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Of course our prices are ridiculous. We have a horrible hybrid government-market system that has completely divorced consumers from providers in terms of prici

by crusso 14y ago

Of course our prices are ridiculous. We have a horrible hybrid government-market system that has completely divorced consumers from providers in terms of pricing. Consumers buy flat rate plans through their employers. They make use of services without much thought or knowledge of costs since they don't see bills. Doctors over-test and over-treat because it makes them money, patients don't protest the cost, and they're covered better legally. Insurance companies don't really care because they pass on their costs by increasing premiums. Employers don't care since they write off the benefit to their employees and pass on much of the costs through premiums. The entire mess is a runaway train with no brakes.

deleted 14y ago
[deleted]
tptacek 14y ago
I guess I'm not seeing where the government enters the picture here. Is it just the tax deductibility of group health insurance? If so, can you explain how the market would be structurally different if those premiums were taxed? For perspective, note that premiums have skyrocketed in the last 10 years, yet employers that offered group health insurance tend to still offer it.
- rdtsc 14y ago
  > I guess I'm not seeing where the government enters the picture here. Government half-assed it. How? By providing neither complete liberalization and deregulation (a libertarian dream I hear often -- why can't my health insurance be like my car insurance...etc..etc), nor fixing prices (a la Japan) or providing free a healthcare alternative. It is the worse of both worlds it seems. All of the recent health care reforms are pretty much bullshit from what I can see if they dropped the single payer option. Without controlling the costs. Yeah I can insure my 26 year old children but my premiums have gone up 30%+ in last 2 years. It is like they are trying to plug holes in a hunk of Swiss cheese. "But we'll mandate them to give free preventive care checkups, we got them now! Everyone cheers. HMOs turns around, laugh and raise premiums by 30%.
  - tptacek 14y ago
    It feels like, at least until guaranteed issue kicks in, the government has no-assed this problem, except for Medicare, which is by many accounts tremendously efficient and effective.
    - rdtsc 14y ago
      They are heavily regulating it. If you ask some people they would say "everything is screwed up because govt is regulating it" others say "everything is screwed up because they are not involved enough with it". I lean towards the latter, but I can buy the argument from the other side as well perhaps.
      - kalleboo 14y ago
        When there's a battle of opinions between "they're regulating too much" and "they're regulating to little", my presumption is the actual answer is "they're regulating it in the wrong way".
    - bradleyjg 14y ago
      I fail to see how Medicare can be considered effective and efficient when it costs about as much per capita as what other countries pay to cover everyone, it covers less than 1/6 of the population, and only covers about half the total health care costs of the covered population. It may be better than the private US healthcare system, but that's not saying much.
      - wtallis 14y ago
        Medicare has to do business with US providers, so of course it's still going to be more expensive than in a civilized country. According to your numbers, the tax burden relative to the level of service is at most about 12 times worse than other countries, though the fact that Medicare covers the people who most need expensive care means it's actually much closer to international costs. It's certainly effective in that it does provide a lot of care for a lot of people, and it's about as efficient as it can be without completely revamping the supply chain it depends on.
- SoftwareMaven 14y ago
  When the government offered tax benefits for corporate plans, it shifted the dynamics from individual plans to said corporate plans. When employers started offering plans, it shifted the way people think about health insurance. The way it existed, pre-tax-benefits, was much more like life insurance: you paid your way for daily expenses but had catastrophic coverage. After the tax benefits, people began treating it more like "nearly free healthcare". Due to the change of insurance type, instead of knowing how much a doctor's visit costs, the insurance "takes care of it". Finally, by having the company hide 60-80% of the cost of the premiums and averaging the costs out across the entire company, people don't know how much things are really changing on a year-to-year basis, even though they are, in all actuality, paying the entire cost of the premium through lower salaries.
Retric 14y ago
The sub 65 population is not really that high a percentage of overall healthcare costs in the US. And the US government actually covers over 50% of all healthcare costs in the country, it's just that young people end up subsidizing elderly care in a vast number of direct and indirect ways. Medicare and Heath insurance are obvious, but also many end of life bills are simply unpaid which causes hospitals to increase there billed costs etc.
- Joeri 14y ago
  And how is this different in other countries?
bostonpete 14y ago
> Doctors over-test and over-treat because it makes them money I believe at least part of the reason is also that it reduces their chances of getting sued.
Retric 14y ago
The average doctor in the US spends 50% of his time on bill collection issues of one type or another and a significant percentage of his income on malpractice insurance. Assuming 6 patents an hour * 10$ a patent * 40 hour weeks * 48 weeks a year = 192,000$. Say 50% overhead and that's 96k / year in Argentina. Drop that to 3 patents an hour and add in ~4x cost of living, rent's cheap cars are less so, and your around 200k / year which is close to the US equivelent. Now, let's swap that around in the US and say 40$ or ~30$ in Canada a visit should be about right for 10-25 minutes with a doctor assuming a decent heath care system. Except most offices have more people doing medical billing than doctors and doctors still spend a lot of time on insurance related tasks and your quickly into 100+$ a visit.

by crusso 14y ago

deleted 14y ago

[deleted]

tptacek 14y ago

I guess I'm not seeing where the government enters the picture here. Is it just the tax deductibility of group health insurance? If so, can you explain how the market would be structurally different if those premiums were taxed? For perspective, note that premiums have skyrocketed in the last 10 years, yet employers that offered group health insurance tend to still offer it.

rdtsc 14y ago
> I guess I'm not seeing where the government enters the picture here. Government half-assed it. How? By providing neither complete liberalization and deregulation (a libertarian dream I hear often -- why can't my health insurance be like my car insurance...etc..etc), nor fixing prices (a la Japan) or providing free a healthcare alternative. It is the worse of both worlds it seems. All of the recent health care reforms are pretty much bullshit from what I can see if they dropped the single payer option. Without controlling the costs. Yeah I can insure my 26 year old children but my premiums have gone up 30%+ in last 2 years. It is like they are trying to plug holes in a hunk of Swiss cheese. "But we'll mandate them to give free preventive care checkups, we got them now! Everyone cheers. HMOs turns around, laugh and raise premiums by 30%.
- tptacek 14y ago
  It feels like, at least until guaranteed issue kicks in, the government has no-assed this problem, except for Medicare, which is by many accounts tremendously efficient and effective.
  - rdtsc 14y ago
    They are heavily regulating it. If you ask some people they would say "everything is screwed up because govt is regulating it" others say "everything is screwed up because they are not involved enough with it". I lean towards the latter, but I can buy the argument from the other side as well perhaps.
    - kalleboo 14y ago
      When there's a battle of opinions between "they're regulating too much" and "they're regulating to little", my presumption is the actual answer is "they're regulating it in the wrong way".
  - bradleyjg 14y ago
    I fail to see how Medicare can be considered effective and efficient when it costs about as much per capita as what other countries pay to cover everyone, it covers less than 1/6 of the population, and only covers about half the total health care costs of the covered population. It may be better than the private US healthcare system, but that's not saying much.
    - wtallis 14y ago
      Medicare has to do business with US providers, so of course it's still going to be more expensive than in a civilized country. According to your numbers, the tax burden relative to the level of service is at most about 12 times worse than other countries, though the fact that Medicare covers the people who most need expensive care means it's actually much closer to international costs. It's certainly effective in that it does provide a lot of care for a lot of people, and it's about as efficient as it can be without completely revamping the supply chain it depends on.
SoftwareMaven 14y ago
When the government offered tax benefits for corporate plans, it shifted the dynamics from individual plans to said corporate plans. When employers started offering plans, it shifted the way people think about health insurance. The way it existed, pre-tax-benefits, was much more like life insurance: you paid your way for daily expenses but had catastrophic coverage. After the tax benefits, people began treating it more like "nearly free healthcare". Due to the change of insurance type, instead of knowing how much a doctor's visit costs, the insurance "takes care of it". Finally, by having the company hide 60-80% of the cost of the premiums and averaging the costs out across the entire company, people don't know how much things are really changing on a year-to-year basis, even though they are, in all actuality, paying the entire cost of the premium through lower salaries.

Retric 14y ago

The sub 65 population is not really that high a percentage of overall healthcare costs in the US. And the US government actually covers over 50% of all healthcare costs in the country, it's just that young people end up subsidizing elderly care in a vast number of direct and indirect ways. Medicare and Heath insurance are obvious, but also many end of life bills are simply unpaid which causes hospitals to increase there billed costs etc.

Joeri 14y ago
And how is this different in other countries?

bostonpete 14y ago

> Doctors over-test and over-treat because it makes them money I believe at least part of the reason is also that it reduces their chances of getting sued.

Retric 14y ago

The average doctor in the US spends 50% of his time on bill collection issues of one type or another and a significant percentage of his income on malpractice insurance. Assuming 6 patents an hour * 10$ a patent * 40 hour weeks * 48 weeks a year = 192,000$. Say 50% overhead and that's 96k / year in Argentina. Drop that to 3 patents an hour and add in ~4x cost of living, rent's cheap cars are less so, and your around 200k / year which is close to the US equivelent. Now, let's swap that around in the US and say 40$ or ~30$ in Canada a visit should be about right for 10-25 minutes with a doctor assuming a decent heath care system. Except most offices have more people doing medical billing than doctors and doctors still spend a lot of time on insurance related tasks and your quickly into 100+$ a visit.