4 ms·

We spend 5-8x more on healthcare than defense. You have to ration somehow. If everyone use as much of the healthcare system as we wanted it would consume our so

We spend 5-8x more on healthcare than defense. You have to ration somehow. If everyone use as much of the healthcare system as we wanted it would consume our society. In the US, we ration by price… “the doctors expensive and I don’t feel too bad so I’m not going to go”. In Europe, they ration via lines… you’ll get your free healthcare eventually. Either way there are problems, but seems like other countries might be onto something

hedora 3y ago
We pay a lot for healthcare, but that money is not spent on healthcare. It is an important distinction. For example, about 33% of healthcare dollars go to paying “claims proceesing” people at your insurance company and your doctors office to haggle with each other and produce duplicate paperwork. If the low end of your estimate (5x) is the correct multiplier, the money that goes to claims processing would be enough to pay for universal healthcare in pretty much any other first world country. Other things, like absurdly high drug prices, also are not healthcare spending. 90+% of drug discovery research money is spent at universities, and not by pharmaceutical companies. Also, those companies pay more for prescription drug advertising than for drug research.
- nradov 3y ago
  Your numbers are way off. The Affordable Care Act capped the insurance company's share at 20% (minimum 80% medical loss ratio). In practice most commercial payers are taking less than that. Certainly nowhere near 33%. I'm not sure what point you're trying to make about drug discovery research. The major expense in bringing a new drug to market is not in the basic research but in the phase-3 clinical trials. Those often cost pharmaceutical companies upwards of $1B now.
  - flagrant_taco 3y ago
    How much do pharmaceutical companies make off of that $1b investment though? The scale of the investment only matters if they don't have the capital to cover.
    - nradov 3y ago
      Pharmaceutical company profit margins are generally in the 15% - 20% range. https://www.gao.gov/products/gao-18-40 https://www.gao.gov/products/gao-18-40 By comparison, several major tech companies have significantly higher profit margins.
      - flagrant_taco 3y ago
        That's more an argument against major tech companies than for pharmaceutical companies.
- lotsofpulp 3y ago
  > It is an important distinction. For example, about 33% of healthcare dollars go to paying “claims proceesing” people at your insurance company and your doctors office to haggle with each other and produce duplicate paperwork. This is not true, but there is a big non patient healthcare services culprit in US healthcare costs, and that is legal liability. In the US, every entity in the healthcare chain is doing so much extra to prevent themselves from being liable, and charging extra in case they are found liable, that it inflates all costs dramatically. Without tort reform, I doubt we see much improvement.
  - throwaway173738 3y ago
    Tort reform is a red herring here in that most insurance companies do things that they deserve to be sued over as a matter of routine, and they like to talk about ways to statutorily limit your right to sue them like having a system of complaints with a commissioner who has no time to process complaints. I think healthcare costs are a result of lots of different insane things that snowball rather than something simple like too many lawsuits.
    - moneywoes 3y ago
      What’s the easiest, ocams razor solution here? Tort sounds easy
  - TexanFeller 3y ago
    Here in TX they put caps on awards for medical malpractice. As far as I can tell it hasn't helped costs all that much. Also if my Dr. leaves me paralyzed I can only get 500k damages. Malpractice law is a problem, but I don't think it's the one to focus on.
    - lotsofpulp 3y ago
      Good point to be able to compare different states.
- evandijk70 3y ago
  "90+% of drug discovery research money is spent at universities" Afaik this is simply not true, and even if it was, this would be misleading if you consider that most costs are made during clinical trials, which test the effectiveness of the drug.
- moneywoes 3y ago
  Citation for the 33%?
_p3fk 3y ago
It’s a common argument that somehow people who live in countries with good health coverage have to wait a very long time for health services. Things that are not urgent, this can be true. And you can certainly hear anecdotes here and there about more serious problems. But most of the time for the vast majority of people in the vast majority of situations, healthcare is delivered when it’s needed, on time, without dangerous delay. This talking point that somehow elevates the American approach because it is faster is misguided.

hedora 3y ago

We pay a lot for healthcare, but that money is not spent on healthcare. It is an important distinction. For example, about 33% of healthcare dollars go to paying “claims proceesing” people at your insurance company and your doctors office to haggle with each other and produce duplicate paperwork. If the low end of your estimate (5x) is the correct multiplier, the money that goes to claims processing would be enough to pay for universal healthcare in pretty much any other first world country. Other things, like absurdly high drug prices, also are not healthcare spending. 90+% of drug discovery research money is spent at universities, and not by pharmaceutical companies. Also, those companies pay more for prescription drug advertising than for drug research.

nradov 3y ago
Your numbers are way off. The Affordable Care Act capped the insurance company's share at 20% (minimum 80% medical loss ratio). In practice most commercial payers are taking less than that. Certainly nowhere near 33%. I'm not sure what point you're trying to make about drug discovery research. The major expense in bringing a new drug to market is not in the basic research but in the phase-3 clinical trials. Those often cost pharmaceutical companies upwards of $1B now.
- flagrant_taco 3y ago
  How much do pharmaceutical companies make off of that $1b investment though? The scale of the investment only matters if they don't have the capital to cover.
  - nradov 3y ago
    Pharmaceutical company profit margins are generally in the 15% - 20% range. https://www.gao.gov/products/gao-18-40 https://www.gao.gov/products/gao-18-40 By comparison, several major tech companies have significantly higher profit margins.
    - flagrant_taco 3y ago
      That's more an argument against major tech companies than for pharmaceutical companies.
lotsofpulp 3y ago
> It is an important distinction. For example, about 33% of healthcare dollars go to paying “claims proceesing” people at your insurance company and your doctors office to haggle with each other and produce duplicate paperwork. This is not true, but there is a big non patient healthcare services culprit in US healthcare costs, and that is legal liability. In the US, every entity in the healthcare chain is doing so much extra to prevent themselves from being liable, and charging extra in case they are found liable, that it inflates all costs dramatically. Without tort reform, I doubt we see much improvement.
- throwaway173738 3y ago
  Tort reform is a red herring here in that most insurance companies do things that they deserve to be sued over as a matter of routine, and they like to talk about ways to statutorily limit your right to sue them like having a system of complaints with a commissioner who has no time to process complaints. I think healthcare costs are a result of lots of different insane things that snowball rather than something simple like too many lawsuits.
  - moneywoes 3y ago
    What’s the easiest, ocams razor solution here? Tort sounds easy
- TexanFeller 3y ago
  Here in TX they put caps on awards for medical malpractice. As far as I can tell it hasn't helped costs all that much. Also if my Dr. leaves me paralyzed I can only get 500k damages. Malpractice law is a problem, but I don't think it's the one to focus on.
  - lotsofpulp 3y ago
    Good point to be able to compare different states.
evandijk70 3y ago
"90+% of drug discovery research money is spent at universities" Afaik this is simply not true, and even if it was, this would be misleading if you consider that most costs are made during clinical trials, which test the effectiveness of the drug.
moneywoes 3y ago
Citation for the 33%?

_p3fk 3y ago

It’s a common argument that somehow people who live in countries with good health coverage have to wait a very long time for health services. Things that are not urgent, this can be true. And you can certainly hear anecdotes here and there about more serious problems. But most of the time for the vast majority of people in the vast majority of situations, healthcare is delivered when it’s needed, on time, without dangerous delay. This talking point that somehow elevates the American approach because it is faster is misguided.