9 ms·

Economic Analysis of Medicare for All

78 points by cribbles 8y ago

entee 8y ago
One thing that sometimes gets lost in the "health care is inefficient" discussion is that one person's inefficiency is another person's living. The cost controls the paper appears to advocate for literally mean someone is making less money, that someone will advocate strongly against it. I've spent the past 3.5 years in healthcare, everyone is convinced they're not the problem, that they're underpaid or overworked or whatever. I would love for some sort of centralized system to push down costs, but I fear it's not realistically every going to happen.
- toomuchtodo 8y ago
  > One thing that sometimes gets lost in the "health care is inefficient" discussion is that one person's inefficiency is another person's living. You are not entitled to a living as bureaucratic waste. We should of course help retrain those who lose their jobs, just as we're doing for coal workers who are going to be out of a job within the next five years. I want my healthcare dollars going to healthcare providers (doctors, nurses, nurse practitioners, CNAs, drug research R&D, medical technology innovators), not private insurance companies, not administrators or third party billers, and most assuredly, not shareholders. I want the AMA to be handicapped from preventing us from dramatically increasing the number of doctors in the US (the American Medical Association operates as a cartel/cabal, attempting to limit supply to keep wages high); they also attempt to reduce the authority given to nurse practitioners [1]. > I would love for some sort of centralized system to push down costs, but I fear it's not realistically every going to happen. The majority of Americans say the government should be responsible for ensuring health care coverage for all Americans [2]. Universal healthcare will arrive in the US eventually, the question is when. The current model is unsustainable, and will reach a tipping point. [1] https://www.modernhealthcare.com/article/20171214/NEWS/171219932 https://www.modernhealthcare.com/article/20171214/NEWS/17121... [2] http://www.pewresearch.org/fact-tank/2017/01/13/more-americans-say-government-should-ensure-health-care-coverage/ http://www.pewresearch.org/fact-tank/2017/01/13/more-america...
  - ams6110 8y ago
    Only a few generations ago, healthcare was not so ruinously expensive in the USA. We've never had taxpayer-funded universal care. So what caused the explosion in costs?
    - toomuchtodo 8y ago
      TL;DR Lack of cost controls and unnecessary administrative costs. > In the U.S., they point out, drugs are more expensive. Doctors get paid more. Hospital services and diagnostic tests cost more. And a lot more money goes to planning, regulating and managing medical services at the administrative level. So, we're all getting a lower quality of care for a lot more money, due to how the healthcare "market" is configured. https://www.nytimes.com/2018/03/13/upshot/united-states-health-care-resembles-rest-of-world.html https://www.nytimes.com/2018/03/13/upshot/united-states-heal... https://www.cnbc.com/2018/03/22/the-real-reason-medical-care-costs-so-much-more-in-the-us.html https://www.cnbc.com/2018/03/22/the-real-reason-medical-care... https://www.cnn.com/2017/11/07/health/health-care-spending-study/index.html https://www.cnn.com/2017/11/07/health/health-care-spending-s... https://www.consumerreports.org/cro/magazine/2014/11/it-is-time-to-get-mad-about-the-outrageous-cost-of-health-care/index.htm https://www.consumerreports.org/cro/magazine/2014/11/it-is-t...
      - sedor0115 8y ago
        This fails to address the elephant-sized American in the room. Any analysis of increasing healthcare costs that doesn't quantify the fiscal impact of the average American's failure to care for themselves is just beating around the bush. The obesity rate alone has gone from 10% in the 60s to 40% today. These people need more care that is harder to provide, and to not expect healthcare costs to rise significantly from that is to expect healthcare workers to work for free. Our system is a little sick, sure, but the bulk of the responsibility for the current situation lies squarely at our own feet as individuals. This problem will never be solved before America puts down the fork.
    - rednerrus 8y ago
      The elastic nature of health care costs and the disconnect between the people making the purchases and the people paying the bills. If you have insurance, chances are that you are not asking your doctor how much something is going to cost. You are not likely to shop around or work to get the best deal. As a healthcare provider, where is the incentive to bring costs down.
- ArchTypical 8y ago
  > that they're underpaid or overworked or whatever Having family in healthcare and being a lifelong patient due to a congenital defect, a job in software (including management obv) is a breeze compared to health care worker jobs across the board. They require more "schooling" (via mind-numbing training), are underpaid, have much more serious consequences from mistakes, have less oversight, work longer hours and under worse conditions. It's disheartening.
  - onlyrealcuzzo 8y ago
    I'm pretty sure most people, even administrators in hospitals and insurance, are overworked. Health care in the US is the textbook definition of big business. The only people making easy, stupid money are shareholders.
  - agumonkey 8y ago
    People's work shouldn't be reduced, but drugs and devices should be to an extent. Firefighters told the portable EKG costed thousands of dollars (5 or 10 don't recall). That thing had bad 2G connectivity so the graph coudn't be sent to a cardiologist. The sensor/dsp part is worth money, the rest would cost 100$ from any smartphone maker today with better performance and portability. I'm sure the price is rigged for margins. This shouldn't be a market, it should be an open duty to make these cost efficient.
    - ams6110 8y ago
      The real cost is not so much in the hardware but in the certification requirements. Medical devices need to be built to and work at a higher standard than consumer electronics, for obvious reasons.
      - agumonkey 8y ago
        Of course, but the interface and connectivity part of that EKG machine wasn't even up to 2005 cellphones standard. On that point, it's a scam.
- thatfrenchguy 8y ago
  And a lot of this is administrative overhead. Coming from a country outside of the US, I was also shocked by the price of medecine, every medecine magically seems to be 5-10x more expensive in the US.
  - ekianjo 8y ago
    The prices help pay for the huge cost involved in developing drugs. How many drugs were developed in France in the past 10 years compared to how many were developed in the US? You know the answer.
    - Analemma_ 8y ago
      Personally, I would’ve liked to be asked whether I consented to paying 10x the price that every other country pays, in order to subsidize drug development, cause I definitely don’t recall ever agreeing to that deal.
      - ams6110 8y ago
        The problem is your other option is likely not having the drug at all.
    - jayd16 8y ago
      This is pretty specious reasoning. The US is a leader in a lot of industries that aren't healthcare.
    - monocasa 8y ago
      I know that's what's pushed, but how much of that is true? Federal grants pay for a lot of initial frubt work, and drug companies spend around twice as much on marketing as they do on R&D. And that's with all sorts of tax benefits behooving them to call as much as possible of their budget R&D.
      - ekianjo 8y ago
        Marketing is needed everywhere, pharma included. You dont spread awareness of a new drug just by filing an application to the FDA. And marketing expenses are high because potential returns are high and make or break a drug. Note that you dont have really new drugs every year so you need marketing anyway to convince prescribers why your version of the drug in the same class as your competitor is slightly better. In reality most drugs of the same class are pretty similar in efficacy and side effects, but thats a tangential topic.
- village-idiot 8y ago
  I’ve always worried about the political consequences to the loss of insurance jobs. I also view that job loss as a foregone conclusion due to insurance companies fighting even moderate changes tooth and nail. If even minor improvements to a nakedly broken system are going to get fought against with such ferocity, it’s not surprising that their opponents would try and move the Overton window in response.
- bedhead 8y ago
  Like, the living of some drug middleman who is a leach on the system and only exists because of some lobbying or other screwed up structure?
  - s3r3nity 8y ago
    More like the doctor who has dropped six-figures + a crazy amount of years in education and certification to work very long hours seeing a lot of patients, many of whom think you're a quack and trust an online forum over anything you say. Oh and don't forget the high premiums for malpractice insurance, as you're working crazy hours without breaks, and if you make a mistake you're sued up the whazoo. And that's just describing a PCP - never mind a surgeon, EHS driver, hell even the nurses (though the latter are most likely unionized.)
    - erentz 8y ago
      Doctors aren’t a huge cost issue. Their pay isn’t that outrageous or out of line. It’s the pharmacy costs and administrative costs (and I think also DME costs?) that are seriously out of whack in this country.
      - s3r3nity 8y ago
        Oh I'm not claiming they're out of line - they deserve that pay. My point was that it's not all these evil salesmen / drug capitalists driving high-costs in medicine. Sometimes better quality care just costs more.
    - dc_gregory 8y ago
      These people get paid very well in Australia.
    - jashpool 8y ago
      Cost controls also have a cost. The UK NHS has chronic staffing shortages, UK doctors are going abroad for better pay; currently the favourites are Australia, Canada and the Middle East. I have heard quite a few people say they actively discourage their children from being doctors.
- jorblumesea 8y ago
  This is the problem with a for-profit healthcare system. Meaningful reform is almost impossible because there's jobs on the line and therefore voters to contend with. More importantly, they are also probably highly educated and well paid voters. Doctors, software engineers, sales, etc. How much white collar employment comes from healthcare inefficiencies? Probably a good percentage of the sector. These workers will need to acknowledge they are part of the problem and willingly give up these positions (or their absurd payouts from them) and vote accordingly. Or not and continue being part of the problem, which I think is your concern.
  - prostoalex 8y ago
    US has a host of not-for-profit providers, they’re not drastically cheaper.
    - jorblumesea 8y ago
      Mostly due to the existing for profit system. Not for profits still have to reside within the existing construct of American healthcare and hardly provide any real advantages when they negotiate with for profit entities.
- AtlasBarfed 8y ago
  The cost problem in healthcare is exactly that: many pigs at the trough, and everyone points at the other pig for being the problem. Healthcare administrators! Drug companies! Device companies! Trial Lawyers! Insurance companies! Doctors (especially specialists)! They're all the problem, and yes lots of them should make less money. I know cardiologists pulling down 500k+ and that is ridiculous. I can see highly skilled surgeons making that much, but pill pushers?
  - ams6110 8y ago
    > I know cardiologists pulling down 500k+ and that is ridiculous. I can see highly skilled surgeons making that much, but pill pushers? I don't know about you but I'm not willing to be a student until I'm in my mid 30s, working crazy hours, likely accumulating a significant amount of debt along the way, without some kind of a substantial payout on the other side.
    - travisoneill1 8y ago
      Which is a good reason to not make doctors spend so many years in school. The Europeans don't and their doctors are just fine.
      - jefurii 8y ago
        Also a good reason for state-funded higher education.
  - naveen99 8y ago
    Cardiologists aren’t pill pushers. They are interventional radiologists of the heart. They do need lots of skill also.
- specialist 8y ago
  "cost controls the paper appears to advocate for literally mean someone is making less money" Reference Table S1. Cost controls would account for ~14.5% of the total savings. Hardly seems onerous. Medicare's medical loss ratio is approx 4% (?), whereas ACA caps private insurers at 15%. So clearly there's plenty of fat to be trimmed. TL;DR: Single payer is cheaper, people live longer. Transition will be painful.
- rednerrus 8y ago
  If we removed the profit paid to investors, isn't there additional money to be paid to people facilitating healthcare and to bring the costs down? It looks like there was $47 Billion, (~9%) in profit in healthcare companies in the US in 2018. https://www.axios.com/health-care-industry-on-track-massive-q2-profits-1533226387-dacec8f8-c9f5-406c-a49e-1103e3316c64.html https://www.axios.com/health-care-industry-on-track-massive-...
  - travisoneill1 8y ago
    This accounts for less than 10% of the difference between healthcare spending between the US and other OECD states. See this report for a much more detailed analysis: https://www.mckinsey.com/~/media/McKinsey/Industries/Healthcare%20Systems%20and%20Services/Our%20Insights/Accounting%20for%20the%20cost%20of%20US%20health%20care/MGI_Accounting_for_cost_of_US_health_care_full_report.ashx https://www.mckinsey.com/~/media/McKinsey/Industries/Healthc...
zjaffee 8y ago
My biggest fear of a bill like this is even should we have the most progressive anti corruption government implement this law originally, whats to prevent this from becoming incredibly wasteful just like our military is. I.e. we spend a trillion dollars over decades trying to develop some drug that turns out to take us nowhere, while enriching pfizer shareholders this time instead of lockheed martin ones. I absolutely support medicare for all, even though as a healthy young software engineer this will raise the cost of my healthcare a ton, I'm just nervous that this will result in the largest negative iron triangle in the history of our country.
- mlthoughts2018 8y ago
  That is the line of thinking explored in Robin Hanson’s article, “Cut Medicine in Half.” https://www.cato-unbound.org/2007/09/10/robin-hanson/cut-medicine-half https://www.cato-unbound.org/2007/09/10/robin-hanson/cut-med... Combined with research on how wealth, family status, social status, access to sex partners, etc. etc. correlate with health outcomes even after controlling for access to doctors, hospital care, etc., it raises a lot of questions. It seems most of the money we spend on medicine as a society is just a form of signalling. We “care” if we give X dollars worth of medical service, regardless of whether that led to a positive outcome or if the outcome could have been obtained more effectively through less “showy” ways or unglamorous things that don’t involve medical procedures or treatment. It goes along with the idea of “betting is a tax on bullshit.” If we paid medical entities based on successful outcomes, including at the population level, then it might incentivize creative, cost-effective solutions instead of providers shoveling more ineffective treatment and demanding high pay just based on administering it.
- nickysielicki 8y ago
  This is why the scope of government matters. I do not understand why people have this idea that it's the job of the government to do things like speculate on the economy via quantitative easing, or save money overall on healthcare costs. The federal government ought to have a few simple jobs --- the ones laid out in the constitution, and everything else can be left up to the people and to the states. I would rather live in a country where healthcare maybe costs more than it otherwise could, and where the economy maybe recovers slower than it otherwise would have, than to live in a country where the government takes lots of our money trying to fulfill promises that it cannot keep. Medicare is projected to be insolvent in 2026, and Social Security is projected to be insolvent 8 years later. We're due for an economic downswing in the next few years (if not the next few months). Our economy will not keep up with the developing world powers; NATO is increasingly irrelevant and the petrodollar is threatened. What are we going to tell the people who depend on these dying programs? "I know that you worked your whole life in a factory, and I know that you are too old to work, and I know that you paid into this system your entire career, and I know you aren't getting enough to get by. But we had the best intentions in mind!" America is rich because we won WWII, not because of American Exceptionalism. The comfortable life that American culture was built on (while the rest of the world needed half a century to recover) is going away quickly. The social programs that we already have in place have less than 6,000 days remaining before they fall apart, and in these last hours, we're seriously talking about adding on? No thanks. I'm okay with living in a poor country. I'd prefer for my government to not fail as a result, though.
deleted 8y ago
[deleted]
ribble 8y ago
| Medicare for All could reduce total health care spending in the U.S. by nearly 10 percent, to $2.93 trillion, while creating stable access to good care for all U.S. residents. how? by taxing a few earners to pay for everyone else not earning. is that fair? in that light, a ten percent reduction in cost is meaningless.
- diego898 8y ago
  Can you expand on what you mean by "in that light, a ten percent reduction in cost is meaningless."?
  - ribble 8y ago
    that "ten percent less" of a payment is no longer being paid by particular patients, it's being paid by everyone. that's like saying, "chris wasn't sick, but don't worry, though 50% of his salary is now gone so everyone has healthcare, he's paying 10% less."
- aczerepinski 8y ago
  High earners were on average raised by high earning parents. Is being born rich fair? Which stages of the game should be fair?
  - anarchimedes 8y ago
    (C'mon downvotes!) I thought the idea of paying your "fair share" was in relation to the services provided by the taxes paid. I can take an extreme example that I've tried to steel man to hold up this point: Bill Gates. Does Bill Gates the man use more taxpayer provided military/healthcare/infrastructure.. than anyone else? Of those things that he does use more of, if he taxed by the volume of those services used (example: water/sewer) and therefore paying his fair share? What difference does it make if her was born to rich parents? How does that make it right to make him pay more money? I am asking respectfully and I sincerely hope that you do not take this as an attack. edit: spelling
    - 8y ago
educationdata 8y ago
How can they assume this will not change how everything else works? Yes. You can say statistically we did the comparison by holding everything else the same, but it only means "statistically". It definitely does not mean in reality you can hold everything else the same. There is no way when the policy changes, the system still works as before. This kind of study is totally delusional. A policy works in other countries does not guarantee it will work in the U.S. For one thing, U.S. doctors make much more money than other countries. There are also other many differences. How can you assume you can simply move a policy successfully from other countries without making other important changes?
- AnimalMuppet 8y ago
  Second order effects... the bane of well-meaning policies. On the other hand, how else are you going to do it? Do you know what the second-order effects are going to be? How sure are you? Can you prove it to someone who doesn't hold the same intellectual framework or political leaning that you do?
pdq 8y ago
Hypothetical economic studies and analyses are almost worthless. In normal science, you need something to be testable, verifiable, and reproducible. I'm quite sure none of these are possible. Just as a counterpoint, the US public primary school education is state run and funded, and has both poor outcomes and is the most expensive in the world [1]. Just because something is run or controlled by the state does not mean it will magically be either efficient or high quality. [1] https://www.theguardian.com/us-news/2018/sep/07/us-education-spending-finland-south-korea https://www.theguardian.com/us-news/2018/sep/07/us-education...
- api 8y ago
  America seems to have a huge problem with everything it does being incredibly costly. It's definitely true in the public sector and universities and also in large areas of the private sector. American healthcare being more expensive than anywhere else fits the pattern. It also apparently costs more to build a rail line or any other work of infrastructure here than anywhere else in the world. I'm not sure why this is, but health care is not exceptional.
  - darawk 8y ago
    America has high costs anywhere that government is involved. Healthcare, infrastructure, etc...The pure private sector is quite efficient here.
    - maxxxxx 8y ago
      How about internet access or cell phones? Is that the government's fault too?
      - slg 8y ago
        In a word, yes. Those industries already have a high barrier to entry which stifles competition and can lead to high prices. However the governments response to that has not been to try to innovate or subsidize new competitors to lower barriers. Their response has been to establish rules that make it harder or even impossible for new competitors to enter the market.
DubiousPusher 8y ago
It seems to me that industrialized countries the world round have different ways of organizing the relationship between patients, payers and providers. There's nearly 100% public models like the NHS in the UK and hybrid market systems like those in Singapore and Switzerland. But the one thing they all seem to do the same is how they keep costs down. They give the payer, whether that's the government or separate insurers a legal framework for setting prices. I know correlation is not causation but until some country shows strong price performance while implementing a different scheme it seems wise to defer to the one that is ubiquitous.
- ams6110 8y ago
  Price controls cause shortages. Simple economics.
  - jedharris 8y ago
    there is always a simple economic reply to every proposal —- neat, plausible, and wrong
rb808 8y ago
Its such a fundamental change I doubt a study could accurately predict changes. I can't read the PDF but I know debate often misses things like: * A big boost for companies as unprofitable companies don't have to pay healthcare of employees. (assuming paid with taxes) * Free medical care means things like ambulance chasing lawyers are not required * Govt is more incentivized to look after the health of citizens as it has to pay for diabetes treatment etc. * People are more likely to retire early, or quit work and live cheaply.
sedor0115 8y ago
The only thing America can really do to get healthcare costs under control is actually really obvious: put down the fork.
- shard972 8y ago
  What about the herion addicts that the healthcare system created? I don't think less food is going to solve their problems.
travisoneill1 8y ago
For an in depth look at the state of the current US system as compared to other developed countries see this report: https://www.mckinsey.com/~/media/McKinsey/Industries/Healthcare%20Systems%20and%20Services/Our%20Insights/Accounting%20for%20the%20cost%20of%20US%20health%20care/MGI_Accounting_for_cost_of_US_health_care_full_report.ashx https://www.mckinsey.com/~/media/McKinsey/Industries/Healthc...
pg_bot 8y ago
A lot of issues with America's healthcare system boil down to what I call "the interception problem". A quarterback who throws an interception directly to a defender without a wide receiver in the vicinity is treated the same as someone who hit a receivers hands and was tipped to a defender when you are looking at the stat sheet. Your perception of the analysis changes drastically if you actually observe the actions going on. I'll take an example from the real world to illustrate my point. When you look at the data, the United States clearly has the highest infant mortality rate of developed countries. On its face it would seem that the United States is clearly failing pregnant women, and that this is a terrible problem that needs to be addressed. However, if you observe the differences between the data sets and actually view how deliveries happen in real life you see a different picture. Not all pregnancies carry the same risk, and the US has a higher percentage of high risk pregnancies than other countries. If you compare people in the same cohorts the US fares a lot better. In layman's terms, we shouldn't treat an infant death from a 25 year old mother who carried to term the same as one from a 40 year old born a month premature. The US is also the most aggressive country in the world when it comes to attempting to save prematurely born children. We try and succeed at a higher rate than anywhere else in the world. I have failed to meet a person who thinks trying to save a prematurely born child is a bad thing. Yet it's those kind of actions that skew the stats. We need more advanced medical statistics. I hope the sabermetrics revolution makes its way into the medical field. If more people are interested, I could probably expand my thoughts further with other examples that look bad on the surface, but actually aren't as bad as you think.
acslater00 8y ago
The math here is based on the idea that MFA would reduce the per-person expenditures by 19% (19.2% actually) (1) 5.9% by unilaterally reducing drug prices by 40% (2) 2.8% by unilaterally reducing medical service prices by 20% (3) 1.5% through the claim that MFA would have fewer "excess services" (4) 9.0% from allegedly increased efficiency due to only having to deal with one payer Is this at all plausible? Achieving (1) and (2) would be - um - difficult, to say the least! In real life, prices would be set by a political process. Our actual history of attempts to unilaterally reduce medical reimbursement reates is not promising! [see https://en.wikipedia.org/wiki/Medicare_Sustainable_Growth_Rate https://en.wikipedia.org/wiki/Medicare_Sustainable_Growth_Ra... or the debate over Medicare drug price negotiation]. (1) & (2) con't: Imposing a single-payer system and then having that payer set prices is effectively the same as imposing a national price control regime, which we in theory could do without MFA. We have not done this, despite the fact that it would save everyone an enormous amount of money. Why not? Because it would be insanely controversial and take a ton of money out of some people's pockets, especially doctors and nurses. Will this be easier under MFA? (3) The idea that MFA would be structurally less likely to provide "excess" health services seems pretty optimistic indeed. Our military, for example, is not really known for being budget conscious and aggressively efficiency minded. Nor are our state and local level agencies, e.g. the MTA here in NY. Spending policies are set by a political process, and political processes are prone to over- rather than under- spending in every case I can think of. (4) The 9%(!) savings from "billing efficiencies" is based on an assumption that billing expenses in medical offices will be reduced by 2/3 when there is only a single payer. Why would this be? Billing expenses scale with the number of bills, not the number of vendors. Will MFA lead to fewer procedures on net? Will it eliminate the concept of prior authorizations, which represent the bulk of these "excess" BIR expenses? Will providers and patients not have coverage disputes? Will MFA have dramatically superior automation than private payers? Note that Germany has a multi-payer system and has Canada-like administrative costs [https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2013.1327 https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2013....]. There are hidden variables here. Here's the thing: The most superficial argument in favor of MFA is to look at a country like Canada and say "Canada spends X / pp on healthcare and they have a single payer system, therefore if the US adopts a single payer system, our costs will drop to X!". That's not real analysis, and it ignores all the cost drivers that have nothing to do with the payer. This paper is a drill-down to component costs, but ultimately is no less superficial. MFA billing will be 65% more efficient because Australia billing is 65% more efficient than the US. Prescription drugs will be 40% cheaper because Canada pays 40% less than the US. And so on. If you could realize any of these cost savings in MFA, you could realize them now. But you probably can't - not easily, anyway, and after burning all your political capital on a $1T/year tax hike it will only be harder. The cost-savings will be compromised to get the medical industry on board, just like it was during the Obamacare debate. And now you can toss this whole analysis in the garbage. This is wish-casting dressed up in 200 pages of rigorous-looking analysis, designed to get people to read the abstract, then look at the page count, and then treat it as credible. MFA is not going to save the system money. Take it to the bank.
time-domain0 8y ago
Let's say an American has to have a very expensive treatment for stage IV cancer that exceeds their insurance's lifetime limit and they can't work. They can say goodbye to their health insurance, goodbye to their savings and hello to bill collectors will force them into bankruptcy where they have to justify keeping a home, a vehicle and the clothes on their back. Dying and having to pay late fees that a person can't pay. It's criminal. It really sucks when that person is married with children. It's often better for the spouse to divorce them and take all the assets well ahead of declaring bankruptcy so they can't be liquidated and lose everything. This is what corporate hospitals, for-profit insurance companies and big pharma has reduced care to: make as much money as possible while screwing over patients, and killing them with substandard care compared to the rest of established economies. Unregulated capitalism is a cannibal.

78 points by cribbles 8y ago

One thing that sometimes gets lost in the "health care is inefficient" discussion is that one person's inefficiency is another person's living. The cost controls the paper appears to advocate for literally mean someone is making less money, that someone will advocate strongly against it. I've spent the past 3.5 years in healthcare, everyone is convinced they're not the problem, that they're underpaid or overworked or whatever. I would love for some sort of centralized system to push down costs, but I fear it's not realistically every going to happen.

toomuchtodo 8y ago
> One thing that sometimes gets lost in the "health care is inefficient" discussion is that one person's inefficiency is another person's living. You are not entitled to a living as bureaucratic waste. We should of course help retrain those who lose their jobs, just as we're doing for coal workers who are going to be out of a job within the next five years. I want my healthcare dollars going to healthcare providers (doctors, nurses, nurse practitioners, CNAs, drug research R&D, medical technology innovators), not private insurance companies, not administrators or third party billers, and most assuredly, not shareholders. I want the AMA to be handicapped from preventing us from dramatically increasing the number of doctors in the US (the American Medical Association operates as a cartel/cabal, attempting to limit supply to keep wages high); they also attempt to reduce the authority given to nurse practitioners [1]. > I would love for some sort of centralized system to push down costs, but I fear it's not realistically every going to happen. The majority of Americans say the government should be responsible for ensuring health care coverage for all Americans [2]. Universal healthcare will arrive in the US eventually, the question is when. The current model is unsustainable, and will reach a tipping point. [1] https://www.modernhealthcare.com/article/20171214/NEWS/171219932 https://www.modernhealthcare.com/article/20171214/NEWS/17121... [2] http://www.pewresearch.org/fact-tank/2017/01/13/more-americans-say-government-should-ensure-health-care-coverage/ http://www.pewresearch.org/fact-tank/2017/01/13/more-america...
- ams6110 8y ago
  Only a few generations ago, healthcare was not so ruinously expensive in the USA. We've never had taxpayer-funded universal care. So what caused the explosion in costs?
  - toomuchtodo 8y ago
    TL;DR Lack of cost controls and unnecessary administrative costs. > In the U.S., they point out, drugs are more expensive. Doctors get paid more. Hospital services and diagnostic tests cost more. And a lot more money goes to planning, regulating and managing medical services at the administrative level. So, we're all getting a lower quality of care for a lot more money, due to how the healthcare "market" is configured. https://www.nytimes.com/2018/03/13/upshot/united-states-health-care-resembles-rest-of-world.html https://www.nytimes.com/2018/03/13/upshot/united-states-heal... https://www.cnbc.com/2018/03/22/the-real-reason-medical-care-costs-so-much-more-in-the-us.html https://www.cnbc.com/2018/03/22/the-real-reason-medical-care... https://www.cnn.com/2017/11/07/health/health-care-spending-study/index.html https://www.cnn.com/2017/11/07/health/health-care-spending-s... https://www.consumerreports.org/cro/magazine/2014/11/it-is-time-to-get-mad-about-the-outrageous-cost-of-health-care/index.htm https://www.consumerreports.org/cro/magazine/2014/11/it-is-t...
    - sedor0115 8y ago
      This fails to address the elephant-sized American in the room. Any analysis of increasing healthcare costs that doesn't quantify the fiscal impact of the average American's failure to care for themselves is just beating around the bush. The obesity rate alone has gone from 10% in the 60s to 40% today. These people need more care that is harder to provide, and to not expect healthcare costs to rise significantly from that is to expect healthcare workers to work for free. Our system is a little sick, sure, but the bulk of the responsibility for the current situation lies squarely at our own feet as individuals. This problem will never be solved before America puts down the fork.
  - rednerrus 8y ago
    The elastic nature of health care costs and the disconnect between the people making the purchases and the people paying the bills. If you have insurance, chances are that you are not asking your doctor how much something is going to cost. You are not likely to shop around or work to get the best deal. As a healthcare provider, where is the incentive to bring costs down.
ArchTypical 8y ago
> that they're underpaid or overworked or whatever Having family in healthcare and being a lifelong patient due to a congenital defect, a job in software (including management obv) is a breeze compared to health care worker jobs across the board. They require more "schooling" (via mind-numbing training), are underpaid, have much more serious consequences from mistakes, have less oversight, work longer hours and under worse conditions. It's disheartening.
- onlyrealcuzzo 8y ago
  I'm pretty sure most people, even administrators in hospitals and insurance, are overworked. Health care in the US is the textbook definition of big business. The only people making easy, stupid money are shareholders.
- agumonkey 8y ago
  People's work shouldn't be reduced, but drugs and devices should be to an extent. Firefighters told the portable EKG costed thousands of dollars (5 or 10 don't recall). That thing had bad 2G connectivity so the graph coudn't be sent to a cardiologist. The sensor/dsp part is worth money, the rest would cost 100$ from any smartphone maker today with better performance and portability. I'm sure the price is rigged for margins. This shouldn't be a market, it should be an open duty to make these cost efficient.
  - ams6110 8y ago
    The real cost is not so much in the hardware but in the certification requirements. Medical devices need to be built to and work at a higher standard than consumer electronics, for obvious reasons.
    - agumonkey 8y ago
      Of course, but the interface and connectivity part of that EKG machine wasn't even up to 2005 cellphones standard. On that point, it's a scam.
thatfrenchguy 8y ago
And a lot of this is administrative overhead. Coming from a country outside of the US, I was also shocked by the price of medecine, every medecine magically seems to be 5-10x more expensive in the US.
- ekianjo 8y ago
  The prices help pay for the huge cost involved in developing drugs. How many drugs were developed in France in the past 10 years compared to how many were developed in the US? You know the answer.
  - Analemma_ 8y ago
    Personally, I would’ve liked to be asked whether I consented to paying 10x the price that every other country pays, in order to subsidize drug development, cause I definitely don’t recall ever agreeing to that deal.
    - ams6110 8y ago
      The problem is your other option is likely not having the drug at all.
  - jayd16 8y ago
    This is pretty specious reasoning. The US is a leader in a lot of industries that aren't healthcare.
  - monocasa 8y ago
    I know that's what's pushed, but how much of that is true? Federal grants pay for a lot of initial frubt work, and drug companies spend around twice as much on marketing as they do on R&D. And that's with all sorts of tax benefits behooving them to call as much as possible of their budget R&D.
    - ekianjo 8y ago
      Marketing is needed everywhere, pharma included. You dont spread awareness of a new drug just by filing an application to the FDA. And marketing expenses are high because potential returns are high and make or break a drug. Note that you dont have really new drugs every year so you need marketing anyway to convince prescribers why your version of the drug in the same class as your competitor is slightly better. In reality most drugs of the same class are pretty similar in efficacy and side effects, but thats a tangential topic.
village-idiot 8y ago
I’ve always worried about the political consequences to the loss of insurance jobs. I also view that job loss as a foregone conclusion due to insurance companies fighting even moderate changes tooth and nail. If even minor improvements to a nakedly broken system are going to get fought against with such ferocity, it’s not surprising that their opponents would try and move the Overton window in response.
bedhead 8y ago
Like, the living of some drug middleman who is a leach on the system and only exists because of some lobbying or other screwed up structure?
- s3r3nity 8y ago
  More like the doctor who has dropped six-figures + a crazy amount of years in education and certification to work very long hours seeing a lot of patients, many of whom think you're a quack and trust an online forum over anything you say. Oh and don't forget the high premiums for malpractice insurance, as you're working crazy hours without breaks, and if you make a mistake you're sued up the whazoo. And that's just describing a PCP - never mind a surgeon, EHS driver, hell even the nurses (though the latter are most likely unionized.)
  - erentz 8y ago
    Doctors aren’t a huge cost issue. Their pay isn’t that outrageous or out of line. It’s the pharmacy costs and administrative costs (and I think also DME costs?) that are seriously out of whack in this country.
    - s3r3nity 8y ago
      Oh I'm not claiming they're out of line - they deserve that pay. My point was that it's not all these evil salesmen / drug capitalists driving high-costs in medicine. Sometimes better quality care just costs more.
  - dc_gregory 8y ago
    These people get paid very well in Australia.
  - jashpool 8y ago
    Cost controls also have a cost. The UK NHS has chronic staffing shortages, UK doctors are going abroad for better pay; currently the favourites are Australia, Canada and the Middle East. I have heard quite a few people say they actively discourage their children from being doctors.
jorblumesea 8y ago
This is the problem with a for-profit healthcare system. Meaningful reform is almost impossible because there's jobs on the line and therefore voters to contend with. More importantly, they are also probably highly educated and well paid voters. Doctors, software engineers, sales, etc. How much white collar employment comes from healthcare inefficiencies? Probably a good percentage of the sector. These workers will need to acknowledge they are part of the problem and willingly give up these positions (or their absurd payouts from them) and vote accordingly. Or not and continue being part of the problem, which I think is your concern.
- prostoalex 8y ago
  US has a host of not-for-profit providers, they’re not drastically cheaper.
  - jorblumesea 8y ago
    Mostly due to the existing for profit system. Not for profits still have to reside within the existing construct of American healthcare and hardly provide any real advantages when they negotiate with for profit entities.
AtlasBarfed 8y ago
The cost problem in healthcare is exactly that: many pigs at the trough, and everyone points at the other pig for being the problem. Healthcare administrators! Drug companies! Device companies! Trial Lawyers! Insurance companies! Doctors (especially specialists)! They're all the problem, and yes lots of them should make less money. I know cardiologists pulling down 500k+ and that is ridiculous. I can see highly skilled surgeons making that much, but pill pushers?
- ams6110 8y ago
  > I know cardiologists pulling down 500k+ and that is ridiculous. I can see highly skilled surgeons making that much, but pill pushers? I don't know about you but I'm not willing to be a student until I'm in my mid 30s, working crazy hours, likely accumulating a significant amount of debt along the way, without some kind of a substantial payout on the other side.
  - travisoneill1 8y ago
    Which is a good reason to not make doctors spend so many years in school. The Europeans don't and their doctors are just fine.
    - jefurii 8y ago
      Also a good reason for state-funded higher education.
- naveen99 8y ago
  Cardiologists aren’t pill pushers. They are interventional radiologists of the heart. They do need lots of skill also.
specialist 8y ago
"cost controls the paper appears to advocate for literally mean someone is making less money" Reference Table S1. Cost controls would account for ~14.5% of the total savings. Hardly seems onerous. Medicare's medical loss ratio is approx 4% (?), whereas ACA caps private insurers at 15%. So clearly there's plenty of fat to be trimmed. TL;DR: Single payer is cheaper, people live longer. Transition will be painful.
rednerrus 8y ago
If we removed the profit paid to investors, isn't there additional money to be paid to people facilitating healthcare and to bring the costs down? It looks like there was $47 Billion, (~9%) in profit in healthcare companies in the US in 2018. https://www.axios.com/health-care-industry-on-track-massive-q2-profits-1533226387-dacec8f8-c9f5-406c-a49e-1103e3316c64.html https://www.axios.com/health-care-industry-on-track-massive-...
- travisoneill1 8y ago
  This accounts for less than 10% of the difference between healthcare spending between the US and other OECD states. See this report for a much more detailed analysis: https://www.mckinsey.com/~/media/McKinsey/Industries/Healthcare%20Systems%20and%20Services/Our%20Insights/Accounting%20for%20the%20cost%20of%20US%20health%20care/MGI_Accounting_for_cost_of_US_health_care_full_report.ashx https://www.mckinsey.com/~/media/McKinsey/Industries/Healthc...

zjaffee 8y ago

My biggest fear of a bill like this is even should we have the most progressive anti corruption government implement this law originally, whats to prevent this from becoming incredibly wasteful just like our military is. I.e. we spend a trillion dollars over decades trying to develop some drug that turns out to take us nowhere, while enriching pfizer shareholders this time instead of lockheed martin ones. I absolutely support medicare for all, even though as a healthy young software engineer this will raise the cost of my healthcare a ton, I'm just nervous that this will result in the largest negative iron triangle in the history of our country.

mlthoughts2018 8y ago
That is the line of thinking explored in Robin Hanson’s article, “Cut Medicine in Half.” https://www.cato-unbound.org/2007/09/10/robin-hanson/cut-medicine-half https://www.cato-unbound.org/2007/09/10/robin-hanson/cut-med... Combined with research on how wealth, family status, social status, access to sex partners, etc. etc. correlate with health outcomes even after controlling for access to doctors, hospital care, etc., it raises a lot of questions. It seems most of the money we spend on medicine as a society is just a form of signalling. We “care” if we give X dollars worth of medical service, regardless of whether that led to a positive outcome or if the outcome could have been obtained more effectively through less “showy” ways or unglamorous things that don’t involve medical procedures or treatment. It goes along with the idea of “betting is a tax on bullshit.” If we paid medical entities based on successful outcomes, including at the population level, then it might incentivize creative, cost-effective solutions instead of providers shoveling more ineffective treatment and demanding high pay just based on administering it.
nickysielicki 8y ago
This is why the scope of government matters. I do not understand why people have this idea that it's the job of the government to do things like speculate on the economy via quantitative easing, or save money overall on healthcare costs. The federal government ought to have a few simple jobs --- the ones laid out in the constitution, and everything else can be left up to the people and to the states. I would rather live in a country where healthcare maybe costs more than it otherwise could, and where the economy maybe recovers slower than it otherwise would have, than to live in a country where the government takes lots of our money trying to fulfill promises that it cannot keep. Medicare is projected to be insolvent in 2026, and Social Security is projected to be insolvent 8 years later. We're due for an economic downswing in the next few years (if not the next few months). Our economy will not keep up with the developing world powers; NATO is increasingly irrelevant and the petrodollar is threatened. What are we going to tell the people who depend on these dying programs? "I know that you worked your whole life in a factory, and I know that you are too old to work, and I know that you paid into this system your entire career, and I know you aren't getting enough to get by. But we had the best intentions in mind!" America is rich because we won WWII, not because of American Exceptionalism. The comfortable life that American culture was built on (while the rest of the world needed half a century to recover) is going away quickly. The social programs that we already have in place have less than 6,000 days remaining before they fall apart, and in these last hours, we're seriously talking about adding on? No thanks. I'm okay with living in a poor country. I'd prefer for my government to not fail as a result, though.

deleted 8y ago

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ribble 8y ago

| Medicare for All could reduce total health care spending in the U.S. by nearly 10 percent, to $2.93 trillion, while creating stable access to good care for all U.S. residents. how? by taxing a few earners to pay for everyone else not earning. is that fair? in that light, a ten percent reduction in cost is meaningless.

diego898 8y ago
Can you expand on what you mean by "in that light, a ten percent reduction in cost is meaningless."?
- ribble 8y ago
  that "ten percent less" of a payment is no longer being paid by particular patients, it's being paid by everyone. that's like saying, "chris wasn't sick, but don't worry, though 50% of his salary is now gone so everyone has healthcare, he's paying 10% less."
aczerepinski 8y ago
High earners were on average raised by high earning parents. Is being born rich fair? Which stages of the game should be fair?
- anarchimedes 8y ago
  (C'mon downvotes!) I thought the idea of paying your "fair share" was in relation to the services provided by the taxes paid. I can take an extreme example that I've tried to steel man to hold up this point: Bill Gates. Does Bill Gates the man use more taxpayer provided military/healthcare/infrastructure.. than anyone else? Of those things that he does use more of, if he taxed by the volume of those services used (example: water/sewer) and therefore paying his fair share? What difference does it make if her was born to rich parents? How does that make it right to make him pay more money? I am asking respectfully and I sincerely hope that you do not take this as an attack. edit: spelling
  - 8y ago

educationdata 8y ago

How can they assume this will not change how everything else works? Yes. You can say statistically we did the comparison by holding everything else the same, but it only means "statistically". It definitely does not mean in reality you can hold everything else the same. There is no way when the policy changes, the system still works as before. This kind of study is totally delusional. A policy works in other countries does not guarantee it will work in the U.S. For one thing, U.S. doctors make much more money than other countries. There are also other many differences. How can you assume you can simply move a policy successfully from other countries without making other important changes?

AnimalMuppet 8y ago
Second order effects... the bane of well-meaning policies. On the other hand, how else are you going to do it? Do you know what the second-order effects are going to be? How sure are you? Can you prove it to someone who doesn't hold the same intellectual framework or political leaning that you do?

pdq 8y ago

Hypothetical economic studies and analyses are almost worthless. In normal science, you need something to be testable, verifiable, and reproducible. I'm quite sure none of these are possible. Just as a counterpoint, the US public primary school education is state run and funded, and has both poor outcomes and is the most expensive in the world [1]. Just because something is run or controlled by the state does not mean it will magically be either efficient or high quality. [1] https://www.theguardian.com/us-news/2018/sep/07/us-education-spending-finland-south-korea https://www.theguardian.com/us-news/2018/sep/07/us-education...

api 8y ago
America seems to have a huge problem with everything it does being incredibly costly. It's definitely true in the public sector and universities and also in large areas of the private sector. American healthcare being more expensive than anywhere else fits the pattern. It also apparently costs more to build a rail line or any other work of infrastructure here than anywhere else in the world. I'm not sure why this is, but health care is not exceptional.
- darawk 8y ago
  America has high costs anywhere that government is involved. Healthcare, infrastructure, etc...The pure private sector is quite efficient here.
  - maxxxxx 8y ago
    How about internet access or cell phones? Is that the government's fault too?
    - slg 8y ago
      In a word, yes. Those industries already have a high barrier to entry which stifles competition and can lead to high prices. However the governments response to that has not been to try to innovate or subsidize new competitors to lower barriers. Their response has been to establish rules that make it harder or even impossible for new competitors to enter the market.

DubiousPusher 8y ago

It seems to me that industrialized countries the world round have different ways of organizing the relationship between patients, payers and providers. There's nearly 100% public models like the NHS in the UK and hybrid market systems like those in Singapore and Switzerland. But the one thing they all seem to do the same is how they keep costs down. They give the payer, whether that's the government or separate insurers a legal framework for setting prices. I know correlation is not causation but until some country shows strong price performance while implementing a different scheme it seems wise to defer to the one that is ubiquitous.

ams6110 8y ago
Price controls cause shortages. Simple economics.
- jedharris 8y ago
  there is always a simple economic reply to every proposal —- neat, plausible, and wrong

rb808 8y ago

Its such a fundamental change I doubt a study could accurately predict changes. I can't read the PDF but I know debate often misses things like: * A big boost for companies as unprofitable companies don't have to pay healthcare of employees. (assuming paid with taxes) * Free medical care means things like ambulance chasing lawyers are not required * Govt is more incentivized to look after the health of citizens as it has to pay for diabetes treatment etc. * People are more likely to retire early, or quit work and live cheaply.

sedor0115 8y ago

The only thing America can really do to get healthcare costs under control is actually really obvious: put down the fork.

shard972 8y ago
What about the herion addicts that the healthcare system created? I don't think less food is going to solve their problems.

travisoneill1 8y ago

For an in depth look at the state of the current US system as compared to other developed countries see this report: https://www.mckinsey.com/~/media/McKinsey/Industries/Healthcare%20Systems%20and%20Services/Our%20Insights/Accounting%20for%20the%20cost%20of%20US%20health%20care/MGI_Accounting_for_cost_of_US_health_care_full_report.ashx https://www.mckinsey.com/~/media/McKinsey/Industries/Healthc...

pg_bot 8y ago

A lot of issues with America's healthcare system boil down to what I call "the interception problem". A quarterback who throws an interception directly to a defender without a wide receiver in the vicinity is treated the same as someone who hit a receivers hands and was tipped to a defender when you are looking at the stat sheet. Your perception of the analysis changes drastically if you actually observe the actions going on. I'll take an example from the real world to illustrate my point. When you look at the data, the United States clearly has the highest infant mortality rate of developed countries. On its face it would seem that the United States is clearly failing pregnant women, and that this is a terrible problem that needs to be addressed. However, if you observe the differences between the data sets and actually view how deliveries happen in real life you see a different picture. Not all pregnancies carry the same risk, and the US has a higher percentage of high risk pregnancies than other countries. If you compare people in the same cohorts the US fares a lot better. In layman's terms, we shouldn't treat an infant death from a 25 year old mother who carried to term the same as one from a 40 year old born a month premature. The US is also the most aggressive country in the world when it comes to attempting to save prematurely born children. We try and succeed at a higher rate than anywhere else in the world. I have failed to meet a person who thinks trying to save a prematurely born child is a bad thing. Yet it's those kind of actions that skew the stats. We need more advanced medical statistics. I hope the sabermetrics revolution makes its way into the medical field. If more people are interested, I could probably expand my thoughts further with other examples that look bad on the surface, but actually aren't as bad as you think.

acslater00 8y ago

The math here is based on the idea that MFA would reduce the per-person expenditures by 19% (19.2% actually) (1) 5.9% by unilaterally reducing drug prices by 40% (2) 2.8% by unilaterally reducing medical service prices by 20% (3) 1.5% through the claim that MFA would have fewer "excess services" (4) 9.0% from allegedly increased efficiency due to only having to deal with one payer Is this at all plausible? Achieving (1) and (2) would be - um - difficult, to say the least! In real life, prices would be set by a political process. Our actual history of attempts to unilaterally reduce medical reimbursement reates is not promising! [see https://en.wikipedia.org/wiki/Medicare_Sustainable_Growth_Rate https://en.wikipedia.org/wiki/Medicare_Sustainable_Growth_Ra... or the debate over Medicare drug price negotiation]. (1) & (2) con't: Imposing a single-payer system and then having that payer set prices is effectively the same as imposing a national price control regime, which we in theory could do without MFA. We have not done this, despite the fact that it would save everyone an enormous amount of money. Why not? Because it would be insanely controversial and take a ton of money out of some people's pockets, especially doctors and nurses. Will this be easier under MFA? (3) The idea that MFA would be structurally less likely to provide "excess" health services seems pretty optimistic indeed. Our military, for example, is not really known for being budget conscious and aggressively efficiency minded. Nor are our state and local level agencies, e.g. the MTA here in NY. Spending policies are set by a political process, and political processes are prone to over- rather than under- spending in every case I can think of. (4) The 9%(!) savings from "billing efficiencies" is based on an assumption that billing expenses in medical offices will be reduced by 2/3 when there is only a single payer. Why would this be? Billing expenses scale with the number of bills, not the number of vendors. Will MFA lead to fewer procedures on net? Will it eliminate the concept of prior authorizations, which represent the bulk of these "excess" BIR expenses? Will providers and patients not have coverage disputes? Will MFA have dramatically superior automation than private payers? Note that Germany has a multi-payer system and has Canada-like administrative costs [https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2013.1327 https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2013....]. There are hidden variables here. Here's the thing: The most superficial argument in favor of MFA is to look at a country like Canada and say "Canada spends X / pp on healthcare and they have a single payer system, therefore if the US adopts a single payer system, our costs will drop to X!". That's not real analysis, and it ignores all the cost drivers that have nothing to do with the payer. This paper is a drill-down to component costs, but ultimately is no less superficial. MFA billing will be 65% more efficient because Australia billing is 65% more efficient than the US. Prescription drugs will be 40% cheaper because Canada pays 40% less than the US. And so on. If you could realize any of these cost savings in MFA, you could realize them now. But you probably can't - not easily, anyway, and after burning all your political capital on a $1T/year tax hike it will only be harder. The cost-savings will be compromised to get the medical industry on board, just like it was during the Obamacare debate. And now you can toss this whole analysis in the garbage. This is wish-casting dressed up in 200 pages of rigorous-looking analysis, designed to get people to read the abstract, then look at the page count, and then treat it as credible. MFA is not going to save the system money. Take it to the bank.

time-domain0 8y ago

Let's say an American has to have a very expensive treatment for stage IV cancer that exceeds their insurance's lifetime limit and they can't work. They can say goodbye to their health insurance, goodbye to their savings and hello to bill collectors will force them into bankruptcy where they have to justify keeping a home, a vehicle and the clothes on their back. Dying and having to pay late fees that a person can't pay. It's criminal. It really sucks when that person is married with children. It's often better for the spouse to divorce them and take all the assets well ahead of declaring bankruptcy so they can't be liquidated and lose everything. This is what corporate hospitals, for-profit insurance companies and big pharma has reduced care to: make as much money as possible while screwing over patients, and killing them with substandard care compared to the rest of established economies. Unregulated capitalism is a cannibal.