan11 10y ago
      One more data point: Our pediatrician has always been great and keeps up with new treatments and such. When her husband was diagnosed with cancer, she said immediately they were leaving Iowa to get better cancer care. That said a lot.

peter303 10y ago

The examples in the article are before ACA. Both prices and insurance availability have changed since then.

deleted 10y ago
[deleted]
theandrewbailey 10y ago
No doubt, prices have gone up even more.

nradov 10y ago

These debates about insurance and payment models are important, but still ignore the biggest issue. US healthcare expenses increasingly go to treating conditions caused by poor lifestyle choices: obesity, substance abuse, and sedentary lifestyles. Certainly there are ways to cut waste and shift costs around more equitably but unless we can improve those root cause factors we're only going to be kicking the can down the road. At some point we just won't be able to provide effective care to everyone regardless of who's paying or how much providers cut prices. Even countries with socialized medicine are going to run into the same issue. Canada and the UK are only slightly better off in those lifestyle choice factors than the US, and their trends are moving in the wrong direction.

paulcole 10y ago
>US healthcare expenses increasingly go to treating conditions caused by poor lifestyle choices: obesity, substance abuse, and sedentary lifestyles. Nice rhetoric, but source?
Zigurd 10y ago
Victim blaming and false. End of life medical treatment (I wouldn't call it "care") is an enormously expensive and often ghoulish practice.
orangecat 10y ago
The root cause is aging. You can exercise religiously and never touch sugar, and at best that will result in racking up huge medical bills in your eighties rather than your sixties.
- voxic11 10y ago
  Also if you die in your 80s you will have collected way more social security money then if you die in your 60s. I wouldn't be surprised if things like smoking which tend to kill you right before retirement age actually saves us money as a society.
bryan11 10y ago
Current insurance plans don't help much with preventative care. While a yearly 'physical' involving an 8 minute talk with a doctor is covered, insurance only pays 10% of lab work and a basic blood panel would cost me $900. Checking things like vitamin D levels aren't covered at all.

joggery 10y ago

Check out healthcare costs by age: http://blogs-images.forbes.com/danmunro/files/2014/04/hccostsbyage.png http://blogs-images.forbes.com/danmunro/files/2014/04/hccost... Hence the importance of research into life extension technology combined with provision of assisted suicide for those who wish to die.

maxerickson 10y ago
That's spending though right? Part of what the article is saying is that spending isn't a great proxy for cost.

mmel 10y ago

If anyone is interested, you can look up what single payer costs[1] are for various procedures in Australia, you can pay more than what is listed if you go private, but it still isn't anywhere near the cost of what procedures cost in the USA. [1] http://www.mbsonline.gov.au/internet/mbsonline/publishing.nsf/Content/45CBF3F97BA64FBDCA257FD5000E6666/$File/201607-MBS.pdf http://www.mbsonline.gov.au/internet/mbsonline/publishing.ns...

james0001 10y ago
Can you get a private MRI without a doctor's requisition in Australia? I know in Canada they try to burn you at the stake if you do that.
- distances 10y ago
  Why would one get a private MRI without doctor's orders?
  - cardiffspaceman 10y ago
    Because you don't have claustrophobia and you're interested in what the MRI might show.
    - nomel 10y ago
      Why should curiosity be covered? A similar scenario involving car insurance, and curiosity of "what's inside", would surely be considered fraud.
      - james0001 10y ago
        It doesn't need to be covered just don't try to restrict me from diagnosing my own health when doctors have shown their shit at diagnostics

WalterBright 10y ago

Here's an in-depth article explaining it: http://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/307617/ http://www.theatlantic.com/magazine/archive/2009/09/how-amer... tl,dr: it's because people who incur the costs are not the people who pay for it.

ScottBurson 10y ago
That's a thoughtful piece, with some interesting suggestions toward the end. Your "tl;dr" is not inaccurate, but I hope people will read the whole thing.

FussyZeus 10y ago

Speaking as an extremely pro-Capitalist person, this is the kind of area where Government interventions are required. Capitalism and fair markets require a few basic things: - Informed consumers (most consumers of healthcare either don't know enough about it to make any solid judgement) - Competition (most hospitals in any given area are grouped together and rarely compete, if at all) - Choice (if you're in an ambulance, you can't exactly instruct the EMTs to take you to 'the better hospital'), plus when it comes to niche treatments like chemo, there often aren't any choices, just the closest one to you that offers the service you need. And again as a Capitalist: You take a high value, required product, mix with a group of consumers who don't have a choice whether or not to buy, and a business minded person with no ethical compass whatsoever and you'll have record profits and screwed customers. Simple as that.

yummyfajitas 10y ago
As a person who consumes capitalist medicine in India, I don't see how any of your issues are fundamental to capitalist medicine. There is plenty of competition among hospitals. You can choose which one to go to (from an ambulance or any other time). Customers are strongly price sensitive and prone to comparison. There are plenty of choices as to where to go. Assuming I'm well enough to travel, I'll always fly to capitalist India to have my medical work done. And again as a Capitalist: You take a high value, required product, mix with a group of consumers who don't have a choice whether or not to buy, and a business minded person with no ethical compass whatsoever and you'll have record profits and screwed customers. Simple as that. So do you believe that Indian doctors/other medical types are just vastly more ethical than the (very often Indian) doctors in the US?
- FussyZeus 10y ago
  I can't comment on India's medical system, never used it and never really researched it. However: > You can choose which one to go to (from an ambulance or any other time). In theory, yes, in practice, it's a little harder. I mean if you were just in a car crash it's not a guaranteed thing that you're going to be capable of speech, let alone coherent enough to make your choice. And more importantly you shouldn't have to, your concern at that moment should be "put my head back together please" not "is this lifesaving treatment going to cost me my home." > So do you believe that Indian doctors/other medical types are just vastly more ethical than the (very often Indian) doctors in the US? This is not American doctors doing this (or at least, not the topic of this article): This is American businessmen who have no background in medicine that are making these decisions.

ainiriand 10y ago

It is good to live in a country where I only spend 50 euro per month in taxes for all the care I could need! Its great to be in the first world!

finid 10y ago
What's the country?
- awesomerobot 10y ago
  Most of Europe
  - Freak_NL 10y ago
    Monthly rates vary though. In the Netherlands you pay €90 or so a month for (mandatory) health insurance, with a €350 a year deductible. Low income households do get partly subsidized by the government of course.
    - _pr 10y ago
      The Netherlands spends ~$5200/pp on healthcare[1]. Where does the rest of the money come from? [1]: http://www.who.int/countries/nld/en/ http://www.who.int/countries/nld/en/
      - Freak_NL 10y ago
        Taxes withheld from salary, just like ainiriand mentioned. In The Netherlands (and most other European countries) you pay for insurance directly (which here includes a mandatory basic plan that can be expanded to include things like full dental) and via taxation of income.
- ainiriand 10y ago
  Spain. https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000 https://en.wikipedia.org/wiki/World_Health_Organization_rank...

Retric 10y ago

I think MRI's are a great example of the costs. An MRI machine used on average 10 times a day for 10 years can do 36,500 scans at the cost of ~3 million for the machine. 3,000,000 / 36500 ~= 82$ for the machines time. (Clearly more if it's used less often, but also clearly not 500+$.) This is a case where the actual cost has almost nothing to do with the machine it's all about manpower + some consumables. So, what's the manpower actually doing? A huge chunk of time in the US is simply billing aka waste.

gbrs 10y ago
Does that $3 million also include the expertise needed to operate and maintain the machine? You also need to account for the money the hospital needs to save to buy a new one when the one they have becomes outdated. Still might not add up to the actual cost they charge for a scan but it would look a bit more reasonable. My guess is the different negotiated rates for insurance plus the low income policies make everything convoluted and add a decent amount of overhead. I wish they would stop this negotiating crap and charge whatever it costs for them to do a scan. At least then I will know how much it will cost upfront.
- maxerickson 10y ago
  It's perhaps more stark with the CT scanners mentioned in the article. They pay off the capital cost in 1 year. If you figure they need two imaging technicians on site 24 hours a day, the labor to staff the machine is roughly 6 * $200,000, or $1.2 million per year. If they average 1 scan per hour (a scan can take as little as 5 minutes), the labor cost of those techs is $140 per scan. If it costs more than $1 million dollars to service the machine per year (the machines cost less than that new), the service cost is $140 per scan. Hospitals routinely charge $2000+ for CT scans.

clifanatic 10y ago

That link was confusing - I was expecting some research from UTA (The University of Texas at Arlington), but apparently it's an article from Time magazine that a UTA professor published on his personal web site.