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> I am interested to understand what makes the "raw" costs so wildly different. There are a number of reasons. One big one is simply that doctors in the US com

by bhupy 6y ago

> I am interested to understand what makes the "raw" costs so wildly different. There are a number of reasons. One big one is simply that doctors in the US command a much higher salary than their counterparts elsewhere in the world: https://economix.blogs.nytimes.com/2009/07/15/how-much-do-doctors-in-other-countries-make/ https://economix.blogs.nytimes.com/2009/07/15/how-much-do-do... https://www.politico.com/agenda/story/2017/10/25/doctors-salaries-pay-disparities-000557/ https://www.politico.com/agenda/story/2017/10/25/doctors-sal... Another big reason is that the US is unique in that it's one of the only countries in the world where you get your healthcare through your employer. What we're seeing in healthcare costs is analogous to what you might see happen to airline ticket costs if we all got our air tickets through our employers: the vast majority of us would fly business class, while the unemployed would be simply unable to pay for business class fares out of pocket. Employers (especially medium-to-large businesses) have a much higher purchasing power (and hence, willingness to pay) than individuals. Now, if you take this behavior and combine it with the fact that health insurers' profit margins are capped by law by percentage, insurers pay more for treatments (which doctors happily accept), charge more to employers (who are generally less price conscious vs individuals), thus bring in more absolute revenue, and therefore more profit because a capped profit percentage of a higher revenue is higher than a capped percentage of lower revenue. It's somewhat counter-intuitive, but the policy combination of an employer mandate and insurance profit cap results in the mother of all local optima. Disclaimer: I work on health pricing in the US and sometimes adjust claims myself.

pvaldes 6y ago
> doctors in the US command a much higher salary than their counterparts elsewhere in the world Yes, but salaries are also linked to huge debts to pay in their first years, a permanent state of fear to be sued by negligence (losing their license and seeing their only possibility of income vanished). It seems that suicide and depression are too common among young students. They also work too many hours in irregular schedules (working in sundays, holidays or passing one on each three weekends at the hospital is not uncommon. This will add a lot of stress for parents with small children trying to having a normal life. And is a emotionally charged work. ... So either you provide a particularly high reward in form of a golden salary, or perhaps nobody would wanted to be a doctor.
- bhupy 6y ago
  Now you're starting to follow the thread to the root cause: onerous medical licensure and onerous medical university accreditation. In the US, the barrier to become a doctor is higher than it is anywhere else. Nowhere else in the developed world are you forced to do 4 years of undergraduate study unrelated to medicine, followed by 4 years of Medical school, followed by 4 years of residency. Also, one doesn't require huge debts to pursue a PA or NP degree, but many States disallow PAs and NPs from practicing basic medicine. Not everyone needs to go through the same level of schooling as a brain surgeon.

by bhupy 6y ago

pvaldes 6y ago

> doctors in the US command a much higher salary than their counterparts elsewhere in the world Yes, but salaries are also linked to huge debts to pay in their first years, a permanent state of fear to be sued by negligence (losing their license and seeing their only possibility of income vanished). It seems that suicide and depression are too common among young students. They also work too many hours in irregular schedules (working in sundays, holidays or passing one on each three weekends at the hospital is not uncommon. This will add a lot of stress for parents with small children trying to having a normal life. And is a emotionally charged work. ... So either you provide a particularly high reward in form of a golden salary, or perhaps nobody would wanted to be a doctor.

bhupy 6y ago
Now you're starting to follow the thread to the root cause: onerous medical licensure and onerous medical university accreditation. In the US, the barrier to become a doctor is higher than it is anywhere else. Nowhere else in the developed world are you forced to do 4 years of undergraduate study unrelated to medicine, followed by 4 years of Medical school, followed by 4 years of residency. Also, one doesn't require huge debts to pursue a PA or NP degree, but many States disallow PAs and NPs from practicing basic medicine. Not everyone needs to go through the same level of schooling as a brain surgeon.