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(Full-time co-founder of a healthcare startup here): W/r/t the US specifically: it seems there is no shortage of inefficiencies and obvious solutions to the ine

(Full-time co-founder of a healthcare startup here): W/r/t the US specifically: it seems there is no shortage of inefficiencies and obvious solutions to the inefficiencies in the US healthcare system. To me, the real problem seems to be a system that has almost diabolically evolved to create competing interests that deadlock all sides into a sub-optimal solution. Specifically-- patients, payers, physicians, pharma, facilities and insurers almost all have indirect but competing interests much like the Dining Philosopher's problem we're familiar with in Computer Science. I'm not sure what the solution is short of a total swamp draining, but our startup went overseas to develop/trial our product in a country with a single payer system. Not perfect, but much more amenable to finding efficiencies.

maxerickson 10y ago
I bet making structural changes so that cost of care is more visible to patients would help a lot in the US. Of course this means disincentivizing health care as a benefit rather than incentivizing it, so it will never happen. It is kind of happening with things like HSAs, but not really. We should also work on removing arbitrary barriers to entering the supply side of the market. Not just for individuals that want to be a doctor or other sort of provider, but certificates of need and such too. Currently, lots of states dictate who can operate a CT scanner.
- TuringNYC 10y ago
  I agree, opacity is a big part of the problem. I'm super-excited about Castlight Health (http://www.castlighthealth.com/ http://www.castlighthealth.com/) and how they approach the problem (by presenting cost/value scatters and other ways)...but...how obscene is it that we as a country should even need such a service!?
  - huangwei_chang 10y ago
    Good point. I am a bit sad that Castlight seems to be struggling and the stock price is pretty low. I thought it had a good mission and solution.
  - softawre 10y ago
    My company uses CastLight and it is pretty great. It has been fairly accurate (+/- 10%) the few times I have used it.
- chicagobob 10y ago
  Only partially. Often at the time of consumption cost isn't something one can use to make decisions. But for those other times, sure it would help. Speaking of lack of info about pricing you might find this interesting: https://www.statnews.com/2017/02/06/health-insurance-high-deductible-experiment/ https://www.statnews.com/2017/02/06/health-insurance-high-de...
  - triangleman 10y ago
    Great article. It's not just about pricing info, it's about the nationwide move to HDHP's and HSA's. Personally I'm pretty happy with my HSA, because now the list of things I can spend my healthcare dollar on is much longer: https://www.irs.gov/pub/irs-pdf/p502.pdf https://www.irs.gov/pub/irs-pdf/p502.pdf Lots of those things would not be covered by a traditional health insurance plan. But of course, it means we have chosen to forego health care and services in some cases, like the author of the article above. In one case we turned down an ambulance and drove ourselves to the hospital, which saved some money.
    - HarryHirsch 10y ago
      we have chosen to forego health care and services in some cases Only in America do you choose to forgo healthcare when you are at a conference and caught food poisoning because you aren't really sure if the hospital will take your health insurance. Where do I apply for my medal for saving the system some money?
    - mgkimsal 10y ago
      "because now the list of things I can spend my healthcare dollar on is much longer:" Longer than what? 8 years ago, I could use HSA funds to pay for over the counter medications. Not anymore, and OTC is generally the first step before visiting a dr or clinic, but OTC is not HSA-usable.
- MR4D 10y ago
  This, times 1,000 !! Imagine you go in for an oil change. You ask how much it costs, and find out it's $20. Great. You get the oil change. One month later you get a bill for "environmental disposal" for $35. The next month you get another bill for "Safety specialist" for $15. This is how healthcare works in the US. If retail worked like this, we'd be in a worldwide depression in about 6 months. Lunacy.
  - cmollis 10y ago
    yes.. another 1K. I blame doctors and insurance companies (but mostly the latter.. the former was taken for a ride long ago by the latter). An example of just how ridiculous this is: my son (who is almost 15), was recommended to have a 'pediatric echocardiogram'. The children's hospital that I took him to (a Tier 2 facility in insurance parlance.. which roughly means that my insurance company doesn't own them) indicated that this procedure MIGHT cost up to $5000. So, I asked my insurance company (which I pay 1000 per month to for my three kids and I, in a addition to a 3500 per year deductible), what Tier 1 facility in NJ I could go to, and how much the procedure would cost. They did not know of a facility where this procedure could be done at first. They had to 'research it'. They found a facility, but when I called, they could not perform the procedure because it called for a 'pediatric echo', which they were NOT allowed to do (mind you, it's like the same echocardiogram that you and I would receive). When I presented this information to my insurance company, they had to again, research it. I ignored it, and found it on my own after calling the heart group at one of the teaching hospitals in my state (NJ). So, I asked my insurance company how much it would cost, they refused to tell me. They indicated that they do not dictate pricing; this is the job of the provider. I noted to them that I did not believe them because I knew that they have contracted rates with all of their Tier1 and Tier 2 facilities and they knew exactly what they would reimburse for. They flatly denied that they had any knowledge of pricing and that this was the responsibility of the provider. My response was a question: so, if the provider charged you 1 MILLION DOLLARS for this procedure, you would, in fact, pay it. They indicated that they did not have any pricing knowledge whatsoever. I ended up getting a second opinion and found out the echo wasn't necessary based on follow up findings. It was one of the most frustrating examples of federally mandated RIPOFF I had ever seen. My son's health was at stake, and they simply wouldn't help me. The doctor's are literally at their mercy because they control the money and EVERYONE lets it fucking slide. It's a crime.
- chimeracoder 10y ago
  > I bet making structural changes so that cost of care is more visible to patients would help a lot in the US. It would, but it would be politically infeasible. Medicare would never let it happen, because providing price transparency in the private market would undermine the convoluted system that allows them to use private insurers to subsidize the care of Medicare patients.
  - triangleman 10y ago
    Explain how. I thought Medicare was rife with fraud and overbilling, so that they end up subsidizing private payers.
    - maxerickson 10y ago
      Medicare is about 1/6 of US healthcare spending so it obviously isn't subsidizing private payers, even if you make a ridiculous assumption like 100% of payments are fraudulent. And then in reality fraud rates seem to be quite low, at most a few percentage points of overall Medicare spending.
      - triangleman 10y ago
        What I meant by fraud, was not cases of outright fraud where someone bills Medicare for services never performed, although I'm sure that happens all the time. I meant cases like the late night commercials "call now and get a free motor scooter! Just fill out a simple form and we will bill Medicare." And more relevant are the cases where hospitals bill medicare huge amounts for long patient stays. Medicare always pays what they are billed, after all it's the government paying, they just write a check. Meanwhile if you bill an insurance company they will negotiate, argue, refuse to pay, deny coverage, etc. If you bill an uninsured person they can also just decide not to pay in favor of paying more important bills like food and shelter. So, the hospital is actually fine with this, they simply write off the unpaid amount on their taxes as a charitable expense, and increase rates, which Medicare will pay. So, as you can see, Medicare (plus tax breaks) create a situation where the government subsidizes and distorts everyone else's health care costs.
- HarryHirsch 10y ago
  cost of care is more visible to patients In the US you get to see the cost of care every time you have reason to see the physician - there's the copay for the physician visit and medications, and then there's the explanation of benefits, where you, as a patient, get to reconcile accounts. In NIH Britain OTOH, you get to see nothing of that sort (except a small copay for medication), and healthcare costs are better contained. It's the US that is the outlier, and shifting even more burden on the patient won't fix matters, it hasn't fixed matters in the past.
  - maxerickson 10y ago
    People with employer provided insurance don't have much reason to figure out how much their employer is kicking in for the insurance and if they have a modest deductible they also won't care a great deal about the EOB. I do agree that a single payer system that mandated prices would also likely result in lower prices, but I think that is less likely for the US than incremental changes to our current system.
  - CaptSpify 10y ago
    > In the US you get to see the cost of care every time you have reason to see the physician I feel it's important to point out that you see the cost in the bill. There's no reliable way to see the cost beforehand.
    - HarryHirsch 10y ago
      What's seeing the expenses going to do, what mechanism is supposed to lower cost? When you need healthcare you need healthcare. No one goes to the physician for fun, elective procedures like breast enlargement or Lasik excepted.
      - DanBC 10y ago
        The free market argument goes that informed consumers will chose healthcare services, and thus will either drive up quality, or drive down prices. The problem is that the customers cannot see the prices, and thus can't negotiate before hand. This isn't just for emergency care, but for stuff that shouldn't be too hard to get pricing for. There's a nice Vice(?) video about a couple having a baby. They find it impossible to get even an indication of cost before hand. This patient choice stuff made its way to England, and frankly it's dumb. People don't change their utility suppliers even though they'd save large amounts of cash. They don't change their GP unless they've moved house; they don't have enough information to make an informed choice of hospital if they need to go for surgery. It's a lot of bureaucracy that has very little benefit.
- jartelt 10y ago
  Maybe it would help, or maybe it would do the opposite. Having an HSA and seeing prices upfront can also make one not go to doctor because they do not want to drain their HSA. This can cause people to skip preventative care steps and to not nip potential problems in the bud before they get bad (and expensive). A lot of diseases/conditions are much cheaper to cure/fix if you catch them early, so maybe you don't want to incentivize people to stay away from the doctor.
  - PKop 10y ago
    And if more and more people were not going to the doctor, the providers would lower the price (to some degree no?)
    - Sanddancer 10y ago
      Or they raise their prices to get money out of a smaller pool of subscribers. Medical care has a pretty inelastic demand curve.
- DanBC 10y ago
  > but certificates of need But they came about to protect the consumer from high prices. If I own a hospital and buy a $300,000 MRI machine I need to make that money back over the 10 year life of the machine. I charge one price if it's used by 10 people a day; I need to charge double if it's only used by 5 people a day. The extra supply reduces demand and thus increases prices to the customer. And it's unethical to just scan more and more people, because of the problems of overtesting and overdiagnosis. EDIT: Citation that CONs came about to reduce prices: http://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx http://www.ncsl.org/research/health/con-certificate-of-need-... > The basic assumption underlying CON regulation is that excess capacity stemming from overbuilding of health care facilities results in health care price inflation. Price inflation can occur when a hospital cannot fill its beds and fixed costs must be met through higher charges for the beds that are used. Bigger institutions generally have bigger costs, so CON supporters say it makes sense to limit facilities to building only enough capacity to meet actual need or demand.
  - maxerickson 10y ago
    Sure, in theory. In practice it just means that hospitals that do not have local competition use them as a revenue center (MRIs in the US often cost $1000-$2000...paying off your 10 year machine in a few months with 5 patients a day). The US Federal government tried them in the 1980s and quickly decided they were counterproductive.
  - arohner 10y ago
    You are literally creating a monopoly (one hospital) to justify that will produce lower prices. Please give me one other example in an unregulated market where your MRI machine example makes sense. It sounds good on paper, but that doesn't happen in any other market in the western world. If there are two competing gas stations, prices get cheaper. Two competing airlines, prices get cheaper.
    - DanBC 10y ago
      I don't agree with it! I'm literally quoting the Americans who support certificate of need laws.
will_pseudonym 10y ago
Don't forget farm subsidies dumping cheap corn syrup into the bellies of our entire populace. Health care in the USA must deal with the reality of our obese and overweight masses (no pun intended). Mental health in this country is similarly crippled by rapid societal changes, but that would take longer to explain in detail.
- cma 10y ago
  I thought subsidies for corn-based ethanol and tariffs on sugar (lowering sweetener supply) made corn syrup more expensive.
  - ihaveajob 10y ago
    Subsidies for corn have been in place, depressing prices (relative to high-tariff sugar) long enough, that food manufacturers have incorporated corn products into almost everything you can buy at the supermarket. Once the supply chain is in place, even if corn prices rise marginally, it's going to take a large effort to eliminate it from the typical American diet.
  - will_pseudonym 10y ago
    * Tariffs on sugar increase demand for corn. * Subsidies for ethanol increases the cost of all food, including corn. * Subsidies for corn for lots of other things[0][1] decrease the direct price of corn to consumers and food manufacturers. As a single data point, I come from Kansas, from a family of farmers. It used to be known as the "Breadbasket of America" because of all the wheat that they grew. Its number one crop is now corn[2]. [0] https://farm.ewg.org/progdetail.php?fips=00000&progcode=corn https://farm.ewg.org/progdetail.php?fips=00000&progcode=corn [1] https://en.wikipedia.org/wiki/Agricultural_subsidy#United_States https://en.wikipedia.org/wiki/Agricultural_subsidy#United_St... [2] https://www.nass.usda.gov/Statistics_by_State/Kansas/Publications/Crops/Production/2011/cropaug.pdf https://www.nass.usda.gov/Statistics_by_State/Kansas/Publica...
    - cma 10y ago
      That chart shows around 7 billion for corn. The text later says: > US corn ethanol subsidies are between $5.5 billion and $7.3 billion per year. Doesn't that mean most non-ethanol uses of corn aren't really subsidized too much? It does also list: "Feed grains, mostly corn 2,841" (million) Am I right that that is just $9 subsidy per citizen, and lots of it is going to feed farm animals? The numbers are all from different years so there could have been some major changes.
warcher 10y ago
In the united states we can't successfully implement negotiation on drug prices for MediCare. They literally can't negotiate with their suppliers. By law. Anybody thinking software is going to solve that is way in a bubble. 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...
- warcher 10y ago
  I just realized that my last two posts are poo-pooing Silicon Valley's recent unwillingness to stay in its lane. I'm not trying to be negative here, it's just... man, it's a big old world and software isn't eating everything. I like a nice website as much as anybody. I think YC has done real well with their websites. If they wanna move fast and break things, I'm gonna wish them godspeed. I still think they're crazy, but that's the point, right?
- chimeracoder 10y ago
  > In the united states we can't successfully implement negotiation on drug prices for MediCare. They literally can't negotiate with their suppliers. By law. On the flip side, Medicare sets reimbursement rates for services essentially by fiat[0], which can be below the marginal costs of providing service. Most providers cannot legally refuse to treat Medicare patients, so they are forced to accept the rates that Medicare sets (they have no ability to properly negotiate). Medicaid is a whole different system, but in this aspect, it also works the same way. This turns into a system in which privately insured patients subsidize Medicare patients through their premiums[1] (separately from their tax money, which also goes towards Medicare)[2]. Medicare has no incentive to change this, because it allows them to increase their (effective) operating budget without requiring Congressional approval. The reason Medicare drug price negotiation was blocked is that people (both pharmaceutical companies and policymakers) were afraid that it would turn out just like Medicare's "negotiated" rates for inpatient and outpatient services. [0] And private insurers are legally prohibited from reimbursing less than Medicare does [1] And uninsured patients receive the same (inflated) bills that private insurers receive. (Whether or not they actually pay their bills is a separate matter). [2] If you've ever wondered why the sticker prices for inpatient services seem so high, this is the underlying reason. Privately insured patients and uninsured patients aren't just paying for their own care (and for the care of others in the same risk pool). They also have to cover the amount of money that providers lose on Medicare and Medicaid patients.
MR4D 10y ago
I agree wholeheartedly. One thing that bugs me is how limited my choices are. I believe that over-regulation drives that. Getting an x-ray for my dog is much, much cheaper than me getting one, which is just one example of an unregulated market (relatively, obviously there are licensing & safety standards) Seems that this would be a shot. If it doesn't work, lets try something different. I'm not wedded to any solution, but I think we probably agree that healthcare is mostly broken in the US (and was even before Obamacare). Final note - I don't distinguish between healthcare & insurance for sake of simplicity in this post.
- bluGill 10y ago
  Be careful about this though. We generally place a higher value on human life than on a dogs life. If the x-ray used on your dog sometimes kills a dog it is not the disaster that it would be if a human was killed. Thus we spend a lot more on quality control for medical devices for humans. You might not agree, but that is how society see it.
wwweston 10y ago
> patients, payers, physicians, pharma, facilities and insurers but competing interests I think this is made harder to see by a certain stripe of market fundamentalism that almost blends into the background for many people at this point. At this level of analysis, it's assumed that every transaction is cooperative in nature and competing interests are correctly balanced if not aligned by the time a transaction takes place. Since that's the general assumption, of course it's the specific assumption that the market will do the right thing (regulated or unregulated -- the regulations are just clothing on the incentives). I'm talking about the general level of lay discourse that defends the recent history (and even the ACA status quo), of course. Scholarship and policy research recognizes the problem.
- TuringNYC 10y ago
  "Assumption that the market will do the right thing" I find it difficult to consider healthcare a true market, since you get to find out the price/cost many weeks later. You generally have transparency over primary care visit prices, etc, but anything complicated is a total crap-shoot w/r/t what you'll be charged, by whom, and whether everyone involved is in/out of network. Ever have surgery? You get bills from parties you've never heard of all of them coming independently and its rocket science to even figure out deductibles at that point since there is no centralized ledger or central party to deal with.
  - wwweston 10y ago
    > I find it difficult to consider healthcare a true market I can see why -- I've had the same terrible experience with billing shrapnel -- and I almost put a clause in my comment knowing this kind of response was almost inevitable. What I did put in instead was that a lot of our details are different kinds of clothing on the fundamental incentives. I strongly suspect that if you started a system from scratch around the central assumption that medicine should be handled as a market for medical products/services and the financing behind it should be private & for-profit, my guess is that you'd get very much the same thing. The skill investment required for some interventions would lead to several consequences: required specialization to be effective, and a proliferation of specializations. Since the skill investments are costly, those costs are passed on in the form of high service rates. Few people know in advance which interventions they'll need, which makes planning for financing care risky, so an insurance market would develop. Insurers would have the same basic incentives to sell to those who are least likely to need their services, avoid those who are likely to need them completely, and independently negotiate their own payout deals with providers, which of course, varies by insurer, so few patients are going to be really sure how much anything costs even if they do understand how all the specialists interact in a given intervention. And at that point, you have the recipe for the billing shrapnel problem everyone hates.
8ytecoder 10y ago
Exactly! Hospitals don't care about inefficiencies because insurance pays for it. Patients don't care either again because insurance pays for it. Insurance can't negotiate with hospitals as patients don't ever want to lose their doctors and revolt if insurance even brings up dropping a hospital for charging exorbitant rates. Add to it an insane 4 years in college + 4 years med school curriculum that does not incentivize more people to even attempt getting into med school. It is however possible to consider at least some technology solutions - build a more transparent system. Let patients do some cost comparison and incentivize them to find cheaper (but good options). People do care about their health and they can and should be trusted to make these decisions. Start more clinics like the One medical group (just an example) to make preventative care easier and accessible.
- chriskanan 10y ago
  >> Add to it an insane 4 years in college + 4 years med school curriculum that does not incentivize more people to even attempt getting into med school. While I agree with your points in general, this point is wrong. There are far more applicants for medical school (both MD and DO programs) than there are slots. I've been told this was done by the AMA to keep the supply of physicians in the US low to maintain high wages (and arguably high quality). I do think we could allow students to go to medical school directly after high school, which is what some nations do.
  - waffle_ss 10y ago
    Residency slots are the limiting factor, not medical school slots. There's no point increasing medical school slots if you're going to create a bunch of people shut out on Match Day with $200K+ in debt. It should be noted that licensing requirements of doctors mean that medical school graduates are also competing against foreign Blaming the AMA is a dated view. I believe that used to be the case, but certainly isn't any longer. They are in favor of legislation that would increase the number of residency slots.[1] edit: Forgot to add that US medical school grads aren't only competing against each other for residency slots. Foreign doctors that want to practice in the US also have to do a residency here due to licensing requirements. [1]: https://www.ama-assn.org/content/ama-applauds-members-congress-efforts-modernize-graduate-medical-education https://www.ama-assn.org/content/ama-applauds-members-congre...
vondur 10y ago
Seems like in the US the easiest way for universal healthcare would be to extend Medicare to all. Most people seem to like Medicare. I'm sure their would be some tax increases, but I'm sure overall it would lower health care costs for everyone.
- toomuchtodo 10y ago
  https://www.congress.gov/bill/114th-congress/house-bill/676/text https://www.congress.gov/bill/114th-congress/house-bill/676/...
- ameister14 10y ago
  That's the simplest way to do it, sure. Not the best, the most efficient, or really workable, but simple.
  - vondur 10y ago
    I wouldn't say it's not unworkable, but you are correct, it'd be simple and it's something that most people could understand. No "death panel" discussions.
- djrogers 10y ago
  > Most people seem to like Medicare. Except for the doctors that can't afford to treat Medicare patients due to the criminally low/skewed reimbursement rates for some services. There's a reason so many private practices don't take Medicare patients...
  - tcbawo 10y ago
    On another thread, it was explained to me that Medicare reimbursement for a vaccine doesn't even cover the cost of the vaccine itself. I'm sure there is a Byzantine reimbursement model, but something tells me that if the entire country switched over to Medicare overnight, vaccines would quickly get much more affordable.
    - 10y ago
marcell 10y ago
Not disagreeing, but could you provide a few examples of inneficiencies that you see? I'm not familiar with the field.
robbiep 10y ago
As a doctor and founder of a healthtech startup based in Aus - well said. I worked in the US for 2 months as a medical student. The mind boggles.
sytelus 10y ago
A pregnant women spending a day in hospital after childbirth with zero complications pays about $2000. During this time she sees a doctor for perhaps 15-20 mins total and a nurse for perhaps 30 mins total. There is no medicine or any other procedure cost. It's day light robbery if you ask me by the people who run the hospital and have figured out how to game the healthcare system using political means. I'm surprised by the statement that major component of healthcare is apparently "operational inefficiency".
sytelus 10y ago
A women spending a day in hospital after childbirth with zero complications pays about $2000 per day. During this time she sees a doctor for perhaps 15-20 mins total and a nurse for perhaps 30 mins total. There is no medicine or any other procedure cost. It's day light robbery if you ask me by the people who run the hospital and have figured out how to game the healthcare system using political means. I'm surprised by the statement that major component of healthcare is apparently "operational inefficiency".
wyc 10y ago
Completely agreed. There's something called a Certificate of Need necessary in many states[1] that effectively allows hospitals to veto any new facilities that they don't "need." I don't think it would surprise anyone that low-cost upstarts about to cut into revenue streams aren't needed by any hospitals. Whenever you have a $500 bottle of orange juice, I think it screams that you're not in a competitive market. [1] https://en.wikipedia.org/wiki/Certificate_of_need https://en.wikipedia.org/wiki/Certificate_of_need
deleted 10y ago
[deleted]
nishs 10y ago
> much like the Dining Philosopher's problem we're familiar with in Computer Science. Worst attempt at an analogy I've seen.
topspin 10y ago
> a system that has almost diabolically evolved to create competing interests that deadlock all sides into a sub-optimal solution The system embodies large amounts of collective dissonance; a natural reaction to the soft corruption that has to be practiced to satisfy policy. Cost shifting is among the most pernicious causes of this; there is little to no correspondence remaining between actual service and the fee that gets billed; it's all about who the patient's payer happens to be, what policies are in play and how much providers can get away with in each case. The seemingly arbitrary outcomes have to get reconciled somewhere and in the doing of that we build up a lot of scar tissue.
perseusprime11 10y ago
Nationalize it. Don't apply free market or for that matter multi sided platform exonomics to these problems. Education, Health, Military, Law enforcement, Internet are basic foundational needs that need to be owned by an entity who is not looking to make a profit on these.

maxerickson 10y ago

I bet making structural changes so that cost of care is more visible to patients would help a lot in the US. Of course this means disincentivizing health care as a benefit rather than incentivizing it, so it will never happen. It is kind of happening with things like HSAs, but not really. We should also work on removing arbitrary barriers to entering the supply side of the market. Not just for individuals that want to be a doctor or other sort of provider, but certificates of need and such too. Currently, lots of states dictate who can operate a CT scanner.

TuringNYC 10y ago
I agree, opacity is a big part of the problem. I'm super-excited about Castlight Health (http://www.castlighthealth.com/ http://www.castlighthealth.com/) and how they approach the problem (by presenting cost/value scatters and other ways)...but...how obscene is it that we as a country should even need such a service!?
- huangwei_chang 10y ago
  Good point. I am a bit sad that Castlight seems to be struggling and the stock price is pretty low. I thought it had a good mission and solution.
- softawre 10y ago
  My company uses CastLight and it is pretty great. It has been fairly accurate (+/- 10%) the few times I have used it.
chicagobob 10y ago
Only partially. Often at the time of consumption cost isn't something one can use to make decisions. But for those other times, sure it would help. Speaking of lack of info about pricing you might find this interesting: https://www.statnews.com/2017/02/06/health-insurance-high-deductible-experiment/ https://www.statnews.com/2017/02/06/health-insurance-high-de...
- triangleman 10y ago
  Great article. It's not just about pricing info, it's about the nationwide move to HDHP's and HSA's. Personally I'm pretty happy with my HSA, because now the list of things I can spend my healthcare dollar on is much longer: https://www.irs.gov/pub/irs-pdf/p502.pdf https://www.irs.gov/pub/irs-pdf/p502.pdf Lots of those things would not be covered by a traditional health insurance plan. But of course, it means we have chosen to forego health care and services in some cases, like the author of the article above. In one case we turned down an ambulance and drove ourselves to the hospital, which saved some money.
  - HarryHirsch 10y ago
    we have chosen to forego health care and services in some cases Only in America do you choose to forgo healthcare when you are at a conference and caught food poisoning because you aren't really sure if the hospital will take your health insurance. Where do I apply for my medal for saving the system some money?
  - mgkimsal 10y ago
    "because now the list of things I can spend my healthcare dollar on is much longer:" Longer than what? 8 years ago, I could use HSA funds to pay for over the counter medications. Not anymore, and OTC is generally the first step before visiting a dr or clinic, but OTC is not HSA-usable.
MR4D 10y ago
This, times 1,000 !! Imagine you go in for an oil change. You ask how much it costs, and find out it's $20. Great. You get the oil change. One month later you get a bill for "environmental disposal" for $35. The next month you get another bill for "Safety specialist" for $15. This is how healthcare works in the US. If retail worked like this, we'd be in a worldwide depression in about 6 months. Lunacy.
- cmollis 10y ago
  yes.. another 1K. I blame doctors and insurance companies (but mostly the latter.. the former was taken for a ride long ago by the latter). An example of just how ridiculous this is: my son (who is almost 15), was recommended to have a 'pediatric echocardiogram'. The children's hospital that I took him to (a Tier 2 facility in insurance parlance.. which roughly means that my insurance company doesn't own them) indicated that this procedure MIGHT cost up to $5000. So, I asked my insurance company (which I pay 1000 per month to for my three kids and I, in a addition to a 3500 per year deductible), what Tier 1 facility in NJ I could go to, and how much the procedure would cost. They did not know of a facility where this procedure could be done at first. They had to 'research it'. They found a facility, but when I called, they could not perform the procedure because it called for a 'pediatric echo', which they were NOT allowed to do (mind you, it's like the same echocardiogram that you and I would receive). When I presented this information to my insurance company, they had to again, research it. I ignored it, and found it on my own after calling the heart group at one of the teaching hospitals in my state (NJ). So, I asked my insurance company how much it would cost, they refused to tell me. They indicated that they do not dictate pricing; this is the job of the provider. I noted to them that I did not believe them because I knew that they have contracted rates with all of their Tier1 and Tier 2 facilities and they knew exactly what they would reimburse for. They flatly denied that they had any knowledge of pricing and that this was the responsibility of the provider. My response was a question: so, if the provider charged you 1 MILLION DOLLARS for this procedure, you would, in fact, pay it. They indicated that they did not have any pricing knowledge whatsoever. I ended up getting a second opinion and found out the echo wasn't necessary based on follow up findings. It was one of the most frustrating examples of federally mandated RIPOFF I had ever seen. My son's health was at stake, and they simply wouldn't help me. The doctor's are literally at their mercy because they control the money and EVERYONE lets it fucking slide. It's a crime.
chimeracoder 10y ago
> I bet making structural changes so that cost of care is more visible to patients would help a lot in the US. It would, but it would be politically infeasible. Medicare would never let it happen, because providing price transparency in the private market would undermine the convoluted system that allows them to use private insurers to subsidize the care of Medicare patients.
- triangleman 10y ago
  Explain how. I thought Medicare was rife with fraud and overbilling, so that they end up subsidizing private payers.
  - maxerickson 10y ago
    Medicare is about 1/6 of US healthcare spending so it obviously isn't subsidizing private payers, even if you make a ridiculous assumption like 100% of payments are fraudulent. And then in reality fraud rates seem to be quite low, at most a few percentage points of overall Medicare spending.
    - triangleman 10y ago
      What I meant by fraud, was not cases of outright fraud where someone bills Medicare for services never performed, although I'm sure that happens all the time. I meant cases like the late night commercials "call now and get a free motor scooter! Just fill out a simple form and we will bill Medicare." And more relevant are the cases where hospitals bill medicare huge amounts for long patient stays. Medicare always pays what they are billed, after all it's the government paying, they just write a check. Meanwhile if you bill an insurance company they will negotiate, argue, refuse to pay, deny coverage, etc. If you bill an uninsured person they can also just decide not to pay in favor of paying more important bills like food and shelter. So, the hospital is actually fine with this, they simply write off the unpaid amount on their taxes as a charitable expense, and increase rates, which Medicare will pay. So, as you can see, Medicare (plus tax breaks) create a situation where the government subsidizes and distorts everyone else's health care costs.
HarryHirsch 10y ago
cost of care is more visible to patients In the US you get to see the cost of care every time you have reason to see the physician - there's the copay for the physician visit and medications, and then there's the explanation of benefits, where you, as a patient, get to reconcile accounts. In NIH Britain OTOH, you get to see nothing of that sort (except a small copay for medication), and healthcare costs are better contained. It's the US that is the outlier, and shifting even more burden on the patient won't fix matters, it hasn't fixed matters in the past.
- maxerickson 10y ago
  People with employer provided insurance don't have much reason to figure out how much their employer is kicking in for the insurance and if they have a modest deductible they also won't care a great deal about the EOB. I do agree that a single payer system that mandated prices would also likely result in lower prices, but I think that is less likely for the US than incremental changes to our current system.
- CaptSpify 10y ago
  > In the US you get to see the cost of care every time you have reason to see the physician I feel it's important to point out that you see the cost in the bill. There's no reliable way to see the cost beforehand.
  - HarryHirsch 10y ago
    What's seeing the expenses going to do, what mechanism is supposed to lower cost? When you need healthcare you need healthcare. No one goes to the physician for fun, elective procedures like breast enlargement or Lasik excepted.
    - DanBC 10y ago
      The free market argument goes that informed consumers will chose healthcare services, and thus will either drive up quality, or drive down prices. The problem is that the customers cannot see the prices, and thus can't negotiate before hand. This isn't just for emergency care, but for stuff that shouldn't be too hard to get pricing for. There's a nice Vice(?) video about a couple having a baby. They find it impossible to get even an indication of cost before hand. This patient choice stuff made its way to England, and frankly it's dumb. People don't change their utility suppliers even though they'd save large amounts of cash. They don't change their GP unless they've moved house; they don't have enough information to make an informed choice of hospital if they need to go for surgery. It's a lot of bureaucracy that has very little benefit.
jartelt 10y ago
Maybe it would help, or maybe it would do the opposite. Having an HSA and seeing prices upfront can also make one not go to doctor because they do not want to drain their HSA. This can cause people to skip preventative care steps and to not nip potential problems in the bud before they get bad (and expensive). A lot of diseases/conditions are much cheaper to cure/fix if you catch them early, so maybe you don't want to incentivize people to stay away from the doctor.
- PKop 10y ago
  And if more and more people were not going to the doctor, the providers would lower the price (to some degree no?)
  - Sanddancer 10y ago
    Or they raise their prices to get money out of a smaller pool of subscribers. Medical care has a pretty inelastic demand curve.
DanBC 10y ago
> but certificates of need But they came about to protect the consumer from high prices. If I own a hospital and buy a $300,000 MRI machine I need to make that money back over the 10 year life of the machine. I charge one price if it's used by 10 people a day; I need to charge double if it's only used by 5 people a day. The extra supply reduces demand and thus increases prices to the customer. And it's unethical to just scan more and more people, because of the problems of overtesting and overdiagnosis. EDIT: Citation that CONs came about to reduce prices: http://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx http://www.ncsl.org/research/health/con-certificate-of-need-... > The basic assumption underlying CON regulation is that excess capacity stemming from overbuilding of health care facilities results in health care price inflation. Price inflation can occur when a hospital cannot fill its beds and fixed costs must be met through higher charges for the beds that are used. Bigger institutions generally have bigger costs, so CON supporters say it makes sense to limit facilities to building only enough capacity to meet actual need or demand.
- maxerickson 10y ago
  Sure, in theory. In practice it just means that hospitals that do not have local competition use them as a revenue center (MRIs in the US often cost $1000-$2000...paying off your 10 year machine in a few months with 5 patients a day). The US Federal government tried them in the 1980s and quickly decided they were counterproductive.
- arohner 10y ago
  You are literally creating a monopoly (one hospital) to justify that will produce lower prices. Please give me one other example in an unregulated market where your MRI machine example makes sense. It sounds good on paper, but that doesn't happen in any other market in the western world. If there are two competing gas stations, prices get cheaper. Two competing airlines, prices get cheaper.
  - DanBC 10y ago
    I don't agree with it! I'm literally quoting the Americans who support certificate of need laws.

will_pseudonym 10y ago

Don't forget farm subsidies dumping cheap corn syrup into the bellies of our entire populace. Health care in the USA must deal with the reality of our obese and overweight masses (no pun intended). Mental health in this country is similarly crippled by rapid societal changes, but that would take longer to explain in detail.

cma 10y ago
I thought subsidies for corn-based ethanol and tariffs on sugar (lowering sweetener supply) made corn syrup more expensive.
- ihaveajob 10y ago
  Subsidies for corn have been in place, depressing prices (relative to high-tariff sugar) long enough, that food manufacturers have incorporated corn products into almost everything you can buy at the supermarket. Once the supply chain is in place, even if corn prices rise marginally, it's going to take a large effort to eliminate it from the typical American diet.
- will_pseudonym 10y ago
  * Tariffs on sugar increase demand for corn. * Subsidies for ethanol increases the cost of all food, including corn. * Subsidies for corn for lots of other things[0][1] decrease the direct price of corn to consumers and food manufacturers. As a single data point, I come from Kansas, from a family of farmers. It used to be known as the "Breadbasket of America" because of all the wheat that they grew. Its number one crop is now corn[2]. [0] https://farm.ewg.org/progdetail.php?fips=00000&progcode=corn https://farm.ewg.org/progdetail.php?fips=00000&progcode=corn [1] https://en.wikipedia.org/wiki/Agricultural_subsidy#United_States https://en.wikipedia.org/wiki/Agricultural_subsidy#United_St... [2] https://www.nass.usda.gov/Statistics_by_State/Kansas/Publications/Crops/Production/2011/cropaug.pdf https://www.nass.usda.gov/Statistics_by_State/Kansas/Publica...
  - cma 10y ago
    That chart shows around 7 billion for corn. The text later says: > US corn ethanol subsidies are between $5.5 billion and $7.3 billion per year. Doesn't that mean most non-ethanol uses of corn aren't really subsidized too much? It does also list: "Feed grains, mostly corn 2,841" (million) Am I right that that is just $9 subsidy per citizen, and lots of it is going to feed farm animals? The numbers are all from different years so there could have been some major changes.

warcher 10y ago

In the united states we can't successfully implement negotiation on drug prices for MediCare. They literally can't negotiate with their suppliers. By law. Anybody thinking software is going to solve that is way in a bubble. 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...

warcher 10y ago
I just realized that my last two posts are poo-pooing Silicon Valley's recent unwillingness to stay in its lane. I'm not trying to be negative here, it's just... man, it's a big old world and software isn't eating everything. I like a nice website as much as anybody. I think YC has done real well with their websites. If they wanna move fast and break things, I'm gonna wish them godspeed. I still think they're crazy, but that's the point, right?
chimeracoder 10y ago
> In the united states we can't successfully implement negotiation on drug prices for MediCare. They literally can't negotiate with their suppliers. By law. On the flip side, Medicare sets reimbursement rates for services essentially by fiat[0], which can be below the marginal costs of providing service. Most providers cannot legally refuse to treat Medicare patients, so they are forced to accept the rates that Medicare sets (they have no ability to properly negotiate). Medicaid is a whole different system, but in this aspect, it also works the same way. This turns into a system in which privately insured patients subsidize Medicare patients through their premiums[1] (separately from their tax money, which also goes towards Medicare)[2]. Medicare has no incentive to change this, because it allows them to increase their (effective) operating budget without requiring Congressional approval. The reason Medicare drug price negotiation was blocked is that people (both pharmaceutical companies and policymakers) were afraid that it would turn out just like Medicare's "negotiated" rates for inpatient and outpatient services. [0] And private insurers are legally prohibited from reimbursing less than Medicare does [1] And uninsured patients receive the same (inflated) bills that private insurers receive. (Whether or not they actually pay their bills is a separate matter). [2] If you've ever wondered why the sticker prices for inpatient services seem so high, this is the underlying reason. Privately insured patients and uninsured patients aren't just paying for their own care (and for the care of others in the same risk pool). They also have to cover the amount of money that providers lose on Medicare and Medicaid patients.

MR4D 10y ago

I agree wholeheartedly. One thing that bugs me is how limited my choices are. I believe that over-regulation drives that. Getting an x-ray for my dog is much, much cheaper than me getting one, which is just one example of an unregulated market (relatively, obviously there are licensing & safety standards) Seems that this would be a shot. If it doesn't work, lets try something different. I'm not wedded to any solution, but I think we probably agree that healthcare is mostly broken in the US (and was even before Obamacare). Final note - I don't distinguish between healthcare & insurance for sake of simplicity in this post.

bluGill 10y ago
Be careful about this though. We generally place a higher value on human life than on a dogs life. If the x-ray used on your dog sometimes kills a dog it is not the disaster that it would be if a human was killed. Thus we spend a lot more on quality control for medical devices for humans. You might not agree, but that is how society see it.

wwweston 10y ago

> patients, payers, physicians, pharma, facilities and insurers but competing interests I think this is made harder to see by a certain stripe of market fundamentalism that almost blends into the background for many people at this point. At this level of analysis, it's assumed that every transaction is cooperative in nature and competing interests are correctly balanced if not aligned by the time a transaction takes place. Since that's the general assumption, of course it's the specific assumption that the market will do the right thing (regulated or unregulated -- the regulations are just clothing on the incentives). I'm talking about the general level of lay discourse that defends the recent history (and even the ACA status quo), of course. Scholarship and policy research recognizes the problem.

TuringNYC 10y ago
"Assumption that the market will do the right thing" I find it difficult to consider healthcare a true market, since you get to find out the price/cost many weeks later. You generally have transparency over primary care visit prices, etc, but anything complicated is a total crap-shoot w/r/t what you'll be charged, by whom, and whether everyone involved is in/out of network. Ever have surgery? You get bills from parties you've never heard of all of them coming independently and its rocket science to even figure out deductibles at that point since there is no centralized ledger or central party to deal with.
- wwweston 10y ago
  > I find it difficult to consider healthcare a true market I can see why -- I've had the same terrible experience with billing shrapnel -- and I almost put a clause in my comment knowing this kind of response was almost inevitable. What I did put in instead was that a lot of our details are different kinds of clothing on the fundamental incentives. I strongly suspect that if you started a system from scratch around the central assumption that medicine should be handled as a market for medical products/services and the financing behind it should be private & for-profit, my guess is that you'd get very much the same thing. The skill investment required for some interventions would lead to several consequences: required specialization to be effective, and a proliferation of specializations. Since the skill investments are costly, those costs are passed on in the form of high service rates. Few people know in advance which interventions they'll need, which makes planning for financing care risky, so an insurance market would develop. Insurers would have the same basic incentives to sell to those who are least likely to need their services, avoid those who are likely to need them completely, and independently negotiate their own payout deals with providers, which of course, varies by insurer, so few patients are going to be really sure how much anything costs even if they do understand how all the specialists interact in a given intervention. And at that point, you have the recipe for the billing shrapnel problem everyone hates.

8ytecoder 10y ago

Exactly! Hospitals don't care about inefficiencies because insurance pays for it. Patients don't care either again because insurance pays for it. Insurance can't negotiate with hospitals as patients don't ever want to lose their doctors and revolt if insurance even brings up dropping a hospital for charging exorbitant rates. Add to it an insane 4 years in college + 4 years med school curriculum that does not incentivize more people to even attempt getting into med school. It is however possible to consider at least some technology solutions - build a more transparent system. Let patients do some cost comparison and incentivize them to find cheaper (but good options). People do care about their health and they can and should be trusted to make these decisions. Start more clinics like the One medical group (just an example) to make preventative care easier and accessible.

chriskanan 10y ago
>> Add to it an insane 4 years in college + 4 years med school curriculum that does not incentivize more people to even attempt getting into med school. While I agree with your points in general, this point is wrong. There are far more applicants for medical school (both MD and DO programs) than there are slots. I've been told this was done by the AMA to keep the supply of physicians in the US low to maintain high wages (and arguably high quality). I do think we could allow students to go to medical school directly after high school, which is what some nations do.
- waffle_ss 10y ago
  Residency slots are the limiting factor, not medical school slots. There's no point increasing medical school slots if you're going to create a bunch of people shut out on Match Day with $200K+ in debt. It should be noted that licensing requirements of doctors mean that medical school graduates are also competing against foreign Blaming the AMA is a dated view. I believe that used to be the case, but certainly isn't any longer. They are in favor of legislation that would increase the number of residency slots.[1] edit: Forgot to add that US medical school grads aren't only competing against each other for residency slots. Foreign doctors that want to practice in the US also have to do a residency here due to licensing requirements. [1]: https://www.ama-assn.org/content/ama-applauds-members-congress-efforts-modernize-graduate-medical-education https://www.ama-assn.org/content/ama-applauds-members-congre...

vondur 10y ago

Seems like in the US the easiest way for universal healthcare would be to extend Medicare to all. Most people seem to like Medicare. I'm sure their would be some tax increases, but I'm sure overall it would lower health care costs for everyone.

toomuchtodo 10y ago
https://www.congress.gov/bill/114th-congress/house-bill/676/text https://www.congress.gov/bill/114th-congress/house-bill/676/...
ameister14 10y ago
That's the simplest way to do it, sure. Not the best, the most efficient, or really workable, but simple.
- vondur 10y ago
  I wouldn't say it's not unworkable, but you are correct, it'd be simple and it's something that most people could understand. No "death panel" discussions.
djrogers 10y ago
> Most people seem to like Medicare. Except for the doctors that can't afford to treat Medicare patients due to the criminally low/skewed reimbursement rates for some services. There's a reason so many private practices don't take Medicare patients...
- tcbawo 10y ago
  On another thread, it was explained to me that Medicare reimbursement for a vaccine doesn't even cover the cost of the vaccine itself. I'm sure there is a Byzantine reimbursement model, but something tells me that if the entire country switched over to Medicare overnight, vaccines would quickly get much more affordable.
  - 10y ago

marcell 10y ago

Not disagreeing, but could you provide a few examples of inneficiencies that you see? I'm not familiar with the field.

robbiep 10y ago

As a doctor and founder of a healthtech startup based in Aus - well said. I worked in the US for 2 months as a medical student. The mind boggles.

sytelus 10y ago

A pregnant women spending a day in hospital after childbirth with zero complications pays about $2000. During this time she sees a doctor for perhaps 15-20 mins total and a nurse for perhaps 30 mins total. There is no medicine or any other procedure cost. It's day light robbery if you ask me by the people who run the hospital and have figured out how to game the healthcare system using political means. I'm surprised by the statement that major component of healthcare is apparently "operational inefficiency".

sytelus 10y ago

A women spending a day in hospital after childbirth with zero complications pays about $2000 per day. During this time she sees a doctor for perhaps 15-20 mins total and a nurse for perhaps 30 mins total. There is no medicine or any other procedure cost. It's day light robbery if you ask me by the people who run the hospital and have figured out how to game the healthcare system using political means. I'm surprised by the statement that major component of healthcare is apparently "operational inefficiency".

wyc 10y ago

Completely agreed. There's something called a Certificate of Need necessary in many states[1] that effectively allows hospitals to veto any new facilities that they don't "need." I don't think it would surprise anyone that low-cost upstarts about to cut into revenue streams aren't needed by any hospitals. Whenever you have a $500 bottle of orange juice, I think it screams that you're not in a competitive market. [1] https://en.wikipedia.org/wiki/Certificate_of_need https://en.wikipedia.org/wiki/Certificate_of_need

deleted 10y ago

[deleted]

nishs 10y ago

> much like the Dining Philosopher's problem we're familiar with in Computer Science. Worst attempt at an analogy I've seen.

topspin 10y ago

> a system that has almost diabolically evolved to create competing interests that deadlock all sides into a sub-optimal solution The system embodies large amounts of collective dissonance; a natural reaction to the soft corruption that has to be practiced to satisfy policy. Cost shifting is among the most pernicious causes of this; there is little to no correspondence remaining between actual service and the fee that gets billed; it's all about who the patient's payer happens to be, what policies are in play and how much providers can get away with in each case. The seemingly arbitrary outcomes have to get reconciled somewhere and in the doing of that we build up a lot of scar tissue.

perseusprime11 10y ago

Nationalize it. Don't apply free market or for that matter multi sided platform exonomics to these problems. Education, Health, Military, Law enforcement, Internet are basic foundational needs that need to be owned by an entity who is not looking to make a profit on these.