6 ms·

"Certificate of Need (C.O.N.) programs are aimed at restraining health care facility costs and facilitating coordinated planning of new services and facility co

by koboll 8y ago

"Certificate of Need (C.O.N.) programs are aimed at restraining health care facility costs and facilitating coordinated planning of new services and facility construction ... The basic assumption underlying CON regulation is that excess capacity stemming from overbuilding of health care facilities results in health care price inflation." Two paragraphs in and I need to stop reading this, I'm getting murderously furious.

darawk 8y ago
Ya, it's kind of incredible. And it's equally incredible how few people seem to know about this. It'd be such an easy thing to fix, and it would substantially improve competition for hospital services. It's completely beyond me why this isn't getting changed.
- aaavl2821 8y ago
  I completely agree. If we had to pick one thing to change to lower healthcare costs in the US, this wouldn't be a bad choice. Hospital costs are by far the largest contributor to US healthcare expenditure at 30%, and when you add in physician costs (since they are increasingly owned by hospitals) that's almost 50% of cost My sort of crazy theory is that there is a behind the scenes lobbying / media battle between pharma, the hospital lobby, and the insurance lobby and that this dictates a lot of the national conversation around healthcare. Because healthcare is so opaque and complex, and because there is so much political energy around healthcare, it is hard for the public to be informed about the facts so they just respond to emotionally driven narratives in the media. Right now pharma is public enemy number one so everyone complains about drug prices even though hospitals are probably just as bad if not worse. Both trade groups spend roughly the same on lobbying although hospitals probably have more "soft" political power bc they are major employers in pretty much every county
  - Cd00d 8y ago
    I suspect that FAR more people are paying for prescription pharma than are visiting hospitals. So, it's not totally irrational that pharma is perceived as a greater "enemy" than hospitals even given possibly equivalent price inflation.
    - pg_bot 8y ago
      Pharmaceuticals represent about 10% of healthcare spending for Americans. Inpatient and outpatient comes out to around 52% of annual healthcare costs.[0-1] While there are many issues in the pharmaceutical industry, as a whole I think they get an unnecessarily bad rap. Most of America's healthcare problems are self inflicted. There are a lot of things that need to be adjusted in order to let markets run effectively. [0]: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/PieChartSourcesExpenditures.pdf https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta... [1]: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/quickref.pdf https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...
      - aaavl2821 8y ago
        The US is actually middle-of-the-pack compared to other OECD countries in terms of rx drug spend as a percent of total healthcare costs. So while drugs are more expensive in the US, that's mostly just due to overall higher US healthcare costs, not because there's anything special about pharma in the US. I know other countries spend more than the US on primary / preventative care (though dont have a source offhand); would be interested to know whether hospital spend as % of national HC spend is higher in the US (ive seen data suggesting that cost of a hospital bed for one night in the US is significantly higher than other OECD countries, but don't recall by how much)
    - aaavl2821 8y ago
      That makes sense that more people spending money on drugs means it is a bigger focus for the public. However i'd strongly question the assumption that hospitals have less price inflation than drugs -- i think that the fact that we give hospitals the benefit of the doubt while blaming drug companies and insurers is a big part of the problem. The fact that far more people pay for rx drugs than hospital visits, yet hospital visits account for 3x as much spend, seems to me to be another data point suggesting we should focus more on hospital costs and less on drug costs
  - secabeen 8y ago
    The physician lobby is also a big part of it. The AMA was vehemently against Medicare.
  - AnthonyMouse 8y ago
    > My sort of crazy theory is that there is a behind the scenes lobbying / media battle between pharma, the hospital lobby, and the insurance lobby and that this dictates a lot of the national conversation around healthcare. It's important to point out that the insurance companies have no cost-lowering incentives though. They have an incentive to deny claims, but their incentive is actually to increase industry-wide healthcare costs because as long as the cost increase also applies to their competitors, it allows them to raise prices and higher premiums means more vig. They're also the ones strongly against some of the proposals that would actually reduce costs significantly, like catastrophic-only insurance that would have people paying out of pocket for routine non-emergent care and provide the incentive to compare prices.
    - darawk 8y ago
      Totally this too. I feel like someone should compile a list of non-partisan (i.e. no more and no less socialization), simple ways to incrementally improve healthcare: - No more Certificates of Need. - Don't force insurance companies to take a fixed percentage of revenue as profit so that they are actually incentivized to care about the cost of medicine. - Expand the scope of procedures that nurse practitioners are allowed to do. - Make residency / med school less restrictive and awful. There is no reason doctors need to be working insanely long shifts during residency. The only reason that they are is as a filter, to keep the supply low. - Remove tax incentives for employer-provided healthcare. Replace with dollar-equivalent direct subsidies to personal health insurance purchases. - Allow people to sell their own organs [1]. I'm sure there's lots more. But these are the ones that spring to my mind. [1] https://www.theatlantic.com/business/archive/2015/10/give-a-kidney-get-a-check/412609/ https://www.theatlantic.com/business/archive/2015/10/give-a-...
      - AnthonyMouse 8y ago
        Price transparency. Require medical providers to publish a price list for every service they provide, then let there be Expedia for scheduled medical procedures. > Don't force insurance companies to take a fixed percentage of revenue as profit so that they are actually incentivized to care about the cost of medicine. This wouldn't really work. The nature of the insurance market is they predict how much it would cost at what probability and then add a percentage as a risk premium. If you lowered the risk premium in absolute dollars against the same level of risk and cost, nobody would provide insurance. If you lowered the cost of claims for the same absolute dollar amount of risk premium, more companies would provide insurance and the competition would reduce the absolute amount of the risk premium per customer back to the original percentage (which is based on risk-adjusted reward) of the now-smaller cost/risk -- which is what they're trying to prevent. What you need is for people to be buying less insurance, i.e. insurance covers what it's supposed to -- losses greater than what you can afford -- rather than covering routine low and medium cost procedures and removing anyone's incentive to care about prices when choosing a provider. All your other ones are good.
  - koboll 8y ago
    >My sort of crazy theory is that there is a behind the scenes lobbying / media battle between pharma, the hospital lobby, and the insurance lobby and that this dictates a lot of the national conversation around healthcare. Of course pharma, hospitals, and insurance are a major force on the right. But there's another culprit exerting force on the left that I rarely see discussed. The nurses' union (National Nurses United) is TREMENDOUSLY powerful. I've been personally involved in several political races where their political machine was a decisive factor in delivering turnout, possibly more than any other union. Another advantage is that it tends to fly way under the radar of most union critics -- no one wants to criticize nurses, of all people. This, without a doubt, causes a chilling effect on Democratic politicians' willingness to write legislation that will threaten hospitals.
- BurningFrog 8y ago
  > It'd be such an easy thing to fix, But this system was put in place for the purpose of keeping competition out and medical costs up. This is not an unfortunate accident in regulation. It reflects the political power of those who benefit from it.
tynpeddler 8y ago
Wow, I'm not sure if I've ever read a sentence in my life so devoid of a basic understanding of economics.
- conanbatt 8y ago
  Hospitals understand economics just fine, dont worry about it.
jrowley 8y ago
While this program sounds bad, it seems like something like it could have prevented this from occurring: https://www.npr.org/sections/health-shots/2018/09/25/647531500/taken-for-a-ride-doctor-injured-in-atv-crash-gets-56-603-bill-for-air-ambulance https://www.npr.org/sections/health-shots/2018/09/25/6475315... Genuine question, how do you think governments should regulate this market?
- AnthonyMouse 8y ago
  Air medical transport is only necessary in an emergency, at which point the customer needs it suddenly and has no opportunity to compare prices or refuse service. This is exactly the market failure that causes municipal fire departments to exist, and should be solved in the same way, potentially by just having the fire department own and operate the helicopter(s).
  - elliekelly 8y ago
    It's bananas that emergency medical services like air transport can be "in network" and "out of network." As if the patient in need of services has the capacity or ability to control which helicopter comes to pick them up from their near-death experience.
conanbatt 8y ago
CON is the perfect name for it.

by koboll 8y ago

darawk 8y ago

Ya, it's kind of incredible. And it's equally incredible how few people seem to know about this. It'd be such an easy thing to fix, and it would substantially improve competition for hospital services. It's completely beyond me why this isn't getting changed.

aaavl2821 8y ago
I completely agree. If we had to pick one thing to change to lower healthcare costs in the US, this wouldn't be a bad choice. Hospital costs are by far the largest contributor to US healthcare expenditure at 30%, and when you add in physician costs (since they are increasingly owned by hospitals) that's almost 50% of cost My sort of crazy theory is that there is a behind the scenes lobbying / media battle between pharma, the hospital lobby, and the insurance lobby and that this dictates a lot of the national conversation around healthcare. Because healthcare is so opaque and complex, and because there is so much political energy around healthcare, it is hard for the public to be informed about the facts so they just respond to emotionally driven narratives in the media. Right now pharma is public enemy number one so everyone complains about drug prices even though hospitals are probably just as bad if not worse. Both trade groups spend roughly the same on lobbying although hospitals probably have more "soft" political power bc they are major employers in pretty much every county
- Cd00d 8y ago
  I suspect that FAR more people are paying for prescription pharma than are visiting hospitals. So, it's not totally irrational that pharma is perceived as a greater "enemy" than hospitals even given possibly equivalent price inflation.
  - pg_bot 8y ago
    Pharmaceuticals represent about 10% of healthcare spending for Americans. Inpatient and outpatient comes out to around 52% of annual healthcare costs.[0-1] While there are many issues in the pharmaceutical industry, as a whole I think they get an unnecessarily bad rap. Most of America's healthcare problems are self inflicted. There are a lot of things that need to be adjusted in order to let markets run effectively. [0]: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/PieChartSourcesExpenditures.pdf https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta... [1]: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/quickref.pdf https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...
    - aaavl2821 8y ago
      The US is actually middle-of-the-pack compared to other OECD countries in terms of rx drug spend as a percent of total healthcare costs. So while drugs are more expensive in the US, that's mostly just due to overall higher US healthcare costs, not because there's anything special about pharma in the US. I know other countries spend more than the US on primary / preventative care (though dont have a source offhand); would be interested to know whether hospital spend as % of national HC spend is higher in the US (ive seen data suggesting that cost of a hospital bed for one night in the US is significantly higher than other OECD countries, but don't recall by how much)
  - aaavl2821 8y ago
    That makes sense that more people spending money on drugs means it is a bigger focus for the public. However i'd strongly question the assumption that hospitals have less price inflation than drugs -- i think that the fact that we give hospitals the benefit of the doubt while blaming drug companies and insurers is a big part of the problem. The fact that far more people pay for rx drugs than hospital visits, yet hospital visits account for 3x as much spend, seems to me to be another data point suggesting we should focus more on hospital costs and less on drug costs
- secabeen 8y ago
  The physician lobby is also a big part of it. The AMA was vehemently against Medicare.
- AnthonyMouse 8y ago
  > My sort of crazy theory is that there is a behind the scenes lobbying / media battle between pharma, the hospital lobby, and the insurance lobby and that this dictates a lot of the national conversation around healthcare. It's important to point out that the insurance companies have no cost-lowering incentives though. They have an incentive to deny claims, but their incentive is actually to increase industry-wide healthcare costs because as long as the cost increase also applies to their competitors, it allows them to raise prices and higher premiums means more vig. They're also the ones strongly against some of the proposals that would actually reduce costs significantly, like catastrophic-only insurance that would have people paying out of pocket for routine non-emergent care and provide the incentive to compare prices.
  - darawk 8y ago
    Totally this too. I feel like someone should compile a list of non-partisan (i.e. no more and no less socialization), simple ways to incrementally improve healthcare: - No more Certificates of Need. - Don't force insurance companies to take a fixed percentage of revenue as profit so that they are actually incentivized to care about the cost of medicine. - Expand the scope of procedures that nurse practitioners are allowed to do. - Make residency / med school less restrictive and awful. There is no reason doctors need to be working insanely long shifts during residency. The only reason that they are is as a filter, to keep the supply low. - Remove tax incentives for employer-provided healthcare. Replace with dollar-equivalent direct subsidies to personal health insurance purchases. - Allow people to sell their own organs [1]. I'm sure there's lots more. But these are the ones that spring to my mind. [1] https://www.theatlantic.com/business/archive/2015/10/give-a-kidney-get-a-check/412609/ https://www.theatlantic.com/business/archive/2015/10/give-a-...
    - AnthonyMouse 8y ago
      Price transparency. Require medical providers to publish a price list for every service they provide, then let there be Expedia for scheduled medical procedures. > Don't force insurance companies to take a fixed percentage of revenue as profit so that they are actually incentivized to care about the cost of medicine. This wouldn't really work. The nature of the insurance market is they predict how much it would cost at what probability and then add a percentage as a risk premium. If you lowered the risk premium in absolute dollars against the same level of risk and cost, nobody would provide insurance. If you lowered the cost of claims for the same absolute dollar amount of risk premium, more companies would provide insurance and the competition would reduce the absolute amount of the risk premium per customer back to the original percentage (which is based on risk-adjusted reward) of the now-smaller cost/risk -- which is what they're trying to prevent. What you need is for people to be buying less insurance, i.e. insurance covers what it's supposed to -- losses greater than what you can afford -- rather than covering routine low and medium cost procedures and removing anyone's incentive to care about prices when choosing a provider. All your other ones are good.
- koboll 8y ago
  >My sort of crazy theory is that there is a behind the scenes lobbying / media battle between pharma, the hospital lobby, and the insurance lobby and that this dictates a lot of the national conversation around healthcare. Of course pharma, hospitals, and insurance are a major force on the right. But there's another culprit exerting force on the left that I rarely see discussed. The nurses' union (National Nurses United) is TREMENDOUSLY powerful. I've been personally involved in several political races where their political machine was a decisive factor in delivering turnout, possibly more than any other union. Another advantage is that it tends to fly way under the radar of most union critics -- no one wants to criticize nurses, of all people. This, without a doubt, causes a chilling effect on Democratic politicians' willingness to write legislation that will threaten hospitals.
BurningFrog 8y ago
> It'd be such an easy thing to fix, But this system was put in place for the purpose of keeping competition out and medical costs up. This is not an unfortunate accident in regulation. It reflects the political power of those who benefit from it.

tynpeddler 8y ago

Wow, I'm not sure if I've ever read a sentence in my life so devoid of a basic understanding of economics.

conanbatt 8y ago
Hospitals understand economics just fine, dont worry about it.

jrowley 8y ago

While this program sounds bad, it seems like something like it could have prevented this from occurring: https://www.npr.org/sections/health-shots/2018/09/25/647531500/taken-for-a-ride-doctor-injured-in-atv-crash-gets-56-603-bill-for-air-ambulance https://www.npr.org/sections/health-shots/2018/09/25/6475315... Genuine question, how do you think governments should regulate this market?

AnthonyMouse 8y ago
Air medical transport is only necessary in an emergency, at which point the customer needs it suddenly and has no opportunity to compare prices or refuse service. This is exactly the market failure that causes municipal fire departments to exist, and should be solved in the same way, potentially by just having the fire department own and operate the helicopter(s).
- elliekelly 8y ago
  It's bananas that emergency medical services like air transport can be "in network" and "out of network." As if the patient in need of services has the capacity or ability to control which helicopter comes to pick them up from their near-death experience.

conanbatt 8y ago

CON is the perfect name for it.