12 ms·

I'd like to believe this, but the study makes a bunch of really hasty assumptions. The authors derive the $1T number from $1.3T in total cost savings and $304B

I'd like to believe this, but the study makes a bunch of really hasty assumptions. The authors derive the $1T number from $1.3T in total cost savings and $304B in incremental spend (incremental spend is due to insuring more people). The $1.3T in cost savings come from five big buckets: lower pharmaceutical prices, Medicare-level payments to providers, reduced administrative overhead, less fraudulent billing, and fewer avoidable emergency department visits and hospitalizations. The buckets themselves don't necessarily survive much scrutiny. Take "Medicare-level payments to providers". Hospitals have an operating margin of 2-5%. Medicare pays 50% less than private insurance. So doing this would require either layoffs, cutting salaries for doctors/nurses/etc, or both. This may well be the right decision for society as a whole--that's a big part of the debate here--but there's no free lunch. The line item of "fewer avoidable emergency department visits and hospitalizations" assumes greater insurance coverage leads to greater access to primary care. It's true that great primary care prevents hospitalizations, and can be a net cost saving under certain assumptions [1]. But, we're actually in a primary care shortage. Existing insurance payments for primary care are low enough that private practices are going out of business and fewer residents are going into family medicine. Cutting rates (the paragraph above) would make this worse. For "less fraudulent billing," a lot of people in the industry believe that Medicare has a large amount of undetected fraud. That's unfortunately the flip-side of reduced administrative overhead. The authors assume an 8% savings here, but the 2003 paper they cite uses the word "fraud" only twice and doesn't give a number. Healthcare reform is hard. [1] Reasonable breakdown on the economics of advanced primary care models: https://olearykm.medium.com/the-cost-equation-for-new-primary-care-models-in-existing-frameworks-part-i-a31109f4dcbb https://olearykm.medium.com/the-cost-equation-for-new-primar...

RunSet 2mo ago
Even if universal health coverage lost money it would be better than the current system that is based on a "causing cancer is better for the GDP than curing it" mentality.
- tptacek 2mo ago
  The US has top-tier cancer survival-after-diagnosis outcomes. We spend too much to get there, and other countries in our cohort would "argue" that we get those numbers in part by diagnosing earlier and that our outcomes are broadly similar, but if you're going into these debates with "the US private health care system causes cancer deaths", that's a pretty rebuttable argument.
  - Alex3917 2mo ago
    I think the parent comment was a reference to the famous “Economists must learn to subtract” commercial that AdBusters ran.
  - vlabakje90 2mo ago
    That overlooks the 27 million uninsured Americans. Uninsured cancer patients are more likely to be diagnosed at a late stage, less likely to receive treatment, and have substantially higher mortality than insured patients.[1] They also have worse survival, even after accounting for cancer stage.[2] So excellent U.S. outcomes among those who access care don't rule out preventable deaths caused by barriers to accessing it. [1] https://pubmed.ncbi.nlm.nih.gov/25092774/ https://pubmed.ncbi.nlm.nih.gov/25092774/ [2] https://doi.org/10.3322/caac.21732 https://doi.org/10.3322/caac.21732
    - tptacek 2mo ago
      No, uninsured Americans are captured in those numbers.
    - s1artibartfast 2mo ago
      entirely beside the point. It is fine to look only at patients with insurance/ access to refute the claim that US doctors dont cure cancer so they can make more money.
  - well_ackshually 2mo ago
    >The US has top-tier cancer survival-after-diagnosis outcomes. "Airplanes that get shot in the wing always survive" logic. People _do not get diagnosed and die_ because the US healthcare system is inaccessible to close to 50% of your population. A diagnosis easily reaches a few hundred dollars for the best cases (and several thousand if you need multiple tests/blood tests/operations like colonoscopies). And when you do get diagnosed, then you've just entered a world of having to pay hundreds of thousands of dollars. >we get those numbers in part by diagnosing earlier and that our outcomes are broadly similar lmao no you simply don't diagnose people and they just "die of natural conditions" early because they couldn't afford the treatment even if they were diagnosed.
onlypassingthru 2mo ago
> Hospitals have an operating margin of 2-5% There's no way a Chairman/CEO would ever reduce the operating margin by just giving themselves and their buddies a raise is there?
- missedthecue 2mo ago
  Are you saying that most hospitals have 50% profit margins, of which 90% are paid to the chairman leaving only a thin margin? That seems difficult to believe. They may have 4.2% margins knocked down to 4% by exec comp but I don't see that how that fact would change OPs point.
  - onlypassingthru 2mo ago
    I'm saying if you think that administrative expenses (among others) can't be inflated for a profitable company, I would like to run your company and demonstrate what executive compensation can include: - Base salary - Bonuses - Stock options - Perquisites (perks) like company cars or private jet usage Just to be clear - I like my private jet(s) on call in case I want to get away for the weekend. TYSM
  - wmorgan 2mo ago
    Yeah, if the hospital is part of an HMO, it wouldn't even be legal. The ACA sets a floor on medical loss ratio.
    - nradov 2mo ago
      [dead]
GuB-42 2mo ago
Yes, I consider big numbers like this to be red flags. The GDP of the US is $32T. Saving $1T will essentially make 3% of the US economy vanish. You don't vanish 3% of an economy without wide ranging repercussion, it would be a crisis similar in scale to that of 2008. With such numbers we are not "saving money", these are about rebuilding an entire economy, a painful process. So either the effect will be much smaller than that, or there will be riots.
- missedthecue 2mo ago
  Well it wouldn't "vanish". The $1T savings (if produced) that were once spent on healthcare would instead be spent on anything else.
  - GuB-42 2mo ago
    Yes, it will, but think about the supply side. If people spend $1T less on health, health professionals will earn $1T less, it means, as GP said, layoffs, cutting salaries, etc... Not just doctors and nurses but also drug researchers, medical equipment manufacturers, etc... These people will now have to do the "something else" that will be spent on, let's say gardening. But you don't turn a nurse into a gardener just like that, that's the kind of "wide ranging repercussions" I mentioned, and the painful transition period where nurses become gardeners. "Nurse to gardener" is just a random example, it can be "drug researcher to petrochemist", and some transitions we may be happy to see, like "health insurance lawyer to burger flipper", but overall, many good people will suffer in transition, many powerful people too, which make such transition unlikely.
    - chermi 2mo ago
      I don't understand why we always pay attention to only the jobs side of decisions like this. Why is the main concern always preserving existing jobs? The extreme version of that is obviously silly. The savings is real and lowers prices, increasing social mobility and spending elsewhere. How many people are locked out of moving for a job that matches them better, or taking some training for a better job and so on just because of medical debt leaving them no flexibility? And if we could save that trillion by eliminating jobs, doesn't that kind of imply those jobs (or at least the system requiring them) were terrible allocation of human capital?
mempko 2mo ago
Yes, these cost savings would be a deflationary event. Most layoffs will come from insurance companies and administration necessary to satisfy them in hospitals. One reason hospitals have such low margins is many people simply can't pay. If you have a payment guarantee like a medicare for all system, this will increase the stability of hospitals. In fact likely bring back some hospitals in places that didn't make sense like rural areas, which have been struggling via hospital closures. If you are worried a low cost system will reduce doctors and hospitals per capita you don't need to, as countries that have universal healthcare often have more per capita. https://worldpopulationreview.com/country-rankings/doctors-per-capita-by-country https://worldpopulationreview.com/country-rankings/doctors-p...
well_ackshually 2mo ago
>Hospitals have an operating margin of 2-5%. I don't see you complaining that the US military has a low operating margin, so maybe we can just agree that some things are just normal expenses for a population. Which therefore leads to step 2: nationalize every single hospital. >cutting salaries for doctors/nurses/etc Considering that over 50% of the money that goes into healthcare is just siphoned off by middlemen, no, just getting rid of these means that your health workers do not have a worse salary. >But, we're actually in a primary care shortage. Because people do not even go see their GP since there's a chance it leads to life ruining expenses. > fewer residents are going into family medicine. Because they're going where money is. Remove that from the equation, and all you have is a public service with public servants. >a lot of people in the industry believe that Medicare has a large amount of undetected fraud. Aside from the fact that "people in the industry" have a financial interest in making you believe Medicare is a net negative, there's a great thing that comes from making healthcare a public service: there's no longer any fraud. And those "fraudulent" expenses you used to have that were costing you millions anyways have just had their costs cut in half. >Healthcare reform is hard. It's the easiest thing in the world when you have the amount of money the US does. Healthcare reform isn't a financial or infrastructure problem, it's a political one. Cuba has a working healthcare system despite being under US embargo. Botswana has a working healthcare system. Rwanda has a working healthcare system. Azerbaijan, Sri Lanka, Turkey, Serbia, and the list goes on. Once you grow the balls to nationalize everything, even a first year economy student could make a plan that works.
- nradov 2mo ago
  Every country with nationalized healthcare systems has lower wages for clinicians. So the notion that this wouldn't lower salaries is just ludicrous. That might be an acceptable trade-off but let's not pretend it doesn't exist. In practice what we would see under a single-payer system is that many doctors would opt out and shift to a cash payment model. So the shortage of doctors would get even worse for patients who can't afford to pay out of pocket.
  - zipy124 2mo ago
    Those countries also just have lower salaries for all sectors. The USA is just exceptional in salaries for many professionals. Just look at software engineers pay in Europe Vs US....
thatfrenchguy 2mo ago
> Take "Medicare-level payments to providers". Hospitals have an operating margin of 2-5%. Medicare pays 50% less than private insurance. So doing this would require either layoffs, cutting salaries for doctors/nurses/etc, or both. This may well be the right decision for society as a whole--that's a big part of the debate here--but there's no free lunch. I mean, admin costs at hospitals are ~25%, around half of that is directly linked to billing. Administrative costs in the US (because of course you have the same costs on the other side in the insurance side) are around 30% of cost in general, which is pretty insane. The lack of regulation around pricing transparency and generally the lack of one-price-per-code (which the government uses to its "advantage" to get lower medicaid/medicare rates for sure) is what has caused this stupid arms race on both sides.
- tptacek 2mo ago
  Billing and insurance ("BIR") is reported at around 8.5% of revenue --- admin isn't just BIR, as you note. But replacing private insurance with Medicare doesn't drive BIR to zero; Medicare is also a claims-based system. Estimates are that you'd cut BIR by somewhere around 30-40% (of 8.5%). Most of the savings in these kinds of reports simply comes from paying doctors less (or delivering fewer procedures, which is also a problem we have.)
  - cyberax 2mo ago
    Physician/nurse salary is not the major driver of the cost of healthcare. It's around 12-15% spending, depending on the methodology. Even if you force doctors to work for free, it won't meaningfully affect the cost. It's really the overhead costs that are so Byzantine that they can't be quantified properly. Hospitals have teams of coders, insurance companies have teams of counter-coders, physicians have to waste their time on calls with insurance companies, etc. "Medicare for all" would alleviate a _lot_ of this. It already works for the elder population, and pretty much every senior has health conditions. So extending it for everybody would result in savings. This is a no-brainer from a purely fiscal point of view. Another way to fix the mess is to lean on the free market side: prohibit employer-sponsored insurance. Completely. All the health insurance plans must be sold on the open market to everyone.
forshaper 2mo ago
I don't think a price transparency reform would be hard. Other than in terms of political will. We did go part of the way there a few years ago, though it's not common knowledge yet.
nullocator 2mo ago
> Hospitals have an operating margin of 2-5% Very curious where this comes from and how accurate it is. For example the $37 a provider charges for an Aspirin seems like more than 2-5% margin.
- bell-cot 2mo ago
  Hand-waving numerous details, but - That $37 isn't the price in the hospital's gift shop. It's n=1 pricing, hand delivered to your bedside by a nurse with a whole hierarchy of higher-level medical & admin staff behind her, and documented out the wazoo. Aspirin could be free & unlimited at the hospital pharmacy's receiving dock, and it wouldn't affect the @bedside price.
  - entropicdrifter 2mo ago
    ... and in other countries, medical administrative costs are far lower because they don't need to build entire divisions around correctly coding the same condition and procedure 11 different times before insurance approves it, because the insurance is universal and self-consistent by comparison to our private fractured mess.
    - bell-cot 2mo ago
      It ain't just the insurance crap that drives up medical overhead costs in the US. Our health care system is treated as a money farm by plenty of other industries and interests. All of which are willing to fight tooth and nail to preserve "their" fat slices of the obscenely bloated pie. And on top of that you've got synergies like the horrific cost of housing in the US - which drives up the cost of every employee, no matter how essential they might be to providing actual medical care.
- rayiner 2mo ago
  Audited financial statements of all kinds of hospitals, both non-profit and for-profit. Here’s data from Moodey’s a credit rating agency: https://www.chartis.com/insights/hospital-margins-trend-higher-looming-disruption-demands-strategic-decisions https://www.chartis.com/insights/hospital-margins-trend-high... (“This month, Moody’s credit rating agency released its annual not-for-profit and public healthcare median financial report for 2024, showing that overall hospital performance continues to improve. The median operating margin increased from 0.5% in 2023 to 1.5% in 2024.”). The $37 for an aspirin offsets huge costs elsewhere for (non-NP) nurses, receptionists, janitors, orderlies, etc., who can’t bill directly to medicare.
detourdog 2mo ago
If universal healthcare just made access simpler with less paperwork it would be a major improvement. The flipside to fraudulent billing is that people that need care are denied. The fraudulent billing was perpetrated by the insurer.
- tptacek 2mo ago
  No, fraudulent billing is the natural predator of insurance companies. You have this backwards.
  - detourdog 2mo ago
    I thought that is what I’m saying.
    - tptacek 2mo ago
      Or maybe I'm reading it backwards! Has been known to happen. :)
rlewkov 2mo ago
As the article said - it has not been peer reviewed
bluedino 2mo ago
> Hospitals have an operating margin of 2-5% I don't spend any healthcare money at the hospital. It's all all providers office, private clinic, etc. It costs $300 for my primary care doctor to see me for about 7 minutes. An assistant takes my blood pressure, he asks me a few questions about my habits and diet, and then I come back next year. If I actually need any services, I go to much more expensive specialist, or urgent care facility. A visit there is about $100 and then a couple bucks for whatever prescription they give me.
01284a7e 2mo ago
"Healthcare reform is hard." People tackle hard things for nothing, never mind billions in savings.
- halJordan 2mo ago
  Yes, but there's a difference between finding out whether P=NP and some of the brightest geniuses in the country actively opposing you.
alistairSH 2mo ago
Hospitals have an operating margin of 2-5% How does this work when many/most US hospitals operate as non-profits? Quick search shows the for-profits have operating margins nearly triple your figures. And the non-profits are beholden to the community to provide some level of "freebies" to maintain their status, right? IE, they're aren't really all operating on razor thin margins.
atmavatar 2mo ago
> Hospitals have an operating margin of 2-5% I'm curious where you got this figure, because it doesn't track with my own experience. I used to work for a place that worked closely with hospital clients (and prospective clients) to resolve billing issues with a particular EMR system, and we regularly discovered that a given hospital was losing hundreds of thousands to millions of dollars weekly due to missing charges. The problem was, so much money was sloshing around that the hospitals were virtually always unaware of the missing charges, and many CIOs were more interested in saving face by shutting down further discussion than in walking through the collected data, how to fix the charging issues, and even claw back some of the lost charges (which you can generally do up to several months after the fact).
- jaredklewis 2mo ago
  Not the parent, but here's one source: https://www.vizient.com/insights/reports/national-hospital-flash-report/december-2025-data https://www.vizient.com/insights/reports/national-hospital-f... There are many others as well. FWIW, your experience doesn't seem contradictory to the operating margin claims. Your experience seems to be that hospitals are run very inefficiently, implying that if they were run efficiently that their operating margins would be much higher than 2-5%. That may be the case, but that still means the Yale paper's claims don't make sense (unless they also propose some mechanism by which to suddenly force all hospitals to start operating efficiently). But I'm also skeptical of your claim that hospitals are leaving a huge amount of operating margin on the table. IME, very little can be explained by "everyone is stupid." Would I be surprised if a given hospital was run very inefficiently or if a given hospital had a particular poor CIO or administrator? Not in the slightest. Would I be surprised if ALL hospitals were run by idiots who were leaving 10% operating margin on the table? Yes, I would be.
  - atmavatar 2mo ago
    To be fair, my experience has been exclusively with hospitals running a specific EMR with a relatively new-ish (at the time) and difficult to configure billing system. Still, we were expecting to see shortfalls nearly an order of magnitude smaller than what we found. That the hospitals didn't seem to notice the problem, and upon being told of it, often pushed back against moving to fix the problem, is what gave the impression that they must be running on much larger margins than advertised.
scoofy 2mo ago
There is a ton of ideology baked into naive-level analysis of this stuff. I am constantly told how much less Europeans pay for better health outcomes and all I can think about was the obesity crisis I grew up around in Texas. Socializing healthcare isn’t going to get an huge portion of the population out of their cars and get them walking as a primary or secondary mode of transportation. Not when it’s 100° and the grocery store is five miles away. Americans, in no small part, have worse health outcomes because we have dramatically worse lifestyles. I support German-style universal healthcare, but I’m not going to pretend it will suddenly give us German health outcomes.
- tptacek 2mo ago
  Europeans do pay much less (though: for roughly the same outcomes --- probably the same outcomes if you control for wild SES variance across the US).
  - scoofy 2mo ago
    Right… my exact point is that it’s not a like-for-like comparison. Take Europeans, put them in Kansas. Fund their healthcare as though they were in Europe, and watch their health outcomes take a nosedive because the environment here is non-trivially worse for you health. Unless I’m wildly misunderstanding these studies, it makes sense that we would need to spend more for the same outcomes because we are starting from a more unhealthy position, so the same results require more resources. We need to at least be controlling for the 10%+ differences in obesity rates, and the enormous differences in UV index. That’s before even considering weekly exercise minimums that most European get when just walking to a bar.
    - tptacek 2mo ago
      I don't think there's a whole lot to understand in this study; it's pretty wildly extrapolated and its savings numbers come from spherical-cow projections of what single-payer would actually do (somehow, it would drastically cut pay to doctors without chasing them all out of the field). I think the important bit in all these discussions is that "universal health care" and "single payer" aren't synonyms. Single payer is one way to do universal, and most universal systems don't do it. But this article conflates the two.
ThrowawayTestr 2mo ago
Why is the United States the only country on Earth where free healthcare doesn't work?
- SpaceNoodled 2mo ago
  Good old American Exceptionalism.
- 6510 2mo ago
  People wouldn't be externalities if healthcare costs money. Next thing you know you would have to pay attention to the environment or god forbid the food. It would eat away the budget for overthrowing countries and bombing children. Watch them elect a democrat to do the bombing next round and a new republican after that. It sounds like a joke but it isn't funny.
- loeg 2mo ago
  The US' healthcare model is not unique, and almost no countries have zero-cost-to-consumer healthcare systems (and none of them are free -- they're just paid by taxpayers instead of consumers). "Free" healthcare is the exception rather than some kind of international norm you incorrectly make it out to be. The first step to reforming US healthcare is actually understanding it, and understanding some international designs. Lying about it doesn't help.
  - preg_match 2mo ago
    Not a single soul on earth thinks single payer healthcare is free. 8 billion people, not one of them thinks it. They mean “free to the consumer at time of service”, which it is. Nobody is lying, everyone agrees, it’s just you who doesn’t understand.
    - loeg 2mo ago
      > Not a single soul on earth thinks single payer healthcare is free. 8 billion people, not one of them thinks it. You are incredibly optimistic about a large swath of the population's understanding, unfortunately. > Nobody is lying There are plenty of people in this discussion making statements of fact that are false. Call it whatever you want.
Obscurity4340 2mo ago
What do you recommend?
MrSkelter 2mo ago
Healthcare reform isn’t actually hard. Every advanced country has done it bar the United States. In every case costs have gone down and outcomes have improved. You always build on what you have because you can’t pause healthcare for very obvious reasons. Hence a lot of different systems all with the same aim. Controlled costs and universal coverage. The idea the US is somehow different and cannot make the change is the result of propaganda and a mistaken belief that the current Us system is the worlds best despite its costs. Healthcare reform is easy and there is an ocean of prior art.
- tptacek 2mo ago
  Yeah, and they all generally get there by paying practitioners much less than the US does (by integer multiples). Single-payer, which this working paper equates with "universal coverage", is in fact not the norm among universal systems; besides using Medicare to ration the supply of practitioners, the original sin of our system is employer-based coverage, not payer structure. Health care is an absolutely massive industry (everywhere, not just in the United States), and slashing compensation in a massive industry by top-down fiat is in fact not an especially easy thing to do.
  - moregrist 2mo ago
    Funny how one of the arguments against Medicare in the 60s was that providers wouldn’t accept it. Turns out when you have the choice of accepting lower payment per patient for Medicare or having a lot fewer patients, you choose the lower payment per patient. I would expect the same situation here. Doctors would grumble, but no one would force them to accept patients on whatever “Medicare for all” would be called. Nothing other than market forces. A number of things would probably have to change, including the cost of medical school. But the system right now is expensive and essentially unsustainable. So change is inevitable.
    - nradov 2mo ago
      Nope. More and more providers are dropping out of Medicare, or imposing limits on the number of Medicare patients that they're willing to see. It's tough to sustain a financially viable medical practice on Medicare rates, especially for primary care in HCOL areas. Medicaid is even worse. There are a lot of patients who nominally have coverage but in practice are functionally uninsured because they can't find a local doctor to take them on.
tylervigen 2mo ago
I think for the math to work you have to consider the bigger bulk of work that could be eliminated by universal healthcare: the payer industry. Insurers, PBMs, and all the smaller sectors that support them. The utility provided to society is fairly low — basically, just selective claims denial. Any model that gets rid of these frees up a huge swath of capital and work from society, and can use that work elsewhere. Of course, that is easier said than done.
- jpalawaga 2mo ago
  Truly. Aetna, United Healthcare, Anthem, etc are examples of industry that does not need to exist, and exist only to serve the status quo. Each of those are companies worth billions of dollars that could be instead used to lower the individual cost of providing health insurance. As you say, this would of course be unsavory in some respects as those companies employ a lot of people. It's not a very economically productive industry though, the main output seems to be consuming patients' and doctors' time, causing financial anguish, and causing stress among people as to whether or not if their condition will be covered.
  - deleted 2mo ago
    [deleted]
  - trollbridge 2mo ago
    They do perform one useful service: forcing a hospital that tries to issue a $100,000 bill that should be $10,000 to reissue it, and not leave the patient saddled with a giant debt. (Medicaid & Medicare claims processors do the same thing. Medicaid claims processing is mostly handled by private, third-party insurers now, and seems to be able to do so more efficiently and cheaply than when it was being run directly by states; the savings is mostly in the area of catching fraud.)
    - stackskipton 2mo ago
      Companies do this because it's massive song and dance by everyone. Hospitals issue big bills to insurance companies knowing they will want a discount so there is plenty of wiggle room. Also, it's free marketing for insurance companies because people see 100k, see all discounts for their insurance and are happy it's only 10% of true cost. It's like car buying except with your healthcare. Medicare is much cheaper because they have fixed rates and hospitals know what to bill.
adgjlsfhk1 2mo ago
A lot of the reason hospitals have to charge so much is that they take massive losses on uninsured people in emergency rooms. Medicare for all means they don't have to treat anyone for free.
- mirzap 2mo ago
  They are not taking any losses; they just charge the regular price with a very tiny profit margin. US healthcare costs are heavily inflated. Insurance is a scam that lets the rich get richer. All insurance should be non-profit. We all contribute to the pool at a time when we don't need it so we can use the money when we do, not to make CEOs or stockholders rich. That is how an insurance pool should work. Any excess money at the end of the year should be moved to the pool for the next year, not as a bonus on CEOs' 100m+ salary.
  - Georgelemental 2mo ago
    No. Under EMTALA, hospitals are required to treat anyone who shows up to the ER regardless of ability to pay; this is an unfunded mandate.
  - gizmo686 2mo ago
    It doesn't matter what they charge if the patient doesn't pay it; which is what often happens with uninsured people showing up at the ER. > Any excess money at the end of the year should be moved to the pool for the next year, not as a bonus on CEOs' 100m+ salary Under the ACA, excess money in the pool must be rebated to policy holders. In practice, this worked for a few years, but eventually insurance companies ended up increasing cost in order to increase the absolute amount they were allowed to keep. Maybe this is still good (more claims approved), but it is counter productive to the goal of reducing healthcare costs.
    - nradov 2mo ago
      It often happens with insured people showing up at the ER as well. Many patients don't pay their bills, either because they can't afford it or are just deadbeats. As overall healthcare costs have increased, insurers and employers have shifted more costs to plan members through higher deductibles / co-pays / co-insurance. So hospitals end up with a lot more bad debt, and this in turn causes further price inflation.
abeppu 2mo ago
You can quibble with the specific projected savings, or the projected lives saved. But it kinda doesn't matter? If we can have net savings of half what this paper said, or a quarter, and still have more lives saved, that would still be a strong argument to do it. Somewhere there's a pareto-optimal frontier where one can't possibly save more lives without spending more, or spend less without more people having negative health outcomes ... and the question is whether universal health coverage would be a step towards that frontier (b/c we're all pretty sure we're far from the frontier today). And the fact that plenty of countries have both lower costs and better outcomes through such a system is highly suggestive that it is a more efficient policy regime. Maybe the big quibble is whether the American penchant for creating corporate givewaways to powerful organizations that lobby politicians would create an especially toxic public-private-partnership monopoly in which the biggest existing private healthcare networks are granted regional monopolies and set crazy prices (or some other dystopian warping of an initially reasonable idea) so costs actually balloon. I do think that would be a risk and so we need to be careful about the specifics of how we implement this.
TuringNYC 2mo ago
>> Medicare pays 50% less than private insurance. So doing this would require either layoffs, cutting salaries for doctors/nurses/etc, or both. This may well be the right decision for society as a whole--that's a big part of the debate here--but there's no free lunch. You arent considering 1. Hospitals eating the cost of the uninsured, which this would solve 2. Hospital spending tons on administrative duties fighting with insurers on coverage, which this would reduce
- nickff 2mo ago
  How would this change solve: "Hospitals eating the cost of the uninsured..."? Wouldn't it just transfer the cost from the hospitals to the universal coverage agency? This would make the financial picture even worse for the proposed system.
  - danlitt 2mo ago
    >>> Hospitals have an operating margin of 2-5%. Medicare pays 50% less than private insurance. The hospital can be paid less without reducing their margin if they can remove a cost from their balance sheet. It does not make the system cheaper overall, but it means the hospital does not have to bear those costs directly. They may not have to bear them at all, because hospitals are not the only things in the system.
  - bigcat12345678 2mo ago
    Think about corps merging to save cost on back office. Here is the same idea. With AI, it would even cut additional order of magnitude of cost.
  - cortesoft 2mo ago
    No, because that cost is included in the $300 billion increase in spending that is part of the calculation they do.
- brandonb 2mo ago
  Those are two real effects, but together they wouldn't compensate for the rate cuts. About 8% of the population is uninsured. The uninsured population skews younger, with less healthcare utilization (Medicare already covers everyone 65 and older). Another comment in this thread estimated billing overhead at 8.5%. Medicare for All would eliminate some, but not all of this, since Medicare is still a claims-based system. You would remove a lot of overhead around prior auths, which I agree is a good thing, but could be achieved with more focused legislation.
jmull 2mo ago
There’s essentially zero doubt that universal healthcare would save over $1T per year. How do we know? The experiment has been done multiple times, all over the world. In the worst case (Sweden), healthcare is a bit short of $5K per capita per year, or around $1.7T. We’ve actually got a nice margin to achieve $1T, even if we remain the worst. I agree health care reform is hard, though. We have a clear roadmap on how it can work a lot better. But what’s the political path forward? As someone who’s actually fiscally conservative, single-payer universal healthcare is an absolute no-brainer, but, ironically, the people who call themselves fiscal conservatives will fight it to the death (well, not that ironic — at this point we all understand that, in politics, what groups purport to believe and what they actually believe have little to do with each other).
NoMoreNicksLeft 2mo ago
>"fewer avoidable emergency department visits and hospitalizations" assumes greater insurance coverage leads to greater access to primary care. This is a hoot. There is an entire cohort of people who use the emergency room as their non-urgent clinic. This is not a small demographic, it must be at minimum tens of millions of people, if not going above the nine digit mark. They do this because their parents did it, and it's the only thing they know, and their parents did it because it's the only thing they knew, and they did it because their parents did the same. It is a culture that no amount of education and public service announcements will ever change. Heaping one perverse incentive after another on top of this mess won't change it either, but will almost certainly make things worse for everyone. >For "less fraudulent billing," a lot of people in the industry believe that Medicare has a large amount of undetected fraud. My grandpa when he was still alive would have one new fraud story with every visit to the doctor, and he wasn't in great shape towards the end, so this was too many to count, every year for the last few. Diabetic, they ordered him compression socks at one point... a dozen show up instead of the two pair that was ordered. He'd come home and wait for a bill in the mail, and a few days later would see itemization for tests and procedures he never underwent. Over and over and over. He was sharp, argumentative, and as far as I could tell, less confused than most his own age. His experience, I think, wasn't atypical.

RunSet 2mo ago

Even if universal health coverage lost money it would be better than the current system that is based on a "causing cancer is better for the GDP than curing it" mentality.

tptacek 2mo ago
The US has top-tier cancer survival-after-diagnosis outcomes. We spend too much to get there, and other countries in our cohort would "argue" that we get those numbers in part by diagnosing earlier and that our outcomes are broadly similar, but if you're going into these debates with "the US private health care system causes cancer deaths", that's a pretty rebuttable argument.
- Alex3917 2mo ago
  I think the parent comment was a reference to the famous “Economists must learn to subtract” commercial that AdBusters ran.
- vlabakje90 2mo ago
  That overlooks the 27 million uninsured Americans. Uninsured cancer patients are more likely to be diagnosed at a late stage, less likely to receive treatment, and have substantially higher mortality than insured patients.[1] They also have worse survival, even after accounting for cancer stage.[2] So excellent U.S. outcomes among those who access care don't rule out preventable deaths caused by barriers to accessing it. [1] https://pubmed.ncbi.nlm.nih.gov/25092774/ https://pubmed.ncbi.nlm.nih.gov/25092774/ [2] https://doi.org/10.3322/caac.21732 https://doi.org/10.3322/caac.21732
  - tptacek 2mo ago
    No, uninsured Americans are captured in those numbers.
  - s1artibartfast 2mo ago
    entirely beside the point. It is fine to look only at patients with insurance/ access to refute the claim that US doctors dont cure cancer so they can make more money.
- well_ackshually 2mo ago
  >The US has top-tier cancer survival-after-diagnosis outcomes. "Airplanes that get shot in the wing always survive" logic. People _do not get diagnosed and die_ because the US healthcare system is inaccessible to close to 50% of your population. A diagnosis easily reaches a few hundred dollars for the best cases (and several thousand if you need multiple tests/blood tests/operations like colonoscopies). And when you do get diagnosed, then you've just entered a world of having to pay hundreds of thousands of dollars. >we get those numbers in part by diagnosing earlier and that our outcomes are broadly similar lmao no you simply don't diagnose people and they just "die of natural conditions" early because they couldn't afford the treatment even if they were diagnosed.

onlypassingthru 2mo ago

> Hospitals have an operating margin of 2-5% There's no way a Chairman/CEO would ever reduce the operating margin by just giving themselves and their buddies a raise is there?

missedthecue 2mo ago
Are you saying that most hospitals have 50% profit margins, of which 90% are paid to the chairman leaving only a thin margin? That seems difficult to believe. They may have 4.2% margins knocked down to 4% by exec comp but I don't see that how that fact would change OPs point.
- onlypassingthru 2mo ago
  I'm saying if you think that administrative expenses (among others) can't be inflated for a profitable company, I would like to run your company and demonstrate what executive compensation can include: - Base salary - Bonuses - Stock options - Perquisites (perks) like company cars or private jet usage Just to be clear - I like my private jet(s) on call in case I want to get away for the weekend. TYSM
- wmorgan 2mo ago
  Yeah, if the hospital is part of an HMO, it wouldn't even be legal. The ACA sets a floor on medical loss ratio.
  - nradov 2mo ago
    [dead]

GuB-42 2mo ago

Yes, I consider big numbers like this to be red flags. The GDP of the US is $32T. Saving $1T will essentially make 3% of the US economy vanish. You don't vanish 3% of an economy without wide ranging repercussion, it would be a crisis similar in scale to that of 2008. With such numbers we are not "saving money", these are about rebuilding an entire economy, a painful process. So either the effect will be much smaller than that, or there will be riots.

missedthecue 2mo ago
Well it wouldn't "vanish". The $1T savings (if produced) that were once spent on healthcare would instead be spent on anything else.
- GuB-42 2mo ago
  Yes, it will, but think about the supply side. If people spend $1T less on health, health professionals will earn $1T less, it means, as GP said, layoffs, cutting salaries, etc... Not just doctors and nurses but also drug researchers, medical equipment manufacturers, etc... These people will now have to do the "something else" that will be spent on, let's say gardening. But you don't turn a nurse into a gardener just like that, that's the kind of "wide ranging repercussions" I mentioned, and the painful transition period where nurses become gardeners. "Nurse to gardener" is just a random example, it can be "drug researcher to petrochemist", and some transitions we may be happy to see, like "health insurance lawyer to burger flipper", but overall, many good people will suffer in transition, many powerful people too, which make such transition unlikely.
  - chermi 2mo ago
    I don't understand why we always pay attention to only the jobs side of decisions like this. Why is the main concern always preserving existing jobs? The extreme version of that is obviously silly. The savings is real and lowers prices, increasing social mobility and spending elsewhere. How many people are locked out of moving for a job that matches them better, or taking some training for a better job and so on just because of medical debt leaving them no flexibility? And if we could save that trillion by eliminating jobs, doesn't that kind of imply those jobs (or at least the system requiring them) were terrible allocation of human capital?

mempko 2mo ago

Yes, these cost savings would be a deflationary event. Most layoffs will come from insurance companies and administration necessary to satisfy them in hospitals. One reason hospitals have such low margins is many people simply can't pay. If you have a payment guarantee like a medicare for all system, this will increase the stability of hospitals. In fact likely bring back some hospitals in places that didn't make sense like rural areas, which have been struggling via hospital closures. If you are worried a low cost system will reduce doctors and hospitals per capita you don't need to, as countries that have universal healthcare often have more per capita. https://worldpopulationreview.com/country-rankings/doctors-per-capita-by-country https://worldpopulationreview.com/country-rankings/doctors-p...

well_ackshually 2mo ago

>Hospitals have an operating margin of 2-5%. I don't see you complaining that the US military has a low operating margin, so maybe we can just agree that some things are just normal expenses for a population. Which therefore leads to step 2: nationalize every single hospital. >cutting salaries for doctors/nurses/etc Considering that over 50% of the money that goes into healthcare is just siphoned off by middlemen, no, just getting rid of these means that your health workers do not have a worse salary. >But, we're actually in a primary care shortage. Because people do not even go see their GP since there's a chance it leads to life ruining expenses. > fewer residents are going into family medicine. Because they're going where money is. Remove that from the equation, and all you have is a public service with public servants. >a lot of people in the industry believe that Medicare has a large amount of undetected fraud. Aside from the fact that "people in the industry" have a financial interest in making you believe Medicare is a net negative, there's a great thing that comes from making healthcare a public service: there's no longer any fraud. And those "fraudulent" expenses you used to have that were costing you millions anyways have just had their costs cut in half. >Healthcare reform is hard. It's the easiest thing in the world when you have the amount of money the US does. Healthcare reform isn't a financial or infrastructure problem, it's a political one. Cuba has a working healthcare system despite being under US embargo. Botswana has a working healthcare system. Rwanda has a working healthcare system. Azerbaijan, Sri Lanka, Turkey, Serbia, and the list goes on. Once you grow the balls to nationalize everything, even a first year economy student could make a plan that works.

nradov 2mo ago
Every country with nationalized healthcare systems has lower wages for clinicians. So the notion that this wouldn't lower salaries is just ludicrous. That might be an acceptable trade-off but let's not pretend it doesn't exist. In practice what we would see under a single-payer system is that many doctors would opt out and shift to a cash payment model. So the shortage of doctors would get even worse for patients who can't afford to pay out of pocket.
- zipy124 2mo ago
  Those countries also just have lower salaries for all sectors. The USA is just exceptional in salaries for many professionals. Just look at software engineers pay in Europe Vs US....

thatfrenchguy 2mo ago

> Take "Medicare-level payments to providers". Hospitals have an operating margin of 2-5%. Medicare pays 50% less than private insurance. So doing this would require either layoffs, cutting salaries for doctors/nurses/etc, or both. This may well be the right decision for society as a whole--that's a big part of the debate here--but there's no free lunch. I mean, admin costs at hospitals are ~25%, around half of that is directly linked to billing. Administrative costs in the US (because of course you have the same costs on the other side in the insurance side) are around 30% of cost in general, which is pretty insane. The lack of regulation around pricing transparency and generally the lack of one-price-per-code (which the government uses to its "advantage" to get lower medicaid/medicare rates for sure) is what has caused this stupid arms race on both sides.

tptacek 2mo ago
Billing and insurance ("BIR") is reported at around 8.5% of revenue --- admin isn't just BIR, as you note. But replacing private insurance with Medicare doesn't drive BIR to zero; Medicare is also a claims-based system. Estimates are that you'd cut BIR by somewhere around 30-40% (of 8.5%). Most of the savings in these kinds of reports simply comes from paying doctors less (or delivering fewer procedures, which is also a problem we have.)
- cyberax 2mo ago
  Physician/nurse salary is not the major driver of the cost of healthcare. It's around 12-15% spending, depending on the methodology. Even if you force doctors to work for free, it won't meaningfully affect the cost. It's really the overhead costs that are so Byzantine that they can't be quantified properly. Hospitals have teams of coders, insurance companies have teams of counter-coders, physicians have to waste their time on calls with insurance companies, etc. "Medicare for all" would alleviate a _lot_ of this. It already works for the elder population, and pretty much every senior has health conditions. So extending it for everybody would result in savings. This is a no-brainer from a purely fiscal point of view. Another way to fix the mess is to lean on the free market side: prohibit employer-sponsored insurance. Completely. All the health insurance plans must be sold on the open market to everyone.

forshaper 2mo ago

I don't think a price transparency reform would be hard. Other than in terms of political will. We did go part of the way there a few years ago, though it's not common knowledge yet.

nullocator 2mo ago

> Hospitals have an operating margin of 2-5% Very curious where this comes from and how accurate it is. For example the $37 a provider charges for an Aspirin seems like more than 2-5% margin.

bell-cot 2mo ago
Hand-waving numerous details, but - That $37 isn't the price in the hospital's gift shop. It's n=1 pricing, hand delivered to your bedside by a nurse with a whole hierarchy of higher-level medical & admin staff behind her, and documented out the wazoo. Aspirin could be free & unlimited at the hospital pharmacy's receiving dock, and it wouldn't affect the @bedside price.
- entropicdrifter 2mo ago
  ... and in other countries, medical administrative costs are far lower because they don't need to build entire divisions around correctly coding the same condition and procedure 11 different times before insurance approves it, because the insurance is universal and self-consistent by comparison to our private fractured mess.
  - bell-cot 2mo ago
    It ain't just the insurance crap that drives up medical overhead costs in the US. Our health care system is treated as a money farm by plenty of other industries and interests. All of which are willing to fight tooth and nail to preserve "their" fat slices of the obscenely bloated pie. And on top of that you've got synergies like the horrific cost of housing in the US - which drives up the cost of every employee, no matter how essential they might be to providing actual medical care.
rayiner 2mo ago
Audited financial statements of all kinds of hospitals, both non-profit and for-profit. Here’s data from Moodey’s a credit rating agency: https://www.chartis.com/insights/hospital-margins-trend-higher-looming-disruption-demands-strategic-decisions https://www.chartis.com/insights/hospital-margins-trend-high... (“This month, Moody’s credit rating agency released its annual not-for-profit and public healthcare median financial report for 2024, showing that overall hospital performance continues to improve. The median operating margin increased from 0.5% in 2023 to 1.5% in 2024.”). The $37 for an aspirin offsets huge costs elsewhere for (non-NP) nurses, receptionists, janitors, orderlies, etc., who can’t bill directly to medicare.

detourdog 2mo ago

If universal healthcare just made access simpler with less paperwork it would be a major improvement. The flipside to fraudulent billing is that people that need care are denied. The fraudulent billing was perpetrated by the insurer.

tptacek 2mo ago
No, fraudulent billing is the natural predator of insurance companies. You have this backwards.
- detourdog 2mo ago
  I thought that is what I’m saying.
  - tptacek 2mo ago
    Or maybe I'm reading it backwards! Has been known to happen. :)

rlewkov 2mo ago

As the article said - it has not been peer reviewed

bluedino 2mo ago

> Hospitals have an operating margin of 2-5% I don't spend any healthcare money at the hospital. It's all all providers office, private clinic, etc. It costs $300 for my primary care doctor to see me for about 7 minutes. An assistant takes my blood pressure, he asks me a few questions about my habits and diet, and then I come back next year. If I actually need any services, I go to much more expensive specialist, or urgent care facility. A visit there is about $100 and then a couple bucks for whatever prescription they give me.

01284a7e 2mo ago

"Healthcare reform is hard." People tackle hard things for nothing, never mind billions in savings.

halJordan 2mo ago
Yes, but there's a difference between finding out whether P=NP and some of the brightest geniuses in the country actively opposing you.

alistairSH 2mo ago

Hospitals have an operating margin of 2-5% How does this work when many/most US hospitals operate as non-profits? Quick search shows the for-profits have operating margins nearly triple your figures. And the non-profits are beholden to the community to provide some level of "freebies" to maintain their status, right? IE, they're aren't really all operating on razor thin margins.

atmavatar 2mo ago

> Hospitals have an operating margin of 2-5% I'm curious where you got this figure, because it doesn't track with my own experience. I used to work for a place that worked closely with hospital clients (and prospective clients) to resolve billing issues with a particular EMR system, and we regularly discovered that a given hospital was losing hundreds of thousands to millions of dollars weekly due to missing charges. The problem was, so much money was sloshing around that the hospitals were virtually always unaware of the missing charges, and many CIOs were more interested in saving face by shutting down further discussion than in walking through the collected data, how to fix the charging issues, and even claw back some of the lost charges (which you can generally do up to several months after the fact).

jaredklewis 2mo ago
Not the parent, but here's one source: https://www.vizient.com/insights/reports/national-hospital-flash-report/december-2025-data https://www.vizient.com/insights/reports/national-hospital-f... There are many others as well. FWIW, your experience doesn't seem contradictory to the operating margin claims. Your experience seems to be that hospitals are run very inefficiently, implying that if they were run efficiently that their operating margins would be much higher than 2-5%. That may be the case, but that still means the Yale paper's claims don't make sense (unless they also propose some mechanism by which to suddenly force all hospitals to start operating efficiently). But I'm also skeptical of your claim that hospitals are leaving a huge amount of operating margin on the table. IME, very little can be explained by "everyone is stupid." Would I be surprised if a given hospital was run very inefficiently or if a given hospital had a particular poor CIO or administrator? Not in the slightest. Would I be surprised if ALL hospitals were run by idiots who were leaving 10% operating margin on the table? Yes, I would be.
- atmavatar 2mo ago
  To be fair, my experience has been exclusively with hospitals running a specific EMR with a relatively new-ish (at the time) and difficult to configure billing system. Still, we were expecting to see shortfalls nearly an order of magnitude smaller than what we found. That the hospitals didn't seem to notice the problem, and upon being told of it, often pushed back against moving to fix the problem, is what gave the impression that they must be running on much larger margins than advertised.

scoofy 2mo ago

There is a ton of ideology baked into naive-level analysis of this stuff. I am constantly told how much less Europeans pay for better health outcomes and all I can think about was the obesity crisis I grew up around in Texas. Socializing healthcare isn’t going to get an huge portion of the population out of their cars and get them walking as a primary or secondary mode of transportation. Not when it’s 100° and the grocery store is five miles away. Americans, in no small part, have worse health outcomes because we have dramatically worse lifestyles. I support German-style universal healthcare, but I’m not going to pretend it will suddenly give us German health outcomes.

tptacek 2mo ago
Europeans do pay much less (though: for roughly the same outcomes --- probably the same outcomes if you control for wild SES variance across the US).
- scoofy 2mo ago
  Right… my exact point is that it’s not a like-for-like comparison. Take Europeans, put them in Kansas. Fund their healthcare as though they were in Europe, and watch their health outcomes take a nosedive because the environment here is non-trivially worse for you health. Unless I’m wildly misunderstanding these studies, it makes sense that we would need to spend more for the same outcomes because we are starting from a more unhealthy position, so the same results require more resources. We need to at least be controlling for the 10%+ differences in obesity rates, and the enormous differences in UV index. That’s before even considering weekly exercise minimums that most European get when just walking to a bar.
  - tptacek 2mo ago
    I don't think there's a whole lot to understand in this study; it's pretty wildly extrapolated and its savings numbers come from spherical-cow projections of what single-payer would actually do (somehow, it would drastically cut pay to doctors without chasing them all out of the field). I think the important bit in all these discussions is that "universal health care" and "single payer" aren't synonyms. Single payer is one way to do universal, and most universal systems don't do it. But this article conflates the two.

ThrowawayTestr 2mo ago

Why is the United States the only country on Earth where free healthcare doesn't work?

SpaceNoodled 2mo ago
Good old American Exceptionalism.
6510 2mo ago
People wouldn't be externalities if healthcare costs money. Next thing you know you would have to pay attention to the environment or god forbid the food. It would eat away the budget for overthrowing countries and bombing children. Watch them elect a democrat to do the bombing next round and a new republican after that. It sounds like a joke but it isn't funny.
loeg 2mo ago
The US' healthcare model is not unique, and almost no countries have zero-cost-to-consumer healthcare systems (and none of them are free -- they're just paid by taxpayers instead of consumers). "Free" healthcare is the exception rather than some kind of international norm you incorrectly make it out to be. The first step to reforming US healthcare is actually understanding it, and understanding some international designs. Lying about it doesn't help.
- preg_match 2mo ago
  Not a single soul on earth thinks single payer healthcare is free. 8 billion people, not one of them thinks it. They mean “free to the consumer at time of service”, which it is. Nobody is lying, everyone agrees, it’s just you who doesn’t understand.
  - loeg 2mo ago
    > Not a single soul on earth thinks single payer healthcare is free. 8 billion people, not one of them thinks it. You are incredibly optimistic about a large swath of the population's understanding, unfortunately. > Nobody is lying There are plenty of people in this discussion making statements of fact that are false. Call it whatever you want.

Obscurity4340 2mo ago

What do you recommend?

MrSkelter 2mo ago

Healthcare reform isn’t actually hard. Every advanced country has done it bar the United States. In every case costs have gone down and outcomes have improved. You always build on what you have because you can’t pause healthcare for very obvious reasons. Hence a lot of different systems all with the same aim. Controlled costs and universal coverage. The idea the US is somehow different and cannot make the change is the result of propaganda and a mistaken belief that the current Us system is the worlds best despite its costs. Healthcare reform is easy and there is an ocean of prior art.

tptacek 2mo ago
Yeah, and they all generally get there by paying practitioners much less than the US does (by integer multiples). Single-payer, which this working paper equates with "universal coverage", is in fact not the norm among universal systems; besides using Medicare to ration the supply of practitioners, the original sin of our system is employer-based coverage, not payer structure. Health care is an absolutely massive industry (everywhere, not just in the United States), and slashing compensation in a massive industry by top-down fiat is in fact not an especially easy thing to do.
- moregrist 2mo ago
  Funny how one of the arguments against Medicare in the 60s was that providers wouldn’t accept it. Turns out when you have the choice of accepting lower payment per patient for Medicare or having a lot fewer patients, you choose the lower payment per patient. I would expect the same situation here. Doctors would grumble, but no one would force them to accept patients on whatever “Medicare for all” would be called. Nothing other than market forces. A number of things would probably have to change, including the cost of medical school. But the system right now is expensive and essentially unsustainable. So change is inevitable.
  - nradov 2mo ago
    Nope. More and more providers are dropping out of Medicare, or imposing limits on the number of Medicare patients that they're willing to see. It's tough to sustain a financially viable medical practice on Medicare rates, especially for primary care in HCOL areas. Medicaid is even worse. There are a lot of patients who nominally have coverage but in practice are functionally uninsured because they can't find a local doctor to take them on.

tylervigen 2mo ago

I think for the math to work you have to consider the bigger bulk of work that could be eliminated by universal healthcare: the payer industry. Insurers, PBMs, and all the smaller sectors that support them. The utility provided to society is fairly low — basically, just selective claims denial. Any model that gets rid of these frees up a huge swath of capital and work from society, and can use that work elsewhere. Of course, that is easier said than done.

jpalawaga 2mo ago
Truly. Aetna, United Healthcare, Anthem, etc are examples of industry that does not need to exist, and exist only to serve the status quo. Each of those are companies worth billions of dollars that could be instead used to lower the individual cost of providing health insurance. As you say, this would of course be unsavory in some respects as those companies employ a lot of people. It's not a very economically productive industry though, the main output seems to be consuming patients' and doctors' time, causing financial anguish, and causing stress among people as to whether or not if their condition will be covered.
- deleted 2mo ago
  [deleted]
- trollbridge 2mo ago
  They do perform one useful service: forcing a hospital that tries to issue a $100,000 bill that should be $10,000 to reissue it, and not leave the patient saddled with a giant debt. (Medicaid & Medicare claims processors do the same thing. Medicaid claims processing is mostly handled by private, third-party insurers now, and seems to be able to do so more efficiently and cheaply than when it was being run directly by states; the savings is mostly in the area of catching fraud.)
  - stackskipton 2mo ago
    Companies do this because it's massive song and dance by everyone. Hospitals issue big bills to insurance companies knowing they will want a discount so there is plenty of wiggle room. Also, it's free marketing for insurance companies because people see 100k, see all discounts for their insurance and are happy it's only 10% of true cost. It's like car buying except with your healthcare. Medicare is much cheaper because they have fixed rates and hospitals know what to bill.

adgjlsfhk1 2mo ago

A lot of the reason hospitals have to charge so much is that they take massive losses on uninsured people in emergency rooms. Medicare for all means they don't have to treat anyone for free.

mirzap 2mo ago
They are not taking any losses; they just charge the regular price with a very tiny profit margin. US healthcare costs are heavily inflated. Insurance is a scam that lets the rich get richer. All insurance should be non-profit. We all contribute to the pool at a time when we don't need it so we can use the money when we do, not to make CEOs or stockholders rich. That is how an insurance pool should work. Any excess money at the end of the year should be moved to the pool for the next year, not as a bonus on CEOs' 100m+ salary.
- Georgelemental 2mo ago
  No. Under EMTALA, hospitals are required to treat anyone who shows up to the ER regardless of ability to pay; this is an unfunded mandate.
- gizmo686 2mo ago
  It doesn't matter what they charge if the patient doesn't pay it; which is what often happens with uninsured people showing up at the ER. > Any excess money at the end of the year should be moved to the pool for the next year, not as a bonus on CEOs' 100m+ salary Under the ACA, excess money in the pool must be rebated to policy holders. In practice, this worked for a few years, but eventually insurance companies ended up increasing cost in order to increase the absolute amount they were allowed to keep. Maybe this is still good (more claims approved), but it is counter productive to the goal of reducing healthcare costs.
  - nradov 2mo ago
    It often happens with insured people showing up at the ER as well. Many patients don't pay their bills, either because they can't afford it or are just deadbeats. As overall healthcare costs have increased, insurers and employers have shifted more costs to plan members through higher deductibles / co-pays / co-insurance. So hospitals end up with a lot more bad debt, and this in turn causes further price inflation.

abeppu 2mo ago

You can quibble with the specific projected savings, or the projected lives saved. But it kinda doesn't matter? If we can have net savings of half what this paper said, or a quarter, and still have more lives saved, that would still be a strong argument to do it. Somewhere there's a pareto-optimal frontier where one can't possibly save more lives without spending more, or spend less without more people having negative health outcomes ... and the question is whether universal health coverage would be a step towards that frontier (b/c we're all pretty sure we're far from the frontier today). And the fact that plenty of countries have both lower costs and better outcomes through such a system is highly suggestive that it is a more efficient policy regime. Maybe the big quibble is whether the American penchant for creating corporate givewaways to powerful organizations that lobby politicians would create an especially toxic public-private-partnership monopoly in which the biggest existing private healthcare networks are granted regional monopolies and set crazy prices (or some other dystopian warping of an initially reasonable idea) so costs actually balloon. I do think that would be a risk and so we need to be careful about the specifics of how we implement this.

TuringNYC 2mo ago

>> Medicare pays 50% less than private insurance. So doing this would require either layoffs, cutting salaries for doctors/nurses/etc, or both. This may well be the right decision for society as a whole--that's a big part of the debate here--but there's no free lunch. You arent considering 1. Hospitals eating the cost of the uninsured, which this would solve 2. Hospital spending tons on administrative duties fighting with insurers on coverage, which this would reduce

nickff 2mo ago
How would this change solve: "Hospitals eating the cost of the uninsured..."? Wouldn't it just transfer the cost from the hospitals to the universal coverage agency? This would make the financial picture even worse for the proposed system.
- danlitt 2mo ago
  >>> Hospitals have an operating margin of 2-5%. Medicare pays 50% less than private insurance. The hospital can be paid less without reducing their margin if they can remove a cost from their balance sheet. It does not make the system cheaper overall, but it means the hospital does not have to bear those costs directly. They may not have to bear them at all, because hospitals are not the only things in the system.
- bigcat12345678 2mo ago
  Think about corps merging to save cost on back office. Here is the same idea. With AI, it would even cut additional order of magnitude of cost.
- cortesoft 2mo ago
  No, because that cost is included in the $300 billion increase in spending that is part of the calculation they do.
brandonb 2mo ago
Those are two real effects, but together they wouldn't compensate for the rate cuts. About 8% of the population is uninsured. The uninsured population skews younger, with less healthcare utilization (Medicare already covers everyone 65 and older). Another comment in this thread estimated billing overhead at 8.5%. Medicare for All would eliminate some, but not all of this, since Medicare is still a claims-based system. You would remove a lot of overhead around prior auths, which I agree is a good thing, but could be achieved with more focused legislation.

jmull 2mo ago

There’s essentially zero doubt that universal healthcare would save over $1T per year. How do we know? The experiment has been done multiple times, all over the world. In the worst case (Sweden), healthcare is a bit short of $5K per capita per year, or around $1.7T. We’ve actually got a nice margin to achieve $1T, even if we remain the worst. I agree health care reform is hard, though. We have a clear roadmap on how it can work a lot better. But what’s the political path forward? As someone who’s actually fiscally conservative, single-payer universal healthcare is an absolute no-brainer, but, ironically, the people who call themselves fiscal conservatives will fight it to the death (well, not that ironic — at this point we all understand that, in politics, what groups purport to believe and what they actually believe have little to do with each other).

NoMoreNicksLeft 2mo ago

>"fewer avoidable emergency department visits and hospitalizations" assumes greater insurance coverage leads to greater access to primary care. This is a hoot. There is an entire cohort of people who use the emergency room as their non-urgent clinic. This is not a small demographic, it must be at minimum tens of millions of people, if not going above the nine digit mark. They do this because their parents did it, and it's the only thing they know, and their parents did it because it's the only thing they knew, and they did it because their parents did the same. It is a culture that no amount of education and public service announcements will ever change. Heaping one perverse incentive after another on top of this mess won't change it either, but will almost certainly make things worse for everyone. >For "less fraudulent billing," a lot of people in the industry believe that Medicare has a large amount of undetected fraud. My grandpa when he was still alive would have one new fraud story with every visit to the doctor, and he wasn't in great shape towards the end, so this was too many to count, every year for the last few. Diabetic, they ordered him compression socks at one point... a dozen show up instead of the two pair that was ordered. He'd come home and wait for a bill in the mail, and a few days later would see itemization for tests and procedures he never underwent. Over and over and over. He was sharp, argumentative, and as far as I could tell, less confused than most his own age. His experience, I think, wasn't atypical.