4 ms·

As a European now living in the US, my first thought is that the $2,000 shouldn't even exist to be collected, especially by invasive data broker rent seekers.

by ev1 6y ago

ericmay 6y ago
It’s collected (generally speaking) one way or another. Unfortunately right now it’s collected from the lower and middle classes, but no matter what you do drugs, treatments, doctors, hospitals, etc. cost money. It’s never, ever, ever “free”. If a drug costs $2,000/month there are probably some inefficiencies baked into the price, but even if it were $500/month, that $500 has to come from somewhere.
- ericd 6y ago
  Probably some inefficiencies baked into the price? There are massive inefficiencies at every level. I probably wouldn't share this "it's the way it is because it has to be" reasoning if you've never looked into why US healthcare is as expensive as it is. For a decent overview: https://www.pbs.org/newshour/economy/why-does-health-care-cost-so-m https://www.pbs.org/newshour/economy/why-does-health-care-co... "Just to give you one example, Duke University Hospital has 900 hospital beds and 1,300 billing clerks."
  - ericmay 6y ago
    I say probably because although I’m quite sure that there are inefficiencies, I am not an expert and don’t have hard data to support my assertion. Don’t mistake what I’ve said as support for the current system.
  - ineedasername 6y ago
    You need context for that because your article is incorrect about Canada. Across all of Canada, on average, there are still 1.1 clerks per bed. (1,100 clerks for every 1,000 beds) [0] [0] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4511963/#:~:text=Duke%20University%20Hospital%2C%20for%20example,administrative%20workers%20in%20health%20insurance.&text=The%20number%20of%20clerks%20of,the%20United%20States%20as%20well https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4511963/#:~:tex....
    - ericd 6y ago
      Interesting. What do all of those clerks do in the Canadian system vs the US system? Would you say that the Canadian system is a paragon of efficiency?
- 93po 6y ago
  Insulin that costs $500 a month after expensive insurance discounts only costs about $5 to manufacture and sells for $30 a month in Canada
- unclenoriega 6y ago
  That's not really how it works with drug prices in the US. I don't know exactly how it works behind the scenes, but from the pharmacy perspective, it's basically like this: The "sticker price" of a drug is called the "usual and customary price" (U&C). This is supposed to be what you charge for a drug, and is generally based on the "average wholesale price" (AWP) of the drug plus a dispensing fee to cover other costs. The AWP, however, may or may not (usually not in the case of generic drugs) be related to the actual acquisition cost of the drug. It tends to be substantially higher. The pharmacy bills its U&C price to the insurance company (or, more often, a pharmacy benefit manager (PBM) contracted by the insurance company), and the insurance company tells you what it will actually pay you—this can be negative—and how much to charge the patient. Usually the pharmacy gets paid whatever the insurance company/PBM thinks it should cost to fill the prescription, and the patient pays a standard copay/coinsurance. If the patient has a large deductible or doesn't have insurance, this is where GoodRx et al. come in. They act as a PBM, allowing the patient to pay a price lower than the U&C while pocketing ~$5 or so of the "copay" for themselves (plus whatever data they get). Often independent pharmacies will just cut out the middle man and give you a better cash price (although this may violate their PBM contracts), but the big chains will need the coupon. Depending on the difference between the AWP and the actual acquisition cost of the drug(s), this can be a substantial savings for cash patients or people with large deductibles.
  - ericmay 6y ago
    Sorry, I’m not sure what you mean here with “that’s not how it works”. Could you explain? -edit- I guess what I mean to say here is I'm not commenting on how drug prices work. It doesn't matter. I am commenting on the fact that somebody, somewhere has to pay for the drug, regardless of the price. I want to push back on this idea that drugs are "free" in Europe or elsewhere. Sure the healthcare programs appear to be better managed, higher taxes on the wealthy or corporations (although I don't know for sure) appear to be subsidizing costs for lower and middle classes, but the drugs still aren't free in any sense of the word to the society as a whole.
    - unclenoriega 6y ago
      I was trying to trying to point out the scale of the "inefficiencies" inherent in current pharmacy billing practices (and in my understanding medical billing in general). The prices are literally just made up[0], and then payors have to guess how much they should pay. "That's not how it works", perhaps a poor choice of words was intended to reflect that if a drug costs $2000 per month or even $500/month, often that money doesn't need to come from anywhere. Now that you've clarified, it sounds like you're arguing against the idea that drugs have no cost of development or production, which is not an idea that anyone actually holds, so I'm sorry for wasting our time. I would point that "free at the point of service" does seem to be one sense of "free". [0] https://www.rjhealth.com/2019/07/31/drug-pricing-101-reimbursement-rj-health-methodologies-drug-claims-code-level-unit-level-hcpcs-ndc/ https://www.rjhealth.com/2019/07/31/drug-pricing-101-reimbur...

As a European now living in the US, my first thought is that the $2,000 shouldn't even exist to be collected, especially by invasive data broker rent seekers.

by ev1 6y ago

As a European now living in the US, my first thought is that the $2,000 shouldn't even exist to be collected, especially by invasive data broker rent seekers.

ericmay 6y ago

It’s collected (generally speaking) one way or another. Unfortunately right now it’s collected from the lower and middle classes, but no matter what you do drugs, treatments, doctors, hospitals, etc. cost money. It’s never, ever, ever “free”. If a drug costs $2,000/month there are probably some inefficiencies baked into the price, but even if it were $500/month, that $500 has to come from somewhere.

ericd 6y ago
Probably some inefficiencies baked into the price? There are massive inefficiencies at every level. I probably wouldn't share this "it's the way it is because it has to be" reasoning if you've never looked into why US healthcare is as expensive as it is. For a decent overview: https://www.pbs.org/newshour/economy/why-does-health-care-cost-so-m https://www.pbs.org/newshour/economy/why-does-health-care-co... "Just to give you one example, Duke University Hospital has 900 hospital beds and 1,300 billing clerks."
- ericmay 6y ago
  I say probably because although I’m quite sure that there are inefficiencies, I am not an expert and don’t have hard data to support my assertion. Don’t mistake what I’ve said as support for the current system.
- ineedasername 6y ago
  You need context for that because your article is incorrect about Canada. Across all of Canada, on average, there are still 1.1 clerks per bed. (1,100 clerks for every 1,000 beds) [0] [0] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4511963/#:~:text=Duke%20University%20Hospital%2C%20for%20example,administrative%20workers%20in%20health%20insurance.&text=The%20number%20of%20clerks%20of,the%20United%20States%20as%20well https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4511963/#:~:tex....
  - ericd 6y ago
    Interesting. What do all of those clerks do in the Canadian system vs the US system? Would you say that the Canadian system is a paragon of efficiency?
93po 6y ago
Insulin that costs $500 a month after expensive insurance discounts only costs about $5 to manufacture and sells for $30 a month in Canada
unclenoriega 6y ago
That's not really how it works with drug prices in the US. I don't know exactly how it works behind the scenes, but from the pharmacy perspective, it's basically like this: The "sticker price" of a drug is called the "usual and customary price" (U&C). This is supposed to be what you charge for a drug, and is generally based on the "average wholesale price" (AWP) of the drug plus a dispensing fee to cover other costs. The AWP, however, may or may not (usually not in the case of generic drugs) be related to the actual acquisition cost of the drug. It tends to be substantially higher. The pharmacy bills its U&C price to the insurance company (or, more often, a pharmacy benefit manager (PBM) contracted by the insurance company), and the insurance company tells you what it will actually pay you—this can be negative—and how much to charge the patient. Usually the pharmacy gets paid whatever the insurance company/PBM thinks it should cost to fill the prescription, and the patient pays a standard copay/coinsurance. If the patient has a large deductible or doesn't have insurance, this is where GoodRx et al. come in. They act as a PBM, allowing the patient to pay a price lower than the U&C while pocketing ~$5 or so of the "copay" for themselves (plus whatever data they get). Often independent pharmacies will just cut out the middle man and give you a better cash price (although this may violate their PBM contracts), but the big chains will need the coupon. Depending on the difference between the AWP and the actual acquisition cost of the drug(s), this can be a substantial savings for cash patients or people with large deductibles.
- ericmay 6y ago
  Sorry, I’m not sure what you mean here with “that’s not how it works”. Could you explain? -edit- I guess what I mean to say here is I'm not commenting on how drug prices work. It doesn't matter. I am commenting on the fact that somebody, somewhere has to pay for the drug, regardless of the price. I want to push back on this idea that drugs are "free" in Europe or elsewhere. Sure the healthcare programs appear to be better managed, higher taxes on the wealthy or corporations (although I don't know for sure) appear to be subsidizing costs for lower and middle classes, but the drugs still aren't free in any sense of the word to the society as a whole.
  - unclenoriega 6y ago
    I was trying to trying to point out the scale of the "inefficiencies" inherent in current pharmacy billing practices (and in my understanding medical billing in general). The prices are literally just made up[0], and then payors have to guess how much they should pay. "That's not how it works", perhaps a poor choice of words was intended to reflect that if a drug costs $2000 per month or even $500/month, often that money doesn't need to come from anywhere. Now that you've clarified, it sounds like you're arguing against the idea that drugs have no cost of development or production, which is not an idea that anyone actually holds, so I'm sorry for wasting our time. I would point that "free at the point of service" does seem to be one sense of "free". [0] https://www.rjhealth.com/2019/07/31/drug-pricing-101-reimbursement-rj-health-methodologies-drug-claims-code-level-unit-level-hcpcs-ndc/ https://www.rjhealth.com/2019/07/31/drug-pricing-101-reimbur...