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Premiums are as high as they are because health care is run as a for profit industry - health care in America is orders of magnitude more expensive than in othe

by yarg 9y ago

Premiums are as high as they are because health care is run as a for profit industry - health care in America is orders of magnitude more expensive than in other countries. If you remove the profit motive prices will drop down towards something more reasonable, in this situation it's not unreasonable to expect that the system could be maintained with employee premiums. The cost of initialisation of services will be huge however, it will be interesting to see how they spread it out - they may bear the costs for now, and seek to recoup them providing excess capacity for service to other companies.

donw 9y ago
As always, things are a bit more complicated. Being largely for-profit is part of the problem with healthcare in the United States, but plenty of other countries have privatized healthcare that works, Japan being the first that comes to mind. The difference being that, in the US, the long-term dysfunction of our political system has allowed the regulatory framework for healthcare to be built to service its own industry, rather than the needs of individual citizens or society at large. As one example, regional hospitals used to band together in groups to bargain collectively when purchasing supplies. This arrangement was formalized, legislated, and then warped, so that rather than the hospitals controlling the organization, it was instead controlled by the suppliers, driving the cost to the patient up, rather than down. There is no easy solution here, without first fixing our broken political system, and I see no evidence of that happening.
- dboreham 9y ago
  >The difference being that, in the US, the long-term dysfunction of our political system has allowed the regulatory framework for healthcare to be built to service its own industry, rather than the needs of individual citizens or society at large. You can templateize that statement, inserting pretty much any aspect of life in place of healthcare and it will still be true.
  - mtgx 9y ago
    And that's because the US government no longer responds to the needs and wants of the people, but to the needs of corporations and rich people, which happened because of legalized bribery, or the ability to buy a politician's vote with "donation money". This is why Larry Lessig was right when he kept saying that this is the root cause that needs to be fixed before anything else. People should be supporting such "single issue" politicians that want to reform this system all over, because this is what will fix everything else in the long term, whether it's economic, healthcare, or even social issues (which tend to be turned into issues to distract from the real harm they're doing somewhere else). https://www.youtube.com/watch?v=5tu32CCA_Ig https://www.youtube.com/watch?v=5tu32CCA_Ig https://www.youtube.com/watch?v=mw2z9lV3W1g https://www.youtube.com/watch?v=mw2z9lV3W1g
    - shaqbert 9y ago
      Why did Larry Lessig not find more support amongst the tech billionaire crowd? His open source policy programs on fixing US democracy ought to be a magnet for hobnobbing billionaires at the very top of Maslow's pyramid.
      - scrame 9y ago
        because tech billionaires don't give a shit if poor people die or go bankrupt from medical bills. They've likely never even had to think about it.
        jeffbax 9y ago
        Sounds like Bezos might disagree. The problem with US healthcare isn't profit seeking, it's that years of regulatory technical debt starting with the employer tax deduction totally broke the market and the incentives to control costs are shattered like most things our interests-captive government pays for anymore. I for one am cheering on the capitalists trying to come and do an end run around this political mess. There's no reason healthcare can't be like buying anything else in a competitive market other than the legal complexity dealing with it and daunting capital required to over come that.
aaavl2821 9y ago
The traditional economic view is that private, profit seeking enterprises actually offer better prices to consumers because of competition, while monopoly firms charge higher prices bc they have more market power, and government run enterprises yield lower quality products because they don't have incentive to compete on quality. India has a very competitive healthcare system that is largely out of pocket and while they aren't perfect, they do pretty well considering the size of the country and their per capita gdp. On the other hand, though it is common to praise "single payer" European systems, these systems are not without fault. France is actually trying to learn about innovative American models of care because their system won't be able to afford caring for an aging population The US system is more expensive due to weird interactions of profit seeking and regulations, and idiosyncratic local systems, all exacerbated by lobbying and political issues (like hospitals being major employers in most counties). Arguably another part of the US healthcare cost premium is that the US invests the most in innovation It's simply not true either that healthcare is cheaper by orders of magnitude than other countries. Using health care expense as % of GDP as a metric of comparison, the US is at 17-18% while France / U.K. / Germany are around 10-12% Attributing the high cost of healthcare in the US is a bit facile and simplistic
- bambax 9y ago
  > the US is at 17-18% while France / U.K. / Germany are around 10-12% One has to consider that many people in the US don't consume healthcare because they can't afford it (hence the lower life expectancy), whereas in other countries everybody who needs it can access it, with almost no limit. So the part of GDP represented by healthcare in the US is much lower than it "should" be; or, to put it another way, there's a huge growth opportunity if one can lower prices. Incumbent actors may prefer profits over volume, but they're vulnerable.
  - refurb 9y ago
    One of the big reasons why healthcare is more expensive in the US is Americans get a lot more of it, particularly out-patient care (~150% of OECD average). And other single payer countries certainly don't offer limitless levels of care. The gov't determines what it will pay for and nothing else. For Americans with generous insurance coverage, the care is much more limitless when you look at things like experimental treatments and the latest drugs.
deleted 9y ago
[deleted]
adventured 9y ago
> Premiums are as high as they are because health care is run as a for profit industry That's disproven by the fact that for decades premiums were extremely reasonable. In fact, premiums roughly tripled in just 20 years. That increase is radically beyond cost inflation in most everything else except university tuition costs. That spike wasn't caused by healthcare being for-profit, it was for-profit in the decades prior to that cost explosion too. You'll have to actually explain the specific cause for why costs suddenly exploded higher in such a short span of time. Compare premiums in 2015 vs 1995, on a per capita income basis, the difference is extreme. Why weren't they always so high? Here's a hint: the same exact thing happened at the same exact time in the university education system as well. Previously, before 2000 roughly, US university costs were far more modest. You could go to a top tier university in the 1970s and 1980s and pay for it entirely with a part-time job. Student loan debt went up five fold in ten years, at the exact same time healthcare costs exploded higher. Want to guess which entity caused both cost inflation outcomes?
- mulmen 9y ago
  No, I don't want to guess. You obviously have some insight here, would you mind sharing?
chatmasta 9y ago
The US pharmaceutical industry is also one of the leading innovators and manufacturers of life saving drugs and medicine. The profit incentive, combined with 10 year intellectual property protection, is what allows pharmaceutical companies to spend enough on R&D to produce these drugs (which the rest of the world benefits from!)
- noxToken 9y ago
  When calculated as a function of GDP, the US isn't that much more innovative compared to other countries. Creating new molecular entities at a higher rate than other countries was the only argument I ever had against a single payer system, but research seems to say that we're not innovating (with respect to GDP) as much as we think we are. From this[1] comment about a 2010 study (and the first result in search about cost): I don't know all of the ins-and-outs of funding, but this[0] study says that there are other countries developing NMEs at a proportionately faster rate than the US. From the discussion section: >Pharmaceutical innovation is an international enterprise. Although the United States is an important contributor to pharmaceutical innovation, we found that more than 20 countries contributed to the development of the 288 NMEs with patents at the time of approval. More than 171 companies were involved in the development of these NMEs, and the vast majority of companies were multinationals with facilities located in more than 2 countries. We also found that the United Kingdom, Switzerland, Belgium, and a few other countries innovated proportionally more than their contribution to the global GDP or prescription drug spending, whereas Japan, Spain, Australia, and Italy innovated less. Granted I know that GDP isn't the end-all be-all for determining how drugs can be financed, but I think there is something to learn from the study and how other countries do business while continuing to innovate. [0]: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2866602/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2866602/ [1]: https://news.ycombinator.com/item?id=15955818 https://news.ycombinator.com/item?id=15955818
- dredmorbius 9y ago
  And yet outcomes measures hardly moved inn the past 50 years, most of that from access, not technical improvements. Life expectancy, QALYs. Contrast infrastructure and public health measures. https://object.cato.org/sites/cato.org/files/wp-content/uploads/200910_blog_goklany1.jpg https://object.cato.org/sites/cato.org/files/wp-content/uplo...
javier2 9y ago
The costs of healthcare in the US seem ridiculous to me, but the treatment given also seem better (given you can pay the exorbitant prices). On a side note, over treatment seem a real threat.

by yarg 9y ago

donw 9y ago

As always, things are a bit more complicated. Being largely for-profit is part of the problem with healthcare in the United States, but plenty of other countries have privatized healthcare that works, Japan being the first that comes to mind. The difference being that, in the US, the long-term dysfunction of our political system has allowed the regulatory framework for healthcare to be built to service its own industry, rather than the needs of individual citizens or society at large. As one example, regional hospitals used to band together in groups to bargain collectively when purchasing supplies. This arrangement was formalized, legislated, and then warped, so that rather than the hospitals controlling the organization, it was instead controlled by the suppliers, driving the cost to the patient up, rather than down. There is no easy solution here, without first fixing our broken political system, and I see no evidence of that happening.

dboreham 9y ago
>The difference being that, in the US, the long-term dysfunction of our political system has allowed the regulatory framework for healthcare to be built to service its own industry, rather than the needs of individual citizens or society at large. You can templateize that statement, inserting pretty much any aspect of life in place of healthcare and it will still be true.
- mtgx 9y ago
  And that's because the US government no longer responds to the needs and wants of the people, but to the needs of corporations and rich people, which happened because of legalized bribery, or the ability to buy a politician's vote with "donation money". This is why Larry Lessig was right when he kept saying that this is the root cause that needs to be fixed before anything else. People should be supporting such "single issue" politicians that want to reform this system all over, because this is what will fix everything else in the long term, whether it's economic, healthcare, or even social issues (which tend to be turned into issues to distract from the real harm they're doing somewhere else). https://www.youtube.com/watch?v=5tu32CCA_Ig https://www.youtube.com/watch?v=5tu32CCA_Ig https://www.youtube.com/watch?v=mw2z9lV3W1g https://www.youtube.com/watch?v=mw2z9lV3W1g
  - shaqbert 9y ago
    Why did Larry Lessig not find more support amongst the tech billionaire crowd? His open source policy programs on fixing US democracy ought to be a magnet for hobnobbing billionaires at the very top of Maslow's pyramid.
    - scrame 9y ago
      because tech billionaires don't give a shit if poor people die or go bankrupt from medical bills. They've likely never even had to think about it.
      - jeffbax 9y ago
        Sounds like Bezos might disagree. The problem with US healthcare isn't profit seeking, it's that years of regulatory technical debt starting with the employer tax deduction totally broke the market and the incentives to control costs are shattered like most things our interests-captive government pays for anymore. I for one am cheering on the capitalists trying to come and do an end run around this political mess. There's no reason healthcare can't be like buying anything else in a competitive market other than the legal complexity dealing with it and daunting capital required to over come that.

aaavl2821 9y ago

The traditional economic view is that private, profit seeking enterprises actually offer better prices to consumers because of competition, while monopoly firms charge higher prices bc they have more market power, and government run enterprises yield lower quality products because they don't have incentive to compete on quality. India has a very competitive healthcare system that is largely out of pocket and while they aren't perfect, they do pretty well considering the size of the country and their per capita gdp. On the other hand, though it is common to praise "single payer" European systems, these systems are not without fault. France is actually trying to learn about innovative American models of care because their system won't be able to afford caring for an aging population The US system is more expensive due to weird interactions of profit seeking and regulations, and idiosyncratic local systems, all exacerbated by lobbying and political issues (like hospitals being major employers in most counties). Arguably another part of the US healthcare cost premium is that the US invests the most in innovation It's simply not true either that healthcare is cheaper by orders of magnitude than other countries. Using health care expense as % of GDP as a metric of comparison, the US is at 17-18% while France / U.K. / Germany are around 10-12% Attributing the high cost of healthcare in the US is a bit facile and simplistic

bambax 9y ago
> the US is at 17-18% while France / U.K. / Germany are around 10-12% One has to consider that many people in the US don't consume healthcare because they can't afford it (hence the lower life expectancy), whereas in other countries everybody who needs it can access it, with almost no limit. So the part of GDP represented by healthcare in the US is much lower than it "should" be; or, to put it another way, there's a huge growth opportunity if one can lower prices. Incumbent actors may prefer profits over volume, but they're vulnerable.
- refurb 9y ago
  One of the big reasons why healthcare is more expensive in the US is Americans get a lot more of it, particularly out-patient care (~150% of OECD average). And other single payer countries certainly don't offer limitless levels of care. The gov't determines what it will pay for and nothing else. For Americans with generous insurance coverage, the care is much more limitless when you look at things like experimental treatments and the latest drugs.

deleted 9y ago

[deleted]

adventured 9y ago

> Premiums are as high as they are because health care is run as a for profit industry That's disproven by the fact that for decades premiums were extremely reasonable. In fact, premiums roughly tripled in just 20 years. That increase is radically beyond cost inflation in most everything else except university tuition costs. That spike wasn't caused by healthcare being for-profit, it was for-profit in the decades prior to that cost explosion too. You'll have to actually explain the specific cause for why costs suddenly exploded higher in such a short span of time. Compare premiums in 2015 vs 1995, on a per capita income basis, the difference is extreme. Why weren't they always so high? Here's a hint: the same exact thing happened at the same exact time in the university education system as well. Previously, before 2000 roughly, US university costs were far more modest. You could go to a top tier university in the 1970s and 1980s and pay for it entirely with a part-time job. Student loan debt went up five fold in ten years, at the exact same time healthcare costs exploded higher. Want to guess which entity caused both cost inflation outcomes?

mulmen 9y ago
No, I don't want to guess. You obviously have some insight here, would you mind sharing?

chatmasta 9y ago

The US pharmaceutical industry is also one of the leading innovators and manufacturers of life saving drugs and medicine. The profit incentive, combined with 10 year intellectual property protection, is what allows pharmaceutical companies to spend enough on R&D to produce these drugs (which the rest of the world benefits from!)

noxToken 9y ago
When calculated as a function of GDP, the US isn't that much more innovative compared to other countries. Creating new molecular entities at a higher rate than other countries was the only argument I ever had against a single payer system, but research seems to say that we're not innovating (with respect to GDP) as much as we think we are. From this[1] comment about a 2010 study (and the first result in search about cost): I don't know all of the ins-and-outs of funding, but this[0] study says that there are other countries developing NMEs at a proportionately faster rate than the US. From the discussion section: >Pharmaceutical innovation is an international enterprise. Although the United States is an important contributor to pharmaceutical innovation, we found that more than 20 countries contributed to the development of the 288 NMEs with patents at the time of approval. More than 171 companies were involved in the development of these NMEs, and the vast majority of companies were multinationals with facilities located in more than 2 countries. We also found that the United Kingdom, Switzerland, Belgium, and a few other countries innovated proportionally more than their contribution to the global GDP or prescription drug spending, whereas Japan, Spain, Australia, and Italy innovated less. Granted I know that GDP isn't the end-all be-all for determining how drugs can be financed, but I think there is something to learn from the study and how other countries do business while continuing to innovate. [0]: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2866602/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2866602/ [1]: https://news.ycombinator.com/item?id=15955818 https://news.ycombinator.com/item?id=15955818
dredmorbius 9y ago
And yet outcomes measures hardly moved inn the past 50 years, most of that from access, not technical improvements. Life expectancy, QALYs. Contrast infrastructure and public health measures. https://object.cato.org/sites/cato.org/files/wp-content/uploads/200910_blog_goklany1.jpg https://object.cato.org/sites/cato.org/files/wp-content/uplo...

javier2 9y ago

The costs of healthcare in the US seem ridiculous to me, but the treatment given also seem better (given you can pay the exorbitant prices). On a side note, over treatment seem a real threat.