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Consolidation is not necessarily a problem. 1/3rd of US healthcare spending is for administration[0], twice Canada's percentage. This is due to fragmentation an

Consolidation is not necessarily a problem. 1/3rd of US healthcare spending is for administration[0], twice Canada's percentage. This is due to fragmentation and it doesn't make a ton of sense for each hospital to have a dedicated finance department, HR department, etc... The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, and hospitals aren't in a position to turn someone away if they can't pay. The rest of the developed world has figured this out but we're too stubborn to adopt what is undoubtedly a better system. [0]https://www.healio.com/news/primary-care/20200106/a-third-of-us-health-care-spending-stems-from-administrative-costs https://www.healio.com/news/primary-care/20200106/a-third-of...

legitster 5y ago
> The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, I may partially agree. Consumers do not have enough information because hospitals intentionally keep it from them. Even in situations where I can call around or schedule a procedure, it's amazing how few places even know or will tell me. Or straight up lie without consequences.
- logosmonkey 5y ago
  Mostly they don't really know. Or they don't know if you have insurance anyway because it's so all over the place with what gets covered and what that specific Healthcare provider has negotiated. Maybe they have some actuaries who could actually tell you what a close approximation would be but that info never really filters down to folks in the call centers or at a front desk. I have worked on the supply side, the insurance side and currently the provider side and it is all messed up. Across the board it's just a travesty of inefficiencies and opaque rules. There just isn't a real way to shop around with our current system even though proponents of the system love to say that's what we all should be doing.
bhupy 5y ago
I work in this industry (on administration, no less) and sometimes even adjust claims myself, so I can speak to this with experience. 1/3 of US healthcare spending is absolutely not from administration fees. Here is a more concrete breakdown of all of the cost components, compared with the same in peer countries: https://www.healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/ https://www.healthsystemtracker.org/brief/what-drives-health... If you look at the breakdown, the vast majority of the cost difference comes from just the raw cost of inpatient and outpatient care. Even if you were to completely zero out the administrative costs per capita, you'd hardly make a dent in bridging the gap. > The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, and hospitals aren't in a position to turn someone away if they can't pay. It depends on what you mean by "healthcare". "Healthcare" is way too broad to have useful conversations. What constitutes "healthcare"? Getting the flu? Vaccines? Annual physicals? Routine treatments? Brain surgery? Cancer? It's a spectrum. There are some parts of healthcare that are highly predictable and fungible, and some that aren't. Whether or not a market can provision predictable/plannable healthcare is quite debatable. Also, what we have in the US is nowhere close to a free market in healthcare, so making this argument is a bit of a non sequitur. > The rest of the developed world has figured this out but we're too stubborn to adopt what is undoubtedly a better system. The rest of the developed world isn't a monolith. Singapore, Switzerland, the UK, Denmark, Germany, and the Netherlands all have wildly different healthcare systems, but all produce fairly good outcomes! All have dramatically different levels of privatization, market mechanisms, and welfare generosity.
- onlyrealcuzzo 5y ago
  > The rest of the developed world isn't a monolith. Singapore, Switzerland, the UK, Denmark, Germany, and the Netherlands all have wildly different healthcare systems, but all produce fairly good outcomes! All have dramatically different levels of privatization, market mechanisms, and welfare generosity. This is why I'm interested why so many people are obsessed with the idea that we need to completely burn down our system and start anew to improve it.
  - 5y ago

legitster 5y ago

> The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, I may partially agree. Consumers do not have enough information because hospitals intentionally keep it from them. Even in situations where I can call around or schedule a procedure, it's amazing how few places even know or will tell me. Or straight up lie without consequences.

logosmonkey 5y ago
Mostly they don't really know. Or they don't know if you have insurance anyway because it's so all over the place with what gets covered and what that specific Healthcare provider has negotiated. Maybe they have some actuaries who could actually tell you what a close approximation would be but that info never really filters down to folks in the call centers or at a front desk. I have worked on the supply side, the insurance side and currently the provider side and it is all messed up. Across the board it's just a travesty of inefficiencies and opaque rules. There just isn't a real way to shop around with our current system even though proponents of the system love to say that's what we all should be doing.

bhupy 5y ago

I work in this industry (on administration, no less) and sometimes even adjust claims myself, so I can speak to this with experience. 1/3 of US healthcare spending is absolutely not from administration fees. Here is a more concrete breakdown of all of the cost components, compared with the same in peer countries: https://www.healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/ https://www.healthsystemtracker.org/brief/what-drives-health... If you look at the breakdown, the vast majority of the cost difference comes from just the raw cost of inpatient and outpatient care. Even if you were to completely zero out the administrative costs per capita, you'd hardly make a dent in bridging the gap. > The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, and hospitals aren't in a position to turn someone away if they can't pay. It depends on what you mean by "healthcare". "Healthcare" is way too broad to have useful conversations. What constitutes "healthcare"? Getting the flu? Vaccines? Annual physicals? Routine treatments? Brain surgery? Cancer? It's a spectrum. There are some parts of healthcare that are highly predictable and fungible, and some that aren't. Whether or not a market can provision predictable/plannable healthcare is quite debatable. Also, what we have in the US is nowhere close to a free market in healthcare, so making this argument is a bit of a non sequitur. > The rest of the developed world has figured this out but we're too stubborn to adopt what is undoubtedly a better system. The rest of the developed world isn't a monolith. Singapore, Switzerland, the UK, Denmark, Germany, and the Netherlands all have wildly different healthcare systems, but all produce fairly good outcomes! All have dramatically different levels of privatization, market mechanisms, and welfare generosity.

onlyrealcuzzo 5y ago
> The rest of the developed world isn't a monolith. Singapore, Switzerland, the UK, Denmark, Germany, and the Netherlands all have wildly different healthcare systems, but all produce fairly good outcomes! All have dramatically different levels of privatization, market mechanisms, and welfare generosity. This is why I'm interested why so many people are obsessed with the idea that we need to completely burn down our system and start anew to improve it.
- 5y ago