9 ms·

I’m sorry to hear about your wife’s friend. But both examples you gave (people having to fight for further diagnoses of outside-case health problems) are really

I’m sorry to hear about your wife’s friend. But both examples you gave (people having to fight for further diagnoses of outside-case health problems) are really common with private healthcare in the United States too - we’ve just shifted the burden of cost of treatment/quality of life decisions to private entities who typically are only interested in furthering shareholder value. To give a personal anecdote as well: A close friend of my wife’s had to fight and fight to get insurance to cover appointments in order to get her breast cancer diagnosed. I would like to understand if the world really does rely on US private-healthcare funded research - I’ve heard this argument mentioned before and have always been curious about it.

ppf 7y ago
Agreed, the US system is flawed. I suppose with public-funded healthcare, everyone is on the same level - the survival rates of breast cancer and bowel cancer is the same for all (unless you can afford to fly to the US and pay for care there).
- rockinghigh 7y ago
  There can still be large variations across hospitals and doctors in a public system in terms of outcome.
AnthonyMouse 7y ago
> I’m sorry to hear about your wife’s friend. But both examples you gave (people having to fight for further diagnoses of outside-case health problems) are really common with private healthcare in the United States too - we’ve just shifted the burden of cost of treatment/quality of life decisions to private entities who typically are only interested in furthering shareholder value. Having a profit motive is only a serious problem when there is insufficient competition. Otherwise companies that try to make outlandish profits would lose business to companies that offer better coverage for lower premiums by taking smaller profits. Insurance company profits are only a single digit percentage of US healthcare costs; eliminating them wouldn't make a real dent anyway. (In many cases the "profits" are also unavoidable. For example, if the insurance carrier owns its building then the internal rents are "profit" but if you want to replace them you would still need a building and then have to pay for it from somewhere else. Every dollar you spend on anything is profit to somebody.) And a profit motive will in general tend to lower costs, because a company that can eliminate waste and then charge lower premiums for the same coverage will get more business and make more money. There are a lot of reasons it doesn't work out that way for US health insurance, e.g. when it's provided with employer subsidies under tax incentives it reduces competitive pressure (employees can't choose another insurer) and the tax incentives reduce price sensitivity. But a big one is this: > I would like to understand if the world really does rely on US private-healthcare funded research - I’ve heard this argument mentioned before and have always been curious about it. The basis premise behind the patent system is like this. It takes a lot of money to do R&D and it may not even turn into anything, but once it's public knowledge, everybody starts making the thing and not just the party who paid for the R&D. Which makes it a lot more profitable to wait for somebody else to do R&D and then go into competition with them than to do the R&D yourself, so then nobody has the incentive to do it. Patents say if you do the work you get a temporary monopoly on selling the thing to give you some time to recover your R&D before competition drives down the price. In principle this allows the market to set the price. If you invent a more efficient light bulb, you can ask $1000 for one but no one will pay that much even if you have a monopoly, they'll just buy the old light bulbs. But you might be able to charge as much of a premium as your light bulb will save in electricity over the existing ones and still find buyers. With drugs the incremental value is often very high -- it could save your life when the alternative is that you die. Which is what you want to happen, because you want a large financial incentive to do R&D that can save lives. But then the cost can be really high which makes people want some kind of insurance. When you have private insurers in competition with one another, you still basically have a market. If the drug maker demands a trillion dollars to treat one patient, any insurance company willing to pay that would have to charge premiums nobody can afford, and then nobody would buy that insurance and the drug maker would get no sales. So there is a limit on what they can charge, but it's still pretty high, because people really want their insurance to cover those drugs and will strongly prefer insurance carriers that do over those that don't. And then you get the large financial incentive to do life-saving R&D as desired. With a single payer system, that competition between insurers doesn't exist. If the system refuses to pay the maker's price for a drug, the system can't lose customers to a competing insurer that will. Which means you have a monopsony buyer that can dictate prices. Naturally they have the incentive to dictate prices that are lower. But higher prices during the exclusivity period is how the patent system directs money to R&D. By dictating lower prices they're not paying their share of the cost of developing the drugs that only exist because the US is paying more, and causing some life-saving drugs to not exist because the US market on its own isn't enough to justify the R&D.
- danaris 7y ago
  > Having a profit motive is only a serious problem when there is insufficient competition. Otherwise companies that try to make outlandish profits would lose business to companies that offer better coverage for lower premiums by taking smaller profits. This works in an idealized free market. Health care is, for a variety of reasons, fundamentally incompatible with this, even if the powerful and wealthy interests within it are not actively working to destroy some of the basic premises of a free market (like equal information).
  - AnthonyMouse 7y ago
    > This works in an idealized free market. It works in any kind of market that isn't a dumpster fire. The closer to idealized it is the better it works, but it still works in real markets that actually exist. The people who sell towels to Walmart are not an "idealized free market" but it's close enough for practical purposes. > Health care is, for a variety of reasons, fundamentally incompatible with this, even if the powerful and wealthy interests within it are not actively working to destroy some of the basic premises of a free market (like equal information). Health care is not incompatible with it. People place a high value on life-saving treatment, but that's as it should be. It has a high value. If it costs a lot to provide or develop, it's worth the cost. The key is to not pay that cost in cases when it isn't necessary -- but you still want to in cases when it is. The state of US health care and insurance regulations, however, are a dumpster fire. It doesn't have to be like this. The status quo is not optimal. As you say, even just having real price transparency would mark a significant improvement. Fixing that is hard because there are powerful interests behind the status quo, but the same interests are aligned against a single payer system. You can't use it as an argument against one and not the other.
    - danaris 7y ago
      > The people who sell towels to Walmart are not an "idealized free market" but it's close enough for practical purposes. Towels are a commodity: they're functional, fairly easy to produce, and differentiation is a pretty straightforward tradeoff of higher price for more luxury towels. Health care is not a commodity. Different services are not interchangeable, and for anything more specialized than basic care, there may only be one provider within a reasonable distance of you that can offer it at all, let alone at an acceptable level of quality. Furthermore, at the point of sale, much of the time, the "customer" is neither in a condition nor a position to be shopping around. Sometimes, they're literally unconscious. And while some elective procedures and preventative visits can be scheduled and planned, emergency care is by definition not something you can plan ahead for to determine where you can get the best value for your money. None of these things are because of the specific sorry state of healthcare in the US. They are all fundamental to its very nature. It is impossible to have a truly free market for healthcare, because getting it is literally a matter of life and death for the patient in many cases, which means that by the economics of an unregulated market, the provider can charge them literally whatever they can afford to pay. Or more. > Fixing that is hard because there are powerful interests behind the status quo, but the same interests are aligned against a single payer system. You can't use it as an argument against one and not the other. Great, I completely agree. So instead of trying to fight for a tiny baby step that will improve the system by 1%, let's fight the same people for single payer, a meaningful change that will improve the system by 1000x.
grkvlt 7y ago
In the UK there is the Wellcome Trust [0] which is a non profit healthcare research body, and I believe other organisations like this exist. They would seem to be the ideal place for this type of work? 0. https://en.m.wikipedia.org/wiki/Wellcome_Trust https://en.m.wikipedia.org/wiki/Wellcome_Trust

ppf 7y ago

Agreed, the US system is flawed. I suppose with public-funded healthcare, everyone is on the same level - the survival rates of breast cancer and bowel cancer is the same for all (unless you can afford to fly to the US and pay for care there).

rockinghigh 7y ago
There can still be large variations across hospitals and doctors in a public system in terms of outcome.

AnthonyMouse 7y ago

> I’m sorry to hear about your wife’s friend. But both examples you gave (people having to fight for further diagnoses of outside-case health problems) are really common with private healthcare in the United States too - we’ve just shifted the burden of cost of treatment/quality of life decisions to private entities who typically are only interested in furthering shareholder value. Having a profit motive is only a serious problem when there is insufficient competition. Otherwise companies that try to make outlandish profits would lose business to companies that offer better coverage for lower premiums by taking smaller profits. Insurance company profits are only a single digit percentage of US healthcare costs; eliminating them wouldn't make a real dent anyway. (In many cases the "profits" are also unavoidable. For example, if the insurance carrier owns its building then the internal rents are "profit" but if you want to replace them you would still need a building and then have to pay for it from somewhere else. Every dollar you spend on anything is profit to somebody.) And a profit motive will in general tend to lower costs, because a company that can eliminate waste and then charge lower premiums for the same coverage will get more business and make more money. There are a lot of reasons it doesn't work out that way for US health insurance, e.g. when it's provided with employer subsidies under tax incentives it reduces competitive pressure (employees can't choose another insurer) and the tax incentives reduce price sensitivity. But a big one is this: > I would like to understand if the world really does rely on US private-healthcare funded research - I’ve heard this argument mentioned before and have always been curious about it. The basis premise behind the patent system is like this. It takes a lot of money to do R&D and it may not even turn into anything, but once it's public knowledge, everybody starts making the thing and not just the party who paid for the R&D. Which makes it a lot more profitable to wait for somebody else to do R&D and then go into competition with them than to do the R&D yourself, so then nobody has the incentive to do it. Patents say if you do the work you get a temporary monopoly on selling the thing to give you some time to recover your R&D before competition drives down the price. In principle this allows the market to set the price. If you invent a more efficient light bulb, you can ask $1000 for one but no one will pay that much even if you have a monopoly, they'll just buy the old light bulbs. But you might be able to charge as much of a premium as your light bulb will save in electricity over the existing ones and still find buyers. With drugs the incremental value is often very high -- it could save your life when the alternative is that you die. Which is what you want to happen, because you want a large financial incentive to do R&D that can save lives. But then the cost can be really high which makes people want some kind of insurance. When you have private insurers in competition with one another, you still basically have a market. If the drug maker demands a trillion dollars to treat one patient, any insurance company willing to pay that would have to charge premiums nobody can afford, and then nobody would buy that insurance and the drug maker would get no sales. So there is a limit on what they can charge, but it's still pretty high, because people really want their insurance to cover those drugs and will strongly prefer insurance carriers that do over those that don't. And then you get the large financial incentive to do life-saving R&D as desired. With a single payer system, that competition between insurers doesn't exist. If the system refuses to pay the maker's price for a drug, the system can't lose customers to a competing insurer that will. Which means you have a monopsony buyer that can dictate prices. Naturally they have the incentive to dictate prices that are lower. But higher prices during the exclusivity period is how the patent system directs money to R&D. By dictating lower prices they're not paying their share of the cost of developing the drugs that only exist because the US is paying more, and causing some life-saving drugs to not exist because the US market on its own isn't enough to justify the R&D.

danaris 7y ago
> Having a profit motive is only a serious problem when there is insufficient competition. Otherwise companies that try to make outlandish profits would lose business to companies that offer better coverage for lower premiums by taking smaller profits. This works in an idealized free market. Health care is, for a variety of reasons, fundamentally incompatible with this, even if the powerful and wealthy interests within it are not actively working to destroy some of the basic premises of a free market (like equal information).
- AnthonyMouse 7y ago
  > This works in an idealized free market. It works in any kind of market that isn't a dumpster fire. The closer to idealized it is the better it works, but it still works in real markets that actually exist. The people who sell towels to Walmart are not an "idealized free market" but it's close enough for practical purposes. > Health care is, for a variety of reasons, fundamentally incompatible with this, even if the powerful and wealthy interests within it are not actively working to destroy some of the basic premises of a free market (like equal information). Health care is not incompatible with it. People place a high value on life-saving treatment, but that's as it should be. It has a high value. If it costs a lot to provide or develop, it's worth the cost. The key is to not pay that cost in cases when it isn't necessary -- but you still want to in cases when it is. The state of US health care and insurance regulations, however, are a dumpster fire. It doesn't have to be like this. The status quo is not optimal. As you say, even just having real price transparency would mark a significant improvement. Fixing that is hard because there are powerful interests behind the status quo, but the same interests are aligned against a single payer system. You can't use it as an argument against one and not the other.
  - danaris 7y ago
    > The people who sell towels to Walmart are not an "idealized free market" but it's close enough for practical purposes. Towels are a commodity: they're functional, fairly easy to produce, and differentiation is a pretty straightforward tradeoff of higher price for more luxury towels. Health care is not a commodity. Different services are not interchangeable, and for anything more specialized than basic care, there may only be one provider within a reasonable distance of you that can offer it at all, let alone at an acceptable level of quality. Furthermore, at the point of sale, much of the time, the "customer" is neither in a condition nor a position to be shopping around. Sometimes, they're literally unconscious. And while some elective procedures and preventative visits can be scheduled and planned, emergency care is by definition not something you can plan ahead for to determine where you can get the best value for your money. None of these things are because of the specific sorry state of healthcare in the US. They are all fundamental to its very nature. It is impossible to have a truly free market for healthcare, because getting it is literally a matter of life and death for the patient in many cases, which means that by the economics of an unregulated market, the provider can charge them literally whatever they can afford to pay. Or more. > Fixing that is hard because there are powerful interests behind the status quo, but the same interests are aligned against a single payer system. You can't use it as an argument against one and not the other. Great, I completely agree. So instead of trying to fight for a tiny baby step that will improve the system by 1%, let's fight the same people for single payer, a meaningful change that will improve the system by 1000x.

grkvlt 7y ago

In the UK there is the Wellcome Trust [0] which is a non profit healthcare research body, and I believe other organisations like this exist. They would seem to be the ideal place for this type of work? 0. https://en.m.wikipedia.org/wiki/Wellcome_Trust https://en.m.wikipedia.org/wiki/Wellcome_Trust