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The private insurance system we have in the USA creates such a tightly-packed nightmare-maze of adverse incentives that the only non-government solution is for
by CptFribble 7y ago
The private insurance system we have in the USA creates such a tightly-packed nightmare-maze of adverse incentives that the only non-government solution is for a company to grow so large it can fully vertically-integrate, from private medical schools all the way to hospitals, labs and clinics, then once it has a total monopoly, convert to a non-profit and slash prices across the board.
Anything else is a half-measure doomed to failure. The AMA limits how many doctors can graduate, medical schools charge enormous prices, limited supply and huge debt means doctors can command incredibly high fees, so hospitals send massive bills to insurance companies and sue the non-payers and yet remain barely solvent. Insurance companies add a profit margin and charge $10,000pp+ annual premiums to employers, who pass on some % to the employees.
Any one part of this is integrated with the whole and can't be easily fixed.
- Hospitals can't just charge less to insurance, because every part of care is so expensive.
- Care is expensive because doctors have debt to pay off, and we can't pay them less or else med-school enrollment will fall of a cliff because why rack up $400k in debt if you won't be earning 6 figures after you graduate? Not when FAANG will pay new grads $120k plus for half the school-time, and most of the students going to med school are smart+motivated enough to get those jobs.
- Insurance companies are making billions, so they aren't going anywhere anytime soon short of massive government policy shift
- Medical device and supply manufacturers make bank for the same reasons, American syringes can cost a fortune because all the prices for everything have been dialed up to 11.
On top of all of that, there's the infinitude of nitpicky soft and technical problems that would require a successful-startup's worth of effort and luck to solve, like HIPAA, coding nonsense, and many others.
Honestly sometimes it feels like the only way to "improve" the USA healthcare system really is just to pass Medicare for All and drop a bomb on the whole thing.
- grecy 7y ago> Honestly sometimes it feels like the only way to "improve" the USA healthcare system really is just to pass Medicare for All and drop a bomb on the whole thing. You mean use the system that has been used for decades in Developed countries and proven to work much better (better outcomes, cheaper, no body without coverage) ? Yes, that would be a good idea.
- mtnGoat 7y agoBut profits! Unfortunately, great American capitalism will prevail, those making the money will keep buying legislation in their favor and selling fear of change via advertising.
- grecy 7y agoAnd as long as the citizen keep believing it and doing nothing about it, things will keep getting worse for them.
- chrisseaton 7y ago> limited supply and huge debt means doctors can command incredibly high fees How does having a huge debt allow you to charge a higher fee? Doesn’t a debt weaken your negotiating position - you have less freedom to walk away for example because you need to service your debt. It doesn’t work that you can charge a higher fee just because you plead ‘but I have a debt!’
- jjoonathan 7y agoIf every supplier in a market has the same overhead, it will pass through to customers, because suppliers cannot compete to eliminate it. See also: high prices in destination shopping. The landlord sets the rent and all stores have to pay the rent, so all stores will have the same high prices no matter how stiff the competition between them.
- chrisseaton 7y agoBut the high debt is why they want to command a high fee, not why they are able to. They’re able to due to restricted supply.
- madiathomas 7y agoThe way I understood it, prospective doctors are only tolerating huge college debt because they will be highly paid and be able to pay back huge college debt. If fees goes down, people will simply avoid being doctors and study something else which is cheaper or a profession which command higher fees.
- neuro_image2 7y ago'doctors can command incredibly high fees' Doctors in Canada and Australia charge as much or more than US doctors (within the context of a universal healthcare system). This is the most absurd scapegoating. If you want to look for excessive expenditure, I encourage you to look at: - The enormous glut of administrators including absurdly well paid CEOs which has expanded non-stop for the last 40 years. - The absurd profit margins and profiteering by the medical insurance industry. - The relentless rent-seeking by 'accreditation and certification' agencies like state medical licensing boards and subspecialty boards. - And at this stage we don't even need to begin talking about pharma and device companies.
- jjoonathan 7y agoBack in health care policy class we did a breakdown comparison against systems in other developed countries. The US system was 2x as expensive, and the three heads of the hydra -- drug companies, insurance companies, and hospitals/doctors -- did a remarkably even job of sharing that factor of 2. While it would be unfair to say that the "step on the training pipeline" hustle was entirely responsible for our current situation, it would also be unfair to point at the other two heads of the hydra and say that they were entirely responsible.
- neuro_image2 7y agoThere's a lot to unpack in 'hospitals/doctors.' Again, a more granular analysis will point you in the direction of the layers and layers of administration and profiteering in the hospital rank and file. Have you seen this graph?: https://investingdoc.com/the-growth-of-administrators-in-health-care/ https://investingdoc.com/the-growth-of-administrators-in-hea... And again, very effective universal healthcare systems exist which remunerate physicians at the top end of the labour payment scale (and for good reason). Now with nurse practitioners and other 'mid-level providers' creeping into all areas of clinical medicine, Americans are unfortunately likely to find out the hard way why appropriately remunerating people who operate on those nearest and dearest to you at their most critical times, is a good idea.
- 7y ago
- theshadowknows 7y agoYou make a good point. Insurance companies aren’t actually that profitable margin wise. They just are so massive that their 5-6% margins add up to huge numbers.
- mtnGoat 7y agoYes, people always miss this, insurance companies do charge a lot, but their margins aren't high. They too are giving a lot of their income to attorneys, lobbyists, etc. When I see people simply blaming insurance it shows me they don't see the actual picture past the first layer.
- shigawire 7y agoIf one were to view insurance providers as unnecessary, then any percentage margin can be seen as a leech on the systems. Saying they are unnecessary would be a misunderstanding of our current system. But to say our current system can be altered to render insurance as we know it today unnecessary is a different thing.
- brennanpeterson 7y agoThey could have zero.margin and still be a net negative. It is the payment to insurers, not the profits, that are at issue.
- kaushikktiwari 7y agoWe need a single payer--that's the answer. Wrote about it here https://news.ycombinator.com/item?id=21710050 https://news.ycombinator.com/item?id=21710050
- tehlike 7y agoFeels like though that tiny margin is to blame. I remember reading about some law that commands 80% or something of insurance premiums to be paid to care and administrative costs. If that is the case, thr only way you can increase profits is to be ok with ridiculous pricing you keep getting... My personal anectode is a genetic tests done for pregnant ladies. Natera, iirc, charged something like 8k$. I asked for cash price they said 230$. Go figure
- nradov 7y agoThe AMA doesn't limit how many doctors can graduate. The bottleneck is in residency slots. Every year students graduate from medical school but are unable to practice because they can't get matched to a residency program in a teaching hospital. We need more public funding for those programs.
- RockIslandLine 7y ago... And the AMA is lobbying for that increased funding?
- nradov 7y agoYes the AMA is lobbying for increased funding. https://www.ama-assn.org/press-center/press-releases/ama-fund-graduate-medical-education-address-physician-shortages https://www.ama-assn.org/press-center/press-releases/ama-fun...
- kaushikktiwari 7y ago^Totally agree with you. Single payer is the answer. The comments on this thread inspired this writeup--how the insurance distribution ecosystem itself sucks up a lot of the dollars https://news.ycombinator.com/item?id=21710050 https://news.ycombinator.com/item?id=21710050