Frank discussion about healthcare costs

I'm tired of reading the partisan crap lines from both sides. "It's the greedy insurance companies". "It's big pharma". "We just need single payer and it'll be cheaper." It annoys the crap out of me that some of the biggest drivers of healthcare costs are ignored. I'm going to be brief, and number my points.

1. End of life. 28% of medical care costs goes to people in the last six months of their life. When the ACA was being debated, there was talk of "death panels" in single payer - there aren't any "death panels", no one calls them that, but the idea is plain and accurate. One of the main ways that single payer cuts costs is by removing those incredibly expensive end of life costs which, I say again, account for 28% of medical care costs just in the last 6 months of people's lives.
2. Licensing. We don't let just anyone be a doctor here - we're actually quite strict about it. You need a bachelor's degree (4 years), you need medical school (4 years), and you need a residency (4+ years, with few exceptions), with an average length of 14 years. In addition to that, we don't have hidden costs - training doctors is expensive, and that has to translate to higher incomes - in many countries doctors education is subsidized, so the expense goes into a different category (education) and is hidden.
3. Patents. We have the strongest patent laws in the world. Our strong intellectual property protection drives innovation - we produce by a far a majority of the world's medical innovations, with less than 5% of its population. This medical innovation has costs, and it gets passed on to the consumer. Part of the problem is that other countries don't have our strict ip laws, which means the extra cost of innovation is born here. Many other countries leach off our IP development. Heard about that expensive Eppie Pen? That's only possible due to stringent patent laws.
4. Limited competition. This is not a major driver nationally, but in some limited areas can be a major factor. It's one thing Republicans have been harping on, letting people buy across state lines. This would increase competition, but the real competition would be regulatory (and that's why Democrats opposed it). Each state has its own guidelines and regulations - what the rule would do is allow a consumer in NY to be able to buy insurance from an AZ insurer according to AZ guidelines. This increased competition would lower costs a bit, but it's no silver bullet. The real benefit, excluding flexibility of consumer choice and looking at reduction in cost *for the same benefit*, would be marginal.

 

Excellent points.

I'm not sure why politicians seem unable to focus their attention on the actual problem. Steven Brill did a nice job of summarizing the health care cost problems in his Bitter Pill write-up in Time Magazine back in March of 2013 (and his subsequent follow up article some time later). So it's not like we don't know what it is we're trying to fix.

 

Good subject!

My 2 cents:

1. End of life: This is certainly a problem. Often, life is extended beyond of what is reasonable, no matter what the suffering of the patient is. However, there is no good answer. At the end, it should come down to the judgement of the doctor, but family members often push for further care because hope dies last. When my mother died at the age of 86 and years of Alzheimers (she was unresponsive at the time), I had to decide whether to call the ambulance. I almost did, but before I did tried to reach my sister, who was out of town, to talk about the decision. During the 15 minutes it took for my calls, my mother already passed away. Now, had I called the ambulance right away, they would have taken her to the hospital and may have been able to prolong her life for maybe a week or month, at tremendous cost and most likely little benefit to her. So, I tell myself that what happened was okay, but I will second guess my indecision for the rest of my life, wondering whether I responded the correct way. End of life decisions are tough and mostly are governed by guilt, not what is best for the patient.

2. The AMA is powerful in restricting the number of doctors. That limits competition and allows doctors to command the high salaries they have.

3. I agree with strong patent laws being a good thing. Of course, they increase cost, especially in the pharmaceutical market.

4. I agree with you. I believe the benefits of competition in the insurance market are vastly exaggerated. For example, your hypothetical case between NY and AZ: There is a reason why the AZ insurance company may be cheaper: Because they cover less since regulations are weaker.

Let me add my own point: I believe that health insurance is becoming less and less an actual insurance, but rather a prepayment for when services WILL be used. In essence, it is like your cell phone plan, for which you pay monthly, and expect service when needed. The monthly payments just smooth out the financial burden, so you don't have a one time large bill coming up when a procedure is necessary.

This is really the crux: The times are over in which people won't use insurance at all. Today the average person WILL, at one point in their lives, have high blood pressure/diabetes treatment, joint surgery, etc. It is a matter of quality of life, but also a matter of lifestyle choices.

 

If you want to know what is wrong with the USA health system it is simple.

It is private. Simple as that. A private health system doesn't work and never will.

Compare it with the UK where we have the NHS. Everybody has access to free healthcare. How does this work:
If I want to see my GP, I can normally see him the same day. Worst case, the day after. It wont cost me anything
If he then writes me a prescription, here in Scotland, the medicine wont cost me anything.
If I need to go to hospital. I will get all the treatment I need and it wont cost me anything.
If I need my eyes testing, I can make an appointment with an optometrist and it wont cost me anything.

So, it must be costing me a fortune in tax? Well, no. The tax rates overall in the UK are less than the USA https://www.theguardian.com/money/2017/may/27/tax-britons-pay-europe-australia-us and I am not having to line the pockets of private insurance companies.

But, the NHS doesn't spend $900 billion a year advertising.

 

1. Mostly good points made. End of life is always a problem. Also one thatg the only solution for is to cut off care except for pain management at some point.

2. Only way to reign in Pharma is to make it cheaper to bring new products to market without lowering standards. The cost of trials is absurd and doesn't even include the actual R&D costs.
http://www.centerpointclinicalservi...-access-part-1-clinical-trial-cost-breakdown/

3. Competition will never happen as long as insurance companies hold all of the leverage. It's time we move away from insurance for routine medical care and instead focus on developing a free market solution.

4. The NHS is bordering on financial collapse and disruptive shortages of personnel.

https://www.theguardian.com/society/2017/mar/19/nhs-impossible-budget-crisis-health-trusts


Our current system and any single payer system I have ever seen aren't working. It's time we try something different and cut out the middle men and their padded prices.

 

1. I think end of life is a key factor in the large differences between health costs in the U.S. and other countries its often compared to who have government healthcare. Those "Death Panels" don't exist - of course, no one running them is going to call them that - but the effect, of government deciding who does and doesn't "need" certain care, is something that happens all the time. People in other countries are often told to "die with dignity" when many in the U.S. would still get care to extend their lives.
2. I think the cost of trials are too heavy, but that requires "deregulation", which seems to be treated like a dirty word. People want lower costs, but not the real practical steps towards them. But I think the bigger issue is on the backend, where intellectual property is strongly protected here but not elsewhere, so recouping the R&D costs is something that they often can only do in the U.S. That's more an issue of foreign countries basically leeching from us.

 

That is what I call a kneejerk reaction. In the op I explained some of the primary reasons why healthcare costs more in the U.S. than in countries like the U.K. Rather than address any of those plain reasons, you just said the reason it costs more is because it's private. Well hey, I'm willing to run with this with you, but I have a question.

It seems that you think that the government would run healthcare more efficiently (better benefit at lower cost) than the private market, so I have to ask - is that true in general, or just in healthcare? Would the government, for example, running the car industry give a better product for a lower price? Or running literally any other business? Because from the 'logic' you've given, I would have to conclude that you should believe (if you are consistent) that the government would run any business better, creating a greater good/service at a lower price, than the private market can. Unless there is some reason why you think healthcare is special in this regard.

I eagerly wait your answer - should the government run all businesses? And if not, why healthcare but not others?

 

Basically, US healthcare is far more expensive because it provides far more services. People are more likely to see expensive specialists, the average patient is likely to get more expensive procedures and treatments, providers have lower occupancy rates and more redundancy in medical equipment to shorten wait times.

The real question is why aren't the results better.

 

Too general of an question.


For complicated and experimental procedures and illnesses, like cancers, US outcomes are the best in the world.

Some basic and chronic illinesses we do far worse. Much of that you can blame on lifestyle. Much higher rates of drug use, much more heart disease and obesity. Another major reason for that is over use of emergency rooms where patients get the worst care at the highest price.

 

So because a benefit is marginal(and actually, according to one study, such reforms would close the gap within a decade), we shouldn't go for it? Marginal upgrades are a HUGE upgrade over *the disaster of 2009. I'd say we should take the opportunity to take what works, no matter how "marginal" it may seem. We'd be surprised at what marginal can do..

 

We also need to control the law suits as doctors pay a lot to be covered in the event they are sued for even the slightest malpractice. I know it happens as someone I know died in part because of it, but we can't just let people get $20 million over a splinter or a small cut.

I will say under a one payer system forget about trying to sue the government for malpractice, the government always win's in court.

 

Great thread; still all in for Medicare for all, however.

 

^_- what? Did you not read the post you were responding to? I think it showed pretty clearly that the gap in costs between U.S. is due to things we like - like not being told to "just die with dignity" months before you're ready.

 

That won't fix the healthcare costs, that'd make it worse.

For some reason people don't like to think so, but healthcare is a market and an industry, and just like any other industry, if you make the products "free" for everyone, you artificially create massive demand and without increasing supply, costs go through the roof, and quality of care drops. The problems in healthcare are more supply side than demand.

Healthcare is an unusual industry because it so so regulated - and we're really not making enough doctors. While medical schools have increased seats, becoming a doctor requires residencies - and the number of residencies has not really increased much in recent years, so the number of doctors made has been relatively stagnant, while the demand for medical care (without medicare for all) has increased, which has fed into an increase in costs.

I don't recall off hand if I mentioned it in the OP, but one of the biggest things we can do to help control medical care costs is to create more residencies. This is one of the very few times when I'll say that government stepping in to help will likely be more beneficial than harmful.

 

The Great American Hospital Pricing Scam Exposed-We Now Know Why Healthcare Costs Are

So Artificially High

https://www.forbes.com/sites/rickun...y-healthcare-costs-are-so-artificially-high/#

 

Why is it that an MRI costs $1,080 in America and $280 in France?

https://dailyreckoning.com/end-greatest-health-care-rip-century/

 

These are all very good points, with end of life being by far the most impactful. All of these factors in truth have always existed and do not represent a new development. What is driving the huge increase in cost is the reality that technology has outpaced our ability to pay for that technology. This creates a conundrum because none of us want to limit future medical advances, and EVERYONE wants to utilize those advances.

By imposing onerous cost controls, single payer could significantly decrease costs, but future innovation and quality would undoubtedly suffer as a result. Some would see that as success because everyone would have equal access to the same care, but I personally see that as a failure because I would prefer to pay a greater amount in order to have better care going forward. I don't see equality as being the optimum result if equality exists as a result of limiting what medicine could otherwise achieve if left to market forces. I would prefer to see options of levels of care that differing insurances could provide, which would allow me to choose various end of life options that could drastically change the price of that insurance.

 

I think Obamacare would be PERFECT, if they could drastically reduce the premiums. Well, almost perfect, single payer at low cost would be better.

 

You know what would be kewl? If people didn't put their messages in all caps or ridiculous font size, and just left it in a reasonable size. Nothing in the link you provided addresses any of the reasons given.

 

Well neither is going to happen. The only way to have single-payer with really low costs is to just be happy with vastly decreased quality of service (including time waiting for it).

 

Sorry, but being private is the root cause. The reasons you give are what in root cause analysis are factors. But not the root cause.

As for do I believe that the government should run other sectors? Yes. The UK and Europe are very good examples of why. Here in the UK we privatized the rail system. It was opened up to competition and we have a load of different companies now running it. But, since then, it has become grossly more expensive, more inefficient, delays have increased and generally become a worse system. In France, they have maintained state ownership. Trains are faster, more efficient and cost about 25% of the cost in the UK private system. We have seen similar things with utilities - all in the UK were state owned. Since being sold off, nothing has improved, but costs have gone up for customers significantly.

Health is even more unique and justifiably needs to be in the state control and for a number of very good reasons.

First, it is not like a commodity, it is something you don't get a choice in. If you have an accident or develop a serious illness, it isn't like deciding whether or not to buy a car. You can chose if you want a car or are happy to get public transport. You don't chose if you need a life saving operation or not.

Then, there is the simple economics. This is witnessed by comparing the health care in the USA and that with state owned systems. In the USA, you pay slightly more tax than I do in the UK. Yet, on top of that, you also have to pay for insurance. Why? Because as I said above, the NHS doesn't have to spend billions advertising and things. It also doesn't have to make a profit for shareholders. Also, because of buying power, its costs are very low - an organization the size of the NHS has massive power in purchasing.

Then there is the broader economic case. The one which recognizes that having people ill for long periods with what would be curable if they had access to health care is fantastically economically stupid for a nation. That lost productivity is costing the USA hundreds of billions - at a time when it has a massive debt that is growing. To some extent, the USA cant afford not to have a state owned health system

Last, is the moral case and the principle which I believe in that basic health care is a human right.

 

http://time.com/money/4462919/prescription-drug-prices-too-high/

we do not have a true free market healthcare system in AMERICA,

 

Healthcare is a service/good, just like any other industry. The only difference is in the minutiae.

But as you've laid out, it is clearly your opinion that a free market economy is bad, and that the state will run businesses more efficiently, and thus we shouldn't have private industry, we should have socialism - not pseudo, but classical dictionary definition socialism, where the means of production are owned by the state. I just have to ask - since you believe this, why do you think it is that the historically free market economies are the most prosperous in the world, and classical socialist countries (where the state OWNS the means of production) have pretty much all failed?

 

No we don't have a PURE free market system, but so what?

 

ALLLLLLLLLLLLL the great works of history, have been organized by a Government. Those things that cannot see an immediate profit MUST be handled by gov, or they don't get started, or developed. What we need to do, is to CHARGE, for the patents we now GIVE away.