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I'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 e
by hotnfresh 3y ago
I'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 agoWhat you think about doesn't apply to healthcare. You cannot pick your emergency room like you might select ddifferent groceries, because if you do, you die. It is not as if there are other nations with formidable health care systems that are way more efficient that one could look into.
- silverpepsi 3y agoThis isn't real Every business, every business has people who go in with the "no matter the cost" situation. But the market sets the schedule of pricing, so if either their status is not "revealed" or the business is simply not allowed to alter the price scedule from person to person, then it is literally no different than -A rich family deciding they'll eat at the amusement park without asking prices, and no matter what, even when a small coke has reached $10 -A guy who walks into a new restaurant after his first 48 hour fast and after payday atd decides to completely ignore the prices and just order unconditionally -A taxi driver get a flat outside of a tire shop by pure chance and it is the start of a ten hour planned shift etc. ad Infinitum
- atoav 3y agoOur goals with a health system are: - give as many people as possible health care - do it in a cheap and efficient way - without stifling innovation If markets are a good way to do that, sure. But let me ask you one question: Who do you think will negotiate better prices for any given procedure or medication: 1. A nation-wide health insurance that makes up 90% of a companies volume 2. The solitary regular Joe who is in pain and uncertainty about their health No need to answer me, because the numbers and real world examples already exist and this is a known market dynamic (bigger buyers can negotiate better prices). This is why patients in nations that have such systems pay sometimes multiple magnitudes less than people in the US. Now let me ask you another question: How would you structure a health care market if your goal was to extract as much money as possible and how would it differ from what you guys already have? If you ask me, the market for healthcare in the US work as intended. Just not for the customers.
- joe_the_user 3y agoNo, just no Health care is a situation where competition cannot be a spur to reasonable costs because individual consumers are simply not in the position to make the kind of "free market" choices that economists (or more often free market ideologues) expect they'll make. Moreover, the malignant and abusive US health care system is in fact a product of layer upon layer of failed "efforts to create competition" intended to reduce cost "through competition" to the point that by now all the abusers really know the dance and will be profiting next year from any further or replacement layer you add this year. (and "no regulation then!" as the US 1900 results in doctors being just heroin dealers - like my great grand father interestingly enough). Most other industrialized nations have a state run medical system that's far superior and cheaper than the US system. They didn't solve their problem with "competition".
- userinanother 3y agoThere is no competition because there is no market transparency at all. There is also no pricing transparency, the prices aren’t even posted and you can’t know what anything costs before you get the bill. How can there ever be competition in that environment
- fires10 3y agoMost medical decisions are not shopped. It has nothing to do with competition. Quality of care is first and foremost for me. I want to live costs be damned. Only rarely will cost come into it as a decision for me. Only on things I don't need. This is for both emergency and non-emergency care. I don't know of anyone who seriously and consistently looks at costs when making medical decisions. I usually have higher priorities.
- Tostino 3y agoYou don't know people who live near the margins then. Cost was pretty much the primary decider for me prior to making a decent living, so much so that I put off rotator cuff surgery for 10 years because I couldn't afford to have it done, no matter how much I "shopped around".
- deleted 3y ago[deleted]
- javajosh 3y agoHealthcare services are not a free market. The idea that competition can drive down costs would be funny if it wasn't driven by such cynicism. Like a lawyer buying time with objections they know they will lose, the "let the market fix things" people push for price transparency, which they don't get, and then they'll push for time to let that work out. It won't because people who buy healthcare - you and me - don't shop. And we won't shop. Insurance companies don't shop either. Providers hire admins who's whole job is to game the system, which enriches the provider slightly, employs the admin, and extracts wealth from insurance companies and ultimately patients. The hard truth is that, ultimately, providers, are to blame. Skilled professionals should NEVER say "I don't know how much it costs" to their clients and get away with it. It's your JOB to know how much it costs and to understand the experience of your patient. I get it that you don't WANT to know, that it's complicated and depressing. I get that because all patients get that. That is not an excuse for not paying attention to the details. It is providers who regularly make their patients wait for hours after the appointment time. It's providers who order expensive and unnecessary tests for every condition, or who refer to multiple specialists. Each of these decisions increases the cost of care, the provider profit margin, and the stress on the patient. Because the provider is ultimately the one with the skill that the patient needs, I blame them for this systemic failure. If you're a doctor and you give in to the status quo, hire a large staff of billing agents and write scripts for all the tests and drugs you can, YOU are the problem. If you took your oath seriously, you'd never accept the way things are. Instead you advocate to maximize your profit margins instead of patient outcomes, and as a result you make the entire system sick. With any luck, it will get so sick it will die.
- isykt 3y agoWhen’s the last time you were in the back of an ambulance telling the driver which hospital to take you to?
- QuarterReptile 3y agoThe principle in that case is elasticity of demand, not competition. As in, my mother always made sure to beat ambulances to us when school or sports reported us injured, because she was worried we wouldn't be confident enough to shoo them away on our own.
- FireBeyond 3y agoAs someone who is a paramedic, we will absolutely listen to you if you say you want to go to hospital X, not Y. If you're unable, we'll take you to the one that best is equipped to deal with your issue. HOWEVER... the insurer. If you're talking about two hospitals in the same town or part of town, no big deal. If you want to go to the hospital 15 minutes beyond that? Your insurer will deny the ambulance bill. Their argument was that "if you were sick enough to require an ambulance, you should have been transported to the closest facility, stabilized, and then transferred to your preferred facility" versus taking a longer ambulance ride.
- s1artibartfast 3y agohow much of healthcare spending is related to emergency procedures? How much is scheduled weeks in advance? how much is scheduled months in advance.
- stevebmark 3y agoRead the book “An American Sickness”. It is indeed everyone.
- secabeen 3y agoYeah. The hardest number I've seen is that if we reduced the spend on health care in the US just to the OECD average, it would reduce overall revenue in the sector by $1 Trillion every year. That's a lot of peoples salaries and livelihoods wiped out and they will fight tooth and nail to protect it. This is why we should not accept any health care reform proposal that any of the American Medical Association, the Pharmaceutical Research and Manufacturers of America, or the American Hospital Association are generally supportive of. Whatever we try, they should be vehemently against, just like they were with Medicare.
- whizzter 3y agoDepends on how much of that trillion goes to actual salaries or how much goes to dividends? Worst part of the privatization of the Swedish school system is that we know that the tax-money we pay to educate our kids is being diverted to Neo-Nazi funders and Saudi oil funds.
- secabeen 3y agoOutside of Pharmaceuticals, most of the US health-care system is non-profit, so no dividends are allowed. High salaries are allowed, but there aren't business owners that get the surplus the business generates.
- activescott 3y agoThe OP article provides clear evidence that for-profit companies is not limited to Pharma: > ...insurers, chemists, drug distributors and pharmacy-benefit managers (PBMs)—sitting between patients and their treatments. In 2022 the combined revenue of the nine biggest middlemen—call them big health—equated to nearly 45% of America’s health-care bill, up from 25% in 2013. 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. It goes on to detail their profit relative to the S&P as well.
- 3y ago
- adamdonahue 3y agoHammer meet nail. The same issue plagues the American higher education system, which is wildly overpriced.
- secabeen 3y agoI would be cautious with any argument about higher ed that focused on student pricing. Higher Ed is full of completely opaque pricing activity, where colleges publish a ridiculous nameplate price, then give enough grants and other financial aid that the average student pays less than $2,500 per year, plus room and board: > Since 2016-17, the average net tuition and fee price paid by first-time full-time in-state students enrolled at public four-year institutions has been declining after adjusting for inflation; it was an estimated $2,250 in 2022-23. https://research.collegeboard.org/media/pdf/trends-in-college-pricing-student-aid-2022.pdf https://research.collegeboard.org/media/pdf/trends-in-colleg... If you want to criticize colleges on their cost, the data to use is expenditure data, which is much cleaner.
- activescott 3y agoAre you arguing that the opaque pricing is effective?
- screamingninja 3y agoI do not believe that the comment above is about the effectiveness, but merely stating facts here. University "sticker prices" are often inflated to maintain prestige and very often supplemented with grants and financial aid based on income. Opaque pricing is never a good thing, but there are two sides this story.
- activescott 3y agoI think worth clarifying. The comment ends with > If you want to criticize colleges on their cost, the data to use is expenditure data, which is much cleaner. As if the opaque pricing of colleges isn't just as baffling as the healthcare system's resulting cost situation.
- bequanna 3y agoThe AMA has pushed for years to artificially restrict the number of physicians that universities are allowed to push out. If I recall, that number has been held steady for a couple decades or more.
- Calavar 3y agoWhile this is true, physician pay also accounts for less than 10% of Healthcare spending. It's Amdahls law. You could cut physician pay in half, and it would barely touch total healthcare costs. In fact, we have been cutting physician compensation - the average physician pay has not kept pace with inflation for about a decade now. (US wages overall were outpacing inflation until the COVID inflation boom.)
- jjoonathan 3y agoEach head of the hydra (providers, insurance, drug companies) points at the other two heads and says "don't look at me, they are the real problem!"
- Calavar 3y agoAgain, healthcare expenditure has been going up versus inflation, and physician compensation has been going down versus inflation. So if you're looking for divers of growing healthcare costs over the past decade, physician compensation isn't it.
- jeffreyrogers 3y agoDo you have data on that? The most recent data I've seen shows physician pay going up.
- mirthflat83 3y ago> versus inflation
- lettergram 3y agoI’ve worked in billing and basically it starts with the fact there’s no competition. Hospitals can veto any building plans of a hospital near them. This is to “keep the current hospital profitable” The AMA artificially limits the number of doctors coming out of school (limiting supply). FDA puts a ton of regulation around producing drugs and equipment. Insurance companies and Medicare set the price for goods and obviously need to make a profit so they gouge. There’s a long tail there, so the average person pays FAR more than their share to cover the long tail. When you wrap this all up, yes. But the solution is massive deregulation. Let the market drive down prices similar to Mexico or India. Socializing medicine basically just regulates it to maximize profits, which is why Europe and US has insanely expensive healthcare (I added Europe because they’re subsidized by taxes, not massively cheaper).
- devin 3y agoIn addition to AMA artificially limiting number of docs coming out of school, teaching hospitals prefer to take on specialists, since they get paid more for specialists than GPs. As a result, in the US specialists represent ~70% of doctors and in other countries, specialists represent 30%.
- katbyte 3y ago> Hospitals can veto any building plans of a hospital near them. This is to “keep the current hospital profitable” wow that is absolutely wild and maybe one the most transparent profits over people i've heard of
- supertrope 3y agoIt’s HHS that can do that not the hospital itself. The intent is to avoid oversupplying an area with hospital services. Because individual demand is inelastic and the government directly pays for half of care (Medicare, Medicaid) adding more supply means increased aggregate healthcare spending. Of course existing firms take advantage of this regulatory process to hobble competition. This is an emergent problem of third party payment. Normal supply and demand mechanisms are not at play.
- api 3y agoI think it belongs in the category of self-licking ice cream cone. The more bloated it gets the more stakeholders there are wanting it to get more bloated. The same thing drives government bureaucracy growth and the ridiculous amount of administrative overhead at universities. At the root I think a lot of this kind of thing is a kind of unplanned jobs program. I also think a related sort of dynamic might drive complexity growth in software. Every layer and every feature has stakeholders and people employed to maintain it, and all those people become defenders of all these things. One of the factors behind “worse is better” in software and systems engineering might be that worse employs more people. Clean well thought out systems are not inefficient enough to create large communities around them because they don’t need enough babysitting.
- tromp 3y ago> The more bloated it gets the more stakeholders there are wanting it to get more bloated. Or, as Oscar Wild stated: The bureaucracy is expanding to meet the needs of the expanding bureaucracy.
- dopylitty 3y agoYou hit it right on the head calling it an unplanned jobs program. So many jobs are unnecessary busy work (Grabers bullshit jobs) that only exist because of this insistence that people have to earn their living by sitting at a desk all day. The reality is that the current standard of living could be maintained or even increased with many fewer people working. Or an even better standard could be reached if those people could be doing jobs that are actually useful like construction, nursing, or basic scientific research. Unfortunately the economic system doesn’t value those things so people only do them if they’re desperate, passionate, or independently wealthy.
- happyjack 3y agoI saw your comment when I was scrolling through and I wholeheartedly agree. Our system does put a price on "well you have to earn your keep and you have to sit here all day." I'm not sure how or if it could be done, but there is definitely enough wiggle room and waste in our current system that we could have people start doing more useful things with their time.
- peteradio 3y agoExactly right and most of those layers are in the insurance side. There can only be so many layers in a hospital it becomes clear that someones not doing anything. But in an industry like insurance where nobody is ever expected to do anything productive at all well you can justify as many layers as your greed allows.
- deleted 3y ago[deleted]
- alexfromapex 3y agoI've seen this pattern again and again where if something is not a luxury but a necessity then rampant capitalism sees an opportunity to absolutely wring money out of people.
- GeekyBear 3y agoThe trend has been accelerating. > Fueled by international private equity funds, consolidating firms have been on a tear in health-professional fields, buying up practices in fields such as veterinary medicine, dental care, optometry and pharmacies and assembling them into chains https://www.theglobeandmail.com/business/article-private-equity-buy-out-pharmacy-dental-office-veterinary-clinic/ https://www.theglobeandmail.com/business/article-private-equ...
- dantheman 3y agoThis is not capitalism - its fraud and government collusion.
- danielvaughn 3y agoIt's a similar structural problem in real estate. There are lots of perverse incentives that make it very resistant to solutions.
- doctorpangloss 3y agoOne simple answer is healthcare is receiving boomer’s wealth, not inheritors.
- comradeDyatlov 3y agoI remember reading a post here on HN, where someone who was undergoing an ACL reconstruction tried to investigate all the costs involved. His post had a detailed breakdown of all the costs. Here's the post: https://news.ycombinator.com/item?id=5814728 https://news.ycombinator.com/item?id=5814728
- protastus 3y agoThat usually means the business model is exposed to disruption. How is this sector siloed against a newcomer that undercuts every incumbent while remaining profitable?
- sirspacey 3y agoThis is the functional definition of profit Turns out maximizing profit is not a panacea for efficient system design
- eastbound 3y agoIn France, when I go to the hospital, I get what I suspect Americans would describe as a war hospital. No separation between indoors and outdoors, blood from previous patients dragged several meters, cops in front of the doors of the surgery room (probably the same cops who did a homelessness “maraude” the same night). It takes 6hrs no matter your problem (saw a guy with a finger cut, 6hrs too) (omg saw an elderly couple whose husband was suddenly deaf, as in, probably a cerebral attack, and they WENT HOME because they couldn’t lie anywhere. Without seeing a doc. I was heartwrenched). Let me guess, are American hospitals a bit cleaner? Are nurses underpaid? Are doctors underpaid like in France, as in, a webdeveloper earns more than a doctor?
- bentt 3y agoOur problems are different, you're right. What you're describing is probably closer to what publicly funded schools in the US have become, in terms of deviation from base expectations. But no, there is almost no such thing as a doctor who doesn't get paid in the US, and definitely no such thing as a hospital or insurance executive that doesn't get paid.
- deleted 3y ago[deleted]
- o11c 3y agoShocking statistic for those not reading the article: > In 2022 the combined revenue of the nine biggest middlemen—call them big health—equated to nearly 45% of America’s health-care bill, up from 25% in 2013. That's 45% waste, and excludes other middlemen. It's unclear if the increase from 25% is due to driving other middlemen out of the industry, or due to becoming even more parasitic.