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The American Healthcare Conundrum

• panny 7mo ago
  [flagged]
• rexroad 7mo ago
  Author here. The 254% figure comes from RAND Round 5.1. I built a Python pipeline on CMS HCRIS cost reports (FY2023, 3,193 hospitals) to compute cost-to-charge ratios by ownership type. The surprising finding: nonprofit hospitals have a median markup of 3.96x actual costs. All scripts are in the repo. Happy to discuss methodology.
  • fblp 7mo ago
    Thank you for doing this analysis! I'd suggest adding some charts to better represent some of the issues you've found!
    • rexroad 7mo ago
      Thank you for the feedback and support! I've added some charts to the repo and have charts in the substack.
• cmiles8 7mo ago
  Challenge is the whole system is just a mess. Medicare probably lays too little. Commercial insurers have formed a mountain of red tape and bureaucracy and arguably pay too much, although individual bills (EOBs) are rarely logically defensible against any scrutiny. Healthcare providers try and combat all this by literally just making up pricing and trying to negotiate something while also having bloated administrative structures that raise costs for all. Nothing about the current state of the healthcare system makes much sense to anyone that tries to peel back the onion.
  • shigawire 7mo ago
    >Nothing about the current state of the healthcare system makes much sense to anyone that tries to peel back the onion. I'd offer a slight tweak. None makes sense in a vacuum or solely considering efficiency. It all makes sense seeing the evolution over time and the misaligned incentives.
  • mexicocitinluez 7mo ago
    > Medicare probably lays too little. What's wild, is that at least in the slice of healthcare I'm in, Medicare is one of our best most reliable payors. In fact, in some cases, our contracts with private insurers have them promise to pay at least 80-85% of what Medicare would reimburse us. The other benefit with Medicare is that they just give us a lump sum of money and let us do what we want with it as long as we get good outcomes. Which means we don't have to fight for every visit we make to the patient. And they base it off of a public formula that we have access to (unlike with the private insurers).
• paulddraper 7mo ago
  This is a believable result. Meta-analysis is 141-259% [1]. Three reasons: 1. Medicare has quasi-monopolistic negotiation power that private insurers can only dream of -- Medicare spend two-thirds of all the private insurers combined. That's why private insurers would combine in a heartbeat if the FTC allowed it. 2. Moreover, that Medicare volume is concentrated in a specific segment of the market. If many providers dropped expensive United contracts, the insured people/companies might move to a new insurer. But Medicare's base will never leave. 3. Since Medicare covers older individuals, often on a fixed income, there is natural discriminatory pricing. (Think of the "senior discount" at your local entertainment venue.) [1] https://www.kff.org/medicare/how-much-more-than-medicare-do-private-insurers-pay-a-review-of-the-literature/?utm_source=chatgpt.com https://www.kff.org/medicare/how-much-more-than-medicare-do-...
  • observationist 7mo ago
    Look at hearing aids. 50,000% markup or higher, even up in the 70k% range in some examples. Old people don't know what to be skeptical of, or at least haven't been nearly skeptical enough, and some industries are getting away with terrible exploitation, all blessed and sanctioned by the FDA.
  • levocardia 7mo ago
    Also, commercial insurers are essentially cross-subsidizing Medicare: the higher revenue from commercial insurers is partly why Medicare can be paid less. Similar dynamics exist with drug prices: the high US cost is a cross-subsidy to other countries. Maybe this is good (someone's got to fund R&D), maybe this is bad (it's a net wealth transfer to the elderly), but it's an important part of the dynamic either way.
    • piva00 7mo ago
      Would like sources about the pharmaceutical sector being "subsidised" by the American system, heard it many times but haven't seen it substantiated.
      • 7mo ago
• recursivedoubts 7mo ago
  [flagged]
  • jltsiren 7mo ago
    Daily reminder to always check data definitions before interpreting statistics. According to the OECD data, US 2023 healthcare spending was 28% by the government, 55% by private health insurance, 11% out of pocket, and 5% from other sources. OECD lists all US private health insurance policies under the "compulsory health insurance" heading. Apparently because there is no clear separation between compulsory and voluntary insurance, and because employer-paid insurance is not truly voluntary when it exists. (Because there is usually no option to take cash instead.) And then the chart you linked to combines compulsory insurance with government spending. Mostly because if compulsory health insurance exists in an OECD member state, it is usually legally mandated, regardless of whether it is provided by public or private entities.
    • hdgvhicv 7mo ago
      Total medical expense of any type per capita is far higher in the us - even as a percent of gdp - than anywhere else.
  • tt24 7mo ago
    It is shocking to me that anyone still considers the US solution to be “too privatized” lol. Healthcare and housing are simply too important to not allow the market alone to dictate.
• timtim51251 7mo ago
  Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.
  • skybrian 7mo ago
    I was under the impression that some companies that provide insurance also provide healthcare?
  • shdudns 7mo ago
    This. It's hard to believe that the Obama team could have been this financially incompetent.
    • bmcahren 7mo ago
      It's easy with hindsight to believe you could have capped expense at 200% medicare but getting what we got passed was nearly impossible at the time. Before Affordable Care Act, insurers had every tool available to deny care, maximize profits, and skim more than 20% off the top. It's great we're getting closer to the point that it feels to you like incompetence that these things aren't fixed today but your anger with the medical lobby is clearly misplaced here. Every major piece of legislation needs revisions to chase circumvention and we're well past due on updates but no legitimate bills have been presented that cover these topics and that's not a one-party issue.
      • cogman10 7mo ago
        Yup, pre-existing conditions, in particular, was a beast. The patient protection portion of the ACA is one of the better parts of the whole bill.
        • prirun 7mo ago
• notfried 7mo ago
  I like this. It'd be great to see such a table of the key issues with proposed solutions, to highlight how the waste isn't an insurmountable impossibility to solve. Having said that, federal lobbying by the healthcare industry was $750 million in 2024 [1], and this is the blocker that needs to be addressed first to be able to enact change. [1] https://www.managedhealthcareexecutive.com/view/health-systems-are-among-healthcare-s-big-spenders-on-federal-lobbying-study-finds https://www.managedhealthcareexecutive.com/view/health-syste...
  • hardtke 7mo ago
    We rarely discuss the primary source of health care cost differences in the United States -- US doctors get paid a lot more than elsewhere. I haven't seen a credible proposal to address that. Most of the salary difference can be blamed on deliberately created shortages of doctors in many specialities. Not enough medical school slots (horror stories among my kid's friends of not getting accepted) and then also shortages of residencies that allow foreign trained doctors to work in the US. The only change in recent memory is replacing some primary care physician services with nurse practitioners.
    • refulgentis 7mo ago
      Idk why but I feel the need to add an empty “co-sign” comment. It is 100% this and I have so many stories from friends who are doctors and nurses that back up every detail. One note: the doctors won’t agree or want to hear this, as they too are human, but listen to how they talk about nurses. Hit me once I had both a CRNA (advanced nursing degree in anesthesiology) and an anesthesiologist friend Edit: glad I did add an empty cosign, right after replying, the parent is now downvoted to gray. And gets it much, much, better info than any other comment, and I read all of them. Last thing I’ll throw out to back it up is, check into who decides how many seats there are at med schools. Can’t remember the exact name but it’s basically the doctors union / professional organization. AMA?
    • tacticalturtle 7mo ago
      I really don’t think doctor salaries are the primary difference when they make up less than 10 % of health care costs: > However, new research by Stanford health economist Maria Polyakova and colleagues — using unique data on physician income — shows that physicians’ personal earnings account for only 8.6 percent of national health-care spending https://siepr.stanford.edu/news/just-how-much-do-physicians-earn-and-why https://siepr.stanford.edu/news/just-how-much-do-physicians-...
• rimbo789 7mo ago
  Having worked in for profit health care pricing and costing yup that makes sense. The layering on of profit margins causes costs to grow exponentially
• conductr 7mo ago
  Medicare prices are too low to operate on. They generally factor in the bare minimum or slightly less for the variable costs of a procedure but severely under value the fixed costs of providing the same procedure. So those costs largely get pushed to commercial payors as those are the only ones who can shoulder it. There’s plenty of arguements about waste and executive compensation but when I was a healthcare CFO we had our financials separated where I could see individual hospital performance and all the executive/corporate stuff was separate and it still was an issue as basic capex was hard to keep up with in a hospital that had a low % of commercial patients.
  • kstrauser 7mo ago
    Sure you’re not thinking of Medicaid? Medicare was generally pretty good for reimbursement. When my wife treated Medicaid patients, she often lost money on the cost of the supplies used to treat them, let alone rent and paying the staff etc etc. Most doctors who see Medicaid patients do it as basically pro bono. Some figured out how to game the system with economies of scale but it’s nearly impossible do do and maintain a decent standard of care. But Medi care was right with the commercial insurers on reimbursement.
    • conductr 7mo ago
      Medicaid is usually a big loss for hospitals. It’s just a cost of doing business and another reason why someone else has to pay more. It’s completely a subsidy essentially. This is why certain areas only have a county hospital, it’s likely the same area that is a food desert and has no retail banks, the simple truth is too high of a Medicaid mix will quickly sink a for profit hospital. Medicare is as I described. Every specialty and procedure has its quirks though, some even make a killing on Medicare and not commercial but the hospital kind of represents a portfolio and the overarching economics in aggregate favor the commercial insurance. I’m guessing your wife’s specialty had decent Medicare rates but it’s not always true. There’s even some private insurance which is effectively Medicare that has different reimburse ranges (Medicare advantage plans). Executives like to lament the lose money on Medicare but I never really saw it that way. If you look at it isolated, sure it’s true. But if you look at it as a portfolio where your fixed costs are covered by another cohort, then it’s a huge volume to add and make money at the contribution profit line. You just have to be careful not to run fixed costs as a percentage of total revenues or something like that. The extra volume Medicare brings to a hospital or network of hospitals also has tremendous negotiating power for pharma, medical supplies and devices, etc.
• graemep 7mo ago
  > The US spends ~$14,570 per person on healthcare. Japan spends ~$5,790 and has the highest life expectancy in the OECD. That gap is roughly $3 trillion per year. The difference in life expectancy will be influenced by multiple factors and may have more to do with diet and lifestyle than with healthcare. Japan also spends less per capita than the UK, France or Germany. The US spends a lot more than any of those so the US system is bad value for money.
  • hermanzegerman 7mo ago
    We in Germany copied a lot of the stupid stuff from America (including the stupid billing system for inpatient stays), so it's not that surprising that our system is also bad value for money. PS: Outcomes here are not worse than those of rich people in the US, because I know some idiots will claim this to cope https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2774561 https://jamanetwork.com/journals/jamainternalmedicine/fullar...
    • legitster 7mo ago
      Germany didn't copy the US - they just happen to share similar roots. Both historically had private hospital systems, and just so happen to implement pension/employer-based insurance programs very early on. German's just evolved in one direction and the US evolved in the other.
      • hermanzegerman 7mo ago
        We copied the DRG reimbursement System from the US. And no, we didn't had a historically significant share of private hospital systems, those came with the introduction of the DRG System, which forced many city/church owned hospitals into privatisation. Before that, they had a "Fixed Price per Night" System, which also was a bit stupid, before that they got reimbursed their cost.
    • graemep 7mo ago
      Actually Germany is a lot better value for money than the US. The cost (either absolute or as a percentage of GDP) is similar to the UK or France, and from what I have been told by people who have lived in both countries, the German system is better than the British.
• etchalon 7mo ago
  The US' refusal to move to a single-payer system, while refusing to accept a world where poor people just die if they can't afford healthcare, creates a lot of deeply weird side effects.
• rybosworld 7mo ago
  For a country that prides itself on CapItAlIsM, U.S. healthcare is the farthest thing from it. - Doctors and hospitals don't compete on price - Prices aren't just opaque, they are unknowable - Shopping around is not possible - Insurer incentive is to maximize billing (cost). They pass along cost as increased premiums to an employer. Employer passes along increased costs to employee as below-inflation wage increases
  • danny_codes 7mo ago
    Capitalism doesn’t work well for goods with inelastic demand. Every other developed country understands this and has a nationalized system. The only reason we don’t have universal healthcare is basically unlucky flukes.
    • Jensson 7mo ago
      > The only reason we don’t have universal healthcare is basically unlucky flukes. You think its a fluke and not intentional corruption of the system? These companies pays both parties a lot so nobody will ever fix this, that isn't a fluke that is just plain old corruption.
      • lotsofpulp 7mo ago
        Voters don’t want universal healthcare. There is some lobbying, but an entire party’s voters are composed of people who only care about taxes and ensuring that those less than them do not benrfit from wealth redistribution. This is why even the meager amount of wealth redistribution we got (which was really young to old and not wealthy to poor) came about due to a fluke 6 months in 2009 that one party had 60 senate votes, and 58 or so votes supported a taxpayer funded option, but 42 did not, so the taxpayer funded option did not make it into the final bill. https://en.wikipedia.org/wiki/Public_health_insurance_option https://en.wikipedia.org/wiki/Public_health_insurance_option
• scotty79 7mo ago
  They are intermediary between buyers and sellers paid with percentage of the price. They have every incentive for the price to be as high as possible. Such entity can't be left to utilize market forces for the same reason cancer can't be left to utilize human physiology.
• underlipton 7mo ago
  No debate about the viability of Medicare-For-All is made in good faith, at this point. The only valid debates are about implementation. No one should entertain any move conversations about whether we should go to a single-payer system, only how we should.
  • wat10000 7mo ago
    Why? I’m in favor of reform and making our system more like other developed nations. But single payer isn’t the only way it’s done, not even the most common way.
    • orange-mentor 7mo ago
      The reason is because Medicare for All is viable both politically and implementation-wise. It's been studied for decades and the bills are already written. Just phase it in by stepping it down: 65+, 55+, 45+, everybody. All providers already accept Medicare. The only disruptions will be to private insurance, which is a backdoor white-collar, make-work jobs program for millions of Americans. But most jobs are bullshit anyways. That's a broader problem and we don't need to sacrifice lives to deal with it.
• profsummergig 7mo ago
  The end goal of AI + Robotics has to be robots doing surgery on humans, for a little more than the price of electricity.
  • Willish42 7mo ago
    I think this is a political and economic problem rather than a technological one. I cannot think of a more important skill than surgery to continue training humans to do and to be wary of AI robotics replacing. Sure, some surgeries could likely be automated, but the entire point of specialist surgeons is to make choices and act in a timely manner in ambiguous situations with extremely high stakes. What happens when the robot messes up? What happens when the internet is down, or the hospital is operating under abnormal circumstances? How do you teach, train, and collaborate with human medical workers and caregivers in a world where surgeons have been replaced by robots? Most of the excess costs for healthcare and surgery aren't the humans doing the work. I think there's a lot of other areas we can optimize first, chief among those in healthcare being the cost structure around private businesses and insurers bloating the bill with administrative costs. There's a reason every other developed nation has a single-payer healthcare system and better outcomes, and I don't think an AI breakthrough is the only plausible solution to improving costs in the US. In fact, under the current system, an AI breakthrough in medicine would likely hurt the workforce more than it would improve costs.
  • tonymet 7mo ago
    2/3 of the costs are already wasted. Even if your robot is cheaper, the provider will hire more lawyers, admins, facilities staff, etc to keep the budget growing. Prices have been going up 15% yoy for 20 years do you think that will stop?
• legitster 7mo ago
  If you ever want to "sanewash" healthcare spending in the US, this random guy stood up an entire website to argue that per-capita healthcare spending in the US is more or less in line with expectations based on per-capita income: https://randomcriticalanalysis.com/why-conventional-wisdom-on-health-care-is-wrong-a-primer/ https://randomcriticalanalysis.com/why-conventional-wisdom-o... TL;DR: As people/countries get richer, a larger share of their money goes towards consumption. It's not just that Americans pay more for the same procedures (sometimes they do, sometimes it's just sticker prices) but we consume more healthcare the more money we make. So it skews costs up disproportionally. That wealth also enables chronic health and lifestyle problems that are expensive in their own right. I'm not sure I'd buy the theory entirely, but it's very well argued and as a null hypothesis it makes a lot of sense.
  • dboreham 7mo ago
    My personal experience is that people in the US feel much more entitled to consume medical services than people in the country I came from (UK). They are richer, but there's a cultural difference too.
    • duskdozer 7mo ago
      What are some examples?
  • Jensson 7mo ago
    But USA isn't the richest country on earth yet why do they spend the most? Edit: I recognize that post now, he uses a special metric "actual individual consumption", which adds healthcare consumed by people as income. So the more expensive healthcare is, the more "actual individual consumption" you will have in the country. That is not the normal GDP metric, but using that special metric USA is on top since healthcare consumed there is so expensive.
    • mbbutler 7mo ago
      I especially love the quadratic fit, chosen with no justification, that brings the US within the uncertainty envelope in the second plot. Also notice how much work the Mexico and USA data points are doing to the previous linear model fit. Oh, my high leverage data point can't be an outlier because it's within uncertainty when I fit the data with the potential outlier included. This is basic linear model validation stuff.
• krautburglar 7mo ago
  Not to hold the commercial insurers' balls here, but if I were a doctor, I'd probably demand more from them. The patient age distribution is not uniform. Most patients are going to be old. If medicare gives me peanuts, I just have to deal with it, for if I don't accept whatever crumbs medicare sends my way, I no longer have a practice. If a private insurer tries to throw me peanuts -- especially when that insurer's customers only make up a percent or two of my practice -- I can easily tell them where to shove those peanuts, so they had better pay well.
• qwertyuiop_ 7mo ago
  Its called American Medical Association racket.
  • programmertote 7mo ago
    Agreed. As a spouse of a specialist doctor in the US, average folks don't include doctors when they blame the exorbitant prices of the US healthcare. Sure, big pharma, insurance companies, hospital admins and everyone in between play a part in this big profit-making machine. But doctors (a lot of them, not all) are complicit in this healthcare complex. American Medical Association is one of the top lobbying groups in D.C. They gate-keep the production of US doctors artificially low by making the candidates go through longer years of education (4 years of college before another 4 years of med school is an overkill for most doctors) compared to other developed nations, resulting in high compensations for doctors AND longer wait-time for patients (due to doctor shortage). They also put up regulation barriers and it requires a lot of certification and exams to become a doctor, so whoever becomes a doctor has the best interest to keep the system (status quo) going. Average US doctor gets paid a lot more than their counterparts in other developed nations.
    • nradov 7mo ago
      The AMA may cause some problems but you can't reasonably blame them for this one. They are not a regulatory or accreditation body. State medical boards control provider certification. Some universities have combined BS / MD programs that cut education time down to 6 years.
      • Panzer04 7mo ago
        Doctors are motivated, intelligent and sometimes self-interested. By no means are all of them against it but like any party there are plenty who unabashedly oppose increased accessibility to their profession in favor of increasing their own value/pay.
    • kart23 7mo ago
      I agree. congress actually caps the number of residency slots, which is agreed by many to be the ultimate bottleneck for the amount of doctors produced each year. There are plenty of people willing and well-qualified to go through medical school and become a doctor. https://pmc.ncbi.nlm.nih.gov/articles/PMC12256077/ https://pmc.ncbi.nlm.nih.gov/articles/PMC12256077/
• nomilk 7mo ago
  I recently travelled to Vietnam for dental work, it's really shocking how easy to it to shop around when dentists actually publish their price lists online for easy comparison/perusal. In my native country, dentists rarely if ever publish prices online, and it's hard to get prices over the phone. If hospitals could be forced to publish price lists, it would be game changing, allowing patients to shop and compare quality/prices. Trump vaguely mentioned he'd try to do something like this but it's not clear what he's attempting: https://www.youtube.com/watch?v=8PQ7l905aVM&t=10h57m30s https://www.youtube.com/watch?v=8PQ7l905aVM&t=10h57m30s Maybe this? https://trumprx.gov/ https://trumprx.gov/
  • nradov 7mo ago
    Hospitals are forced to publish price lists (charge master). https://www.cms.gov/priorities/key-initiatives/hospital-price-transparency https://www.cms.gov/priorities/key-initiatives/hospital-pric... But at a consumer level it's still quite difficult to predict what your total out-of-pocket expense will be for the same course of treatment at two different facilities.
    • nomilk 7mo ago
      Oh wow. Appreciate the correction. I wonder what improvements in price transparency Trump has in mind. Perhaps it's that website in the parent comment.
  • paulmist 7mo ago
    In the Netherlands dental service prices are set by the government [1]. Under 18 are universally covered by basic health insurance; for adults average dental for regular work + emergency is 30/month. [1] https://puc.overheid.nl/nza/doc/PUC_789284_22/1/ https://puc.overheid.nl/nza/doc/PUC_789284_22/1/
• nomilk 7mo ago
  Interesting case study (video; ~2 min): https://www.tiktok.com/@thesephew/video/7476558168059809067 https://www.tiktok.com/@thesephew/video/7476558168059809067
• Sanctuary8542 7mo ago
  Not in Maryland https://en.wikipedia.org/wiki/Maryland_hospital_payment_system https://en.wikipedia.org/wiki/Maryland_hospital_payment_syst...
  • siliconc0w 7mo ago
    All payer is really the most viable policy direction to save the US from medical bankruptcy.
    • linsomniac 7mo ago
      Yeah, but on our way to medical bankruptcy a lot of people are going to get stinking, filthy rich on it...
• bawana 7mo ago
  Does anyone here remember how health care was delivered before medicare and medicaid was enacted in 1965? It was not pretty. Prices were low then because it was all private pay and charity. Why do you think so many hospitals are named after saints? The church made a significant contribution to running healthcare. But when the govt got involved in 1965, the MBAs started salivating. Now we have a system that is built around govt style procurement that we cannot afford. As our population ages, as salaries continue to remain flat, we will have hard choices to make.
  • 0xbadcafebee 7mo ago
    Or we could adopt universal healthcare like every other developed nation, pay less, and have a healthier nation?
  • linehedonist 7mo ago
    1965 was 61 years ago. Are you saying you yourself had significant experiences with the pre-1965 healthcare system?
  • cozzyd 7mo ago
    Chicken barter, presumably
• Mistletoe 7mo ago
  I recently had a preventive CT angiogram and the cash price was $500 and the price with insurance was going to be $1000. The system we are in makes no sense at all.
• WarmWash 7mo ago
  Firey take, but health insurers are not the problem they are made out to be. They're on your team and benefit from lower prices just as much as you do. They don't make any money either, don't argue with me, buy their stocks if you are so convinced and see how that goes over. Health care providers carry immense blame. It's full of passionless people in it for the outsized paychecks, who once inside will just seek whatever local minimum to stay employed.
  • niij 7mo ago
    Insurers are only allowed to keep a % as profits. Higher spending increases the absolute amount of profit that can be retained.
    • deleted 7mo ago
      [deleted]
  • DangitBobby 7mo ago
    They add an entire layer of make work and waste just for existing.
  • soared 7mo ago
    [flagged]
    • WarmWash 7mo ago
      Exactly, ask anyone in a job for the money how their week was. Not saying nursing is stress free, or every nurse is bad, but like tech companies in 2021, it's full of directionless people who pushed through the cert program to get paid $50/hr with $100/hr weekend shifts and be disgruntled with you that you are making them do work.
      • shigawire 7mo ago
        The disillusionment comes from hospital admins constantly squeezing blood from a stone. Patient populations are up, nursing FTEs down. Support staff down.
• calebm 7mo ago
  "We've negotiated special rates on your behalf."
• kstrauser 7mo ago
  No, they don’t. Medicare’s one of the better payers among major groups. Source: owned a medical practice for over 20 years, and was staff engineer at a company that processed medical bills.
• busterarm 7mo ago
  There's so much culturally different here that blaming just the differences in the system of health care is effectively meaningless. Yearly physical exams are much more thorough in Japan. Unless you are optimally fit, you will be prescribed lifestyle changes to make and there is a strong expectation that you will work hard on these. Your employer will be involved. There is _tremendous_ social pressure if you are overweight. Healthy food options are ubiquitous there with healthy and cheap meals available 24/7. Combini food certainly has bad options but nothing compared to American fast food or the American diet generally. There are other health problems that are significantly overrepresented in Japan compared to the western world. Alcohol, smoking and stress-related illnesses. Liver & Kidney diseases. Peptic ulcers, GI problems in general.
• tptacek 7mo ago
  I buy that the locus of American overspending is in fees charged by providers (my understanding is that a further principle component of that spending is in end-of-life care). The problem, though, with going after pharma costs, and pharma benefit managers is that pharma is a relatively small component of overall spending; it's less than 10%. That is to say, you could make all pharmaceuticals entirely free, and we'd get at best a 10% discount on what we pay. I don't think any of us would be satisfied with that! This is data from the most recent (as of last year) CMS NHE: https://nationalhealthspending.org/ https://nationalhealthspending.org/
  • sudopsuedo 7mo ago
    The 9.2% figure is pharma's direct share of NHE, but drugs are a net-positive externality. Cheap statins can stave off cardiac surgeries, GLP-1 can stave off bariatric surgeries, etc. It's ridiculous to conclude we would only save 9.2% on costs--this is not zero-sum. No comment on drug pricing and its incentives, the existence of America's prescription drug markets drives the new innovative drugs that the rest of the world picks up for cheap.
    • tptacek 7mo ago
      That's an interesting argument --- that massively increased access to pharmaceuticals would have knock-on impacts on other cost areas in the NHE. I think if we dig into the numbers we're likely to find those effects, even if we maximize them, are marginal, unless we do other structural things to untangle the provider pricing system and do price transparency. Like: you could posit a material impact on CVD costs by making statins more widespread, and that should make a dent somewhere, but I don't know that CVD costs in non-Medicare-insured patients are really that big a line item, and non-Medicare is important here because people already Medicare-qualified generally have all the statins they want already. Meanwhile, providers are still ripping patients (and insurers) faces off for shoulder impingements, stents, and spinal fusions. It's a super interesting comment. Thanks!
    • onraglanroad 7mo ago
      > the existence of America's prescription drug markets drives the new innovative drugs that the rest of the world picks up for cheap. That's the ludicrous propaganda that you've been fed but you really should be intelligent enough to dismiss it. The world would get along just fine without you overpaying for your drugs. You pay for marketing costs.
• nativeit 7mo ago
  This is an interesting way of presenting a topic, I like it. Especially if it’s got included datasets that allow others to mess with said topic. I don’t want to suggest bloating it up with any complicated UIs, but a Jupyter notebook could be nifty. Maybe not for this specific topic, but other data-heavy subjects.
• pfdietz 7mo ago
  I think the problem is the system is designed to inflate what is being done to the point it's barely affordable. This new treatment requires more equipment and time? No problem, it's x% more effective, so it gets rolled out. And as medicine expands, the opportunities to make it marginally better also increase. If what we defined as care was constant, it would get cheaper over time. But it doesn't stay constant.
• andai 7mo ago
  Is the author GPT-5?
  • IntrepidPig 7mo ago
    Probably so. The table heading “Key Finding” smells rankly of LLM, plus the massive overconfidence that they’ve single-handedly figured out the problem with American healthcare with a little data science that only an LLM or a schizophrenic could be capable of (I haven’t read anything beyond the first part of the README because I don’t waste my time with slop, but I’m assuming they’re ignoring the incentive structures which encourage the system to stay this way), plus the simple fact that they call out a completely meaningless $3T gap that doesn’t account for population difference at all. It’s so strange because they mention the per capita difference right before that. That’s the number that matters. But still they go on and say $3T gap, and even measure the issues in terms of a percentage of that $3T gap. It’s nonsensical, right? I’m really tired of this.
  • joaohaas 7mo ago
    Kinda insane no one else is talking about this. The entire repo reeks of a "Write an extensive analysis comparing the american and japanese medical care systems" prompt. Not saying all the findings are invalid, but most of them are just the LLM trying to justify it, like the life expectancy one.
• biang15343100 7mo ago
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• umvi 7mo ago
  > Japan spends ~$5,790 and has the highest life expectancy in the OECD Is Japan's life expectancy because of its healthcare or culture? I'm pretty sure Americans would not live to the same age as Japanese even with Japanese healthcare because of our low nutrition high sugar diets...
  • tptacek 7mo ago
    Life expectancy is not a useful health care system comparison because the primary factors that cause divergences between developed countries aren't based in the health system --- they're things like traffic accidents, homicides, drug overdoses, and suicide. Yes, CVD will appear in that list of factors, but it's noisy; despite having structurally the same health care system, states in New England will have Scandinavian CVD outcomes while southern states (some of whom actually do a better job than New England at making care available) have developing-nation CVD outcomes.
• bcooke 7mo ago
  This project reminds me of a book I highly recommend called An American Sickness. It sheds a lot of light on the same sorts of issues. One underlying, perverse incentive behind many of the problems is that insurers are regulated based on percentages of spending rather than total costs. The US passed laws meant to limit marketing and overhead that tied insurers economics to the size of the overall medical bill... which means as healthcare spending rises, the dollars they’re allowed to retain can rise too, which basically means they're incentivized to drive costs up rather than down. Here's a link to the book: https://www.helmpublishing.com/products/an-american-sickness-2021 https://www.helmpublishing.com/products/an-american-sickness...
  • hattmall 7mo ago
    It's almost as if the insurance companies wrote those regulations. The same ones that required everyone to purchase their product and implemented government subsidies to pay them. Legitimately no way anything other than price increases and insurance profits could happen.
  • Taikonerd 7mo ago
    > The US passed laws meant to limit marketing and overhead that tied insurers economics to the size of the overall medical bill... which means as healthcare spending rises, the dollars they’re allowed to retain can rise too, which basically means they're incentivized to drive costs up rather than down. Yes, this is an important piece of the puzzle. The "medical loss ratio" for large insurers (the kind we all know and love) is set to 85%. So they can keep up to 15% of their revenue as profit. As you said, if total spending goes up, they get 15% of a larger number.
  • yeahwhatever10 7mo ago
    So same as realtors and most other brokers.
• edgarvaldes 7mo ago
  As a non-American, I find it interesting that so many comments in the thread insist that "No, American healthcare is not that expensive compared to that of other countries; no, the costs of the American healthcare system are not high due to greed and capitalism; and no, the American healthcare system cannot be cheaper or better, it is not perfect, but it works as it is."
  • joe_the_user 7mo ago
    As an American, I think most of my countrymen's arguments on the subject resemble something like "learned helplessness". The "healthcare system" is craptasm of kludges that each partly counter the fundamental irrationality of rapacious private healthcare but introduce their own idiocy. So the arguments and "ideas" involve this already dumb measure needs to be changed in that half-assed fashion. A few election cycles ago, an old woman was quoted saying "get the government out of my medicare [medicare is a state program, for foreigners trying to understand this stuff]"
  • PeppaPig 7mo ago
    [dead]
• turlockmike 7mo ago
  Unregulate the insurance industries problem solved. Let people actually buy insurance for it's intended purpose. No insurance company would pay these rates willingly, they do it because of all the regulations. They aren't allowed to profit normally, so they find ways around it. Just let them operate normally, like all sorts of other insurance programs.
  • danny_codes 7mo ago
    Back to pre-existing conditions eh? Yeah no thanks, let’s do the tried and true universal healthcare that literally every else does. They get better results AND it’s cheaper. We’re literally paying more for something worse.
• linsomniac 7mo ago
  Healthcare administrative overhead in the US is pretty huge and has been for a long time. Back in the early 90s I worked on claim processing software and I recall it being discussed as being around a third of healthcare costs. Last year this podcast said that nobody wants to solve this because solving it is going to eliminate (IIRC) hundreds of thousands of jobs. Which is a point to consider. In 2021, the U.S. spent $1,055 per capita on healthcare administration, while the second-highest country — Germany — spent just $306 per capita, Japan is $82. https://www.pgpf.org/article/almost-25-percent-of-healthcare-spending-is-considered-wasteful-heres-why/ https://www.pgpf.org/article/almost-25-percent-of-healthcare... Administrative spending accounts for between 15% and 30% of total medical spending, with lower estimates covering only billing- and insurance-related expenses, and higher ones including general business overhead such as quality assurance, credentialing, and profits. https://www.healthaffairs.org/do/10.1377/hpb20220909.830296/ https://www.healthaffairs.org/do/10.1377/hpb20220909.830296/ The Center for American Progress estimates that health care payers and providers in the United States spend about $496 billion annually on billing and insurance-related (BIR) costs alone. https://www.americanprogress.org/article/excess-administrative-costs-burden-u-s-health-care-system/ https://www.americanprogress.org/article/excess-administrati... The time burden on physicians is staggering — estimated at $68,000 per physician per year spent dealing with billing-related administrative matters. https://www.pgpf.org/article/almost-25-percent-of-healthcare-spending-is-considered-wasteful-heres-why/ https://www.pgpf.org/article/almost-25-percent-of-healthcare...
  • jimt1234 7mo ago
    I witnessed this devolution with my GF. She's a medical provider in CA that, since the mid-90's, got her funding from a state agency. She met with the agency once per quarter, reviewed her funding claims, worked out any discrepancies one-on-one, in-person with her representative. Worked great. Then private insurance muscled their way in. It's been a bureaucratic nightmare ever since. She had to hire a full-time staffer just to handle all the insurance BS. She never needed that before private insurance. The nightmare isn't just for her; it's also for her patients. She now spends almost as much time walking her patients through the insurance bureaucracy than she spends on actual treatment. And it's so sad because her patients are so desperate (parents of extremely sick children), but often get nothing but bureaucratic run-around from their private insurers. So yeah, it's been a lose-lose situation since private insurance took over.
• novok 7mo ago
  When you really dig into the difference it's metabolic health that is driving most of it, and that will be fixed by agricultural and food regulation for the most of it, starting with going with the whitelist system that japan and the EU have for food additives & manufacturing processes vs. the wild west that is GRAS in the USA, and way more strict food quality / inspection standards than you would think.
  • paulmist 7mo ago
    This! I flew from Madrid to SF last year and I can't begin to describe the difference in the quality of food. The scale of agricultural industrialization is terrifying - I wish you luck but I don't think anything short of this becoming a major campaign issue will help you.
    • hax0ron3 7mo ago
      I think it is possible that the majority of Americans do not know what they are missing. It is difficult to really understand how much better simple things like fruits, vegetables, and bread can taste without experiencing it. It's like The Matrix, you just have to see it for yourself. Well, taste it for yourself. I find that in America even local farm produce at the "farmer's market" often tastes flat and uninspiring. For whatever reason, heirloom tomatoes tend to be good though - they constitute an exception. To be fair, I was not born in America. So it is possible that it's not that American food is actually subpar, it's just that I became used to particular nuances of how certain foods taste back when I was a child and I do not get that from most American food, and to Americans their produce tastes extremely delicious. I'm pretty skeptical of this idea though. My hunch is that I'm not experiencing some sort of chemical nostalgia, and that American produce actually isn't very good. RFK Jr. successfully made some of this kind of stuff a minor campaign issue in the most recent US presidential election, so whatever one thinks about RFK Jr., at least it seems that there is some demand for food production reforms in the US electorate.
      • sobjornstad 7mo ago
        Lifelong American Midwesterner and I'm also convinced there's a big difference in the taste of some produce between what you get at a typical American grocery store and a farmer's market or my local natural foods store. I get all my produce there, and people who don't normally shop there often comment on how much better my raw vegetables are when they eat at my house. Someday I should go buy some produce from each store at peak season and try them side by side.
• paulmist 7mo ago
  As a European I would think a large part of the problem is that Americans are just sick more seriously and often. Your car culture, quality of food, and general preventative healthcare accessibility seem all terrible there. The prevalence of obesity in younger population is staggering. In my (engineering) programme I see one very obese person and a couple fairly overweight, but that's about it.
  • zdc1 7mo ago
    Australia and the US have similarly higher obesity rates. As you can see in the article, their system is simply just inefficient (arguably, by design)
• dzink 7mo ago
  Huge chunk of the costs come from the fact that Doctors pay astronomical malpractice insurance rates in some states with no tort reform. Some have to spend more than 100k on insurance - 1/3 of their total pay. Since some states allows multi-million dollar judgments from juries that raises insurance everywhere, which raises not only prices for everyone but also dramatically contributes to more procedures and tests being done at even higher costs to avoid liability. The risks of having your entire livelihood wiped out chases out doctors from those states and reduces availability of care for patients as well. If you want objective cost comparison, compare Veterinary care which has similar consumables and training, but no insurance and liability impact on prices.
  • sethammons 7mo ago
    The doctor that delivered my middle child said he had to deliver three babies a week just to cover insurance, and he had never had a case against him in his decades of practice.
    • LorenPechtel 7mo ago
      Yup, obstetrics is a really nasty one. The problem is in many cases it's impossible for the doctor to prove he didn't harm the baby, the jury sees a baby that needs a lot of care and they see deep pockets. And then you get stuff like the local case the lawyers were using as a poster boy for supposedly blaming the insurance companies. Baby had serious problems. Trial #1, 90% fault to the mother, IIRC 10% to the birthing center (which was no longer in existence.) By state law she couldn't collect because she was more than 50% at fault. Trial #2, same case, refiled in the name of the baby. 90%/5%/5% to one doctor who saw her once several hours before delivery. The whole $6 million judgment landed on him and last I heard that was being litigated over sticking him with the whole bill. Hey, both juries agreed she was the problem. But there's no way to prove the others were blameless. I've also seen this more directly: mock jury. Their screening questions weren't adequate--I knew how things would actually play out. Claim for IIRC ~150k, defense presents a smoking gun, but I don't think they went far enough on arguing the implications of it. We "settled" (didn't have to be unanimous) on ~30k, giving her a fifth of what she was asking for--except that doesn't make the medical bills for running up the tab go away. Lawyer is going to get his percent, docs will get the rest, she will see nothing. I kept quiet about this part as I knew it was information their screening questions missed.
• jeffreyrogers 7mo ago
  > The US spends ~$14,570 per person on healthcare. Japan spends ~$5,790 and has the highest life expectancy in the OECD. Ethnic Japanese in the US live have about the same life expectancy as Japanese living in Japan do (within 1 year). US GDP per capita is about 2.4x Japan's. So the numbers don't look nearly as bad when you adjust for that. The higher drug prices in the US are definitely part of it, part of it is our population is less healthy in general (fatter, worse diet, more drug and alcohol abuse), but part of it is Baumol's cost disease[0]. Biggest barrier to lowering healthcare costs in the US is it probably requires paying doctors, nurses, etc. significantly less and most of them work hard and feel like they deserve to be paid as well as they do. [0]: https://en.wikipedia.org/wiki/Baumol_effect https://en.wikipedia.org/wiki/Baumol_effect Edit: to some extent high US drug prices are a public good that subsidizes healthcare for the rest of the world. I don't know the data but I would guess the US is responsible for a disproportionate share of new drugs.
• jimt1234 7mo ago
  > Issue #4 examines pharmacy benefit managers ... I'm curious to read that. I worked for a PBM back in the 90s/early-2000s. When I was hired, it was just a job; I had no idea what the business did to make money. After working there a few years and learning - well, I would've felt better about myself if I had become an actual drug dealer, selling cocaine and meth. That's not a huge exaggeration.
• slashtom 7mo ago
  It's great to see work being done to highlight an issue but I do wonder what background does the author have? Would recommend gestalt/cleveland as a good grounding, the visualizations is editorial rather than analytical. Choosing US versus Japan, which Japan has the lowest cost and highest life expectancy in the OECD, it's cherry picking. I'd recommend showing the full distribution of OECD per-capita spending rather than just a single cherry picked comparison. This also is troubled by McNamara Fallacy, we're looking at metrics that are qunatifiable but ignoring what can't be measured or overlooked, is speed of access being considered, how about innovation incentives, quality and outcomes variation across systems, patient choice and flexibility, in addition to workforce compensation (nurses and physicians in the US earn significantly more). Where are the trade-offs? Summary Statistics can be dangerous. 254% of medicare is a single ratio summarizing enormous variation across thousands of hospitals and procedures. Median markup of 3.96x inherently hides the distribution, some hopsitals may be higher or lower, why is that? I think the biggest one to me was the confirmation bias, the $3 trillion gap that represented 'fixable waste' was the conclusion. Every price difference is interpreted as waste rather than investigating the potential cost drivers, was there a null finding framework in place where US spending appears justified or is it all bad? Overall, glad someone is looking into the data and pulling insights, please don't take this as discouragement just a comment from the peanut gallery.
• socalgal2 7mo ago
  This might be rigth but I don't get a lot of confidence from the start comparing Japan's lifespans to the USAs and implying it's because of health care Japanese, as a whole, have a vastly different diet than the average USAian. As a whole, they are far less obese, eat far less diary products, over eat less, eat less meat, etc... Again, not saying that's the reason but it's a possibility. USA = 2500 calories a day. Japan = 2000 calories a day. Japan = 3% obese. USA = 33% obese. Next up is exercise. Sure, lots of people in the country live in rural areas and drive a car. But some large portion of the population does the majority of their commuting and shopping by walk/bus/train/bicycle. That means that on average, Japanese get more far more exercise than the average USAian. Japan gets ~25% more exercise on average I'd suspect these 2 (3)? are the major reason Japanes live longer. (1) they get more exercise (2a) they don't over eat (2b) they eat healther foods. Anyway, the point is, the post should arguably not be putting such a specious statement at the top. It suggests the rest is probably just as specious
• TrackerFF 7mo ago
  Healthcare can only get you so long, if we're looking at life expectancy If you're less active, eat worse, throwing more money at fixing the symptoms will not fix the underlying problem. Not saying that Americans aren't paying outrageous amounts compared to others, but when comparing these things, I think it makes more sense to look at countries with population more similar to US.
• tsoukase 7mo ago
  In health care everyone knows the exact problem because they live it and suggests a solution, mostly from opinion or other countries' systems. In the US the system is so bad primarily due to the holy national founding principles: the minimal public support pushes the prices to exorbitant levels due to loss of regulation that ends up to abject profiteering by providers. People try to hack the system so the price is reduced from exorbitant to very expensive. The naive but painful solution is to borrow and adapt elements from other systems and if the Sweden's feels too socialistic, let it be Portugal's or Greece's. The reform will do good to the whole nation, only a few jobs will be lost and some others will see less 6-figure income.
• 999900000999 7mo ago
  Looking at this as a math problem is a bit navie. Americans don't want cheaper healthcare. We've collectively decided the nightmare of employer based health insurance is a good idea. Single payer healthcare will never happen. Imagine if you will an Apple farmer willing to supply an entire town for a set amount per person. One town, call it NordicTown says this is a great idea. Everyone chips in. Another town, Jamestown has lively debate on the issue, but half the population believes unworthy people will get apples. Since it's the policy that if anyone who shows up at the apple market starving they'll always get an apple, the apple farmer figures out they can bill the town for whatever they want. Jamestown then ends up implementing special taxes to pay for poorer people to have apples. They could actually extend this to cover everyone without raising taxes. But this will never happen. Someone you consider lazy might get a free apple. So you gladly pay 3 times as much. Everyone in America is a single expensive illness away from ruin. We like living in a dystopian nightmare where you have to pick between medicine, a car note and rent. Did I mention Jamestown residents who relay on free apple programs regularly vote against free apples?
• bojangleslover 7mo ago
  It's neither capitalist nor socialist. If it were fully socialist you would have long wait lists but it would be free and there would be one payer. It is like this for Medicare and Medicaid which I've heard are a fantastic UX. But this is only the case for about half of Americans (the ones who don't pay for it). On the other side, if it were fully capitalist you would be able to see the price and walk away if you didn't like it. This is what makes capitalism work. Your margin is my opportunity. Instead, the upper middle class, who pays for everything already, and is unable to use Medicaid, is forced to use a certain "network" of providers and never, ever sees the price upfront. This is the cornerstone of capitalism. Does the buyer like the price? If so, transact. It's completely not there. Instead, it's actively discouraged and banned, and the price is maximized post-hoc by the same entities who negotiate directly with the employee's employer. Ie, a quantitative shakedown.
  • TheOtherHobbes 7mo ago
    Waitlists are a function of funding, not a direct abstract consequence of socialism. Countries with single payer that have adequate funding - with single payments from taxes that are hugely lower per capita than the US system - do not have long wait lists. As for walking away - it's hard to do that if you're dying or unconscious. And of course corporate capitalism always collapses to cartels and monopolies. The idea that a free market optimised for consumer competition is a mythology, not a reality. Markets compete for shareholder returns, not customer satisfaction. Customers are only ever a convenient source of profit with inconvenient expectations of service quality and cost.
  • Doable0896 7mo ago
    > If it were fully socialist you would have long wait lists but it would be free and there would be one payer. That is a crazy thing to say. Not saying that it can't be true, but a socialist system doesn't mean automatically long wait lists.
  • Ylpertnodi 7mo ago
    >If it were fully socialist you would have long wait lists but it would be free [....] No. Wouldn't wait times are dictated by supply (doctors) and demand (patients), not the political system?
• petesergeant 7mo ago
  It’s not a conundrum, it’s a stealth regressive tax. The people who could fix it don’t want it fixed, and there’s are massive commercial incentives to keep perpetuating it, wrapped up in arguments against socialism.
• UmGuys 7mo ago
  [flagged]
• TuringNYC 7mo ago
  The problems are so vast it is difficult to even describe to outsiders. For example, if I purchase a particular medication at a local pharmacy, it costs $25. However, my insurer mandates that I purchase it via their Pharmacy Benefit Managers (PBM) Optum, which charges $125. Easy enough right, you price shop? Well then it doesnt count towards your deductible. The whole thing is an elaborate trap to not pay. Sometimes it is easier to just pay cash without insurance altogether. You need the medication today and dont have two weeks to fight it out with letters and forms, then it definitely doesnt count towards your deductible (and also, what is the purpose of the pharmacy coverage insurance?)
  • cmiles8 7mo ago
    Prescriptions are a total racket. A good portion of actual medication literally costs a few dollars at most. Then there’s layer upon layer of bloat and bureaucracy that add no value but drive the cost up 10x or more. It’s totally bonkers. When these Rx cards and Marc Cuban CostPlus drugs came out where you just pay cash and a fraction of the price I thought there must be some catch or scam here. But turns out no, they’re just cutting out all the middleware bloat and selling you the meds at a defensible markup plus their logistics costs. Love what these guys are doing. The fact that something like that even exists highlights how corrupt and broken the health insurance companies have become. It’s their job to get better prices at scale and yet somehow they manage to sell at prices far worse that Joe Blogs off the street can get with cash. In many ways the quality of care in the US is far better than what folks get elsewhere, which in part is probably why there isn’t a total patient rebellion, but the US’s challenges are all rooted in massive administrative overhead. If we got rid of that and had a lean system where healthcare providers can do their job without interference there would be plenty of money to go around for amazing care at lower cost.
    • Turskarama 7mo ago
      > In many ways the quality of care in the US is far better than what folks get elsewhere, which in part is probably why there isn’t a total patient rebellion How sure of this are we really? Other countries mostly have problems with emergency departments being full, but that's less because those emergency departments are worse and more because in the US people aren't going, they just stay home and hope they don't die.
• whatever1 7mo ago
  The problem with healthcare is that it can have infinite cost. The question that each society tries to answer is how much are they willing to pay to prolong the life of each individual. There are no right answers unfortunately, as all of them lead to preventable deaths. But some of them at least promote the concept of a caring society.
  • turbotim 7mo ago
    One example of this calculation is QALYs (Quality Adjusted Life Years) which is used in the UK to determine what drugs are worthwhile: https://www.nice.org.uk/news/articles/changes-to-nice-s-cost-effectiveness-thresholds-confirmed https://www.nice.org.uk/news/articles/changes-to-nice-s-cost...
    • whatever1 7mo ago
      Adding a formula just hides the harshness of the decision. It does not change the fact that some people who could have been saved, will die as a result of the policy. All answers are wrong. But at least the one that you highlight can help us track over time if we are making progress to saving more people.
• elgertam 7mo ago
  I see a lot of the comments operating from an empirical framing. This is valid analysis and is good; we should want to understand the waste in the system as it stands. However, that isn't enough. US healthcare is wildly inefficient because the paying customer is different than the serves customer. This has been known for sixty years, since Arrow published his paper (he identified four reasons, three of which are not exclusive to healthcare and seem to be mitigated well in other industries). I'm surprised people posting can't quite see this: when you go to the doctor, would you call the experience efficient? You check in, then wait, then are called back, tell the nurse or PA why you're there, wait, see the provider who asks you again why you're there, has a short exam, wait, finally get all the paperwork and sign out. If you have labs or tests, you then wait again. And of course if you need a specialist, you wait again, sometimes for months. If you need any sort of "specialty" medication or equipment, then you REALLY wait, as specialty pharmacies, DMEs and the like jump in. The whole system is woefully inefficient, and overhead is only a part of the explanation. No one knows what anything costs, and the people who pay (insurance providers, the largest of which is the US Government) want to believe they're not getting scammed - they still are, but at an acceptable level. The question we ought to ask is how we can buy better health outcomes for people. And I think part of the answer is that in most cases, individuals and families themselves must allocate resources they control to make this happen.
  • Vinnl 7mo ago
    And yet it is still vastly more inaccessible and inefficient than other countries where the same holds. There is a lot that could be learned from other countries. So it's good to see that this repo does so.
    • klipt 7mo ago
      I notice the repo has no data on supply of doctors per person in different countries. It's well known that the US residency system with its limited slots constrains the supply of doctors who can practice in the US.
      • cycomanic 7mo ago
• philipallstar 7mo ago
  > US pays 7–581x more than peer nations for the same drugs This is what pays for future drug research for the world.
  • jdub 7mo ago
    No, it pays for ticket-clipping middle-men and political corruption.
    • philipallstar 7mo ago
      It also does that.
  • pif 7mo ago
    No, this is just what pays big dividends to useless managers.
• ArtDev 7mo ago
  From the top to just above bottom: waste, fraud and abuse and injustice.
• MrBuddyCasino 7mo ago
  "Our high spending is overwhelmingly a product of our high incomes and if other OECD countries had our exceptionally high material standard of living most of them would be spending very similarly, with similar utilization, similar intensity, similar prices, and otherwise not obviously better overall outcomes." https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/ https://randomcriticalanalysis.com/2018/11/19/why-everything...
• tlb 7mo ago
  You and I look with dismay at the high prices, but remember that a million hospital administrators are high-fiving themselves. So ideas like "just cut waste" are opposed by a large group with a lot more skin in the game.
• StacyRawls 7mo ago
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• superxpro12 7mo ago
  Until we eliminate for-profit health insurance companies, i will never be convinced this isn't anything other than a massive scam to over-inflate costs, and inflate insurance margins as much as the people can tolerate. Im sure big-pharma has an interest in over-medicating too, but that should be solved by transparent pricing. It still blows my mind i cant window shop hospital procedures. The opaque-ness of medical billing in the US only further favors the for-profit insurance company margins. Burn it all down. Single-payer for all. I really have zero sympathy for insurance companies who pride themselves on denying their paying clients life-saving care in favor of shareholder returns. It's such a crazy moral hazard that really highlights a sickness in America.
  • Dumblydorr 7mo ago
    We already have multiple forms of socialized medicine, it isn’t perfect. Burning our current system down and shoving them all into Medicare and the VA system would kill thousands or more people, healthcare needs to be operational 24/7/365. I think a gradual move to single payer is the way, but even if you could get that passed as legislation, which you can’t due to a rigged senate balance, and not struck down by SCOTUS, you’d need 10 years to begin the changeover. It’s really that massive of a project. But it won’t happen with the current solidifying conservative governmental systems. Say hello to your future, it’s now.
• ferguess_k 7mo ago
  I don't really think it (late Capitalism) is reversible in anyway. It is better to just let it completes its path, turn a new page and maybe we can start from scratch. A lot of people (you and me) are going to suffer and die. But human nature says that real changes only happen when the old bastion is dead. Ancient Chinese wisdom: "People praise doctors who delay the progression of incurable diseases but not those who prevent them".
  • virgil_disgr4ce 7mo ago
    Although I'd be happy to see this insanity die, I don't understand how anyone thinks this is going to "complete its path." Honest question. Can someone describe what that end consists of?
    • ferguess_k 7mo ago
      It is just like anything in the world, that has a path to complete. I'm just saying that no one can stop it from completing its path. I don't know what the end consists of, or what exactly the path consists of, but nothing too good for ordinary people, I guess, as an armchair historian observing current affairs.
• Taikonerd 7mo ago
  I think the root problem is fee-for-service. Doctors and other providers bill for each individual thing they do. But that means that their incentive is to do as much as possible, so they can quickly rack up billable codes. It's like if developers billed their employer per line of code they wrote: the incentive is for churn, when it should be for slowing down and thinking about quality.
  • ThrowawayTestr 7mo ago
    Doctors in Canada also bill the government for everything they do but I've never felt pressured for procedures by my doctor. Don't kid yourself, it's the insurance companies.
• mchusma 7mo ago
  It’s disturbing to see multiple comments that “capitalism” is to blame for the costs in healthcare. The US healthcare market is the least free market in the US. Capitalism (when there is true competition) brings down costs pretty universally. Those parts of the market that are market oriented tend to get better and cheaper over time (for example, generic over the counter meds, needles, and even health care panels, AI health advice) all getting better and cheaper. You can get pretty cheap panels of blood drawn, for $200 or less with tons of data. It’s only when you hit the regulatory wall and you exit the market do you see costs explode. Our imperfect system pays for the worlds medical R&D, so I would actually love to see per capita spending remain similar BUT have the market opened up, with a nice safety net at reasonable cost, and money pouring into curing aging and all disease.
  • estearum 7mo ago
    > Capitalism (when there is true competition) brings down costs pretty universally. "True competition" is doing a lot of heavy lifting here. There are many conditions that must be true for prices to go down.
  • Dumblydorr 7mo ago
    Capitalism =\= free-market We have crony capitalism in the US, healthcare is one of the easiest areas to see it. Free-market is the illusive perfect sphere. Most markets are oval or amoeba shaped. Rarely can the US achieve a true free market in any industry, since money pours into politics and corrupts the laws and regulations.
  • rexroad 7mo ago
    Agreed on the diagnosis: the inpatient hospital market does not function as a competitive market. Patients arriving by ambulance do not shop on price. Insurance insulates consumers from marginal cost. Regulatory and capital barriers prevent new entrants. The HCRIS FY2023 data for 3,193 hospitals shows what this produces: a 2.6x median markup to actual cost, with the highest-markup hospitals rarely losing patients to lower-cost alternatives nearby. Your examples of what works are instructive. Generic OTC, needles, blood panels all share the same conditions: price-visible, consumer-controlled, no third-party payment insulation. The RAND hospital data shows the identical procedure (hip replacement) costing $29K commercially in the US versus $14.7K in Germany and $8.7K in Spain. Same implant, same surgeon training requirements. The patient's insurance status varies; the procedure does not. Montana's commercial reference pricing is not deregulation, but it creates the price-visibility function you are describing: a known floor price that makes it possible for a purchaser to act on price information. Employers have adopted it nationally with documented savings.
• cyprustaxlife 7mo ago
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• a3w 7mo ago
  Removing cars and fast food would probably equal things out a bit in terms of life expectancy. Removing some patent protections earlier and having a national healthcare system own the clinics and insure people would reduce the cost?
• Sanctuary8542 7mo ago
  https://www.cms.gov/priorities/innovation/innovation-models/maryland-all-payer-model https://www.cms.gov/priorities/innovation/innovation-models/...
• rexroad 7mo ago
  Correction on ownership breakdown: A CMS cost report expert flagged that my CTRL_TYPE mapping in the HCRIS processing script was wrong — I had for-profit and nonprofit hospital categories swapped. The corrected figures: for-profit hospitals have a 4.11x median markup (highest), nonprofits 2.46x, government 2.22x. The 254% commercial-to-Medicare finding ($73B savings estimate) is unaffected — that's from RAND, not my HCRIS analysis. Corrected code and a full audit report are on GitHub. This is exactly why the code is open-source.
• thegrim33 7mo ago
  Am I completely tripping out or does rexroad's profile use a template where they were supposed to fill in a blank but forgot? "Former [your background if relevant]". Really opens my eyes to all the other politics posting accounts that have a similarly constructed profile description .. But of course, they'll never be banned and instead they get front page of HN and hundreds of upvotes.
  • slumberlust 7mo ago
    Yeah, day old account too.
  • simojo 7mo ago
    What do you see as the bad part of this? That the user is trying to farm points by copying patterns of upvote-winning users, or that there's a flood of inauthentic new users? Genuinely asking.
    • stronglikedan 7mo ago
      every forum has busybodies who try to make something out of nothing
• dfilppi 7mo ago
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• zk_haider 7mo ago
  Healthcare is the one industry we need AI or automation to take over large parts, and a hostile Uber style industry take-over. Make treatment stupidly cheap with innovations, watch the corrupt racket unfold.
  • deleted 7mo ago
    [deleted]
  • hirako2000 7mo ago
    Mark Cuban is at it. I doubt the Uber trick would work. Because as with banks, innovative and more efficient businesses get bought out. Or engage in the racket once they make it.
• iwontberude 7mo ago
  Kaiser Permanente solved all of my problems with healthcare. They are what Medicare should be, single payer with one system.
• snarfy 7mo ago
  If healthcare was cost competitive there would be prices listed like a fast food restaurant.
  • rexroad 7mo ago
    CMS now requires hospitals to publish machine-readable price files under the Hospital Price Transparency Rule (effective 2021, enforcement added 2022). Compliance rates are technically high. The problem is the files run tens of thousands of line items in inconsistent formats, negotiated rates vary by insurance plan, and chargemaster list prices bear no predictable relationship to what any patient actually pays. RAND's Round 5.1 study analyzed actual paid claims rather than posted prices and found commercial insurers paid 254% of Medicare rates for identical procedures at the same hospitals. The transparency is on paper. The opacity is structural: a price list is only useful if a purchaser can act on it, and the moment of care is not when most patients can comparison shop. Which is why reference pricing works at the employer level (purchaser can act in advance on a population basis) but published hospital price lists have not moved the market.
• 8f2ab37a-ed6c 7mo ago
  There's a super long episode on The Drive going deep into the mechanics and economics of the US healthcare system, could be a useful addition to the conversation here: https://www.youtube.com/watch?v=QqrpFICtqpQ https://www.youtube.com/watch?v=QqrpFICtqpQ
• bhelkey 7mo ago
  Public perception is that the US is not willing to pay for universal healthcare. However, the US spends enough money, it just spends it inefficiently. The US spends ~$900 Billion a year on Medicaid [1] and ~$1.1 Trillion a year on Medicare [2]. If the US spent this money as efficiently as Japan (or UK [3], ...) it could pay for Universal Healthcare without increasing its budget. [1] https://www.kff.org/medicaid/medicaid-financing-the-basics/#870ed126-45c3-4465-8b9a-ae0eea487dcf https://www.kff.org/medicaid/medicaid-financing-the-basics/#... [2] https://usafacts.org/answers/how-much-does-medicare-cost-the-federal-government/ https://usafacts.org/answers/how-much-does-medicare-cost-the... [3] https://www.bbc.com/news/articles/cwy7zvp5xrqo https://www.bbc.com/news/articles/cwy7zvp5xrqo
  • adventured 7mo ago
    Incomes are dramatically higher in the US than in Japan. Their economy has imploded so badly due to debt + currency destruction that they're now just barely above Lithuania (which has come a long ways of course) on economic output per capita. Japan is no longer a primary economic power and their (perpetually falling) purchasing power + incomes represent that. US GDP per capita is estimated at $92,000 for 2026. Norway is $96,000 for comparison. 340 million people vs one of the world's richest nations at 5 million people. The UK is $60k, and Japan is a mere $36k. Read that again. US GDP per capita will soon be 3x that of Japan. Doing a direct comparison of healthcare costs is silly accordingly. At a minimum you need to 2x to account for the drastically higher US incomes vs Japan, and at least 50% higher vs the UK.
    • Nicook 7mo ago
      Japan is also way thingger than America, which the article points out: > The US spends ~$14,570 per person on healthcare. Japan spends ~$5,790 and has the highest life expectancy in the OECD. That gap is roughly $3 trillion per year. Need to have people go in for checkups and get shamed for unhealthy habits, not really a money question.
    • bhelkey 7mo ago
      I don't agree with your framing but let's accept it for the sake of this conversation. The UK and Japan are not the only countries with more efficient healthcare systems than the US. We can look at a variety of countries, some of which have a higher GDP per capita than the US. If we look at a graph of 'healthcare spending per capita' by 'GDP per capita' [1], we can see that the US is a massive outlier spending ~2x countries with comparable GDP per capita. In fact, the US has a higher healthcare spending per capita than every other OECD country. By a large margin. [1] https://www.healthsystemtracker.org/chart-collection/health-spending-u-s-compare-countries/#GDP%20per%20capita%20and%20health%20consumption%20spending%20per%20capita,%20U.S.%20dollars,%202024%20(current%20prices%20and%20PPP%20adjusted) https://www.healthsystemtracker.org/chart-collection/health-...
• jasonhong 7mo ago
  I saw Jim Clark (founder of SGI, Netscape, Healtheon) talk one time about entrepreneurship. He said something that compactly explains a lot of issues humanity faces in general: "One person's inefficiency is someone else's bottom line." A lot of the things that the original post shares has this characteristic. Sure, things in US healthcare are wildly inefficient, but that's how a lot of these companies make a lot of money. And they will lobby and fight to the death that cash flow.
  • rexroad 7mo ago
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• techcam 7mo ago
  This resonates — most of the hard problems show up after you ship, not before.
• nacozarina 7mo ago
  there’s no conundrum, the lords have the peasants by the neck and they are never gonna let go, you’re choices are an early death or an earlier death.
• broabprobe 7mo ago
  for people who prefer a video intro to the mess of the American healthcare system, Brian David Gilbert has an excellent video on the subject, https://www.youtube.com/watch?v=-wpHszfnJns https://www.youtube.com/watch?v=-wpHszfnJns he manages to make it a fun and enjoyable topic to learn about which is quite a feat imo
• SlightlyLeftPad 7mo ago
  I suspect we can solve about 2.9T of waste by eliminating publicly traded for-profit healthcare and for-profit insurance.
  • rexroad 7mo ago
    For-profit structure is part of the problem but not all of it. Issue 3 analyzed 3,193 hospitals using CMS HCRIS FY2023 cost reports. For-profit hospitals do have the highest cost-to-charge markups: 4.11x median. But nonprofits are 2.46x, and nonprofits hold 75.5% of total national hospital supply spend. The ownership form does not reliably determine pricing behavior when market conditions are the same: opaque prices, patients who cannot shop, no reference price to anchor negotiation. Maryland has had all-payer hospital rate-setting since 1977 with a largely nonprofit hospital sector. It produces significantly better cost control than the national average. The structural fix for hospital pricing (commercial reference pricing at 200% of Medicare) works regardless of tax status because it creates a known floor price. That is what the RAND data and the Montana Medicaid experience both show. The mechanism matters more than the ownership form.
    • SlightlyLeftPad 7mo ago
      I’m willing to agree on some points however, the for-profit model is what incentivizes the convolution in the first place. It has been the main driver for injecting complexity at every level. In turn, even nonprofits have to spend capital to make sense of it. In other words, it does measurable harm to the entire industry and builds the moat wider in favor of the for-profits and shrinks the margins of the nonprofits trying to compete.
• rexroad 7mo ago
  Author here. Issue #4 is now live — pharmacy benefit managers. Three companies process 80% of US prescriptions. The FTC spent two years investigating them and documented $7.3B in specialty drug markups at PBM-owned pharmacies alone. Ohio's state auditor found $224.8M in spread pricing extracted from one state's Medicaid program in a single year. Six mechanisms, $30B/year booked conservatively. Running total across four issues: $128.6B. github.com/rexrodeo/american-healthcare-conundrum
• rexroad 6mo ago
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