17 ms·
Who profits most from America's baffling health-care system?
- haspoken 3y agohttps://archive.ph/Typim https://archive.ph/Typim
- infogulch 3y agoWhen I complete the captcha it responds with a 429 Too Many Requests and fails to load.
- MallocVoidstar 3y agoTry changing the link to one of their other domains, like .today or .vn. I get captcha-looped on some domains and not others.
- Eduard 3y agowhen hitting a captcha loop, temporarily deactivate any adblockers, including especially VPN-based ones such as blokada and pihole, and solve the captcha one more time. This fixes the problem for me.
- ridgeguy 3y agoAlternate, works for me. https://archive.ph/u3HmK https://archive.ph/u3HmK
- lolinder 3y agoYou shouldn't see a Cloudflare captcha at all, if you do then you're probably using Cloudflare as your DNS. The guy who maintains archive.today and friends has beef with Cloudflare for leaving off certain location information from their DNS requests, so he redirects all traffic coming from their DNS servers right back to Cloudflare.
- jayavanth 3y agoFor me, these links either never load or I get an nginx page. Must be an ISP-level block Works with Tor though
- PaulHoule 3y agoThere was an article about Bloomberg which was about another case of international businesses getting the wrong idea about the US market. https://www.bloomberg.com/news/articles/2023-10-11/new-walgreens-ceo-tim-wentworth-faces-grip-of-former-boss-stefano-pessina https://www.bloomberg.com/news/articles/2023-10-11/new-walgr... Specifically, pharmacy chain Boots in the UK sells a lot more cosmetics and stuff in the front of the store relative to prescription drugs and they thought they could do the same w/ Walgreens. Except the UK has NHS and price controls whereas the U.S. has “cost disease” where certain sectors (health care) are on an entirely different scale of pricing compared to everything else. There’s that to begin with but after you have paid for your health insurance (directly, in terms of wages you didn’t get, taxes, …) and all your out of pocket expenses, you might not have much money left to buy stuff from the front of the store.
- bombcar 3y agoThe US also has an absolute abundance of competition for the Walgreens/CVS "front of store" items - almost everything there is available at the grocery store or Walmart, and the things you need "right away" are often found at a closer gas station/convenience store.
- smelendez 3y agoYeah, it feels like the drug store chains have really struggled to find their niche here. Their selection and pricing is closer to a convenience store, but it’s usually slower to get in and out, more like a grocery.
- bombcar 3y agoCombined with most grocery stores and Walmart, etc having pharmacies i can see why they have a hard time competing.
- deleted 3y ago[deleted]
- alostpuppy 3y ago
- pydry 3y ago>Who profits most from America’s baffling health-care system? >Hint: it isn’t big pharma When the Economist - the neoliberal paper of record writes an article downplaying the profitability of a particular industry I have to say I get a little suspicious. And I discovered that the Journal of American Medical Association apparently doesn't agree that Pharma makes mediocre profits: https://www.biospace.com/article/how-profitable-is-the-pharma-industry-a-new-report-shows-the-industry-is-more-profitable-than-most-other-large-companies/ https://www.biospace.com/article/how-profitable-is-the-pharm...
- anovikov 3y agoYeah i'm on Wegovy and the price in EU is less than 1/3 the American price. Same company sells it. They just figured that people in the U.S. are used to pay way more. It has nothing to do with insurance inflating price - it's not covered by insurance for almost anyone in either place. Seriously what's wrong with the U.S. Here in Europe, heating bills can bankrupt people and they have to overpay for rent because gas is so expensive they can't rent further from their jobs - their commute radius is frequently limited with gas costs that are insane - resulting in needlessly dense cities. A separate house is a thing for upper class. All of it sucks, but... no one gets bankrupted by healthcare costs here. This is simply unheard of. And health insurance costs an invisibly small amount. I guess it removes a great deal of worry for health-concerned people.
- codeTired 3y agoI’m actually exploring legality of shipping meds from EU to us directly to patients. There is a compounded med that isn’t covered by insurance and I wonder if I could find a pharmacy in my homeland(Poland) to compound and ship it directly to patients. I have found some places that apparently do it but the sites are bad and don’t seem legit.
- anovikov 3y agoWhy not just fly there and bring in luggage? I fly for my each 3-months pack to Copenhagen, it's also a nice place to hang out.
- hotnfresh 3y agoI've made a few forays into trying to figure this out, and the best I've come up with is, "everyone involved is taking quite a bit more than they ought to, at every layer and level, which adds up to a lot of money".
- SoftTalker 3y agoThis is indicative of a lack of competition.
- BartjeD 3y agoAnd also of regulatory capture.
- SoftTalker 3y agoYes I was just about to edit my above post and add that.
- perryizgr8 3y agoAlso of over regulation.
- Podgajski 3y ago[flagged]
- stevebmark 3y agoCompetition doesn’t drive down prices in American healthcare, it usually increases prices.
- crobertsbmw 3y agoInteresting. Do you have any support for this claim?
- atoav 3y ago
- cagenut 3y agoThe employers of the terrified-to-lose-their-health-insurance "middle" class.
- paulpauper 3y agoCompare the stock prices. Insurers seme to have done the best, followed by drug companies. Hospitals by comparison have done worse. Insurers have the power to raise premiums to always make a profit , but hospitals are obligated to treat unprofitable patients.
- supertrope 3y agoThe closer you are to the capital, the easier it is to slice off a piece.
- yojo 3y agoThe article points out that the ACA caps insurer profits at 15%. A 15% profit doesn’t begin to explain the double cost of American healthcare. The article postulates it’s all the middlemen, which, incidentally, the insurers are acquiring in search of higher profits.
- supertrope 3y agoVertical integration helps reduce the double margin problem. Instead of each middleman needing their own profit margin, a vertically integrated company can earn e.g. 5% on the entire operation. Of course this assumes the new market power is not abused to increase prices more than they would have increased without the vertical integration, or results in damaged choice and quality. Something like Kaiser is closer to the solution if we don’t have a government led rationalization.
- hyperpape 3y agoI’m actually not clear that the ACA isn’t tougher than that. The ACA introduced a 85% medical loss ratio. I thought that required them to spend 85% of premiums on payouts. That limits profits to an obvious maximum of 15%, but there are other expenses (advertising and so on) that also cut into that 15%. In practice, maximum profit will be lower than 15%. That said, I haven’t gone into this in tremendous depth, so I’m kinda hoping someone can confirm or deny my understanding.
- fdehbde 3y ago
- Podgajski 3y ago[flagged]
- danvoell 3y agoAs a contract medical device manufacturer I was incentivized to charge more. A device which costs $1 to make can only reasonably be marked up so much before it's a red flag. A $100 product can more easily be marked up to $300. So all kinds of little extra features are added when the $1 product got you 99% of the functionality. So many people are on the take there is no end in sight. The doctor sees the admins make more, the admins see the insurers make more, the product distributers, the device manufacturers... so everyone keeps asking for more.
- s1artibartfast 3y agoIt is basially a tragedy of the commons. The patient will pick the $300 device over the $1 device every time, because their copay is the same either way. However, it means insurance premiums go up next year. The doctor, hostpital, insurance, and manufacturer all get paid more the higher the price. There is literally nobody in the system who wants to choose the cheaper but 99% as good product.
- deleted 3y ago[deleted]
- y1426i 3y agoAllow everyone the freedom to own their health, see whichever doctor they want, get prescription from whomever they want and get their medicines shipped from wherever they want from around the world. Let health care compete globally. That will automatically fix this problem.
- arbuge 3y agoIt would fix some of it. But when you need emergency in-person medical care, or even not-so-emergency ongoing care for chronic conditions, it is generally not an option to visit another country for that.
- y1426i 3y agoTrue. But emergency only insurance can be much cheaper. Local labs can still send scan/blood results globally wherever the patients want. The bulk of lab costs is a medical doctor attesting/writing the report. That can be solved. There was a post recently about a diabetic patient not able to afford the daily medicines. Most chronic problems require chronic medicines and regular consultation which can be solved. One issue someone might raise is the quality of doctors. I have heard tons of cases from friend I know where the doctors have messed up here. It is mostly about reviews and trust, and applies globally, and can be an individual preference.
- napierzaza 3y ago[dead]
- ilc 3y agoGo ahead and negotiate while you have a heart attack. I'll wait.
- pvaldes 3y agoSoftware can be cloned. Doctors not, and have a limited amount of time. If everybody wants to see the same doctor (a lot would do it for random reasons like appearing on a TV show or marrying a celebrity), their agendas would get stuck for months while the other wait
- mikpanko 3y agoI was hoping the article would explain where the 2x cost of US healthcare comes from compared to other developed countries, but I don’t think it provided the answer. Would be nice to see the breakdown of costs per patient between all major parties: physicians, hospitals, insurance, drug makers, pharmacies, etc - in the US vs Canada vs UK vs etc. Does anybody have a link to this info?
- spandextwins 3y agoThe politicians. That's easy. Next??
- INTPenis 3y agoFollow the drugs and you get drug producers, follow the money and you don't know where you'll end up.
- djhope99 3y agoSince moving to America from the UK, 8 years ago, I am completely baffled by the whole system. You could blame capitalism but the reality is that it seems to be where the government intervenes that causes the problem, every time they try to do something they cause unintended incentives and break more of the system. The government needs to take charge of insurance like we have in the UK, at the very least they need to stop doing stupid things that break the system. Nothing is worse in my opinion than some sort of half capitalist, half arsed regulation, it’s the worst of all the worlds, it’s not free markets and it’s not socialist, it’s Frankenstein.
- robocat 3y ago> The government needs to take charge of insurance like we have in the UK Let's compare outcomes. Do you personally think the healthcare received by the average UK citizen is better than the US? It is easy to whinge about the problems. It is hard to find solutions. For all the glaring deficits of the US systems - maybe it works okay? Democracy is the worst system... I'm in NZ. The public healthcare system has its benefits but it definitely has its costs (I've recently been dealing with expensive private healthcare providers in a situation where the public system wasn't achieving the outcomes we needed).
- fzeroracer 3y ago> Let's compare outcomes. Do you personally think the healthcare received by the average UK citizen is better than the US? It is easy to whinge about the problems. It is hard to find solutions. For all the glaring deficits of the US systems - maybe it works okay? Democracy is the worst system... Our life expectancy is falling (and is worse than the UK), people are afraid to go to the hospital because of bankruptcy and we pay far more than other nations on healthcare. In all aspects of outcome our healthcare system costs more for less. The only exception is if you're extremely wealthy, and the gap between wealthy and not has widened. I, as a fairly well-off software engineer could be bankrupted by healthcare costs if a hospital decides I'm out of network during an emergency.
- verteu 3y agoIt seems the US compares quite poorly in life expectancy and rankings by experts. It does better in cancer survival rates (but the data seems old). - https://www.internationalinsurance.com/health/systems/ https://www.internationalinsurance.com/health/systems/ - https://www.healthsystemtracker.org/chart-collection/quality-u-s-healthcare-system-compare-countries/ https://www.healthsystemtracker.org/chart-collection/quality... - https://en.wikipedia.org/wiki/List_of_countries_by_quality_of_healthcare https://en.wikipedia.org/wiki/List_of_countries_by_quality_o... - https://worldpopulationreview.com/country-rankings/best-healthcare-in-the-world https://worldpopulationreview.com/country-rankings/best-heal...
- NelsonMinar 3y agoThis comment thread is full of people sharing their uninformed opinions without reading the article. It's maddening, the article is very good and worth a careful read. Two pull quotes to whet your appetite: > The country spends about $4.3trn a year on keeping citizens in good nick. That is equivalent to 17% of gdp, twice as much as the average in other rich economies. And yet American adults live shorter lives and American infants die more often than in similarly affluent places. > Much less attention is paid to a small number of middlemen who extract far bigger rents from the system’s complexity.
- hotpotamus 3y agoThis has been the situation my entire adult life; I've never understood why American Exceptionalism means that we seem to get screwed on healthcare (and seemingly just about everything else), but I think I've more or less come to accept it, and mostly I just try and avoid the medical system.
- grecy 3y agoI had a lightbulb moment when I realized the USA is not a country (or collection of states) that exists to benefit the citizens. It's not there to provide healthcare or education or food to kids and all that. It's a system (or whatever word you want to use) designed to benefit companies and corporations. Everything is designed the way it is to create maximum profit for the owners. Think about the whole concept of an LLC, look at tax rates and the kinds of fines a company gets when they do something bad. They profit hundreds of millions and get a $400,000 fine for breaking the law. This is not an accident.
- earthboundkid 3y agoThe AI has been running things for its own benefit for hundreds of years.
- uoaei 3y ago> It's a system (or whatever word you want to use) designed to benefit companies and corporations. You will note that this is literally the concrete political definition of "fascism". Typical definitions highlight more the cultural features of such a politics (i.e., deference to authoritarian rule, ethno-based identitarianism) but the literal organizational aspects of fascism are described well by the above quote (bundling the governmental, industrial, and cultural aspects of a nation into a singular mass directed centrally for the purpose of benefit of those at the top -- primarily high-ranking government officials and owners of massive critical industry leaders -- by support or extraction from the bottom).
- Eumenes 3y agoStop paying any bill under $1k, hospitals and healthcare networks have stopped sending these low level bills to collections. Source: I do it all the time.
- arbuge 3y agoNot my experience.
- dclowd9901 3y agoWondrous. Now I know why my premiums keep going up. The money’s gonna come from somewhere, dude.
- Eumenes 3y agoyeah i pay 500/month for a shitty bronze plan ... your premiums aren't going up because of me, its because of the tens of millions of people paying zero per month.
- NotSuspicious 3y agoI got a medical bill for $300 from collections a couple months ago.
- BobbyTables2 3y agoIn the US people gripe about prescription costs but the hospitals are the real villains. Especially if you look at what an uninsured patient would pay. I recently had a planned, non-emergency outpatient procedure that did not involve any incisions, nor medications, lasted about 2-3 hours. Hospital billed $100K, insurance negotiated to about $20K. The actual doctor only got $2-3K. Makes me wonder why doctors don’t build their own hospitals…
- robocat 3y ago> Hospital billed $100K, insurance negotiated to about $20K But those numbers have no relation to reality. The amount you would pay as a private individual would be something else again. > The actual doctor only got $2-3K Could the doctor do the procedure on the street with their bare hands? That $2k also gets taxed and pays for education (it isn't disposable). I think you are hinting that you think the worker should get much more of the profit - but I'm unsure what economic theory that is called.
- lolinder 3y ago> But those numbers have no relation to reality. The amount you would pay as a private individual would be something else again. Exactly. The worst horror stories I've heard aren't of uninsured billing—self-pay individuals typically get a steep discount from what I've seen—it's the out-of-network hospital bills (especially pre-No Surprises Act) that consistently screw people over. In those cases the hospital would bill the insane number they officially ask for from insurance companies, the insurance company says "nope" and pays the portion they consider fair, and then the patient is (or at any rate used to be) on the hook for the remainder. If they were billing as uninsured the hospital wouldn't have come up with the insane number they started with, but now that's on record and that's the number they want.
- robocat 3y agoGotta love me some cooked numbers & incentives for perverting. An obvious incentive is that the insurance company wants a big number so they can sell the patient on just how amazing their insurance is!
- fullarr 3y agoMy least favorite part of this site is all political posts that get upvoted like crazy when they have nothing to do with technology or really anything in the field
- hotpotamus 3y agoI work for a SaaS company that provides software to doctors, so it seems somewhat relevant? To answer the question of the article, I don't think it's us; we do OK, but I'm not exactly rolling in dough, and I don't think my bosses are either based on their lifestyles.
- NotSuspicious 3y agoHow much do you make?
- deleted 3y ago[deleted]
- deleted 3y ago[deleted]
- tinix 3y agodo you understand that software drives the world? i work for a healthcare network administration startup.
- gumby 3y agoNote: some have pointed out I went by weight while the article went by revenue. I don’t have a Bloomberg so can’t update this comment with ranking by revenue). I have loved the Economist for 40 years but you have to check things sometimes: > Big health accounts for eight of the top 25 companies by revenue in the s&p 500 index of America’s leading stocks, compared with four for big tech and none for big pharma. Actually tech constitute 9 of the top 25 and pharma four, while of the parasitic rentiers discusssed in the article, only one, United Health, makes the list (https://www.investopedia.com/ask/answers/08/find-stocks-in-sp500.asp https://www.investopedia.com/ask/answers/08/find-stocks-in-s...): Apple (AAPL): 7.05% Microsoft (MSFT): 6.54% Amazon (AMZN): 3.24% NVIDIA (NVDA): 2.79% Alphabet Class A (GOOGL): 2.13% Tesla (TSLA): 1.95% Alphabet Class C (GOOG): 1.83% Berkshire Hathaway (BRK.B): 1.83% Meta (META), formerly Facebook, Class A: 1.81% UnitedHealth Group (UNH): 1.28% Exxon Mobil (XOM): 1.27% Eli Lilly (LLY): 1.21% JPMorgan Chase (JPM): 1.18% Johnson & Johnson (JNJ): 1.07% Visa Class A (V): 1.05% Procter & Gamble (PG): 0.99% Mastercard Class A (MA): 0.93% Broadcom (AVGO): 0.92% Home Depot (HD): 0.85% Chevron Corporation (CVX): 0.81% Merck (MRK): 0.75% AbbVie (ABBV): 0.75% Costco (COST): 0.67% PepsiCo (PEP): 0.67% Adobe (ADBE): 0.65%10
- yumbrand 3y agoThat Investopedia link is by market cap, but the quote you mentioned from the Economist is by revenue.
- JohnCClarke 3y agoEconomist said "by revenue". You seem to have listed by market cap, so not the same.
- doodlesdev 3y agoThe list you grabbed is ordered by market cap, while The Economist said there were 8 Big Health companies in the top 25 _by revenue_ which is a different metric.
- deleted 3y ago[deleted]
- deleted 3y ago[deleted]
- vsskanth 3y agoIn America, most get their health insurance through their employers, and you don't get to choose the details. Naturally this leads to middle men because it's all opaque. They'll eventually run up costs because they keep taking more of the profits.
- steveBK123 3y agoDoctors & MBAs. MBA types running health care insurance, hospital groups, etc take the brunt of the anger because that's where we see our dollars go most directly, due to the convoluted way we pay for healthcare here. However, doctors are very well compensated, and in HCOL often enough to underwork & choose their own hours. And there is an entire cartel system to ensure we don't produce more doctors domestically via our educational system, nor do we allow doctors to immigrate from elsewhere and start practicing. So supply is artificially limited. The really enterprising doctors then setup all sorts of alternative income streams, like building their own clinic with other specialists to which they then refer you for all procedures. Then you have all the doctors pushing elective procedures when you just want to talk about health. And finally don't forget all the free golf resort trips they get in the form of "conferences" paid for by pharmaceutical reps. Basically kickbacks. The opioid crisis relied on a lot of this in order to happen, and 1000s and 1000s of doctors failed the moral test. Plenty of doctors went into it for the right reason, are overworked, and underpaid.. and I don't exactly want to say "its a choice" but.. the option not to be certainly exists..
- bdcravens 3y agoDoctors can rack up hundreds of thousands in debt just getting to the point where they can bill. Additionally, malpractice insurance is insanely expensive, as are rents in typical medical spaces. I can't see what doctors charge going down without addressing at least some of this.
- steveBK123 3y agoYes. I said they get paid well but I didn’t say that it is bad or makes them bad. Educational costs and duration means putting their life on hold well past the point your median FAANGer is taking in big bucks. So they expect the pay to start paying down that debt & lost time. But other countries get by without their doctors accruing a mountain of educational costs and time spent in apprentice like conditions. AMA is a cartel. Imagine if SWEs managed to create a certification process essentially locking out H1Bs and constrained the number of new SWEs domestically minted.
- duffpkg 3y agoI wrote Hacking Healthcare for O'Reilly, I've managed hospital systems and group practices, I've been a patient with a life threatening illness. This is a really low effort article, it doesn't even really define what it considers "healthcare". In the US healthcare is 1/5 or more of the entire economy, so who profits from 1/5 of all US economic activity is a silly premise. The US doesn't have one healthcare system, it has 50+ (or 51, ...59, is healthcare in Puerto Rico part of the US healthcare system?, how about American Samoa?). Contrary to many peoples opinions the "healthcare system" is not operated or overseen primarily at a federal level. The federal government is one of the largest buyers of healthcare as an insurance provider, that is true. Comparisons to other countries that are much much smaller than the US are sort of silly to me. Europe does not have one healthcare system. Subsidized education and price controls in foreign systems also make comparisons excruciating. I think it is usually a canard. OECD data is, in a word, "garbage", as it relates to healthcare. Just one example: In the US, eyewear for seeing purposes is healthcare. In almost no other countries do you need a prescription for eyeglasses. Prescription eyewear in the US is a 20-30 billion dollar market, depending on how you want to count it. I think the mechanisms for paying for healthcare in the US are really inefficient and involve too many intermediaries. This is a result of a lot of accidents of history. America is a very physically large country with a lot of people all over it, we expect very high standards of care, we consume a tremendous amount of pharmaceuticals, we have wildy abundant and relatively inexpensive food that seems to be correlated to our being much more overweight than a lot of other peoples, we engage in a lot of dangerous activities at a rate that far exceeds what a lot of other peoples do that seems to correlated with our culture, on and on. Instead of hand wringing about differences between ourselves and other cultures we would be better served looking at boring things like medicares 3 million pages of medical claim guidelines, clearing house operations and conflicts of interest, better incentives for state level responsibility, antitrust litigation, lots of practical things that don't make click bait headlines.
- rozenmd 3y ago> In almost no other countries do you need a prescription for eyeglasses In both Australia and France, you need a prescription. This assertion makes me question the accuracy of the rest of your comment.
- 3y ago
- thenerdhead 3y agoInsurance > Big Pharma > Healthcare Providers > Medical Devices > Physicians > Everything else. Saved you a read. I hope Amazon and CostPlusDrugs can disrupt. I also would love to see regulation come to insurance especially with all the horror stories of denied claims/disability/etc even with support from a team of medical professionals.
- AndrewKemendo 3y agoIf the American health system were a piece of software in an industrial use, no one would ever attempt to update it. Too many foundational problems are structural and have ensured that patient outcomes are disincentivized. We would build entirely new system, and then migrate people over to that slowly
- Frost1x 3y agoWhere do I sign up?
- tristanb 3y agoAnother perspective, my partner is a physician. She makes a pretty healthy wage, but that wage goes into paying off her $500k of student loans that got her there.
- tptacek 3y agoWhat's really frustrating to me about this article --- someone tell me if I'm wrong and just missed what I'm looking for --- is that there's no simple chart of the dollars allocated to each of these major health care middlemen versus total health care spending. So the article firmly establishes that the market for PBMs is consolidated down to a couple huge firms. Good note! But how much do PBMs matter? Why aren't they showing me that on a graph?
- tiahura 3y agoIt’s a slice of doctors and hospitals. https://www.ama-assn.org/about/research/trends-health-care-spending https://www.ama-assn.org/about/research/trends-health-care-s... Medicaid for all and drs must accept certain level of Medicaid patients. Everyone should be able to get BASIC treatment. Don’t make employers deal with it. If you want all sorts of joint and organ replacements because you’re a slob or a lost cause, that’s on you.
- fooker 3y agoThe US health care industry is a massive while collar jobs program in disguise. I'm not saying that's a good thing, but most countries have one or more of these.
- redwood 3y agoExactly and this means the US bankrolls global R&D for Healthcare to everyone in the world's benefit
- dbg31415 3y agoIt just feel so incestuous. Insurance company can't make more than 15% profit... OK, easy solution... just buy the hospitals. Now you can set the prices... if a service costs you $1,000, you can advertise things cost $10,000, but only have the parent company pay some small fraction of that... and leave others to pay $7,500 out of pocket (or other insurance carriers out of network). There are all these shady deals that aren't transparent to the end user. I think the only solution is socialized medicine. And just remember, we'd have that today if it wasn't for Joe Lieberman. He torched the public option, then didn't even run for re-election after. This guy could have prevented so much suffering in America today. He knew it, he just wanted to side with the insurance companies in 2009. https://slate.com/news-and-politics/2009/10/did-sen-joe-lieberman-just-kill-the-public-option.html https://slate.com/news-and-politics/2009/10/did-sen-joe-lieb...
- mrangle 3y agoFundamentally, lawyers. As America's ruling class needs multiple massive cash piles to drain. All types of insurance directly or indirectly providing them. Next, the insurance companies. Last, the medical system owners (various) to include Big Pharma but also the other niches. The better but related question is why it is such a shit show. The answer has always been that insurance was introduced into it. If medical treatment had been kept tied to market forces, then what people could generally afford would have continued to set pricing. As well as kept pathological industry motivations (harm) in check.
- chevman 3y agoIt's interesting the article doesn't directly describe or explore the actual reported profit margins of the various companies! I work in the industry and in general you see high margin (50-75%+) in areas like outpatient surgery centers, senior primary care ACO groups (ie providers getting paid by CMS to fully manage Medicare Advantage patients), etc. PBMs and health plans generally have lower margins (in the 5-15% range), dictated largely by state and federal MLR regulations. Watch who the large medical insurers are buying and you will get a good feel where there is margin to be had. They can use this to generate cash flow for other activities, drive savings within their insurance book, offer more competitive group pricing to their clients(ie employers, state govts, etc),drive affordability directly to consumers or some combo based on what business goals they need to hit that quarter.
- specialist 3y agoI worked within the Quest Diagnostics conglomerate, mid 2000s. After capex, lab companies print money. Some wags added a speedometer type thing to their monitoring dashboard to show "velocity" of revenue. (Actually proved pretty useful as a global system health indicator.)
- OrwellianChild 3y agoWorth getting a bit specific about terminology here... The article states that _insurance_ profits are capped, but that PBMs and other stages of care are not. That's why they're all vertically integrating - so they can steer margin to the un-regulated entities. Can't help but feel like this is a simple anti-trust issue just like you'd see in other industries. If they were truly separate companies with robust competition, we could see a lot more efficiency and less rent seeking.
- GiorgioG 3y agoIt's all a shell game...sure insurance profits are capped, but it doesn't stop executives from taking lavish salaries. I worked for a Blue Cross Blue Shield affiliate in 2006-2007. The CEO was making 2.1 million dollars per year. Think about that.
- 3y ago
- TechnicolorByte 3y agoSo what are practical solutions for the US? The rest of the developed world has already shown that socialized medicine is the only way. Details like private/public mix or not don’t really matter as long as there’s a guarantee of free-at-service healthcare for everyone. The main question is how do you actually go about making the change in the US with so many entrenched vested interests in keeping the status quo? How do you get people to agree to effectively fire millions of admin and health insurance actuaries? Seems like an impossible problem, especially given the political state of the country.
- sneak 3y ago> The rest of the developed world has already shown that socialized medicine is the only way. That’s not remotely true at all.
- Analemma_ 3y agoEvery single other developed country has 1) socialized medicine in some form or another, be that the UK-style NHS or German-style mandatory insurance with a public option, 2) better health outcomes than the United States on pretty much every measure and 3) spends less of their income on healthcare, even after taxes are included. I'm not sure what conclusion other than the GPs you can possibly reach.
- AnthonyMouse 3y ago> socialized medicine in some form or another, be that the UK-style NHS or German-style mandatory insurance with a public option This is not actually true. Some other countries have private insurance and those countries also have lower costs than the US. The US system is unusually mismanaged/corrupt. > better health outcomes than the United States on pretty much every measure This is also not true. The main way universal systems get better numbers on some metrics is that people with no coverage often have extremely poor outcomes, which when averaged in results in poor averages. But the average for people in the US with insurance is better than it is in many systems with universal coverage, which is an important metric because the large majority of people in the US do have insurance and their own outcomes is very much a thing that they care about. You could bring about a large improvement in average outcomes in the US merely by providing an insurance subsidy for lower income people to increase the number of people with coverage. That wouldn't affect the cost much though -- it might lower it a little if it converts some emergency care to preventative, but only for that small percentage of the population that doesn't currently have insurance. The cost issue would still remain in general. > spends less of their income on healthcare, even after taxes are included. This is the legitimate criticism of the US system, but it doesn't tell you what to do about it. For example, Medicare in the US still pays more for equivalent care than many other countries do, so just putting everyone on Medicare without changing anything else wouldn't resolve the high costs in the US. And might even make Medicare look even worse because Medicare is in many ways currently subsidized by the high cost of private insurance. None of that proves that you can't address the high costs without a socialized system -- but making the necessary reforms isn't easy for the same reason that bringing about your own proposal in the US isn't easy. Either way you'd have to overcome the political influence of all the people profiting from the status quo. Doing that is the hard problem.
- black_13 3y ago[dead]
- uoaei 3y agoThere are a few industries where the purpose of the painfully inflated costs seems to be internally (to the managers of the US economy) justified by nothing more than "creating money", i.e., paying lots of people the wages they need to move money back and forth in the economy for the purposes of increasing GDP. Those people have jobs which allow them to participate in consumption, which makes US industry look good because they have revenue they can report as earnings. It's real money because of the sovereign fiat nature of the US dollar, but it's not necessarily value. This is ultimately artificial inflation and the subject of Graeber's critique of the modern economic system in his essay Bullshit Jobs.
- frellus 3y agoOne of the baffling things to me is lack of price transparency and incentives for consumers to make value based choices. Example: I just got some medication I take daily forever. Insurance will only allow it to be distributed at 90 days (qty 90) and my co-pay is $30, so 4 trips to Walgreens and $120. I just got them to fill the entire 360 pills using a GoodRx coupon and paid $53. It took a but of convincing the front clerk I knew what I was doing, he couldn't add it up in his brain how it was cheeper not to go through insurance. Now imagine managing your health was like running your car. Everytime you went to the gas station you would pay a fixed amount through insurance, but you're only allowed to gas up once every two weeks. Need car repair? I agine your mechanic calling your car insurance to try to get the work approved -- you need a brake job, and instead of costing $500 it will cost $5000, but since the mechanic is in-network they have pre-negotiated the rate to $600 and you pay that amount until you hit your annual deductible of $5000 for the year. The system is built for manipulation, anti-competitive practices and fraud. Think about it. Who wins? Everyone except the consumer, who has been convinced its the only way to transact is through insurance, and if it were just bigger and more centralized it would certainly be more efficient so lets get a single-payer system! That will be the final nail in the coffin of our world-class healthcare in the US. There will be no more specialization, as the system will incentivize (if not demand) commoditization of skills and services.
- colinmorelli 3y agoThis is one of those things that sounds really great - and would be helpful - but not have the significant impact that it might initially seem outside of prescription medication. The reality is that price transparency already is federally mandated and you can get a list of every contracted rate for every procedure any doctor that is credentialed with your health plan will perform. They’re all available on every national payer’s directory in a machine readable format and updated every month. Startups have formed around making this data available to consumers. This has been the case for a while (well, the number of procedures was limited before, but the concept still existed). It made headlines years ago. The problem is three-fold (there are multiple but these tend to be the most problematic): 1) It’s almost impossible to know, for any non-trivial visit, the actual procedures that will be performed. This makes price shopping almost impossible to begin with. Not only is it difficult to understand up front, it can (and does, with regularity) change halfway through the procedure - sometimes even after the fact if the procedure was improperly coded. To some extent this is just a result of an overly bloated and complicated billing machine, but it’s a real issue today. 2) Healthcare consumers at their most vulnerable (and, typically, most expensive) are not in a mental space to be price shopping for care. Savvy individuals might comparison shop before an orthopedic surgery, but nobody who just suffered cardiac arrest or was diagnosed with cancer will spend weeks finding the affordable doctor. 3) Healthcare is an intensely personal and emotional interaction. People don’t want to price shop for care even if they can and are in the headspace for it. You don’t want the budget doctor performing the bypass surgery, you want the good one if that’s an option for you. This can and likely will change in the future. But today the system is broken much beyond price transparency.
- beefman 3y agoIt's a classic market failure. But attacking cost is not the way forward. Improving quality is the way forward. There is a level of quality at which 17% GDP would be a bargain. Edit: To be clear, the 17% is more a system footprint than a cost. The number we want is GDP delta with one system versus some other system, irrespective of system size.
- neonate 3y agohttps://web.archive.org/web/20231022180807/https://www.economist.com/business/2023/10/08/who-profits-most-from-americas-baffling-health-care-system https://web.archive.org/web/20231022180807/https://www.econo...
- code_runner 3y agoAfter working in consulting you find out: - there are companies dedicated to detecting “missing” treatment codes based on a patients chart - companies dedicated to detecting hospitals gouging insurance companies, and deciding which instances to push back on and which to just ignore - a whole slew of companies that essentially make awful old tooling “online enabled” by just syncing troubling amounts of data to salesforce The companies making tons of money live in the margins and you’ll never see them. They can make one tiny thing more efficient and the hospitals are so poorly managed they’ll just add more contractor to the mix and pass the cost on. There are no rules for hospital management and administrative reporting etc. it’s all a giant shit show
- thelastgallon 3y agoRegulations limit profit. Profits are limited to cost + profit (as a percentage). The workaround is to make the cost so high that profits are also high. Charge $1400 for a band-aid, insurance negotiated discount of some arbitrary number (say, $1200), on the hook for $200 deductible. It is a nexus between all the players in the industry to keep costs high. Same thing plays out with utilities, they are given a monopoly with guaranteed percentage of profit. They are incentivized to spend a lot of money. If these regulations were lifted, utilities would incentivize demand shifting instead of building more and more natural gas peaker plants. Warren Buffet owns many utilities, he invests in things that are monopolies, guaranteed to extract rents forever. https://www.boredpanda.com/absurd-medical-bill-bernie-sanders/ https://www.boredpanda.com/absurd-medical-bill-bernie-sander... https://www.vox.com/2016/5/13/11606760/emergency-facility-fees-american-health-care https://www.vox.com/2016/5/13/11606760/emergency-facility-fe...