5 ms·

The problem is intractable in no small part because most people are unwilling to acknowledge where the vast bulk of the money is going—-healthcare workers. They

The problem is intractable in no small part because most people are unwilling to acknowledge where the vast bulk of the money is going—-healthcare workers. They keep on looking for bad guys like insurance or drug company executives. There are some of these, and they do make a lot of money, but in the face of nearly $4 trillion in spending they don’t move the needle. The one million doctors do. The 3.8 million nurses do.

someguydave 5y ago
Yes, doctors, nurses, and administrators hold the entire country’s health hostage for maximal cash.
- hirako2000 5y ago
  It just can't be that simple. Since there is a freer health market in the US than say in France, the staff costs would have come down with competition. I think what we have there is a very expensive medical school system. And things snow ball. Especially given a doctor role. A doctor studies and goes through practical training a good 8 years. That's college/uni + health center fees that stack up with interest over a long period of time. Doc then needs to make a living in accordance to his past effort, more than a living, get enough to earn the status he deserves. Now the thing is, taxes accounts for a lot given the high band income. So we could say the doctors are earning too much, but reality is 70% of their gross income goes to multiple tax tiers. 1/ income tax 2/ debt pay back 3/ insurer, continous training fees and other things that are sort of imposed on medical professional. I'm not a doctor, but I couldn't figure out how even a surgeon could justify such high pay, in the million dollar per year in many US positions. But looking comprehensively as the taxes imposed on them, everything makes sense, all they have left is 200k per year. Cashiers and other clerks earn a quarter this amount, but that's for any less than what doctors are making not many would go through all these hops and be privileged enough to even take the risk of such a financial investment. The argument that many doctors come from wealthy families doesn't invalidate the simple fact debt still exists and somehow needs to be paid back, and in most cases it does get paid back. Solution? Get rid of income taxes, make medical schools optional to practice, just make exams open to any participant, affordable education channels will pop up by themselves. Don't regulate medical malpractice, practicians should rather have their lives ruined instead, it's actually a stronger incentive to proper practice than having a big insurer paying the millions in settlement cases. The medical sector is far more tied to other industries and regulating costs than it looks. I only included 3 obvious contributors to high staff cost, there are numerous supply chains to look at to also account for other spendings that seem unavoidable but in reality pointless for health care.
  - throwawaygh 5y ago
    > Since there is a freer health market in the US than say in France, the staff costs would have come down with competition. "When reality doesn't confirm your axioms, double down on the axioms" puts the fundamentalist in market fundamentalism.
    - hirako2000 5y ago
      That's not fundamentalist market thoughts. The argument is against free market rules . Sorry if that wasn't made clear to you. The premises are that in a rather laissez faire market, prices are obscured and tend on the over profiting side. With competition not actually leading to the outcome one would expect in a free market. One pays 100 bucks,another pays 700 bucks. And an RMI shot ( decades old tech ) still costs thousands of dollars. Edit: can't write proper English with auto correct.
  - pySSK 5y ago
    > Solution? Get rid of income taxes, make medical schools optional to practice, just make exams open to any participant, affordable education channels will pop up by themselves. Don't regulate medical malpractice, practicians should rather have their lives ruined instead, it's actually a stronger incentive to proper practice than having a big insurer paying the millions in settlement cases. All those make society worse. Alternatively: - subsidize or cap education fees so that students don’t go into crushing debt - reduce inefficiencies resulting from a for profit insurance system by switching to a single payer social insurance system - cap malpractice claims and put in better controls against frivolous lawsuits - doing all this also lower doctors wages
    - hirako2000 5y ago
      Subsidising? See what happens when we do. And it doesn't mean nobody pays, tax payers. And that would make the education and health sectors even worse than they are. We already have armies of people taking on studies that are dead ends, and medical services that are pure money making scams. You are advocating for more people being forced to contribute for unjustified expenses. It doesn't need to be argumented against anyway, the economy cannot take much more tax levels, we are probably defaulting on paying taxes we are asked to pay at this point.
himinlomax 5y ago
Do you count the people who are paid to dispute every single insurance claim and fill insurer-specific forms as "health care workers"?
- bradleyjg 5y ago
  When some rust belt county has healthcare employment as they only thing keeping it going at all, those workers are part of it. The point is that there’s no magic bullet here. There’s no mustache twirling trillionare villain that we can shut down and get the UK’s spending numbers. Cutting healthcare spending significantly, which I think we should do, would cause hardship for a huge number of people and entire regions on the country.
  - GaryTang 5y ago
    > “Cutting healthcare spending significantly, which I think we should do, would cause hardship for a huge number of people and entire regions on the country.” And cutting healthcare spending would provide prosperity for many more.
  - maerF0x0 5y ago
    Which, if Andrew Yang is was correct in his thinking and sources, could be part of why there was a flood oxycontin & suicide cases, leading to Trump being highly favored by those regions... not going into the politics of trump being good or bad, but I think we can all agree human suffering and suicide are bad.
    - bradleyjg 5y ago
      https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window There’s real truth in the parable, but what it doesn’t get at is the transition costs in human misery of getting from an economy based on breaking and fixing windows to a better one.
      - specialist 5y ago
sokoloff 5y ago
That’s 4.8M people. I don’t know what “vast bulk of the money” would mean numerically, but let’s posit that it’s not less than half. Half of $4T/yr is $2T/yr or over $415K/yr for the average nurse or doctor. So, either “vast bulk” is well under half, nurses make a ton more than I think, or some assumption above is incorrect.
- tacostakohashi 5y ago
  > nurses make a ton more than I think, or some assumption above is incorrect. It could be this - plenty of nurses make well over $100k, plenty of doctors make well over $500k. It varies a lot based on location, specialty, overtime, but there are some good livings being made.
  - onlyrealcuzzo 5y ago
    Are there pensions and does this $4T figure include that? If so, that could account for a lot of the "worker compensation". But, the median wage for a medical doctor is <$250k in the US. I would be surprised if the pay amongst doctors is so unequal that the average is making >$500k. That being said, there are a ton of people who work in hospitals beside just "doctors and nurses". I wouldn't be surprised if all this factored in was close to 50% of the total pay.
    - mcguire 5y ago
      Referring to the CDC link I posted above, physician and clinical services are 20% of total medical expenses. That's your primary care physician, nurses, labs, and specialists. (Hospital care is about 33% of the total.) 20% of $4T is $800 billion. There are ~209,000 primary care doctors in the US (https://www.ahrq.gov/research/findings/factsheets/primary/pcwork1/index.html https://www.ahrq.gov/research/findings/factsheets/primary/pc...), not counting specialists, etc. Each doctor therefore is responsible for ~$4M. Assuming for no reason whatsoever that specialists and outside labs, etc., take 50% of that, each doctor's practice gets $2M. Making ye olde "everybody costs $100,000 / year" assumption, that works out to 20 people including the doctor: nurses, receptionists, lab techs, janitors, etc. Doesn't sound terribly unreasonable.
14 5y ago
This. My brother a highly educated health care worker wanted to move back to Canada. The only catch is he was offered $20usd/hr less working in Canada then where he is in Washington. Think about that. He basically would have to turn down my entire years wage to get a job here. He has so much more earning potential down south then here it is absurd. Or perhaps what is absurd is how much he is paid for his job. I’m leaving towards the paid too much.
- ta988 5y ago
  Yes some salaries are absurd in US. Look at programmers, no other country pays that much. Look at CEOs, same thing. By not capping salaries with reasonable caps we just completely broke the system (edit: I wrote market but meant something more like system), and it will be hard to revert that. But it may not be bad to have doctors that care more about their patients than their money, I've met my share of absolutely inhumane doctors and MD students.
  - lotsofpulp 5y ago
    Paying someone more than what their counterparts in other countries get is not breaking the market. Good luck incentivizing the smartest kids to go through the torture chamber that they have to in order to become a doctor without the high pay potential. I suspect, proportionally, many smart parents and kids have already chosen to avoid careers in medicine due to the coming squeeze in pay. The better way to decrease labor costs is to increase labor supply. Make it so you do not have to sacrifice your 20s to become a doctor. Make it so kids are not looking at hundreds of thousands of dollars of debt by the time they are a doctor and in their early 30s when they need to be thinking about starting families. There is no physical limitation why we cannot start preparing kids for careers halfway through high school and have them working by 25. Or why residency spots are so limited so there is a cap on how many doctors are added.
    - bradleyjg 5y ago
      Why would we want the smartest kids to become doctors? Maybe the small fraction of doctors that are working on new or improved treatments, but most doctors treat one person at a time. I’d rather have the smartest kids go into a field where they can do work that impacts millions or billions of people.
mcguire 5y ago
National Health Expenses, 1960-2018: https://www.cdc.gov/nchs/data/hus/2019/045-508.pdf https://www.cdc.gov/nchs/data/hus/2019/045-508.pdf Linked from https://www.cdc.gov/nchs/fastats/health-expenditures.htm https://www.cdc.gov/nchs/fastats/health-expenditures.htm In 2018, hospital care is about 33%. Professional services (physician and clinical services, 20%, dental services, and other) is about 26%. Retail medical products is 12% (prescription drugs, 9%). Net cost of health insurance is 2.6%, which is "Difference between premiums earned and benefits incurred. This is the amount of health insurance spending attributed to nonmedical benefit expenses such as administrative costs, additions to reserves, rate credits and dividends, premium taxes, and profits. This category includes the net cost for private health insurance companies that insure enrollees in Medicare, Medicaid, CHIP, and workers’ compensation (health portion only)." It would be nice to have a breakdown of hospital budgets, but I cannot find any.
- pizza234 5y ago
  This is very interesting, however, I wonder how those numbers reconcile with wildly different prices based on insurer. At a naive look, if insurance cost would be less than 10% of the final cost of a service (assuming that a generic service can represent health cost in general), one would expect the difference to be in that range - but the article shows a much higher variance.
  - mcguire 5y ago
    How so? The article discussed differences in the prices paid by insurance (on uninsured patients) to the service providers. That is entirely unrelated to the aggregate amount of money the insurance companies pay to their staff, their profits, etc.
jjav 5y ago
> where the vast bulk of the money is going—-healthcare workers Any credible source for this? Most of the cost is actually going to those who profit from the system without contributing any actual health care. That is, very much not the actual healthcare workers. When you see a doctor for 15 minutes and get charged $300-$400, the vast majority of that money does not go to the actual doctor. It's the overhead people, the administrators and the insurance company who are taking most of the money.
specialist 5y ago
> healthcare workers Please be more specific. What fraction is spent on front line value add labor, like doctors and nurses, vs administrative flak?
lr1970 5y ago
I am a bit biased here, for I am married to an American Physician. She works longer hours than I do. Her work is much more stressful (literally, life and death decisions almost every day). She can be sued for malpractice while I can only be fired for my screw ups. Her Medical education (undergrad + MD + medical residency) took three times as long as my Engineering degree with much larger student debt at the end. And yet, as an SWE I make more money than she does. American doctors and nurses are not overpaid, certainly not if compared to the SWE crowd at HN. American health care is a chaotic poorly organized mess with lots of money simply going to waste. Bringing an order to it (single payer system is one example) can restore some sanity, fairness and financial accountability.
- bradleyjg 5y ago
  > with lots of money simply going to waste What does this look like? Is there money going into the system that’s not going to anyone / any company at all?
  - lr1970 5y ago
    >> with lots of money simply going to waste > What does this look like? Is there money going into the system that’s not going to anyone / any company at all? It means that money efficiency and productivity are low. A surgeon is idling because an OR is not setup because stuff is poorly organized, etc. It was mentioned in this thread already that with similar outcomes US healthcare costs are way higher than comparable systems in other countries. Low efficiency per dollar is a money waste. EDIT: formatting.

someguydave 5y ago

Yes, doctors, nurses, and administrators hold the entire country’s health hostage for maximal cash.

hirako2000 5y ago
It just can't be that simple. Since there is a freer health market in the US than say in France, the staff costs would have come down with competition. I think what we have there is a very expensive medical school system. And things snow ball. Especially given a doctor role. A doctor studies and goes through practical training a good 8 years. That's college/uni + health center fees that stack up with interest over a long period of time. Doc then needs to make a living in accordance to his past effort, more than a living, get enough to earn the status he deserves. Now the thing is, taxes accounts for a lot given the high band income. So we could say the doctors are earning too much, but reality is 70% of their gross income goes to multiple tax tiers. 1/ income tax 2/ debt pay back 3/ insurer, continous training fees and other things that are sort of imposed on medical professional. I'm not a doctor, but I couldn't figure out how even a surgeon could justify such high pay, in the million dollar per year in many US positions. But looking comprehensively as the taxes imposed on them, everything makes sense, all they have left is 200k per year. Cashiers and other clerks earn a quarter this amount, but that's for any less than what doctors are making not many would go through all these hops and be privileged enough to even take the risk of such a financial investment. The argument that many doctors come from wealthy families doesn't invalidate the simple fact debt still exists and somehow needs to be paid back, and in most cases it does get paid back. Solution? Get rid of income taxes, make medical schools optional to practice, just make exams open to any participant, affordable education channels will pop up by themselves. Don't regulate medical malpractice, practicians should rather have their lives ruined instead, it's actually a stronger incentive to proper practice than having a big insurer paying the millions in settlement cases. The medical sector is far more tied to other industries and regulating costs than it looks. I only included 3 obvious contributors to high staff cost, there are numerous supply chains to look at to also account for other spendings that seem unavoidable but in reality pointless for health care.
- throwawaygh 5y ago
  > Since there is a freer health market in the US than say in France, the staff costs would have come down with competition. "When reality doesn't confirm your axioms, double down on the axioms" puts the fundamentalist in market fundamentalism.
  - hirako2000 5y ago
    That's not fundamentalist market thoughts. The argument is against free market rules . Sorry if that wasn't made clear to you. The premises are that in a rather laissez faire market, prices are obscured and tend on the over profiting side. With competition not actually leading to the outcome one would expect in a free market. One pays 100 bucks,another pays 700 bucks. And an RMI shot ( decades old tech ) still costs thousands of dollars. Edit: can't write proper English with auto correct.
- pySSK 5y ago
  > Solution? Get rid of income taxes, make medical schools optional to practice, just make exams open to any participant, affordable education channels will pop up by themselves. Don't regulate medical malpractice, practicians should rather have their lives ruined instead, it's actually a stronger incentive to proper practice than having a big insurer paying the millions in settlement cases. All those make society worse. Alternatively: - subsidize or cap education fees so that students don’t go into crushing debt - reduce inefficiencies resulting from a for profit insurance system by switching to a single payer social insurance system - cap malpractice claims and put in better controls against frivolous lawsuits - doing all this also lower doctors wages
  - hirako2000 5y ago
    Subsidising? See what happens when we do. And it doesn't mean nobody pays, tax payers. And that would make the education and health sectors even worse than they are. We already have armies of people taking on studies that are dead ends, and medical services that are pure money making scams. You are advocating for more people being forced to contribute for unjustified expenses. It doesn't need to be argumented against anyway, the economy cannot take much more tax levels, we are probably defaulting on paying taxes we are asked to pay at this point.

himinlomax 5y ago

Do you count the people who are paid to dispute every single insurance claim and fill insurer-specific forms as "health care workers"?

bradleyjg 5y ago
When some rust belt county has healthcare employment as they only thing keeping it going at all, those workers are part of it. The point is that there’s no magic bullet here. There’s no mustache twirling trillionare villain that we can shut down and get the UK’s spending numbers. Cutting healthcare spending significantly, which I think we should do, would cause hardship for a huge number of people and entire regions on the country.
- GaryTang 5y ago
  > “Cutting healthcare spending significantly, which I think we should do, would cause hardship for a huge number of people and entire regions on the country.” And cutting healthcare spending would provide prosperity for many more.
- maerF0x0 5y ago
  Which, if Andrew Yang is was correct in his thinking and sources, could be part of why there was a flood oxycontin & suicide cases, leading to Trump being highly favored by those regions... not going into the politics of trump being good or bad, but I think we can all agree human suffering and suicide are bad.
  - bradleyjg 5y ago
    https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window There’s real truth in the parable, but what it doesn’t get at is the transition costs in human misery of getting from an economy based on breaking and fixing windows to a better one.
    - specialist 5y ago

sokoloff 5y ago

That’s 4.8M people. I don’t know what “vast bulk of the money” would mean numerically, but let’s posit that it’s not less than half. Half of $4T/yr is $2T/yr or over $415K/yr for the average nurse or doctor. So, either “vast bulk” is well under half, nurses make a ton more than I think, or some assumption above is incorrect.

tacostakohashi 5y ago
> nurses make a ton more than I think, or some assumption above is incorrect. It could be this - plenty of nurses make well over $100k, plenty of doctors make well over $500k. It varies a lot based on location, specialty, overtime, but there are some good livings being made.
- onlyrealcuzzo 5y ago
  Are there pensions and does this $4T figure include that? If so, that could account for a lot of the "worker compensation". But, the median wage for a medical doctor is <$250k in the US. I would be surprised if the pay amongst doctors is so unequal that the average is making >$500k. That being said, there are a ton of people who work in hospitals beside just "doctors and nurses". I wouldn't be surprised if all this factored in was close to 50% of the total pay.
  - mcguire 5y ago
    Referring to the CDC link I posted above, physician and clinical services are 20% of total medical expenses. That's your primary care physician, nurses, labs, and specialists. (Hospital care is about 33% of the total.) 20% of $4T is $800 billion. There are ~209,000 primary care doctors in the US (https://www.ahrq.gov/research/findings/factsheets/primary/pcwork1/index.html https://www.ahrq.gov/research/findings/factsheets/primary/pc...), not counting specialists, etc. Each doctor therefore is responsible for ~$4M. Assuming for no reason whatsoever that specialists and outside labs, etc., take 50% of that, each doctor's practice gets $2M. Making ye olde "everybody costs $100,000 / year" assumption, that works out to 20 people including the doctor: nurses, receptionists, lab techs, janitors, etc. Doesn't sound terribly unreasonable.

14 5y ago

This. My brother a highly educated health care worker wanted to move back to Canada. The only catch is he was offered $20usd/hr less working in Canada then where he is in Washington. Think about that. He basically would have to turn down my entire years wage to get a job here. He has so much more earning potential down south then here it is absurd. Or perhaps what is absurd is how much he is paid for his job. I’m leaving towards the paid too much.

ta988 5y ago
Yes some salaries are absurd in US. Look at programmers, no other country pays that much. Look at CEOs, same thing. By not capping salaries with reasonable caps we just completely broke the system (edit: I wrote market but meant something more like system), and it will be hard to revert that. But it may not be bad to have doctors that care more about their patients than their money, I've met my share of absolutely inhumane doctors and MD students.
- lotsofpulp 5y ago
  Paying someone more than what their counterparts in other countries get is not breaking the market. Good luck incentivizing the smartest kids to go through the torture chamber that they have to in order to become a doctor without the high pay potential. I suspect, proportionally, many smart parents and kids have already chosen to avoid careers in medicine due to the coming squeeze in pay. The better way to decrease labor costs is to increase labor supply. Make it so you do not have to sacrifice your 20s to become a doctor. Make it so kids are not looking at hundreds of thousands of dollars of debt by the time they are a doctor and in their early 30s when they need to be thinking about starting families. There is no physical limitation why we cannot start preparing kids for careers halfway through high school and have them working by 25. Or why residency spots are so limited so there is a cap on how many doctors are added.
  - bradleyjg 5y ago
    Why would we want the smartest kids to become doctors? Maybe the small fraction of doctors that are working on new or improved treatments, but most doctors treat one person at a time. I’d rather have the smartest kids go into a field where they can do work that impacts millions or billions of people.

mcguire 5y ago

National Health Expenses, 1960-2018: https://www.cdc.gov/nchs/data/hus/2019/045-508.pdf https://www.cdc.gov/nchs/data/hus/2019/045-508.pdf Linked from https://www.cdc.gov/nchs/fastats/health-expenditures.htm https://www.cdc.gov/nchs/fastats/health-expenditures.htm In 2018, hospital care is about 33%. Professional services (physician and clinical services, 20%, dental services, and other) is about 26%. Retail medical products is 12% (prescription drugs, 9%). Net cost of health insurance is 2.6%, which is "Difference between premiums earned and benefits incurred. This is the amount of health insurance spending attributed to nonmedical benefit expenses such as administrative costs, additions to reserves, rate credits and dividends, premium taxes, and profits. This category includes the net cost for private health insurance companies that insure enrollees in Medicare, Medicaid, CHIP, and workers’ compensation (health portion only)." It would be nice to have a breakdown of hospital budgets, but I cannot find any.

pizza234 5y ago
This is very interesting, however, I wonder how those numbers reconcile with wildly different prices based on insurer. At a naive look, if insurance cost would be less than 10% of the final cost of a service (assuming that a generic service can represent health cost in general), one would expect the difference to be in that range - but the article shows a much higher variance.
- mcguire 5y ago
  How so? The article discussed differences in the prices paid by insurance (on uninsured patients) to the service providers. That is entirely unrelated to the aggregate amount of money the insurance companies pay to their staff, their profits, etc.

jjav 5y ago

> where the vast bulk of the money is going—-healthcare workers Any credible source for this? Most of the cost is actually going to those who profit from the system without contributing any actual health care. That is, very much not the actual healthcare workers. When you see a doctor for 15 minutes and get charged $300-$400, the vast majority of that money does not go to the actual doctor. It's the overhead people, the administrators and the insurance company who are taking most of the money.

specialist 5y ago

> healthcare workers Please be more specific. What fraction is spent on front line value add labor, like doctors and nurses, vs administrative flak?

lr1970 5y ago

I am a bit biased here, for I am married to an American Physician. She works longer hours than I do. Her work is much more stressful (literally, life and death decisions almost every day). She can be sued for malpractice while I can only be fired for my screw ups. Her Medical education (undergrad + MD + medical residency) took three times as long as my Engineering degree with much larger student debt at the end. And yet, as an SWE I make more money than she does. American doctors and nurses are not overpaid, certainly not if compared to the SWE crowd at HN. American health care is a chaotic poorly organized mess with lots of money simply going to waste. Bringing an order to it (single payer system is one example) can restore some sanity, fairness and financial accountability.

bradleyjg 5y ago
> with lots of money simply going to waste What does this look like? Is there money going into the system that’s not going to anyone / any company at all?
- lr1970 5y ago
  >> with lots of money simply going to waste > What does this look like? Is there money going into the system that’s not going to anyone / any company at all? It means that money efficiency and productivity are low. A surgeon is idling because an OR is not setup because stuff is poorly organized, etc. It was mentioned in this thread already that with similar outcomes US healthcare costs are way higher than comparable systems in other countries. Low efficiency per dollar is a money waste. EDIT: formatting.