28 ms·

The US spends more on healthcare for no gain says new report from Johns Hopkins

• airstrike 8y ago
  It's worth noting that the U.S. market does pay for the lion's share of patented drugs, effectively funding a significant portion of R&D that benefits the whole world years later when generics come into market (at least for those drugs which are not costly to manufacture, which happen to be the majority). I'm not saying this model is right. I'm just saying that doing away with it will have fundamental consequences to healthcare R&D EDIT: To be clear, a minority of drugs are either very hard to manufacture (It's been a while for me so I don't recall their exact name, but I think they may be called "biosynthetics" – please correct me if I'm wrong) or researched for a very small number of patients (so-called "orphan drugs"), which confers them additional protection from generics and competitors. These generally have much higher prices than the "standard" drug.
  • api 8y ago
    If this is in fact true it means the rest of the world is freeloading off the US system. Not saying I'm convinced it is true. I'd like to see a deeper unbiased analysis.
    • Alex3917 8y ago
      > If this is in fact true it means the rest of the world is freeloading off the US system. Sort of. We also export our definitions of diseases, and since the market for new diseases is a lemon market it makes sense that other countries should pay less for the treatments. E.g. if people in other countries can't really be sure whether or not hysteria is really a real disease that affects women, it makes sense that they would be less willing to pay the full price for cure. It's just like how consumers in the U.S. probably wouldn't pay full price for a pill to prevent fan death. Overall though the U.S. probably comes out ahead by exporting its medical model.
    • dogma1138 8y ago
      Define true, it is true that the US spends more on medical research than the rest of the world combined, and produces more drug patents than the rest of the world combined. https://assets1b.milkeninstitute.org/assets/Publication/ResearchReport/PDF/CASMIFullReport.pdf https://assets1b.milkeninstitute.org/assets/Publication/Rese... This btw went up fairly recently especially since Indian generics became accepted world wide in the late 90’s and early 2000’s. The US used to produce 20-30% of the world’s drug patents now its peaking at 60%.
      • JAlexoid 8y ago
        Probably has something to do with the research facilities in US becoming better and better with time. Since you don't really need to be in US to create drugs for US market.
        • dogma1138 8y ago
          The US always had the best facilities, biomedical research started in the US the Rockefeller University was the first one in the world iirc. This doesn’t explain it really what could explain it is that as the cost of developing a drug became higher more and more players dropped out of the game especially as the revenues started shrinking due to Indian generics becoming popular around the world.
    • krupan 8y ago
      "In Europe, drug prices are set by governments, not by pharmaceutical companies the way they are in the U.S. On average, the difference between the price of one drug in the U.S. and the same drug in France, Germany, Italy, Spain and the U.K. was 50 percent, an analysis by the consulting firm McKinsey has found. “U.S. consumers are in fact subsidizing other countries’ public health systems, at least with respect to drug pricing,” Jacob Sherkow, an associate professor at New York Law School, said." https://www.ibtimes.com/how-us-subsidizes-cheap-drugs-europe-2112662 https://www.ibtimes.com/how-us-subsidizes-cheap-drugs-europe...
    • fzeroracer 8y ago
      I would say it's more likely that the rest of the world has realized that collective bargaining allows them to set prices far lower than countries like say, America where they're free to gouge the money right out of your wallet. If you don't play ball with a government, you're denying yourself a lot of potential customers. A single person? A fraction of a fraction of a drop in a bucket.
    • tripzilch 8y ago
      > If this is in fact true it means the rest of the world is freeloading off the US system. It would be if the US system was in fact efficient and good. But it's not. It doesn't work for the people. It's a huge beast that is out of control and costs billions. It will happily "research" identical drugs, worse drugs or unnecessary drugs if it means it can milk patents for a few years longer. As it currently stands, it's more accurate to say that drug research in the rest of the world is suffering because it's being dominated (because part of the billion dollar budgets go to marketing) by the US pharma industry, including everything that is broken about it. If we were freeloading, wouldn't we just take the useful results of your research?? But we get the bullshit too, because yes, your pharma marketing budgets are so huge they do in fact reach overseas.
  • mikeyouse 8y ago
    Meh -- If this is the case, it would be far better to explicitly fund research and development in a separate appropriation rather than just mindlessly subsidizing all prescription meds. Calamities like the Valeant fraud would be much less common without the US dramatically overpaying for drugs. https://www.newyorker.com/magazine/2016/04/04/inside-the-valeant-scandal https://www.newyorker.com/magazine/2016/04/04/inside-the-val...
    • airstrike 8y ago
      The Valeant fraud was 90% sketchy accounting and 10% price hikes, more Enron than Martin Shkreli. By anyone's standard, they are not representative of the U.S. Pharma market as a whole.
      • mikeyouse 8y ago
        Without the accounting fraud, they're not far off the US pharma market as a whole... Teva is doing the same nonsense with generics, Turing did with their toxoplasmosis drug, Mallinckrodt bought Ofirmev then jacked up the price by several hundred percent, Allergan & Pfizer were trying to merge solely to tax advantage of Ireland's (and the US's) dumb IP/tax laws, GSK, Abbott, and J&J have all paid billion dollar settlements for their fraudulent marketing practices. Look at the PBMs that are suddenly worth billions of dollars purely by being middlemen between Pharma and Insurance companies. There is so much obnoxious 'financialization' and tax optimization to justify share prices.
      • JAlexoid 8y ago
        What is representative of the US market, is the cost of marketing in US.
    • BurningFrog 8y ago
      >Meh -- If this is the case It is. If the US starts paying what Sweden pays for drugs, there is no one left to pay the cost of developing drugs on this planet.
  • sbov 8y ago
    I've heard this argument a lot, even by diehard conservatives. The amazing thing about it coming from these diehard conservatives (I'm not saying you're one of them, your comment just reminded me of it) is they're basically saying it's OK for the USA to help the rest of the world socialize their drug costs but it's not OK for the USA to help socialize drug costs for their own citizens.
    • brohoolio 8y ago
      It’s a talking point. Compact. Powerful. No grounding in reality. My dad is a conservative and his talking point about the house member who called trump a motherfucker shouldn’t have said that because she’s a woman. It’s ok that Trump swears but my dad was literally screaming about this representatives language.
    • brohoolio 8y ago
      I should say it’s the kind of comment that throws off the whole thread, instead of talking about the article we are all arguing about talking points.
  • brohoolio 8y ago
    I’m not sure what kind of R&D the $800 or whatever it costs now Epipen is paying for. R&D for lobbyists? Or profits because the company gamed the market.
    • brohoolio 8y ago
      ^famed^gamed
    • airstrike 8y ago
      The EpiPen is one of the "hard to manufacture" drugs I mentioned. Although it is top of mind to many, it is not representative of the market. EDIT: "hard to manufacture" is in quotes because it's what I said in my parent comment (though to be fair I said "costly to manufacture"), but I meant it as an umbrella term for everything that can't be substituted by generics
      • dragontamer 8y ago
        If it was hard to manufacture, why is it cheaper in Europe?
      • AngryData 8y ago
        There are cheap generics all over. The only patent EpiPen has is the applicator. Generics require you to take a syringe and inject it by hand because the patent prevents competitors from using a similar style spring loaded applicator. The epinephrine used in epipens is extremely cheap to produce.
      • Retric 8y ago
        EpiPen is just an epinephrine autoinjector which date back to the 1970’s. The medicine is much older and very cheap ~50 cents. In term of cost syringe‘s cost ~15 cents and work fine in experienced hands, but auto-injection makes them slightly less error prone. It’s litterally over a 300x markup for a rare problem.
      • modriano 8y ago
        EpiPens used to cost under $100 for a 2-pack, but now they cost over $600 for a 2-pack. Epinephrine costs like $0.17 per ml, and an EpiPen dose is 0.3 ml. http://mshpriceguide.org/en/single-drug-information/?DMFId=298&searchYear=2014 http://mshpriceguide.org/en/single-drug-information/?DMFId=2...
  • tzs 8y ago
    That would explain why we pay more for drugs, but as the article notes higher drug prices is just one thing we pay more for: > The researchers determined that the higher overall health care spending in the U.S. was due mainly to higher prices—including higher drug prices, higher salaries for doctors and nurses, higher hospital administration costs and higher prices for many medical services.
  • craigc 8y ago
    Do you have any sources/data for this? I would be very curious to see it. The mentioned costs in this article only point to > higher drug prices, higher salaries for doctors and nurses, higher hospital administration costs and higher prices for many medical services I’m not sure if R&D costs are factored in at all for this particular study.
    • dogma1138 8y ago
      The US spends more on biomedical R&D and produces more drug patents than the entirety of the world combined. https://assets1b.milkeninstitute.org/assets/Publication/ResearchReport/PDF/CASMIFullReport.pdf https://assets1b.milkeninstitute.org/assets/Publication/Rese... As far as it’s implications on the cost of healthcare in the US I don’t think there is data for it since it’s pretty hard to measure.
      • craigc 8y ago
        Good to know, but my question really has to do with if the extra cost for doctors, hospitals, drugs, etc. is used to offset R&D costs. What I am getting at is that in theory, it should still be possible to do a lot of great R&D work while still providing affordable health care to citizens. I don’t think they are necessarily tied together. Also more patents is not necessarily a good thing since they can create more legal hurdles and red tape for other pharmaceutical companies who may want to build on top of the ideas and inventions.
        • dogma1138 8y ago
          Could be but the fact is that still the country with the highest cost of health care is the one that producing more drugs than the rest of the world combined. The US is also 40% or so of the global pharmaceutical market given its population it literarily funds the profits of the global pharmaceutical industry doesn’t matter if it’s American Swiss or Indian company they all make their buck on the back of Uncle Sam. It’s not clear what the impact would be if the US would say start paying 50% less for health care on the world.
      • 8y ago
  • maxxxxx 8y ago
    I would like to see some hard numbers for this. Otherwise I believe this is just self-serving propaganda by drug manufacturers.
    • cameronh90 8y ago
      Especially when you consider most pharma companies seem to make around 15-30% profit after all costs/R&D... not many industries manage those kind of numbers.
      • anonymous5133 8y ago
        You are looking at a biased data set is why. You are looking at the biggest drug manufacturers in the world which most likely own the most lucrative drugs. If you want a more unbiased sample then you need to look at the entire industry. For small drug companies most of the time their drugs do not get FDA approval or doesn't pass some regulatory approval and the whole company folds. For the bigger drug companies, the trend isn't to increase R&D spending but rather to simply buy up smaller companies that have patented drugs. This makes sense though because of eroom's law which states that even with advanced technology...creating new drugs or discovering new treatments is getting harder (more expensive) which means that the rate of return for drug R&D is declining.
      • thousandautumns 8y ago
        There's plenty of industries that do. Tech makes much more. In fact, pharma on average spends a greater proportion of revenue on R&D than just about any other industry.
  • grecy 8y ago
    Except that every company involved in the healthcare industry in America (drug companies, insurance companies, hospitals, etc.) make hundreds of billions (or trillions) in profit each and every year. The reason for the high prices is because healthcare in the US is an extremely, extremely lucrative for-profit industry.
    • orangecat 8y ago
      Health insurers and hospitals have profit margins under 5%. Pharma margins are larger but not outrageously so. https://www.investopedia.com/ask/answers/052515/what-usual-profit-margin-company-insurance-sector.asp https://www.investopedia.com/ask/answers/052515/what-usual-p... https://www.advisory.com/daily-briefing/2017/05/18/moodys-report https://www.advisory.com/daily-briefing/2017/05/18/moodys-re... https://www.bbc.com/news/business-28212223 https://www.bbc.com/news/business-28212223
      • rsj_hn 8y ago
        That doesn't mean anything at all. The problem is dissipation of rents -- when an industry gets an economic rent, expenses will tend to increase to the maximum allowed by market discipline. This is true for all bureaucracies -- e.g. Universities are always out of money but keep charging more. Hospitals are always out of money but still charge too much. That a firm finds a way to spend the money does not mean that the amount charged is the minimum that is possible in a long term stable solution. Prices are clearly out of line in these fields with OECD averages, yet each specific firm finds that its expenses are great enough that they only earn the market required return.
        • philwelch 8y ago
          So where does the money physically go? If I’m a rent-seeker, I still have an incentive to be stingy with my expenses. The only reason I wouldn’t would be if someone else had a monopoly and was rent-seeking on me, but who’s doing that? I wouldn’t rule out the possibility that it’s rent-seeking all the way down, but you’d have to make that case. Suppose you say, doctors and pharma companies are rent-seeking, and I say doctors don’t really bring home the bacon and pharma has a 5% profit margin. Then you say, well, it’s the bureaucrats, and then I say, why doesn’t some pharma company just fire the bureaucrats and keep the profit margin to themselves? They can’t because of regulations? That’s not even rent-seeking anymore, it’s just over-regulation and you can fix it with deregulation. OK, well, the doctors have their student loans and the pharma companies have some other requirements that they need universities for, so universities are the real rent-seekers. Except it’s not the universities, who are broke, it’s—well, who seeks rent from universities? I’m not ruling it out, but this is also starting to sound like it leads back to the Rothschilds somehow. You can’t just say “Americans pay more for X therefore rent-seeking”. There are lots of things that can cause inefficiencies.
  • shereadsthenews 8y ago
    R&D only comes to about $500 per capita per year. That doesn’t amount to a significant fraction of Americans’ inflated costs.
    • kodablah 8y ago
      It's not just about pure R&D, it's about all the financial incentive for all the wheels that will be greased by it all throughout the industry. On the outside we don't like it, but we can't pretend the drive for research isn't also built on the back of the drive for profits outside of research.
  • cameronh90 8y ago
    It does appear to be the case that the US funds most pharma R&D due to Americans overpaying relative to the rest of the word. In some cases (China, India) this is due to weak IP protection, but in other cases (Canada, UK, Europe) it's more to do with our governments having a stronger negotiating position and setting hard limits on what they'll spend for a given benefit to patients. Some characterise this as freeloading, but looking at the NHS for example, they set relatively clear limits for how much they will pay per quality-adjusted life year that a drug provides. If a drug costs more than this limit, financially more people will lose out if our healthcare system purchases this drug over something else (more doctors, hospital beds, etc.). Does this make us immoral for "freeloading", because we prefer putting our limited money into cost effective treatments? Also, is it not worth looking at why pharma R&D costs so much? The pharma industry seems to run at a very healthy profit margin compared to most other industries. Maybe the lack of market pressure is allowing the pharma industry to remain fatty? Obviously there's a fear that cutting US pharma revenue would hurt global medical R&D, but I don't see this as being a foregone conclusion. It could just as possibly be market failure and regulatory capture keeping pharma R&D expensive.
    • rayiner 8y ago
      > The pharma industry seems to run at a very healthy profit margin compared to most other industries. But not compared to other high risk, capital intensive industries, i.e. tech.
      • refurb 8y ago
        Any those margins only look great if you ignore the billions of investment that failed to produce $1 of revenue.
    • darawk 8y ago
      > Does this make us immoral for "freeloading", because we prefer putting our limited money into cost effective treatments? It doesn't make you immoral, but it is important in understanding the tradeoffs of suggesting that the US switch to an NHS-style system. > Also, is it not worth looking at why pharma R&D costs so much? The pharma industry seems to run at a very healthy profit margin compared to most other industries. Maybe the lack of market pressure is allowing the pharma industry to remain fatty? Obviously there's a fear that cutting US pharma revenue would hurt global medical R&D, but I don't see this as being a foregone conclusion. It could just as possibly be market failure and regulatory capture keeping pharma R&D expensive. They may be doing well, but you may not be seeing all the little pharma companies that die trying. At the end of the day, investors are allocating capital where they think they can get returns. If you reduce the returns of pharma, you reduce the attractiveness of investing there.
  • tomlock 8y ago
    I think it is also worth noting that number of drugs patented is not necessarily the best metric for measuring healthcare success. I think one of the best is perhaps life expectancy - and that's dropping in America, patents or no.
    • kodablah 8y ago
      I don't think anyone was arguing it is a success, so not worth debating that non argument. The commenter simply pointed out something that exists.
      • tomlock 8y ago
        I am similarly pointing out something that exists, the falling life expectancy in America. I am also pointing out that patents are not a good metric for healthcare success, whether or not the OP intended that it be used that way. I'm not debating anyone with my comment.
  • cmurf 8y ago
    Proof? What about the cost of marketing drugs? What about shareholder profits? Both of those could come down without affecting the R&D budgets.
  • krupan 8y ago
    Everyone asking for sources fornthis, just think about it. What if Europe decided that iPhones we're too expensive and implemented Single-Payer Phone Care? They'd dictate a price that the government would pay for iPhones in their countries and Apple would either not sell iPhones in Europe at all, or they would sell for the dictated price. They'd do their market studies and possibly conclude that they can jack up U.S. prices and still stay in business in Europe. With something like pharmaceuticals, of course the U.S. customers are going to pay the higher price, they need the medicine! That means that European countries are of course squeezing the drug companies (which really means squeezing U.S. citizens) as much as they can get away with. They would be dumb not to.
    • graeme 8y ago
      What percent of us health costs are pharmaceuticals? You also have to factor in that americans take more pharmaceuticals than in other places, likely fruitlessly or even harmfully in a lot of cases.
    • tripzilch 8y ago
      That is not how any of this works.
  • cpncrunch 8y ago
    But R&D isn't included in the OECD health spending database as far as I can tell. http://www.oecd.org/els/health-systems/health-data.htm http://www.oecd.org/els/health-systems/health-data.htm
    • ekun 8y ago
      I think it wouldn't be explicitly included, but it goes into the bottom line of big pharma companies. There is a very lengthy process of getting drugs through the FDA which makes investment's return-on-investment difficult to justify without raising already available drug prices. (edit: Having said that, our healthcare costs are out of control and it's not directly because of the R&D. It has more to do with wild overhead in insurance and HMOs where only a small fraction of what consumers pay goes to healthcare.)
      • asdff 8y ago
        >There is a very lengthy process of getting drugs through the FDA which makes investment's return-on-investment difficult to justify without raising already available drug prices. The lengthy process is there for a reason, it's not some hamper on profits just to hamper profits. Do we believe that the FDA is full of short sellers? Poor Pfizer, they won't get more money than they've spent! The logic here is sinister. ROI on drugs shouldn't be every dollar spent gets you a dollar ten and a drug, it should be you have a drug. The basic research that informs R&D spending has a ROI of zero by business metrics. It is sad to think that the trajectory of medical advancement is dictated not by what we can achieve as scientists, but what is profitable for businessmen. When Jonas Salk was asked who owns the patent to the polio vaccine he developed, he replied, "Well, the people, I would say. There is no patent. Could you patent the sun?" In 1988 there were an estimated 350,000 cases of poliomyelitis worldwide, in 2018 there were 29 (1). The global initiative to eradicate the disease would not have been possible had the vaccination been for-profit. (1) https://www.who.int/en/news-room/fact-sheets/detail/poliomyelitis https://www.who.int/en/news-room/fact-sheets/detail/poliomye...
      • cpncrunch 8y ago
        Pharma company “bottom line” (or any other measure of pharma companies) isnt included in the OECD dataset. See link above.
  • buboard 8y ago
    while it is probably true that US healthcare is subsidizing drug discovery (perks of being the strongest economy), there still seems to be an asymmetry in the US. E.g You spend 6-8 times more in administrative costs and about 2 times more in drugs: https://jamanetwork.com/journals/jama/article-abstract/2674671 https://jamanetwork.com/journals/jama/article-abstract/26746... Administrative costs of care (activities relating to planning, regulating, and managing health systems and services) accounted for 8% in the US vs a range of 1% to 3% in the other countries. For pharmaceutical costs, spending per capita was $1443 in the US vs a range of $466 to $939 in other countries. Salaries of physicians and nurses were higher in the US; for example, generalist physicians salaries were $218 173 in the US compared with a range of $86 607 to $154 126 in the other countries.
  • darawk 8y ago
    Yep. This needs to be repeated more.
  • ridgeguy 8y ago
    >It's worth noting that the U.S. market does pay for the lion's share of patented drugs... And even in doing so, we're getting contaminated meds. See the article at Ars,[1] which is based on a recent study from Kaiser.[2] [1] https://arstechnica.com/science/2019/01/scary-reality-meds-tainted-with-germs-glass-carcinogens-mystery-particles/ https://arstechnica.com/science/2019/01/scary-reality-meds-t... [2] https://khn.org/news/how-tainted-drugs-reach-market-make-patients-sicker/ https://khn.org/news/how-tainted-drugs-reach-market-make-pat...
    • masonic 8y ago
      we're getting contaminated meds ... from overseas. All the examples in that article were non-US manufacturers.
  • theseadroid 8y ago
    >I'm not saying this model is right. I'm just saying that doing away with it will have fundamental consequences to healthcare R&D. Might not be a bad thing to try it out and see what the consequences can be.
  • Scoundreller 8y ago
    Sorta. It’s not like every other country waits for a generic to come out before paying for IP-protected drugs. E.g. my health region in Canada will pay up to $50k or so per year of additional life provided.
  • jonathankoren 8y ago
    This is common PhRMA talking point that needs perspective. Large pharmaceutical companies spend twice the their readers h budget on marketing, a good percentage of now is that is spent on patient oriented marketing. (e.g. “Talk your doctor about Xyzzy!”) If there would be a loss of revenue, any reduction in R & D costs lies purely with c-suite’s priorities. https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/ https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...
    • airstrike 8y ago
      They spend on marketing because they are trying to sell as much as possible of the drug during the patented years. If people do not realize there's a superior drug out there, they will never part with the money for the improved treatment
      • JAlexoid 8y ago
        Why do I get that information from my doctor when I'm outside of US? Why do American doctors just throw antibiotics at you, as soon as you sneeze in their office?(Getting a test for bacterial infection is cheap and fast. No bacteria - no effect by antibiotics.) There's a lot of issues with drug awareness and appropriateness in US.
      • jonathankoren 8y ago
        Well.. yes. My point was that a person makes the decision to what to cut. Saying that eeasearch will be cut, is the same as saying marketing über alles. Punting and trying rationalize such a decision as saying “must maximize shareholder profits”, is simply myopic post hoc rationalization.
      • tripzilch 8y ago
        That's a bad argument because the drugs are heavily marketed regardless of being superior or not.
    • thousandautumns 8y ago
      Why should pharma companies not be allowed to market their products?
  • rpedela 8y ago
    It is true that the US pays for a significant portion of drug R&D for the world. However the vast majority of that R&D is funded by the NIH which in turn is funded by U.S. taxpayers. It is a myth that it is the pharma companies who fund much of R&D even though they do spend some money on it. They set the prices so high because they can. The patents give them a monopoly, and they do everything in their power to "evergreen", or extend, the patents so they can continue their monopoly. One example is first patenting the left version of a molecule then patenting the right version (mirror image). How do they acquire these patents if they don't do their own R&D? They buy them.
    • rfinney 8y ago
      Check: https://www.thebalance.com/who-funds-biomedical-research-2663193 https://www.thebalance.com/who-funds-biomedical-research-266... "In a Journal of the American Medical Association (JAMA) study published in January 2010, the largest study to date to attempt to quantify U.S. funding of biomedical research by the pharmaceutical industry, government, and private sources, researchers estimate that U.S. biomedical research currently stands at about over $100 billion annually. The pharmaceutical industry is the largest contributor towards funding research, funding over 60 percent. The government contributes to about a third of the costs, with foundations, advocacy organizations and individual donors responsible for the remaining investments."
    • autokad 8y ago
      > "It is a myth that it is the pharma companies who fund much of R&D" I dont think that statement is incorrect. They spend a ton on r&d (20%), which is more than pretty much any other industry https://www.investopedia.com/ask/answers/060115/how-much-drug-companys-spending-allocated-research-and-development-average.asp https://www.investopedia.com/ask/answers/060115/how-much-dru...
    • tripzilch 8y ago
      > One example is first patenting the left version of a molecule then patenting the right version (mirror image). Just a small correction for accuracy; they actually patent the 50/50 mixture of both versions first. And then they patent the purified version that only contains the active enantiomer ("mirror image"). Because of how biology works, turns out that the "wrong" mirror image (that is absent from the new version of the drug) was in fact really inactive, doesn't do anything, and thus offers no advantage over the old version, except being covered by a new patent to milk. These are the kind of drug research "advances" that the rest of the world is supposedly freeloading off of. It's not freeloading, it's being dominated by a multi-billion dollar global marketing budget.
  • pjmorris 8y ago
    US GDP is ~19 Trillion. If US Health care spending is 18% of GDP, that's about 3.5 Trillion annually. Pfizer's (largest drug co) net income in 2017 was ~21 Billion [0], less than one percent of health care spending. I didn't tally the rest of the industry up, but I'd be surprised if it hit 10% of total costs. [0] https://en.wikipedia.org/wiki/Pfizer https://en.wikipedia.org/wiki/Pfizer
    • refurb 8y ago
      Prescription drugs account for about 10% of all healthcare spending. It’s been pretty steady over the years.
    • vonmoltke 8y ago
      Why are you looking at net income? Revenue is the relevant number, which was $52.55B in 2017.
      • pjmorris 8y ago
        Actually, both revenue and income are proxies for the relevant number, given that I had in mind to address the GP's point of 'effectively funding a significant portion of R&D.' If the article [0] is to be believed, that's about 8-9 Billion for Pfizer, and about 70 Billion for the top 15 pharma companies, about 2% of US health care spending. Even if we cut US health care spending in half (to, say, the UK's level), funding pharma research at current levels would be a fraction of total costs. [0] https://endpts.com/top-pharma-biotech-research-development-budgets/ https://endpts.com/top-pharma-biotech-research-development-b...
  • awinder 8y ago
    NIH has also kicked in vast sums of capital to help fund that research, though. And actually considering the scale of healthcare spending (3.5T in 2017), you could probably publicly fund drug development outright within the savings window of something like full public funding of healthcare. Total drug R&D expenditure was like 70B in 2017, it's not some giant gift (though appreciated, temper the enthusiasm, so to speak).
  • DennisP 8y ago
    Yes, but there are better ways to do it. A natural group to pay R&D for patent-free drugs is health insurance companies, who would benefit from the lower costs, and perhaps even come out ahead. But its hard for those companies to organize such an effort, because they can get the same benefit even if they don't contribute. It's a classic public goods problem. Usually we solve public goods problems with taxes, and we could do that here, taxing the insurers and spending the money on R&D for patent-free drugs. Bernie Sanders introduced a bill to this effect several years ago. Iirc it involved "xprizes" for successful treatments, so bureaucrats wouldn't be steering all the research.
    • Ericson2314 8y ago
      To the person elsewhere that complained in behalf of little drug R&D outfits, well, bounties vs patents would probably be beneficial to them too.
    • philwelch 8y ago
      If this was the case in the US than birth control, Plan B, and abortifacient drugs would never have been invented here.
      • DennisP 8y ago
        The plan simply provides another funding mechanism. There's nothing in the plan to prevent companies from developing patented drugs. So if you're right, it would just mean that birth control drugs would not be free of patents when introduced, just as under the current system.
  • jellicle 8y ago
    Most drug research is paid by the US taxpayer through research grants, not by private companies. Pharma company marketing budgets much exceed their drug research budgets.
    • greeneggs 8y ago
      Do you have a source for this? From what I can find, e.g., [1], the government only pays for about 1/3 of the costs. And the government funding is usually more for the underlying basic science and preliminary results, compared to the drug companies that develop drugs, test them and bring them to market. These last steps, which are ridiculously expensive, have not been a government area of expertise. (The same pattern holds for most any technology, the government supporting the basic research while more applied research and development is left to private companies.) [1] http://thebalance.com/who-funds-biomedical-research-2663193 http://thebalance.com/who-funds-biomedical-research-2663193
  • asdff 8y ago
    R&D should be publically funded like basic research is. We can say 'these drugs are expensive because they are expensive to research' all we want because it's true, but this statement ignores the problem of it all, and that is every step of the way from a customers insurance payment to research and development, there is skimming. Private health insurance cannot run at cost, private biotechnology companies cannot run at cost either, and this is because shareholders and executives demand it cannot. Every dollar of ROI in their portfolio is a dollar that could have gone to research and development or lowering drug prices, every yearly bonus could have tipped the scales and let one more person afford to save their life. It is tragically terrible that if you had the right books, you can calculate the exact x% of every dollar people spend towards healthcare that goes toward someone else's luxury rather than healthcare or in support of research. And thats ignoring the other half of the problem with private research, in that projects are decided by white collars and not white coats, so research efforts are focused on what will make a profit or what they can put out quickly before anyone else to dominate market share on a novel treatment, and not treatments for rarer diseases that might be backed with extensive basic research and only need to scale, but is marginally less profitable for the company. However, if money for healthcare is taken publically, then there is no need to skim dimes on every dollar spent to grant someone a third house and a fifth car. Money can be earmarked directly for research, like basic research is, and what happens to that dollar would be of public record. Capitalism and its sole metric of success of infinite growth is inefficient by design and has no place when it comes to universal needs like healthcare.
    • airstrike 8y ago
      I'm a diehard capitalist working in Wall Street and I could not possibly agree more. Healthcare is not like other goods and services because (a) it's an universal need for which price sensitivity is zero (b) no one should have to pay life-crushing bills because they had no luck in the genetic lottery and (c) even for those health risks that people can control (obesity, cardiovascular problems), we have to admit that educating the population to eat better, sleep more and exercise is a pipe dream, particularly in the U.S. where shitty food is everywhere, the lobby for junk food and sugar is rampant, labeling and advertising for food is downright evil and work is incredibly demanding (unbelievably more demanding than in Latin America or Europe). Healthcare and Education should be entirely subsidized by the government. Everything else can just be regulated to various degrees, always with the dual goal of minimizing state intervention while ensuring the market remains competitive.
  • luckydata 8y ago
    This has been debunked over and over again. It's just not true.
  • JAlexoid 8y ago
    If that's the case, then don't forget that a huge part of US drug market is marketing. Those expensive pharma reps are not a usual thing outside of US, and provide no value when it comes to the healthcare system overall. When it comes to some really interesting drugs, prices and their accessibility are really strange. Take HIV infection preventing Truvada. The "market" price of 30 pills is $1600 in US. It's a good drug for continuous mass use for Gilead. Instead of making it pretty much ubiquitous as vitamins, they chose to target only US market for the low volume high margins. So... I'm actually annoyed with Gilead over this. I own stock and getting good deals in Europe could get up to 50mil people on daily dose of it. That would push the stock wildly up! With 0 extra marketing, as it's not high on adverse reactions with massive preventative benefits.
  • thinkcontext 8y ago
    The US pharma market is around $300B vs total health spending of $3T. Pharma is a big expense but certainly not amongst the biggest. Costs for boring health issues like births, broken bones, diabetes and end of life care are what really matter. Oh, and administrative costs are way higher in the US.
  • InclinedPlane 8y ago
    This is not an explanation. The amount of money spent on actual drug R&D in the US is a tiny blip compared to the excess costs in the whole system.
  • tptacek 8y ago
    We overpay for prescription drugs, but they're not even close to the biggest contributor to healthcare overspending. We could make all prescription drugs free and only reduce our costs by ~9%.
  • pbreit 8y ago
    This is the common defense, that the US is somehow responsible for an outsized amount of medical progress. Are there studies of such a thing? And do these studies distinguish between healthcare that leans elective vs necessary? Also, the US seems to excel at the very expensive end of life care.
  • diogenescynic 8y ago
    We don’t pay for that drug research via insurance though—even worse it’s our taxes that fund big pharma’s research and we give them tax breaks. So it’s even worse that we subsidize them and then allow them extort the public.
  • atombender 8y ago
    > "biosynthetics" You're probably thinking of biologics [1]. These include immunosuppressant monoclonal antibodies such as adalimumab (Humira) and secukinumab (Cosentyx), used in treating autoimmune diseases such as psoriasis, ankylosing spondylitis, psoriatic arthritis, MS, Crohn's, etc. They are derived from biological sources such as Chinese hamster ovary cells [2]. They are also extremely expensive -- often several thousands of dollars per month [3]. [1] https://en.wikipedia.org/wiki/Biopharmaceutical https://en.wikipedia.org/wiki/Biopharmaceutical [2] https://en.wikipedia.org/wiki/Chinese_hamster_ovary_cell https://en.wikipedia.org/wiki/Chinese_hamster_ovary_cell [3] https://health.usnews.com/health-news/health-wellness/articles/2015/02/06/why-are-biologic-drugs-so-costly https://health.usnews.com/health-news/health-wellness/articl...
  • OliverJones 8y ago
    It's true. But the US drug marketers also move lots of money to television companies (watch any non-sports show and look at the ads). They finance lots of perks for prescribers. Their clinical trials for new compounds are extremely expensive, freeway-tunnel-under-harbor expensive, Carl Sagan expensive (billions and billions). They pay generic-drug manufacturers to refrain from making competitors to their compounds for which patents have recently expired. They pull the enantiomer hack. Many organic compounds have a right-handed and a left-handed version of their structures, only one of which is active as a drug. Chemists call these two versions "enantiomers." The first patent on a compound covers the basic chemistry. Then, when the first one expires they patent the same compound, but only the purified active enantiomer. They then send their sales reps out to convince docs the newly patented drug is way better than the old one. They lobby the US federal legislature to enact health care insurance laws (Medicare Part D) prohibiting the negotiation of prices. They claim drugs bought in Canada aren't safe, even if they come from the same factory. And, Purdue Pharma.
    • tripzilch 8y ago
      Can confirm. And it affects medicine outside the US as well. A bit over a decade ago, one very popular modern antidepressant drug used to be citalopram (cipramil). This is the racemic mixture (meaning it contains both the left and right-handed versions). The new one, escitalopram (lexapro) only contains the active stereoisomer. Its dosage is exactly half of the previous version because racemic mixture always (?) occurs in an exact 50/50 proportion. Both drugs work perfectly well. No statistically significant difference in effect or side-effect. You just don't get the inactive half of the molecules. Escitalopram wouldn't exist if it weren't for citalopram's patent expiring. Or maybe they were just sitting on the purified version, biding their time. This is a straight counterexample of the argument that the insane costs of the healthcare system in the US somehow pays for new drug research all over the world. This industry called "drug research" simply isn't motivated to improve health (not just "find better drugs"), they are just researching whatever is driven by profit. They will just as happily waste billions of research on a drug that is almost literally identical to one that already exists and is known to work, a copy that nobody needed, only so they can patent it again. At least they replaced it with something equivalent, instead of something worse. Because they would if they could (and given the state of reproducibility of medical research, probably did at some point or another). That is not research, that is throwing money into a bottomless pit. Which is what the featured article is about. Drug research in the US is no exception. You could do so much better research if it was done efficiently (and as a bonus take some pride in your work). The fact that US drug research dominates the world market is not something that the rest of the world should be thankful for. You waste billions upon billions on such an industry, of course it's gonna dominate. Doesn't mean it's good. Other countries could do efficient drug research but if they don't get billions budgets (because you don't need it), they can't waste it on marketing and push their version of a drug no matter what. Just because something is expensive, doesn't mean it's good.
  • gerbilly 8y ago
    This smells like pharmaceutical industry propaganda to me. Even if it's true, we should just fund drug research explicitly.
• deleted 8y ago
  [deleted]
• wwarner 8y ago
  The name of the school is `Johns Hopkins`. Carry on!
  • tlb 8y ago
    Fixed the title, thanks.
• bluetwo 8y ago
  Like the article says, previous research has come to the same conclusion. We pay much more, and are ranked nowhere near the top for lifespan, childhood mortality, and other measures. Obamacare was a great first step. Define what basic healthcare is and form markets that encourage apples-to-apples comparison. Let the free market work. Sucks that one party used this as a weapon to wrestle power. Oh well. Not going to argue here about healthcare reform, though. So if you disagree, don't expect a response.
  • MichaelApproved 8y ago
    > Let the free market work Respectfully, enough with this free market garbage. The healthcare industry is not a free market, it can never be. It's not possible for the consumer to be educated. Even if you put emergencies aside, when an unconscious person can't start price shopping emergency rooms, you still have regular office visits that are impossible to price shop. Ask yourself when the last time you asked your physician how much a service cost. I asked my physician and they had no clue. They finally gave me an estimate of "it'll be nominal", so I accepted the procedure. Turned out to be ~$200. I'm currently disputing it and refuse to pay based on their original quote of "nominal". Imagine your at the doctor and need to get a blood test. What do you do? Start calling around local labs to ask which one has the best price? Maybe check Groupon for a discount? All this while your doctor waits to see if the price is within your budget, so they could continue the test. Pricing in the medical industry is not even opaque. It's solid black.
    • kps 8y ago
      A free market would have patients and physicians reaching a supply/demand equilibrium, with facilitating brokers taking a small cut. In the US, patients go bankrupt and physicians go bankrupt — money flows to the parasites who set prices: administrators and insurers.
      • Gibbon1 8y ago
        Respectfully; you believe in magic.
• trophycase 8y ago
  Everyone wants to blame drug prices but let's not ignore the problems of obesity, diabetes, etc. Much of which is a result of urban sprawl, poor diet (both in food culture, and in crop subsidies), and poor work culture.
  • airstrike 8y ago
    As a U.S. immigrant who struggles to find truly healthy food choices in Manhattan of all places, I couldn't agree more.
    • d--b 8y ago
      Whole Foods is pretty healthy. Fresh direct is not bad at all. Fairway market...
      • rsj_hn 8y ago
        Whole Foods has expensive food, together with a lot of outrageous health claims, but it's the industry black sheep in terms of health and sanitation. Most supermarkets, for example require basic things like bathrooms and hand washing stations separated from food handling areas on agricultural farms that supply them with product. Not Whole Foods. There also have lots of issues with sanitation in their stores, especially given the volume they move from their salad bars. I'd check them out a bit more: https://www.barfblog.com/tags/whole-foods/ https://www.barfblog.com/tags/whole-foods/ https://www.ajc.com/news/national/fda-letter-says-whole-foods-unsanitary-and-unacceptable/trMIU2823fnqU463g0AR8I/ https://www.ajc.com/news/national/fda-letter-says-whole-food... https://twitter.com/sarahtaber_bww/status/1013184700599488512 https://twitter.com/sarahtaber_bww/status/101318470059948851... I'm hoping that the Amazon acquisition will lead to some much needed professionalization and normalization of their supplier requirements and processes, but we'll see.
    • wil421 8y ago
      Most really healthy people cook for themselves.
• vasilipupkin 8y ago
  I think it’s hard to compare these numbers across countries. For example, a richer country could choose to spend more on stuff that ultimately makes little difference in outcomes. For example, fewer people per hospital room or better hospital food or shorter wait times for a non threatening disease.
  • nerdponx 8y ago
    I'm not sure this holds up to scrutiny. Why don't other rich countries (e.g. Canada, which lets you pay for your own healthcare if you want) have this problem?
    • vasilipupkin 8y ago
      Canada has equivalent of Medicare for all. And Canada has at least some of these problems, for example longer wait times. These long wait times don’t ultimately affect average outcomes.
      • nerdponx 8y ago
        I think you misread my post. By "these problems" I meant "overspending on things that don't improve outcomes." But if paying for extra care is illegal in Canada then my argument doesn't work.
        • vasilipupkin 8y ago
          Being able to see my doctor for a health problem on short notice improves my quality of life but it probably doesn’t change outcomes as there is a very low likelihood that my problem is both life threatening and urgent. But choosing to pay doctors more to reduce wait times is not right or wrong - it’s just a different preference.
          • nerdponx 8y ago
            My point is that you don't see people spending extra to see private doctors in Canada despite it being a generally wealthy nation. There is more at play than the original suggestion that high spending is simply a function of being a richer nation with more money to spend on "extras" like short waiting times.
• bunkydoo 8y ago
  Healthcare starts with emotional care, then moving on to the physical level.
• d--b 8y ago
  These studies serve no purpose. Everybody knows this. The usual debate follows: yes but US funds research - yes but doctors, insurance and pharmaceutical companies get paid a lot more than anywhere else - yes but that’s the market, I want to pay more to have a top notch doctor / insurance - blah blah blah.
• harimau777 8y ago
  Are there any measures of how America does compared to Europe if you only count Americans that have good health insurance? It seems to me that many people who are opposed to socialized medicine don't necessarily disagree that it would give the poor better care; rather they fear that it will result in them receiving worse care.
  • reasonablemann 8y ago
    Would also be important to include the number of Europeans that are bankrupted by rejected insurance claims.
  • grecy 8y ago
    > Are there any measures of how America does compared to Europe if you only count Americans that have good health insurance? Anecdotally, I'd say they do crap. Friends outside LA are upper-middle class. Extremely good health insurance for the last 20+ years. Had a baby, emergency C-section. Less than 12 hours later they were told they must move hospital or else pay the $60,000 per day out of pocket because their insurance wouldn't cover it anymore. They had to drive themselves, in their own car, less than 12 hours after an emergency C-Section, with the infant. Of of this after paying through the nose for 20+ years for excellent health insurance. As an Australia/Canadian this is barbaric, and utterly unacceptable.
    • kodablah 8y ago
      I think the commenter was asking about quality regardless of cost, especially for the upper tier.
      • grecy 8y ago
        Yes, and I was saying the quality is very low.
      • tialaramex 8y ago
        It's going to be very hard to usefully measure, because it'll vary hugely by personal experience, where you are, what services you needed, etcetera. I can't imagine how any experiences I have with the NHS could be better privately, I have enough money that I could afford a private system if I had any idea why or how that could be better, so I'd be genuinely torn (I support the existence of the NHS and one way to kill something like the NHS is to encourage everybody who can afford to go privately to leave the system) but it never comes up at all. Not everything is perfect, but the less-than-perfect things don't feel like private healthcare could fix them e.g. At home I live near a hospital, because I live in a city, but where I grew up there isn't a nearby hospital. Private doesn't fix that, under the US system I might be even further from an "in network" option, and even in a sane system the private hospitals would be in similar places to those for a universal system, it doesn't help. I had cancer years back. Nothing about this seemed awful except the "having cancer" part which I'm sure private healthcare doesn't get rid of. Curing cancer is urgent so there was no waiting for treatment, the staff were competent, my oncology consultants were the exact sort of "no nonsense" people I'd have picked if I had a free choice. The hospital was nice. A+++ would recommend (except cancer, don't get cancer) Once upon a time I moved to a new city and friends were all like "Oh my god, get a private dentist, ugh, it's just impossible to get an NHS dentist". And being contrary I was like "Huh, I wonder how impossible it is?" and the answer was "You phone this number and they assign you one" and I'm still with the same dental practice twenty years later. In fact my specific dentist left last year and I was like "Oh, maybe he went private and I could follow?" but nope, he retired, I feel old. His replacement is young enough to be my daughter. But she's already nagging me about stuff just like he did, so that's fine. I had a scary moment in a distant city last year, I had found a lump and was experiencing peripheral neuropathy. I went to an Urgent Care clinic and rather than examine me they booked me into my own GP for the next day and I went home early. In hindsight they should have examined me, because my GP was like "The clinic nurse could have told you this is not what you were worried it might be". But, would private healthcare have done the examination? That comes down to personal judgement by a clinic nurse, and money wouldn't change that.
• skookumchuck 8y ago
  In the US, the most heavily regulated industries are health care and education. They have the highest prices. The least regulated industry is software, with the lowest prices (most software is literally free).
• dhruvp 8y ago
  If you want to read more on this topic, I highly recommend An American Sickness (https://www.goodreads.com/book/show/31253737-an-american-sickness https://www.goodreads.com/book/show/31253737-an-american-sic...). It's written by the current Editor in Chief of Kaiser Health News.
• mikeg8 8y ago
  The book The Healing of America by T.R. Reid, 2010 was a phenomenal look at this subject and the conclusion was this: we are the only developed nation whose government allows for-profit health insurance companies to exist with ZERO regulation to cap healthcare prices. Because of this, we spend 20% of every dollar on "administrative" costs compared to 3%-7% in the European and Asian countries. The goal for American healthcare companies is increasing shareholder value, not reducing costs. IMO healthcare is an obvious example of where a "free market" approach has failed and government oversight is critical. https://www.amazon.com/Healing-America-Global-Better-Cheaper/dp/0143118218 https://www.amazon.com/Healing-America-Global-Better-Cheaper...
  • braythwayt 8y ago
    "Never confuse an unregulated market with a free market." --- (Yes, yes, I understand that to an economist, a "free market" is free of regulation, a product of laissez-faire economics. But to the lay person, a "free market" is one where prices are set by perfect competition, which requires a balance of power, the prevention of monopolization, and information symmetry.)
    • PakG1 8y ago
      Really? I thought it was the other way around.
    • minikites 8y ago
      Both are about as real in practice as the Easter Bunny, so it's a distinction without a difference.
    • james_s_tayler 8y ago
      Yeah lay peoples definition is the markets which they are used to living with which don't match the technical terms exactly but come close enough for them. I just use the term "free enough market" to describe it.
  • DennisP 8y ago
    I read that book too, and agree it's phenomenal. It's not just about capping insurance profits. The countries doing the best also have price controls on the healthcare providers. Doctors make a lot less money. On the other hand they generally don't have to pay for medical school. France, Germany, and Japan all have similar systems, according to the book. They have private nonprofit insurance, some kind of mandate to purchase it, a government price list on services, guaranteed coverage of anything on the list, and digital medical records. A lot of German primary care doctors don't even hire office staff. They prescribe whatever they want, swipe your medical card, and they're guaranteed to be paid in a week, no questions asked. Japan has a clever way to handle the mandate. If you don't pay your premiums, nothing happens, but if you need healthcare you're not covered until you pay your back premiums. I wish all the Americans who think the rest of the developed world runs on single payer would read this book. None of the three countries I just mentioned use single payer. The book also covers Canada and the UK, both of which are single payer (and single provider in the UK), and while their results are pretty good, they're not as good as the other three.
• tabtab 8y ago
  Many are not going to trust such studies any more than they trust climate-change research, and would rather the market "fix" the problems than a gov't-centric approach.
• rohanshah 8y ago
  It's worth noting that a recent analysis of S.1804, the Medicare for All Act, "could reduce total health care spending in the U.S. by nearly 10 percent" [1]. Even conservative analysis [2] has the program project to save in the trillions over a decade. All while providing comprehensive, universal healthcare, free at the point-of-service. Also, Medicare For All would theoretically be able to command substantially lower drug prices by nearly monopolizing demand. Notably, given the study's analysis focus on OECD countries, the United States is (said to be [3]) the only of the top 25 wealthiest countries and one of two total member countries to not provide universal healthcare coverage. [1] https://www.peri.umass.edu/publication/item/1127-economic-analysis-of-medicare-for-all https://www.peri.umass.edu/publication/item/1127-economic-an... [2] https://www.mercatus.org/system/files/blahous-costs-medicare-mercatus-working-paper-v1_1.pdf https://www.mercatus.org/system/files/blahous-costs-medicare... [3] https://www.politifact.com/virginia/statements/2015/sep/01/dan-gecker/dan-gecker-says-us-only-wealth-nation-without-univ/ https://www.politifact.com/virginia/statements/2015/sep/01/d...
  • tptacek 8y ago
    Why would I be excited about a proposal to totally restructure an industry that every American comes into contact with and that represents something approaching 20% of our economy just for the prospect of a ten percent savings? Take any family complaining today about the cost of a Silver plan on an ACA exchange, offer them a 10% savings, and see if they're OK with what they're paying.
    • bshoemaker 8y ago
      Because it covers millions more, while spending less. Is this difficult to understand?
      • tptacek 8y ago
        It leaves us overspending on health care by a huge amount, raises everyone's insurance, and ultimately takes away everyone's employer-provided care, which the majority of Americans who have it like. If it was cutting our expenses in half, the cost savings might sell it. But 10%?
• bedhead 8y ago
  Where does the money go? Aside from the waste and fraud, two places. First, we pay for convenience. We want to see a doctor now. We want immediate access to all the best equipment, and specialists, and drugs, and we don't want to wait around or travel far. And we increasingly want it for every citizen. Second, over treatment of the dying - no subject is more uncomfortable. When asked what the biggest problem Kaiser Permanente faced, Charlie Munger, board member, responded over treatment of the dying. Various estimates are half of all healthcare spending takes place in the final two years of peoples' lives. In both cases, we've essentially deemed care as "cost no object", and when that happens, things get sideways fast. I'm not saying what is right or wrong, just what the problem is. Fast, cheap, good - you can always only pick two.
  • beatgammit 8y ago
    Do you have links to those estimates or a book recommendation? I wonder if legalizing euthanasia would help significantly. Also, perhaps more awareness for geriatric strategies that promote comfort over cures. Many elderly people spend a ton trying to fix problems that can't really be fixed and should probably just have the discomfort treated. Also, I wonder how we stack up against the rest of the world if we ignore expenses for people over the age of 70 or so.
  • jorblumesea 8y ago
    Not really, most of the costs go straight to shareholders. 25% of our spending is "Administrative costs" aka profits for investors. The issues of American healthcare are well documented and not a mystery. It boils down to two clear facts: 1) The US has no price controls whatsoever 2) The US has a for-profit system where your health is a business. It's not that complicated. The rest of the world has it figured out for the most part. https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us https://www.commonwealthfund.org/publications/journal-articl...
  • skwb 8y ago
    A good summary of the political economy that surrounds the US healthcare system is that people want healthcare that's: - fast - efficient - no restrictions on hospitals, doctors, or treatment - financed by taxes on the rich (defined in whoever is in a tax bracket higher than themselves) Now this is obviously untenable. In my professional estimation (ex-health policy analyst) I think you CAN have a public option be viable. But financing it will likely have to be done by expanding revenue through middle class tax hikes (not just millionaires), which never fend very well in our current political climate.
• elipsey 8y ago
  I think it would be worthwhile to discuss more than just per capita cost. The way that these costs are distributed is important and, I believe, problematic. The problem here is not just that per capita cost is high, it’s that for reasons that are partly structural, and partly demographic, healthy young payers with lower incomes can be burdened with the full, un-subsidised, costs of insurance, while others consume services without seeing the price. Some people have tax subsidized employer sponsored health care, some people have socialized health care, some people pay for insurance out of pocket with post-tax income, and some people have nothing and have to negotiate costs under duress after they have already consumed services. Doctors will not commit to a price in writing in advance. If you think will, try it sometime ;) I’m currently paying more then %100 of my annual income into an insurance pool, because I need insurance to protect my assets. (It’s complicated...) Moreover, the cost is not tax exempt because it is not employer sponsored. I’m healthy and don’t really consume much in the way of services. Meanwhile, others in the same insurance pool I’m paying into never see the price of their premiums, and don’t pay taxes on them. I understand that the point of insurance is to pool risk for insurable events, but how can we ever have an efficient market without price information? As Milton Friedman put it “No one is as careful with other people’s money, as he is with his own.”
  • deleted 8y ago
    [deleted]
  • beatgammit 8y ago
    I'm confused, do you have low income and a fairly large amount of assets? I can see this if you retired early or something, and in this case the comparison with your income really isn't particularly interesting.
    • deleted 8y ago
      [deleted]
• pytyper2 8y ago
  They spend more on healthcare because a corporation presented a bill with a larger total at the bottom. NO human goes to the hospital and says, "...please charge me 37 dollars more than last visit for that generic aspirin..." All you international geniuses, help us out, stop investing in the for profit US healthcare system. Sell your holdings today, don't invest your retirement in funds that invest in for profit healthcare companies. That would get the ball rolling. Same goes for for profit prison management. Trivia: What percentage of for profit healthcare corporations are directly or beneficially controlled by foreign investors who reside in countries that do not have our healthcare cost problems?
  • JAlexoid 8y ago
    We will not. USA is the global piggy bank. Honestly - it is.
• HillaryBriss 8y ago
  one of the mysteries for me is always: economists love it when the government spends more money because of money multiplier effects (the old Keynesian idea of burying wads of hundred dollar bills in millions of bottles and then pay someone to dig them up and spend it). but then, when you have this HUGE industry which literally spends hundreds and hundreds of billions on all kinds of nonsense like wasteful billing administration, unnecessary defensive medical tests, overpriced drugs, etc, the same economists are unhappy.
• topkai22 8y ago
  I saw an interesting article a while back. It looked at the benefits adjusted income of workers in the US since 1980 or so. Basically, the “disappearing wage growth” at of the last part of the 20th and early 21st century fir the bottom of the income curve is largely (although entirely) explained by the increasing cost of health care as a component of compensation.
  • int_19h 8y ago
    Is this averaged across all industries and income levels?
• sdrinf 8y ago
  PSA: As of 2019, federal law requires all hospital & doctors to post prices in a machine-readable format. The results are pretty striking, esp here in the Bay: eg UCSF ( https://www.ucsfhealth.org/about/pricing-transparency/ https://www.ucsfhealth.org/about/pricing-transparency/ ) charges $2600 for 1-way and 2-way chest X-rays, but charges $220 (that’s two _hundred_) for 3-way chest X-ray. The difference? How many angles they take of your body -ie, a 3-way includes the 2 & 1-way; and, more notably, the 3-way was used as a chargemaster item used in pricing estimators. So eg when I went in for a routine chest x-ray, I've expected a $300-ish bill, and got charged with a $2600 one. Knowing these prices now allows me to ask specifically from my doctor to select the diagnosis&intervention with the highest benefit/cost ratio. I’m really curious seeing consumer reactions to this, because current medical billing practices must die.
  • taormina 8y ago
    This is astounding. It used to be that doctors were not allowed to post their prices! Openness is needed to fix medical billing.
    • JAlexoid 8y ago
      Why would you care, when your copay is $30 flat?
      • int_19h 8y ago
        Because my premiums could be lower?
        • JAlexoid 8y ago
          Why would they be? They are both employer sponsored and would still rise to drive profits for the insurance companies.
      • dougmwne 8y ago
        Every time I use my health insurance in the USA I peel back another layer of this onion of a scam. I've started doing most of my health care abroad even though I'm insured just so I don't have to deal with this industry. I doubt posting prices online will do much because it seems like a quick fix to a systemic issue. 1. Go for a 3 minute, 30 second ENT appointment about earwax. Think I'm just paying a co-pay. Receive an extra bill for "Charges in excess of negotiated amount" 2. Go for appointment and be told: "If you just pay us now and bypass your insurance it will be cheaper than your copays." This happened twice without any prompting. 3. Be told by another office that my insurance doesn't cover a service and that it would be better if I paid out of pocket. Learn later that that service should have been covered 100%. Struggle for months to get insurance to pay instead all the while being told by the office "we can't guarantee you won't end up paying more in the end, even if it does say 100%"
• sanjiwatsuki 8y ago
  I see people saying that drugs in the US are twice as expensive as other countries in the comments. I'll summarize [0] which is one of the sources for that number. People in the United States spend roughly 2x per capita compared to Germany, Canada, and the UK. This does not mean that drugs in the United States are twice as expensive. The US tends to use newer molecules in the drugs that are purchased -- particularly ones that are still patented and more expensive. Other countries like Germany and the UK tend to use older drugs (e.g. molecules over 30 years old). A naive analysis would notice that the US spends more on drugs for a lower number of sales and would conclude it's because prices are high, but that ignores the fact that US doctors tend to prescribe newer on-patent drugs which are -- drumroll -- more expensive and not necessarily more effective. I'd argue this is the fault of the doctors prescribing the drugs more than any drug company's fault. If you examine Exhibit 6 in the study, you'll see that, yes, the United States does tend to have more expensive drugs than most other countries but it is NOT an outlier. For example, Japan and Mexico pay more than the US for the same drugs on average. Drug prices are not nearly as big of a problem as people make it out to be. Also, to its credit, the US also has significantly cheaper generics and over-the-counter drugs. [0] https://www.healthaffairs.org/doi/full/10.1377/hlthaff.27.1.221 https://www.healthaffairs.org/doi/full/10.1377/hlthaff.27.1....
• EGreg 8y ago
  It’s a simple economic argument: In a single payer system, providers compete but buyers don’t, so prices are kept low. Prioritization is based on need.
• whiddershins 8y ago
  I believe there is an economic analysis I saw mentioned by Scott Alexander that basically the cost of healthcare can be predicted as a function of the quality of care and the wealth of the country. Allegedly healthcare in the United States costs exactly as much as that formula would predict. I don’t have a citation here, and if anyone has one that would be great. But if it is true, we might be trying to fix something that isn’t broken in any of the ways people intuitively conclude.
  • InclinedPlane 8y ago
    I don't give a shit even if we ultimately have to pay more than we are now on healthcare (spoilers, we won't) as long as we can have universal coverage.
• nickhalfasleep 8y ago
  I wonder how long other industries will let the healthcare companies get away with this. The first Fortune 500 company to give it's employees free travel to Mexico, Canada, or Cuba for affordable care will cause quite a few waves. Or a smart country could open up "embassy clinics" throughout America, offering affordable healthcare and taking the profits back home.
  • analog31 8y ago
    I've thought about a similar arrangement, where a state could contract its entire health care system to a smart country.
  • tptacek 8y ago
    Fortune 500 companies already frequently self-insure their employees.
• Fej 8y ago
  Judging by the comments, there are a lot of us here who already know this. So what are we going to do about it, now? The system is broken but there are a number of entrenched interests who want to keep it that way and an electorate willing to buy whatever they say. I am short on hope.
• interlocutor 8y ago
  The reason healthcare costs so much more in the US than other countries, is health insurance. When insurance pays for everything patients don't care how much the medical providers are charging, or whether they are providing unnecessary services. When somebody else (i.e., insurance) is paying, the individual consumer is encouraged to consume without any restraint. When all consumers behave this way, healthcare providers are able to charge sky-high prices and unnecessary services, which in turn causes insurance premiums to go up. (Look up "tragedy of the commons"). The solution is to make the consumer participate in driving costs down. One employer I know of has an excellent solution to the problem: Make employees pay 100% of the bill up to a certain amount, such as $6000. That's a large amount, but the employer then contributes a large amount to your Health Savings Account (HSA), such as $4000. This amount is for you to keep regardless of whether you have any health bills or not. (This money can be used for medical expenses only, but can be used any time, including after retirement). So the maximum you will spend out of pocket per year is $2000. How does this encourage the consumer to scrutinize and control medical expenditure? Because the first $6000 of medical spending in a year is "your money". This is money you'd be able to keep in your HSA if you didn't have any medical expenses. This gives the consumer a strong incentive to reduce costs, question charges, avoid unnecessary services, and so on.
• anovikov 8y ago
  Why do people keep thinking about this in the terms "who should pay for that" while in the market economy, it won't change anything? It's about supply and demand, just force medical schools prepare more doctors, for example threatening them with automatic diploma recognitions and green cards on arrival, for medical professionals from every first world country who could speak decent English.
• slx26 8y ago
  I speak for myself, but I'm pretty sure many people would share the thought: healthcare is the number one reason for which I'd never move to America. And there are a billion things for which you might want/not want to move to another country. And I'm healthy, and there are many other things that might seem crazy about America. I don't know, maybe I'm just paranoid, but I do seriously hope for the sake of everyone (and I don't mean to be meddlesome), that US citizens stop accepting this as normal and the situation changes soon.
  • ropable 8y ago
    Yep. Healthcare, and gun culture.
    • SmellyGeekBoy 8y ago
      The police would be another.
      • Pigo 8y ago
        As someone living in the US, I have to agree, I'm getting shot at by the police on a daily basis. They are the devil incarnate.
      • dandare 8y ago
        Just avoid dangerous, heavily policed areas. /s
  • bitxbit 8y ago
    This is odd. If you have a decent job and health insurance coverage, there’s nothing better in terms of healthcare than living in cities such as Boston. I can’t think of another city where you have access to multiple world-class hospital systems. Quality of care is simply unmatched.
    • AndrewDucker 8y ago
      Have you see the discussions above where people talk about being hit with bills for hundreds of thousands because of Out Of Network charges?
• sbt 8y ago
  It's always for someone's gain but as with other things in the US it's the shareholders who gain.
• halfjoking 8y ago
  The title is inaccurate. It shouldn't be "spends more for no gain"... it should be "spends more for worse healthcare." "No gain" implies that we are getting the same level of healthcare as other countries, when in fact we have worse outcomes, less nurses/doctors, worse wait times, and always get stuck with the bill. Only in America do people regularly end up in bankruptcy for medical expenses.
• vmsp 8y ago
  Interestingly, I just read this last night on Factfulness by Hans Rosling so it's certainly not a new finding. I highly recommend the book.
• deleted 8y ago
  [deleted]
• pokerwe1 8y ago
  Freechip just For You http://wishmindr.com/list/4dvh#.XDB3syS-FEo http://wishmindr.com/list/4dvh#.XDB3syS-FEo
• gerbilly 8y ago
  It seems to me the US never outgrew it's frontier mentality. Before, if you felt too hemmed in you could always move west and get free land, get together with other locals and form a small town. Better to be the founder of your town than a random nobody in your previous town. Back in the 18th-19th centuries, medical care was primitive and sometimes dispensed by the barber. For toothaches and broken limbs, you might see a dentist or a doctor, for anything life threatening you toughed it out and died at home. We don't do that anymore of course, but it's almost as if attitudes about self sufficiency have lagged behind.
• geggam 8y ago
  I was in a cancer center picking someone up and overheard the staff ordering a dose of medicine. A single dose was billed at $100k US
• WhompingWindows 8y ago
  Reading through this thread is proof enough that the system is relentlessly complex. Medicine itself is incredibly complex, payment is complex, the system is nearly 20% of the economy, and not even 100 world-class experts could provide us with a fool-proof plan to solve this mess. Whatever the solution is to our healthcare systems' problems, it is not going to be simple, easy, quick, or cheap.
• tboyd47 8y ago
  Here's a simple, free-market solution that no one seems to have thought of: start a health insurance company that pays for medical tourism. That would provide consumers a cost-effective alternative and put pressure on the American hospital systems to bring down costs. Why wouldn't this work?
  • dandare 8y ago
    Even better: a billionaire philanthropist to start a non-profit health insurance company that only works with its own chain of evidence-based providers and hospitals, combined with medical tourism. That would provide consumers with a cost-effective alternative and put pressure on the American hospital systems to bring down costs. Why wouldn't this work?
• jasonlotito 8y ago
  These studies never seem to differentiate between different types of care. We left Canada for the US because of the healthcare. Autism care and support is far better in the US then Canada. Even if this is costing us more as a whole (it's far cheaper in my out of pocket costs), there are gains. So in general, we might be doing worse in general, but that doesn't mean we aren't doing amazingly betting in certain areas. I realize I'm talking about one specific area, but knowing how much was spent in the US vs Canada in terms of care, yes, more was spent on my child in the US instead of Canada, but the results were so much better. Basically, it's easier to spend less when you just don't do certain things that are much more expensive.