I'm not American and grew up (and work) in Western Europe.
Everyone is born, and, at some point, will get sick and die. Why does each of these cost tens or hundreds of thousands of dollars? I've heard American doctors at conferences describing their system as "the worst imaginable". Every American I know hates their system. It costs a lot more, has worse outcomes and shovels money and privilege towards the rich.
Why don't you change it? What are the reasons why moving to a single payer system is so bad? Denmark has the same system as the NHS, puts more money into it than the Brits do, and has some of the best health outcomes in the world. If a politician seriously suggested copying them -- with an income tax deducted at source with employee and employer contributions -- what would happen?
Everyone hates “the system”, including the people in it. But every party of the system is perfectly fair and reasonable for the people benefitting from it, even if they hate every other part. So every part of the system will have people fighting for it—and if you try to change the whole system, the entire system will fight you. It’s an equilibrium, even if it’s obviously far from optimal.
That's 20% of the country that will be less well off if you "fix" healthcare in any meaningful way and the overwhelming majority of them will fight tooth and nail to prevent that from happening.
That is a hell of a minority to overcome when the issue is one of personal economics (i.e one everyone will experience directly, not some abstract social policy thing that people will ignore as long as their lives are good), dare I say basically impossible in a democracy.
(yes I know I'm assuming that the healthcare industry is a cross section of the country, no I don't care if that isn't 100% accurate)
Excellent comment, succinctly summarizing how a systems thinking perspective translates the monster of health care in a large system of interconnected parts, each with its own stakeholders. Trying to change a single part triggers a reaction from everyone.
Tough ecosystem to change. But, at the same time, seems to be the one needing change the most.
I still expect people to raise awareness if and when they're caught in a perverse incentive/Moloch situation so as to give the public greater insight into how it can be fixed.
This is a really good read. It talks about all kinds of systems which become their own entity. Nobody likes them. They make things worse for everybody. But somehow we get trapped in these downward spirals and there’s seemingly no way out.
Surely some people do actually want suffering, or at the very least are indifferent to causing suffering to advance their goals? I don't feel like there's some weird paradox, but rather that the system makes it too easy for sociopathic types to rise to the top.
I think this is related to fundamental attribution error. The system is messed up and therefore attracts messed up people in leadership positions, not the other around.
I guess I miscommunicated the thrust of my argument. It seems to me that the paradox presented in the linked article hinges on an assumption that "nobody wants" there to be suffering. This seems flawed to me. There are plenty of people - some of whom are in positions of great power - who are content to generate a large degree of suffering in order to advance personal goals. This is currently very clear in Ukraine and Gaza. But it applies equally well to people that drive shady mergers and acquisitions at the cost of the consumer, or people that push drugs at the cost of addicts' health and relationships.
It's not "nobody wants this", but "sufficiently many people are sufficiently apathetic to continue this state of affairs".
You’re making the classic mistake of assuming the US works like the average European country: a functioning democracy where if something makes sense, politicians will promise it in their manifestos, and then implement it once they get elected.
In reality the US works completely differently and is not a functioning democracy. Making any major reform in any area is, to a first approximation, impossible.
As an American born to European immigrant parents I can assure you that the grass is not always greener on the other side. All systems have problems. I say this as the parent of a child with a chronic illness (t1d) who is extremely frustrated with our health(insurance)care system.
Not everything is better about Europe than the US, I agree (and the extent to which this is true depends on where in Europe you’re talking about - Bulgaria is not much like Switzerland).
But one of the things that I think is unambiguously better (at least in highly developed Northern and Western Europe) is the quality of democratic institutions and their responsiveness to the people’s will. In the US, it is structurally almost impossible for Congress to legislate meaningfully, so effectively no one is in charge.
As an American watching Brexit and other self-owns pouring out of the UK, I’m not completely sold on this. If our system is insane — and it is — I’d say it’s a family disorder we inherited.
I think a lot of the "insanity" we see in both the US and UK and probably elsewhere can be traced back to lies from the consolidated & ubiquitous conservative media (specifically, guys like Rupert Murdoch).
Health insurance in the US isn't practically compulsory since SCOTUS struck down the individual mandate's fines for not having it in 2012. (It was then removed entirely from the law in 2017.)
At very least the French and Italian people would disagree (I’m French and Italian).
Seems like folks across Europe were pretty upset with the number of asylum seekers and the problems that followed their migration into Europe in the last couple of years. Their governments didn’t seem to give much of a shit and that’s led to more right-wing support.
Europe is a big place. Which part of Europe are you referring to? There's a huge variance in cost and quality of care between, let's say, Copenhagen and Chișinău.
And even if we look only at the wealthier EU member states, "better" depends on which metric you look at. They're generally more cost effective. But the US is better for 5-year survival rates on most types of cancer.
The only hope for reform in the US is to position it as furthering the transfer of wealth to the ultra-rich. Then, you might get some traction. But it’s hard to frame a legitimately good policy in these terms.
It’s a nice soundbite, but not really accurate to describe US economic history as a process of wealth transfer to the ultra-rich. Everyone has gotten wealthier over time, it’s just that the wealth of the rich has increased even faster than everyone else’s.
Richer how, and relative to who and when? Because you could say the same thing for nearly every country on earth purely through technological advancements. Wealth is always measured in relative terms, and relative to the top of society much of the US hasn't gotten any richer. The average American only gained wealth relative to the past through technological means. Home ownership isn't really going up for the average American, education standards have been falling behind many other parts of the world, and while we have recently had a little bit of wage increases, it doesn't really make up for the decades of wage stagnation and only really came with an accompanying large increase in inflation for nearly every other consumer good.
Health culture in the US and Danemark are complete opposites. I mean how common people think about the system, and their expectations. Americans basically do not want to pay for anyone else than themselves. Europeans expect a strong social safety net, and accept higher taxes. So, you can't apply the danish system in the US. It would be anathema for a large part of the US population.
While technically true, hospital sticker prices actually are extreme because hospitals try to impress insurers with gigantic discounts off a fictitious base price, which no one pays except the unfortunate middle class person who finds themselves in an emergency without adequate health insurance.
This is critical. I get these "Explanation of Benefits" from United, and they always show some enormous sticker price with a "discount." Something is clearly whack with these discounts.
It would be too much credit to call it "financial engineering". Do you know who mostly benefits from these (basically) fraudulent "discounts"?
I think US has a much larger need for welfare than Denmark, or actually maybe all Western nations. So, welfare and care for the homeless is super pricey. IMO, this a byproduct of the extreme form of capitalism practiced in the US.
The payment model probably isn't the biggest problem with the US system.
My belief is that it's the relatively complicated regulation of capacity (federal and state regulations on facilities and providers), which pairs poorly with government programs that increase access to care with direct subsidies.
We should train lots more providers and eliminate barriers to entry (so for instance, if someone wants to open an MRI suite, let them).
I generally agree, but many states don't have certificate-of-need rules blocking new imaging centers and those states don't seem to have significantly lower healthcare costs.
The most immediate bottleneck on producing more physicians is lack of federal government funding for residency programs. Every year there are students who graduate from medical school with an MD but are unable to practice medicine because they don't get matched to a residency program (some do get matched the following year). At one point the AMA lobbied Congress to limit the supply of doctors but some years back they reversed that position. So far Congress hasn't acted.
The other thing we can do to increase the supply of providers is to rely more on physician assistants and nurse practitioners for primary care. There may be some reduction in care quality but it's good enough for routine treatments and patients will just have to accept that. Real physicians should be reserved for more complex cases.
> There may be some reduction in care quality but it's good enough for routine treatments and patients will just have to accept that. Real physicians should be reserved for more complex cases.
Every efficiency idea is ultimately just used as an excuse to make the system worse and worse. As it stands "real physicians" are already mostly phoning it in, because their attention has been sliced up into 10 minute slivers by "insurance" companies. I'm not saying that NPs or PAs are going to be worse than that (in fact individual NP/PAs can be more engaged than individual MDs!), but it's still galling to be on the receiving end of negative-sum cost optimization - "our next appointment with a doctor is in four months, or you can see a PA next month".
The sweeping reform we need is to drastically introduce actual market dynamics into the industry. This applies regardless of the payer structure - the entire industry needs to be moved from cost-externalizing negative-sum interactions towards cost-internalized positive-sum interactions. Imagine having actual supply and demand for doctors and hospitals funding their own residency programs rather than a set number of government funded residency slots.
How exactly would doctors fund their own residency programs? They already graduate from medical school $500k in debt. There's no more room to squeeze them further. And teaching hospitals have no real incentive to fund more residency program slots. Their customers aren't willing to pay more for it. In game theory terms this is essentially a free rider problem: many entities in the healthcare system would benefit from a larger supply of physicians but they all want someone else to pay for education.
There have been some attempts to introduce market dynamics such as high-deductible health plans (HDHP) with HSAs. Those can work fairly well for a minority of engaged and intelligent consumers but overall aren't an effective solution to systemic problems.
Classical supply and demand economics don't function very well in healthcare. Demand is effectively infinite: sick people want all the healthcare they can get (even if it doesn't really help them much or causes iatrogenic harm) and they think someone else should pay for it. Thus the only way to constrain total system costs is by artificially limiting supply and imposing some sort of rationing. So the real argument ends up being about how we do the rationing.
It is a billing problem. Simple as that. Residents provide a vast amount of care, both under the supervision of an attending physician, that currently goes uncharged.
Federal residency payments to hospitals forbids charging for it, and insurance refuses to pay for it. It is enough to cover the salary and cost of the residents.
You are right that the current state is a free-rider problem. Free rider problems have tons of solutions, in both through markets and public policy. A free rider problem doesn't mean we must throw up our hands and give up. Instead, it suggests the type of solutions which are applicable.
I wasn't suggesting a solution. I was highlighting one of the current problems with residency funding. Hospitals need to be able to make money of residents, not lose money on residents.
If I were to suggest a solution, the first step would be allow all hospitals to bill for work done by residents. IF they can make money on residents the entire problem goes away.
If a resident fixes your broken arm with the same quality as regular doctor, I think the hospital should be charging the payer the same.
From the papers I have seen, unbilled procedures by residents is more than enough to cover their salary.
IF it doesnt get there, we could talk about contractual solutions, but the first step should always be figuring out the true value of their work.
PS, I don't pretend to understand the intricacies of the law you linked, but it does not seem to address the issue on first read. It seems that Medicare will pay an arbitrary premium set by Congress on healthcare services not performed by residents to compensate for the fact that neither Medicare nor private insurance pays for the healthcare services that are provided by residents.
You have misunderstood the problem and misinterpreted the papers you read. Hospitals bill for everything they do (although some bills are written off as bad debt or charity care). They don't fix broken arms for free. The bill might have an attending physician's name on it rather than the resident who actually performed the procedure but it still gets billed.
The problem is that employing a resident incurs a lot of overhead. Some of this is paying attendings for training and supervision. There's also a lot of other general overhead expense associated with having another clinician on staff. None of that overhead is directly billable to customers as a separate line item. So, who should pay?
What I said especially holds true if you are billing in the name of the attending. If you have residents doing real work and the attending checks it out, that shows up as $0 on the books for the resident, and potentially millions of billable services for the attending. When the hospital says, "we lose money on residents", of course they do! They way they bill ensures exactly that.
That's why I say that step 1 is determine and bill the actual value of resident work. Lots of papers claim teaching hospitals actually make money on residents before medical education payments (and that doesnt even include the unbilled work I mentioned earlier [1])
If after a true accounting of the value, it still comes up negative due to overhead, then bill the customer! they are the ones that should be paying overhead anyways. There are 101 ways to recoup overhead, especially capital investment.
You're just hand waving and haven't proposed any sort of viable specific solution. Customers aren't willing to pay higher bills for the sake of training residents. Those who have a choice will go to a cheaper, non-teaching hospital. Hence the free rider problem.
When the holiday rush comes around, does UPS pay to train new employees or do they just throw up their hands and say that it will now take a month to deliver a package? And how does UPS avoid its customers being not "willing to pay higher bills" for the sake of training new employees? And what stops Fedex from being a free rider that poaches the new UPS employees right after they're trained?
Your whole argument is just beating down criticism by taking the current broken incentives as if they're set in stone. Yes, we know the incentives of the current system are terrible. In fact that's exactly why the whole system needs to be overhauled with sweeping reforms, rather than waiting for it to get better on its own.
Why do you keep asking me for a solution, without agreeing with me on the problem at hand?
We dont even agree that residents drive up costs. I dont agree that is a given.
If we assume residents are a cost, the solution is still simple. you just attach the cost of training to the physicians salary. Then, whatever hospital they work at will have pay for the training.
Last, the residency program costs are tinny in comparison to overall physician costs. Back of the envelope math shows the 20 billion program is a few percent physician costs, which are themselves only a part of healthcare costs.
> How exactly would doctors fund their own residency programs?
I said hospitals. You'd do your residency and then have a commitment to keep working at the hospital for say 3 years (or otherwise repaying the training).
> In game theory terms this is essentially a free rider problem
Yes, this is exactly what I mean by founded on negative sum interactions. Every player is focused on avoiding costs rather than providing value. In a sane market, when a business can't find employees they offer higher wages, overtime, train new employees, etc. That's positive sum that grows the industry, rather than just throwing their hands up and letting the shortages build.
> There have been some attempts to introduce market dynamics such as high-deductible health plans (HDHP) with HSAs
I guess if you squint really hard, just subjecting patients to even more unknown charges is some kind of attempt? I'm talking about things like making providers beholden to the basic legal norms of commerce that apply everywhere else. End this nonsense where providers won't answer questions about how much anything costs, but then shake you down after the fact with a volley of fraudulent bills - that foundation is already askew from how every other industry works.
Imagine going to the grocery store, and then receiving bills over the next year from the cashier, shelf stocker, distributor, etc, all claiming that you're also responsible for paying them. Healthy industries work by consolidating costs and making prices legible. The healthcare industry is stuck in a state of doing the exact opposite, but yet has managed to entrench itself with the entitlement of still getting paid.
If providers want to be able to bill patients directly then they need to do the work of forming actual contracts based on fixed price services, estimated work, hourly rates, etc (once again like every other industry). Or if you've got a healthcare plan and go to providers they point you to, the only entity you should ever be receiving bills from is the plan itself.
> Thus the only way to constrain total system costs is by artificially limiting supply and imposing some sort of rationing. So the real argument ends up being about how we do the rationing.
So just scrap the entire concept of individual agency? Are you a doctor or something?
And lest people jump on me for not just toeing the party line of "single payer" - as I said this is orthogonal to who may be ultimately paying. Furthermore, if we're going to be paying for a base level of care with public funds (which we're already doing for a large part), then we want to be spending that money wisely and not squandering it on a system sick with organizational cancer.
Yes, Congress and the American Medical Association capped the number of new doctor trainees in 1997.[1] That is one cited reason why there is a serious shortage of medical doctors in the US.
> Why does each of these cost tens or hundreds of thousands of dollars?
Because money is just a tool for allocating resources. And having well trained people with equipment ready to attend to every person in that situation requires a lot of resources.
I’m not justifying our systems inefficiency - let’s just be clear that medical care costs a lot of money.
So the challenging political question is how to manage access and costs (often devolves into rationing) and who should pay for it.
> Because money is just a tool for allocating resources.
> often devolves into rationing
Just to expand upon what you're saying a bit; most people don't view things in such terms which I think is unfortunate. You often see discussions about waiting times in single payer healthcare systems and cost in more free-market systems. The fact of the matter is that if demand is greater than supply you must ration the supply somehow. Prices are one way but not the only way. Waiting lines, by need, randomly, etc... are all valid rationing mechanisms as well.
What I've noticed is that when people don't view this is a resource allocation problem they are able to always see the greener grass somewhere else. They see the lack of treatment of a person or group of persons as a failing of their system where those people would have received treatment in a different system that uses a different rationing mechanism. The issue is that in a different system there would still be people who don't receive treatment, they would just be different people.
By not viewing it as a resource allocation problem I think it gives the appearance that there is a perfect solution and that its just political will halting its implementation.
> This is logic of post-2008 fail-capitalism instead of 1970’s and China’s aspirational, problem solving capitalism.
No, this is reality. It does not matter if you're working under capitalism, socialism, communism, mercantilism, or some as yet unknown system since economics is the “study of the allocation of scarce resources which have alternative uses.” You cannot deny resource scarcity anymore than you can deny natural selection or gravity. To do so leads to a lot of tragic consequences.
> You don’t address shortages of healthcare, housing or food with an elegant and fair system to decide who starves and dies.
Food is an excellent example to use. In order to guarantee that no one goes hungry, or is well fed, or whatever metric you want to use how much food should be produced? Please find a way for this seemingly simple solution to not devolve into rationing by some mechanism.
> You expand supply to make sure no one has to. You examine supply chain and figure out the bottlenecks.
By expanding supply of healthcare you are taking resources away from somewhere else. Everyone can become a doctor and the nation will have very cheap and plentiful healthcare. Of course no one will be building houses, repairing roads, generating electricity, making MRI machines, refining helium, building the equipment to do the above, or countless other economic activities required for society as we know it to exist. There are limited resources, people, and time. You can’t do everything all at once.
> For example China has started mass producing MRI machines, that’s one way you adress a problem.
How do you know how many MRI machines you need? How do you know if you have too many? What about doctors, nurses, gloves, defibrillators, etc… Prices are actually a mechanism that communicates where more resources need to be allocated and where less are needed. What you’re talking about sounds more like central planning or some subset of it.
> expanding supply of healthcare you are taking resources away from somewhere else
This is totally wrong.
It takes 5 years to get planning approval in UK, it takes 1 year in France. Tunnelling costs are 3x higher in Uk than in europe. Building a tram takes 3 times less. Lower Thames crossing has been in planning for 15 years and we have spent 300 million on lawyers, more than Norway has spent on building an actual tonnel of comparable size.
If UK has economy of France but infrastructure worse than Poland, maybe we are doing something dumb.
If USA has expensive insulin and poor Bulgaria has cheap insulin and it works just as well, maybe you are doing something dumb.
You can expand supply of housing in UK without damaging other sectors of economy: introduce statutory right to add an extra story on your op if your house. Remove green belt protections, introduce 1 month limit on review of any planning application, after which it is automatically granted if valid objection is not found.
Introduce a single planning portal and standardise software for planning applications across the whole country instead of every Shropshire and Wolverhampton having their own practices. Purchase perpetual license for such software as a country and make it freely available to every citizen.
Introduce favourable mortgages for self-building.
Produce detailed, pre-approved designs for standardised homes and bulk purchase materials or modular components for them.
Organise mass production of
high-speed trams and make them available to local government with favourable, pre approved finance terms, so that larger areas of housing are accessible by high speed transport.
All of the above is implemented in different countries around the world, whether it’s France, China or someone else.
>If USA has expensive insulin and poor Bulgaria has cheap insulin and it works just as well, maybe you are doing something dumb.
The insulin example always drives me nuts. The type of insulin you get in Bulgaria is also cheap in the US. In the US, you can get a months supply of generic off patent insulin at Walmart for $40. You can also get extremely fancy insulins for $1000, and $10,000 insulin pumps.
It’s not a binary decision. Healthcare is a gradient of treatment options and outcomes. The concept you are missing is called economizing which includes substituting services, adjusting time preferences, sharing, expanding network of providers, etc.
> post-2008 fail-capitalism
You mean the one where government agencies were taking the risk of bad mortgages from sellers?
We don’t have anything close to a capitalist market in healthcare or finance.
> Although the period from 1837 to 1864 in the US is often referred to as the Free Banking Era, the term is a misnomer in terms of the definition of "free banking" above. Free Banking in the United States before the Civil War refers to various state banking systems based on what were called "free banking" laws at the time. These laws made it necessary for new entrants to secure charters, each of which was subject to a vote by the state legislature with obvious opportunities for corruption. These general banking laws also restricted banks' activities in important ways.
Note that what constitutes healthcare is culturally defined. Different groups have varying expectations of procedures which is then conflated with other services.
When my baby was born my wife and I stayed in the hospital for two nights during which we received constant checks and meals. I was ready to go because my baby was healthy and I knew it was expensive.
Is this level of service required medical care? I don’t think so. Many choose to have a medical professional at home to help with a delivery for a day or so.
If it is deemed required, how many nights should be offered? I’m sure people with a bad home environment would stay as long as they could. If we set a hard cap of a few days, that’s also bad because some babies need to be at the hospital and it’s very helpful to have that.
Alternatively imagine if the beds are occupied who don’t really need to be there and then a new baby needs to be born?
We already are doing rationing, it's just the rations are distributed according to our class system instead of any reasonable metric.
Everyone already pays for heavily for it, much more than necessary due to the grift.
These things are conceptually simple and much easier for a bureaucracy to handle than the current dumpster fire. It's actually only impossibly hard for us to solve because entrenched power and corruption mean few politicians are actually particularly interested in making the changes necessary to fix it, and those who are are excluded from the democratic process by gatekeepers.
We are rationing. But not in the binary yes/no sense you will get from a bureaucracy designed flow chart. It’s economizing which allows substitution and sharing across supply and demand.
At least you agree it’s a resource problem and we don’t have infinite healthcare.
The point about rich folks being price insensitive is demonstrably false. One key here is that rich and reckless exists, but is a much rarer breed than rich and careful.
> much easier for a bureaucracy to handle
Navigating bureaucracy favors elite groups even more strongly as it requires education in law, politics, and communication skills most lacked by disadvantaged groups.
The biggest problem is if your voice isn’t loud enough you literally have no alternative.
The insurance pleading nightmare is exactly this system. They are a rationing bureaucrat.
The US has unique demographic problems where the bottom quartile of health and well being demand most healthcare resources. So the sales pitch for European style healthcare sounds like “we are going to make everything slightly worse for responsible people and remove higher end options, so we can better cover super users”.
Our healthcare system is complicated by the fact America has much larger wealth disparities and more complex regulations stemming from a republican government with disparate laws among the states. Also the baumol effect: America has a significantly more developed tech and finance sectors compared to Europe which inflates the cost of less productive service based industries like healthcare.
The system can't be "just changed" because it's a very complex issue with a lot of entrenched interests. There has to be sufficient political will at the top levels of government that simply doesn't currently exist (in either the Democrats or Republicans).
Like where? UK system is collapsing under underfunding and misallocation, German system is crumbling under terrible lack of personell with raising (already high) costs with lowering quality and increasing waiting times (up to infinite where mamologs and psychiatrists simply take no new patients in many cities).
Basically in all thirst world countries trend is negative unless and experience is frustrating unless you are rich with good private coverage. At least that's my experience.
The NHS structurally basically has to get worse no matter who is in charge:
- the cost of top healthcare will keep going up as new technology is invented
- the amount of care you need keeps going up as the population ages
- GDP can't grow because of various political constraints (Brexit, planning permission, Green Belt, environmental rules, etc)
- Tax revenue can't rise much because it's already ~40% of GDP
- NHS can't grow as a percentage of the budget because of competing commitments (pension triple lock must, in the long run, grow as a percentage of GDP)
I'm sure Labour and Starmer want to fix the NHS, but it's like trying to play chess when you're already mated.
It is same with housing where US housing market is supposedly worse compared to Asia, Europe, Australia or anywhere. Despite clear evidence that housing is increasingly more expensive all over the world. In places where people don't earn half or one-third of US, homes are sometimes more expensive than US. And there is no NIMBYism or bad regulations there to cause high prices.
Dems in the last two elections before this one have had a single payer candidate. Both times the dem primary voters rejected him. If people want single payer they need to vote for it.
Having the majority of the population supporting something doesn't really mean too much in the US. I mean marijuana legalization was supported by near 70% of the population even 2 decades ago. Many states now have legalized recreational marijuana, and yet it is still federally illegal and the federal government could at any time shut down all the state approved marijuana sales. I think that by itself makes it pretty clear that the US is barely democratic and the will of the people is easily and regularly ignored by politicians.
Most people know the overall system sucks, but they also think their insurance is mostly fine because they haven't had to use it very much (which is simply definitional, 80% of costs come from 20% of people). And so people fear the unknown. They would like something better but fear giving up what they have right now for something they haven't experienced. It is also a deeply personal issue, and has so many entrenched interests. Health care spending is 1/3 of our economy.
Any evidence that "most people" are given a voice into actual systemic change? I haven't been given an opportunity to vote for a candidate that actually wants to change our healthcare system, personally. Obama helped many people, but his moves did not really attempt to solve the problems of insurer inefficiency and grift, and instead codified their position as gatekeepers.
> Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.
Your core mistake is assuming that America is a democracy.
It is not. It has been very efficiently designed to strip as many people of their political voice as possible. Our major elections are literally engineered to give insane advantages to whichever party is currently in power
> What are the reasons why moving to a single payer system is so bad?
Half the country (or at least, half the voters, which is only like 2/3rd of the country because so many don't vote) believes in rugged individualism and a Just World.
They see single payer as their tax dollars going to paying for someone else's health problems that they caused themselves. In other words, they'll complain about their dollars paying for a smoker's lung cancer treatment or an overeater's diabetic treatment. They think everyone's health problems are their own and don't want to pay for it.
The fact that when they pay for health insurance but don't make claims means their money goes to other people is completely lost on them.
Healthcare is incredibly complex because currently all technologies we have just make living longer exponentially more expensive with every added year.
But one thing is clear: it's easy to improve the nutrients that people in the USA take.
Whenever I travel in to USA, in the airports I can't even find a simple salad or any real food, even though I can see lots of pictures of salads, which drives me crazy.
Last year I went through Atlanta airport, I bought a hamburger because they didn't have literally any other food at 10pm, and I thought I would just throw away the buns and eat the salad + maybe the meat (depending of the ingredients). Then I looked at the ingredients and it was like 50 things that I didn't even know what they mean. It didn't smell or taste like food at all, so at the end I found 1 year old nuts in my bag that my mom packed a year earlier, and I ate that.
While you are right and you have to work(and pay) to find good food in the US, I would not use airport food as a signal of nutrition availability anywhere in the world
I think airports are great reflections of culture of a country, because that's the first thing a visitor from another country sees, but I had other experiences in USA, where I felt that some of the reataurants just shouldn't be allowed to exist.
I'm from Hungary, a country with 4x smaller average salary, and you can be sure that nowhere would the thing that they sold me without shame in the airport would be considered food, do it's clearly not a money problem.
I believe RFK Junior understands how seriously USA food culture is behind compare to the available money and hope he does something about it.
Any single payer system would significantly impact American's ability to choose their doctors, specific drugs, and procedures. Just look at the difference between dealing with an MRI for an injured knee in the US vs Canada - you're going to wait much longer in Canada.
Americans really value choice and access, so they resist anything that hints at “rationing.” As a result, costs keep climbing, and there’s an insane amount of money tied up in administrative overhead.
For anyone looking for a nuanced perspective on this, I highly recommend Peter Attia's interview with Saum Sutaria (McKinsey's formed healthcare lead).
Even in Canada you can pay more to get better or faster care. You'll always have overpriced options that by definition won't be worth it for people who can wait, and you can shop around the world if it's not an super emergency and you're really willing to spend.
If that doesn't resonate, it's the same as schooling: you can have good and cheap public schools accessible to everyone, and private schools that will cost 5~20x more but provide a significantly different education.
> For anyone looking for a nuanced perspective on this, I highly recommend Peter Attia's interview with Saum Sutaria (McKinsey's formed healthcare lead)
A definition of insurance that doesn't seem to understand how randomness can be upon the group instead of the individual. A person in his situation can't be so grossly misunderstanding pooling risk over a population.
I've skipped here and there among the multiple videos to get a better feeling of the whole interview, but to be blunt that perfectly fit into the stereotype of a guy coming from McKinsey.
Americans don't have to wait, if they can pay enough money to make other people wait, usually through having superior insurance. And this is anecdotal but my own father had to spend 3 months in 24/7 heart afib as he waited for his thyroid to be removed. And that is with every doctor knowing for a fact that having afib is both damaging to the heart and may result in a deadly heart attack at literally any moment. But because his insurance isn't as great as other people's insurance, he has to wait in line with all the poor saps while people with money get treatment within hours or days.
The idea that American's get better and more immediate healthcare is only true for people with money.
Physicians are largely why the US doesn't have single payer.
They've been funding a massive influence campaign against government health insurance and most cost containment efforts for nearly a century under the guise of "protecting patients" (in reality protecting their pocketbooks).
The questions that I like to ask first when comparing systems to the US is, what is Denmark doing to reduce/prevent obesity and drug use, and what does elder care look like? There are certainly things that could change in the system, and it would be great to see what practices other countries have for some of our biggest cost drivers.
I can't speak for Denmark, but I can speak for New Zealand, which has similar spend, and similar results (compared to the US). I wrote a thesis about healthcare software in uni, but as part of that I interviewed a bunch of people across the NZ healthcare industry, and learnt a lot about it.
A big efficency for NZ is 'pharmac', which is essentially a country-wide medicine subsidizer, and supplier. It's a government entity which figures out how much of a certain drug the entire country will need for say a month, then goes and buys it, in bulk on the international market. Making such a large purchase gives them really good bargining power, and they'll buy generic versions. Not all drugs are pharmac covered, but most are. It means there's not much profit margin for drug supply in the system.
The system is setup into 'district health boards'. Their job is to manage the health of everyone in a geographic area, and this means both in hospitals, and in primary care (your local doctors office). Because of this, they see the cost of their entire system, and are incentivised to optimise the care overall, as opposed to say a private hospital, and a private doctors office optimising their individual businesses.
One way this manifests, is putting a big focus on getting people to go to primary care, instead of hospitals. Hospitals are the most expensive thing in the system turns out, so they'd much perfer people get to a primary care doctor sooner, before something becomes an issue that requires hospitalization. So they're incentivised to keep doctors visits cheap, and accessible. This comes into play quite a lot with elderly care, they make up a huge amount of primary care visits - but if they don't become hospital visits, that's great.
You mentioned drug use. That's an interesting one as that's a government-wide issue, not just a healthcare issue. It affects poverty, education, emergency housing, the economy as a whole. There's been a big focus on public education, and actually ad campaigns about tabacco and alcahol, trying to make them seem really un-cool. And it's sort of been working, smoking rates are down, I'm not sure about vaping rates though. Meth is a big issue in NZ, but opiate/painkiller abuse is uncommon (compared to the US).
One general point though, is there's not much profit oppertunity for companies in the system. As the majority of money comes from the government, the funding is very standardized. Running a doctors clinic or say a pharmacy is just like running a small business, with the same oppertunities. There just isn't huge 'startup' oppertunities to find a killer product and turn a huge profit. Profit isn't taken at every point of the supply chain in care.
NZ's system has flaws, but overall I'm really pleased with it, and glad that we have it.
In the US, Medicare is doing negotiation for meds for those in the program. There is talk about expanding that bargaining.
The ACA was trying to get people into primary care early. I'm not sure how big of an impact that made. At least in my experience, the primary care is hard to get on short notice in my area - takes 1-4 weeks depending on different things. One big seems to be that the offices Tru to increase throughput and keep their schedule booked solid to make money based on what the insurance will pay per visit (eg maximize visits). I wonder how NZ deals with the availability part if prices are set. I would think the incentive would be similar.
The funding for primary care comes from a bunch of places in NZ, but most of it comes from the government. Most people in NZ don't have private healthcare insurance, it's just not needed.
The way it works is patients 'enroll' with a doctors office, and then the clinic gets funding based on that patient population (how many patients, what sort of patients, etc). GPs still set their own fees ontop of that, but it's usually not much (like $20 USD), as they're competitive.
There isn't really an incentive to maximize the number of visits, the goal is to maintain a good patient population, who's satisfied with your services.
The average book size for an individual doctor is about 1000 people (might have gone up a bit by now). But I found that number quite interesting, as it lets you frame the job of a doctor quite differently - their job isn't just to take appointments as they come, their job is to keep about 1k people healthy. It lets you think about how else that problem could be solved.
Seems like they have as many or more here in the states, at least where I am. I see some stats that it's about 20 patients a day. I almost always end up at urgent care because they don't have enough availability at the primary in my area. The urgent care isn't covered by my insurance because they say there's enough covered providers in the area already. When I have a fever of 103F for 5 days and think it's time to investigate antibiotics, I want an appointment within 24 hours, not 5 business days from now. It seems the insurance payout and keeping the schedule booked solid drive the (under)staffing in my areas. Although it hasn't been like this in other areas I've been in, but that's more than 10 years ago now.
> The implicit question is – if everyone hates the current system, who perpetuates it? And Ginsberg answers: “Moloch”. It’s powerful not because it’s correct – nobody literally thinks an ancient Carthaginian demon causes everything – but because thinking of the system as an agent throws into relief the degree to which the system isn’t an agent.
The problem is that not everyone hates the current system. Doctors in the US are paid exceptionally well because the system limits their supply. They can admit the system is horrible while also benefitting themselves. Healthcare is 17% of US GDP so there are huge incentives to not change anything from the people collecting that money.
not an American, but it seems to me that the reason is purely ideological. They like a small state, especially the federal government. This would give too much power to the government. The idea of federal government providing care for citizens is not acceptable to people.
Now, weird thing is this doesn't work for the military somehow.
The federal government already
pays (either directly, for Medicare and Tricare) or indirectly (Medicaid) around 45% of healthcare expenditures in the United States, and regulates nearly every aspect of healthcare delivery in some form or fashion.
There’s an awful lot of small-government posturing that goes on, but it is not accurate to say our system is the result of a small government approach.
To provide just one concrete example: in the 80s, we had problems with hospitals “dumping” indigent patients. In some cases, they would literally take homeless people who showed up needing medical attention to some random part of town and drop them off on the side of the road.
Naturally, there was public outrage about this. Demands that it stop.
There are, of course, many ways a society could address this problem: a single payer system, a nationwide indigent care fund, etc.
Here’s what we did: as part of the Consolidated Omnibus Budget Reconciliation Act of 1986, the federal government stipulated that any hospital which accepts Medicare/Medicaid[0] and which operates an emergency department must provide “stabilizing care” to anyone who shows up at that emergency department with an "Emergency Medical Condition" before inquiring about the patient’s ability to pay[1].
This law did not stipulate that those hospitals, or the doctors who practice at those hospitals, be reimbursed in any way for providing that stabilizing care, just that they provide it.
Naturally, doctors and hospitals consider this an example of a heavy handed government engaging in cost-shifting. CMS countered with a paper written by one of their economists that what they do here is not technically “cost-shifting” for reasons.
Hospitals now employ staff to get uninsured patients who qualify for Medicaid signed up so they’ll get paid.
(I haven’t seen stats on this in several years, but the last numbers I saw were that around half of US hospitals lose money on an operating basis. They make up the balance in the gift shop, cafeteria, endowment if they are lucky enough to have one, local taxes, or bankruptcy court.)
0 - that’s basically “all hospitals”
1 - the actual rules are more complex, but that’s the gist of it
The US should not be used as an example of a small government. Some people in the US may profess to wanting a small government, but they definitely don’t have one.
Haven’t run the numbers but I would suspect the US government is the largest government in human history.
(Wikipedia has a similar page, but not as navigable imo)
I scroll through a lot of European countries before getting to the US at 13.4%.
I think the healthcare (and other) systems suck because they are complex. There are two ways to hid information: lock it up (lack of transparency) OR dilute it amongst noise. The latter is what complex systems of whatever do. Complex systems create opportunity for those with enough resources to locate and exploit eddies of wealth in the system. While those without the time and resources to spend understanding the complex system just decry it because it is too difficult to understand.
Well clearly absolute staffing numbers would work, but I would go by absolute money spent.
I think it's ironically reductive to simplify a complex problem to a general problem of complexity.
I'm not sure what your point is, we appear to agree that the system is corrupted and that there is regulatory capture. My point is that the US government shouldn't be used as an example of a small government in general and for healthcare specifically. Even if I was to agree that the US should adopt an European healthcare system I don't see how to uncorrupt the existing system to enable that to happen. This notion that a government takeover will take the money out of the system and diminish opportunity for greed is fanciful.
You goto seperate the imperial machine of world policing (paid in the dollats used and held by the world for trade)from the government managing the citizens of the us (parially paid in taxes by the citizens)
This is fair. I personally agree that US government is small, or should be small for that matter. A lot of EU countries have much more efficient governments.
My original comment was about the neo-conservative ideology, which was either directly in power or heavily influencal in governmental policy in US since Reagan. It's, like anything ideological, mostly symbolic. I think the whole healtchare debate is just one of the symbolic points of this ideology. Ideologies change, and I certainly hope this for US and rest of the world that it changes.
We don’t have a small state. It intentionally meddles in everything from mail delivery to medical care, to make them worse for the masses and better for the agents of the state.
Those agents really just being normal self selecting biology like everywhere else.
Functional illiteracy where people can only understand life through a job and paying bills is a carefully crafted propaganda. America been at the forefront of converting wartime propaganda research into advertising and marketing. A big government military industrial complex is the backbone of the economy. We just look away because wtf else we gonna do?
All of our systems are made by and for the rich. Not the doctors and certainly not the patients. This isn't limited to healthcare. When I say all systems, this includes government who make laws for lobbyists (who represent big business, like the insurance companies) and this also includes the media who ridicule the idea of socialized healthcare & the politicians who back it for all Americans as childish, impossible to pay for & socialist (as if that's a bad thing), among others. Even the political parties will withhold support from the few candidates who are realistically trying to make this happen.
Against these odds, our current healthcare system is very unpopular [0], and if you put it to a vote, we would probably get a more sane healthcare system, but again, realistically, it's not up to us, unless, over the course of ~6 years we constantly show up to both primary and general elections and vote for representatives who support it, and leave the corporate backed candidates in the dust.
Curious what drive-by down voters actually have to say about this. The entire block of text seems at least mostly true. I think it's fair to say the assumption that the USA is a functioning democracy is at the very least up for debate.
Combo of the truly wealthy buy politicians AND many professionals and union employees have employer-subsidized health plans AND 100 years of “socialism bad!” messaging from the political right.
A couple of things. We've spent the last three generations systematically deconstructing our public education system while certain billionaires raid our journalism and social media businesses. Fully half of America actually and fully believe any lie put in front of them by someone with enough power (money) and who says it scary enough.
Americans don't want universal healthcare because then "bad" (read: not-white) people will have it. That's it. Giving something to the benefit of everyone is untenable evil because it's "communism". If you weren't lucky enough to be born into a social class that already has socioeconomic benefits, you simply don't ever deserve to have those things.
This country has spent the last half century pillaging the commons and masterfully convincing just enough of the population that it's a good thing, actually.
Why don't we just change things? Because we no longer own the government. Several billionaires own the government. Democratic change is next to impossible because the game has been rigged so well for so long and nobody with any power has any interest in fixing it. The US government no longer exists to serve the needs of the people, it exists solely to funnel the maximum possible amount of money from the working class to the ultra elite
The problem with the European system is that it is contingent on the American system keeping the status quo. Without high prices in the US, European governments can't negotiate for the same lower prices.
The US is a goldmine for medical corporations, which the EU gets to ride on the coat tails of.
you're suggesting that the entire difference in cost/benefit between the US and EU model is due to research and development? that seems wildly unsubstantiated. the google blurb puts it at 6% of US spending, but its unclear how much of that is actual research and how much is product development and marketing.
Not “due to” in the sense that that’s where the money directly goes, but concerns about slowing medical innovation are one of the big arguments that are raised against reform proposals in the US. In Europe, my understanding is that this is broadly not a concern and few health systems take fully incentivizing new therapies as a design criterion.
I've heard this bunk before, that if it was not for extortionate pricing in the US, medical R&D would grind to a halt. Putting aside for the moment how inflated drug prices are only a small element of US health industry problems, let's re-examine the claim:
"If you don't pay my exorbitant fee, I will cut the part of my business that you need most.. but leave other parts alone?" - pharma spends more on marketing than R&D [1], but the propaganda never says "drug marketing is only possible thanks to high US prices", or "dividends", it's always "research".
How about this - drug R&D is only possible by high public spending on research, which is only possible because governments save money on healthcare: "Study: Public funding made up 97-99% of the R&D cost of Oxford Astra-Zeneca vaccine" - https://www.theguardian.com/science/2021/apr/15/oxfordastraz...
You're cherry picking a single vaccine and failing to understand how the "D" part of R&D works. The vast majority of drug development expense comes from large scale phase-3 human clinical trials. Those now cost ~$1B each (necessary to establish safety and effectiveness) and many fail. Outside of rare circumstances like a global pandemic there is little political appetite anywhere in the world for widespread public funding of phase-3 trials. It's just never going to happen, and even if it did there's no evidence that government bureaucrats would make good decisions about which trials to fund.
> Without high prices in the US, European governments can't negotiate for the same lower prices.
This sounds like total Copium. It is also remarkably anti-market, suggesting that negotiating well is actually bad.
I could invent similar argument for why it is people in the global south that deserve credit for democracy in the west. Or for anything really:
The problem with western democracy is that it is contingent on the Global south being totalitarian and penniless. Without cheap raw materials from the non-west, western governments can’t maintain the high standards of living required for a stable democracy.
> I could invent similar argument for why it is people in the global south that deserve credit for democracy in the west..
And you seem very right to me. It is much better than bullshit that some propagate like "we can all be college educated, doing a high paying IT jobs, living in nice house in nice neighborhoods and so on.."
> Why don't you change it? What are the reasons why moving to a single payer system is so bad?
The best way I can describe our healthcare is that it's freakishly complicated, so complicated that pretty much every argument made by any side at any given time is both correct and incorrect.
For your example about single payer, with that scheme costs will likely be much lower but on the flip side, we also would not get immediate access to care (that is you can't attend a doctors appt within 72 hrs of scheduling) and we also would not get access to the latest and greatest drugs and therapies because those are always expensive and SP schemes typically do not cover that.
Now with that said is single payer good or bad? Well it all depends on who you ask. If you ask a 20 something that just visits the doctor once a year for a checkup and maybe calls into urgent care once every few years when the get the flu or food poisoning, that person will be all over the moon about a single payer system.
Now contrast that with someone in their 50's or 60's that has pre-existing conditions, sometimes chronic conditions, and needs constant care and access to the latest drugs. Well for that person single payer is dogshit and won't cover half their needs.
And that is the essence of the problem, two sides with vastly different needs from the healthcare system and a government that has to make one decision that will somehow satisfy both parties, even though that could really never happen. You're either going to pick the 20 year old and screw over grandma or you're gonna pick the grandma and screw the 20 year old.
> For your example about single payer, with that scheme costs will likely be much lower but on the flip side, we also would not get immediate access to care (that is you can't attend a doctors appt within 72 hrs of scheduling)
I am curious, why is this accepted as a "given" of single payer health care? I know it's a a problem in Canada and Britain, but those systems seem to be victims of something between neglect and outright political sabotage.
As a side note, my partner is currently about half way through a two month wait to see her GP in the good old US of A (on United Health Care). I would love to only have to wait a few days.
Incentives matter. If theres no downside to using a service people will use the service more. Single payer removes much of the downside to using medical care so people will look for medical care where they wouldnt before. To solve this single payer systems need ways to stop people from receiving care they dont need, and heuristics are imperfect so that will stop some people who actually do need care too.
Right? It took me a year and a half to find a GP accepting new patients and get my first appointment. I’m in the US. Getting pre approvals and appealing denials has delayed my care multiple times in other situations.
What he said is true, if you have a lot of money, which is the part people always seem to miss. But people get sucked into the propaganda because they personally haven't had to deal with it, or themselves or their family have the money to bypass such problems. Every time someone complains, people with money will dispute it because they themselves have not had or seen that experience and deny there is a problem at all because they personally don't have that problem.
And HN itself is full of people doing way better financially than the average American with better insurance than the majority of people, so even here many people will have a much better impression of and access to the US healthcare system than the average person in the US actually does.
"someone in their 50's or 60's that has pre-existing conditions" should not be naive enough to believe your nonsense about seeing doctors right away. No matter what you need, it's always a referral to a specialist, and they are generally booking out months in advance. One or two months is a good wait time here.
Also "grandma" is on Medicare, if not completely then as the primary payer (supplement) or at least benefiting from the negotiating/regulations (medicare advantage).
(and just for perspective here, I'm actually not a big proponent of single payer as the main reform. the problem is that discussing any type of reform has been absolutely paralyzed by nonsense talking points to entrench the status quo)
But that second argument of "saving grandma" isn't an issue in Europe either. You think we just abandoned old people with difficult health care needs to the dogs? They get first class care in most European countries - if anything, the issue is the reverse of what you describe. Most young people resent how much they pay in tax for a system they rarely use, while the elderly spend much of their geriatric life bed bound in hospital getting 24/7 care, all for free on the working person's dime despite them being long retired with no private health coverage. I'm typing this right now from a general practice surgery in the UK. The place is full the brim with older people getting local treatment, fast. I booked this morning and they're seeing me the same day. Much of what Americans get fed on the news about waiting lines is exaggerated from the days of Covid. For most services you get seen in a few weeks. My local allergy checks happened within a week. I broke my ankle playing rugby a few months ago and was seen, xrayed, got surgery, and was out the door within 48 hours. Some specialisms are still struggling to get through the backlog of patients, but it's just that - a backlog from when all the surgeries were closed and running on no funding because everything went into Covid-19 treatment.
If you're so concerned about not getting the latest and greatest treatment, in the UK private and public health care have started to work progressively more hand in hand. My family are all covered by my private insurance through work. We get consultations online through an app, and they refer us to either and NHS surgery or a private one, depending on which is fastest and has the best health outcomes. That's a privilege not everyone has, but everyone gets the next best thing which is free universal health care covered by all tax payers - corporate and individual.
This "decision" that you seems to think exists isn't one. We get the best of both worlds - a society where the poor don't fight tooth and nail for health care with the risk of becoming forever indebted and subjected to poverty, and the rich get whatever level of service they're willing to pay for.
Personally, I think you're all fed a lot of propoganda by folks that make a lot of money out of the misery of your healthcare system.
Oof, CONs strike again. We really do have the absolute worst of both worlds, neither free market nor gov run. Just some fucking government locked in monopolies.
I mean, call a spade a spade. Single Payor can have programs set up to specifically address specific issues, like turnaround time to see a GP when sick (e.g virtual visits to clear up demand that can be routed that way).
Whereas the disjointed system the US currently "enjoys" STILL has GP rationing -- and worse, whole specialties disappearing or otherwise rejecting a payor because it sucks.
It's bogus that "single payor won't cover people in 60s/70s with chronic needs." That is 100% a policy decision. Versus the entrenched broken system we have now, where often needs are covered despite urgency.
Ironically, I think that the increased attention to the denial of claims plays straight into insurer's hands. Healthcare isn't expensive because insurers don't pay enough to healthcare providers. In fact, it's the opposite. The ACA mandates that at least 80% of premiums must go towards medical expenses. This means that insurers are actually incentivized to overpay for care to maximize the size of their 20% slice. If we want to decrease healthcare costs in the US, we need to focus on how insurers are failing to negotiate on behalf of consumers.
Nobody, not this article or any other reasonable person, thinks that claim denial is the reason healthcare is expensive. Rather, they think it is fundamentally fraudulent that someone can pay their premiums, etc. and then when they need treatment, be arbitrarily denied by an in-house doctor employed by their insurer to deny treatment.
This is a story of the fraud in the health insurance industry, not the racket part of the industry.
> be arbitrarily denied by an in-house doctor employed by their insurer to deny treatment.
Oftentimes by a doctor who cannot or doesn't practice in "the real world" (some physicians employed by insurers go straight to working from them after becoming licensed). Or a nurse (technically with "oversight" by a doctor who might "supervise" the decisions of dozens of nurses or more).
And now these companies if not using AI directly, will present these providers "notes" along with the claim for review with an AI summary, replete with hallucinations, as bullet points "guiding" them towards the "correct" decision.
It's also important to realize claim denial isn't the same for all customers. When I was classed as an executive at a large blue chip company, my claims were approved quickly and easily at the company specific hotline. With the same provider, making the same claims, they are now partially denied initially and it requires long phone calls to get them to admit they should be covered and often it just isn't worth the hassle.
Again, zeroing in on these denials is missing the forest for the trees. It's the entire claims process that is incentivized to dysfunctional. Insurers are paying for unnecessary chiropractic adjustments, name-brand prescriptions as a first resort, and the more expensive private rooms that hospitals like to build these days over shared ones. Occasionally, they'll fail to provide life saving care, but they can spin that into a win because that will give them an excuse to increase premiums even higher.
Psychiatric issues, which this Propublica article is about, are already being over-treated even though it may be under-treated in other aspects. Focusing only on these cases of denial may cause under-treatment to go down, but at a cost of much higher over-treatment, which comes out of everyones premiums. I don't think anything wrong with SSRIs or stimulants being used as medication, but clearly something wrong with the way we're prescribing them when despite being the largest consumers of them, Americans suffer more poor mental health outcomes.
When judging a system using the ROC curve, you need to evaluate both the precision AND the recall. You are pointing out that the precision is low, and must be improved; the article is pointing out that recall ought to be improved. Both are true, and we cannot use just one of the two metrics to evaluate system performance.
> The ACA mandates that at least 80% of premiums must go towards medical expenses.
This is not precisely accurate. The medical loss ratio (80% for individual plans) can also be spent on quality improvement. There is a blurry line between administrative costs and QI initiatives. For example, a plan-provided coordinator could be QI rather than administrative.
> incentivized to overpay for care to maximize the size of their 20% slice.
This.
You see it anytime you mandate some profit cap or limit as a percentage of revenue. Companies will just manipulate the other variable to get more profits. Or they'll buy other related companies so they can do sneaky internal pricing shenanigans.
That is a unnecessarily narrow definition of competition, and businesses don’t steal clients (absent illegal methods), they provide better products or services at a preferable utility to price ratio such that customers choose them over another business.
Just like a person performing better in a job interview isn’t stealing from other applicants who performed worse.
> This means that insurers are actually incentivized to overpay for care to maximize the size of their 20% slice.
I'm confused. If that's the case, then why would they deny coverage? Wouldn't that be an easy way to overpay?
Heck, they could simply allow everything through and use rising costs as a justification to increase premiums.
This nefarious scheme of course requires insurers to have no competition. After all, if your competitors don't overpay, then they can lower rates and steal your customers.
The truth of the matter is that hospitals and doctors try to maximize their profits through excessive billing and care little about cost efficiency. They don't try this at the same rate with medicare/medicaid both because the government does not generally negotiate - reimbursement schedules are largely fixed and because defrauding the government is a criminal rather than civil offense.
There are some easy fixes here and there. We could, for instance, ban price discrimination by healthcare providers. Every payer would then pay the lowest accepted rate - which is usually medicaid or medicare's. This won't prevent billing for medically unnecessary or inefficient services, but it would eliminate the negotiation problem.
The problem is political. If you save a trillion dollars a year in healthcare costs, the GDP gets lowered by roughly the same amount. Healthcare providers would, of course, fight to prevent any reduction in reimbursements from happening - which they've been extremely effective at historically.
I mean I guess but it would still be a huge improvement in real people's lives if the burden was flipped and insurance companies had to prove fraud to deny a claim.
I think we want the opposite when it comes to negotiations and want instance companies to all have to pay out the cash price. The first step to making it possible to not need insurance for most care is making everyone pay the same.
It would be an improvement until premiums increased and/or there was a shortage of services, likely in the form of longer wait times. That would be a net benefit for some patients and a net loss for others.
Given that claim denials most often happen after the services are rendered the shortage issue
is probably not that significant.
But nonetheless health insurance being affordable only because insurance companies can simply choose to
not provide service to their customers and if people stopped forgoing necessary medical care there would be shortages aren't I think the points you think your making.
This is one of the drivers of cost disease[1] in healthcare, which is a huge problem that won't completely go away even if insurance is radically reworked.
The "Average annual growth rate of GDP per capita and total national health spending per capita, 1970-2023" chart even shows the 2020s as the first decade with lower increases in healthcare spending than corresponding GDP growth.
This theory seems... unlikely as a result. (Cost disease itself is certainly an issue; I merely very much doubt its attribution to this particular provision. Obama didn't have a time machine.)
To be clear, I'm not blaming the ACA for increased healthcare costs. Most people get insurance that is self-funded by their employer where the mandated loss ratio doesn't apply. The incentive for insurers to overpay for care has always existed, but the loss ratio mandate makes it easier to illustrate.
That's a good point - I didn't know that the ACA was that recent. Haven't health insurers still had been regulated to cap how much they can make off payouts for longer than that, though?
You can negotiate all you want but ultimately the productivity improvements have to come from providers (hospitals, pharmaceutical companies) if you want to lower costs. There are ways to make insurers better agents (one simple step would be to make their customers the actual patients, rather than the employers of patients) but I'm not sure how much power they actually have to keep costs low
Every dollar of profit an insurance company makes is an unnecessary cost. It should be returned to the customers because it means they were over charged. That’s the biggest opportunity for cost savings
I like the wording leftover money. My index fund has an "expense ratio" of 0.06% or something like that. Any money that doesn't go toward a patient directly, including everything from CEO bonus to call center expenses should be added as an expense that does not go directly to the patient and this expense ratio should be advertised front and center everywhere.
However, I don't think the problem is truly fixable without Medicare for all or similar single payer scheme. There is just a huge gap in not just bargaining power but just knowledge of the market information between the seller (hospitals and health care providers) and the buyers (sick people) that a free market solution can't even work in theory. Even if you ignore the fact that I can't exactly shop around when I have an emergency any more than I can shop around when my house is on fire. The only viable solution is single payer and the sooner we get there, the better for everyone.
Healthcare cost sharing ministries can work for some consumers but there are loopholes which allow them to deny coverage for services that commercial insurers do cover. This can leave consumers with huge surprise bills.
Luigi went back to the drawing board, and seems to have found a way to get health "insurance" executives quite freaked out to the point where some of their proposed changes for 2025 were quietly walked back.
They get round this by what's called "intercompany eliminations".
UHC and chums simply buy the medical providers, and can then use them to launder people's premiums. UHC et al can only keep a maximum of 20% (? - I forget the exact figure) of the premiums; but if UHC simply own the hospitals, then money laundered through those hospitals via very high profit procedures etc become permitted profits for UHC.
That’s correct. And I still baffles me that no substantial improvements have been made in that problem space. My grocery shop has a LLM powered Robo-assistant, and doctors are still copy-pasting (or even worse, re-inputting them by hand) text between various pieces of software on a daily basis.
I understand regulation plays a good role in that, but I can’t believe that it is the only reason..
LLMs are absolutely being used in medical transcribing. A doctor I know was just raving to me about Epic's new system. Now instead of staring at the computer during the whole appointment he has the epic LLM fill out the report from his notes and does brief editing which allows more face to face time.
Even vertically integrated hospitals, insurances and pharmacies still suffer from the cost issue, so I think a large portion of the problem is more fundamental.
I think a substantial part comes from low risk tolerance and opting for high quality low volume care
The conversion factors for private insurance are 2–3x those of Medicare. There's plenty of room to lower costs. Either private insurance companies aren't interested in lowering costs or their claims process is so arduous that providers demand higher rates to deal with the high rate of denials and ever changing minutiae.
> Either private insurance companies aren't interested in lowering costs
They aren't. Since their profits are capped at 20%, reducing costs means reducing profit as well, so they are actually incentivised to keep costs high.
> their claims process is so arduous that providers demand higher rates to deal with the high rate of denials and ever changing minutiae.
Pharmaceutical companies and hospitals both have much higher profit margins than insurance companies and represent a much larger share of the total cost of healthcare than insurance companies so while I don't think they're the entire problem, they are at least part of it. You and another commenter make a good point regarding inefficiencies in claims processing but I'd be curious to know how substantial that is relative to the entire cost of care.
That is an entirely worthless metric. Pharma and for-profit hospitals benefit from the insurance companies' perverse incentives to keep costs high. Higher cost for care means that the insurance companies can jack up the premiums to maintain their legally allowable margin. A 20% slice of a bigger pie is a larger amount than a 20% slice of a smaller pie after all.
Even better, insurance companies can wag their fingers at the doctors and all of Ayn's acolytes will chime in about how for-profit care is here to save humanity from the evils of doctors. All the while the for-profit insurance companies are laughing to the bank because they're disincentivized from negotiating more reasonable prices. There's a reason Medicare pays conversion factors that are about a third to a half of what for-profit insurance companies are willing to pay.
Even better, insurance companies have a captive audience. While the federal mandate to redirect your money to for-profit insurance was struck down, five states (and DC) have their own individual mandates.
You can negotiate all you want but ultimately the productivity improvements have to come from providers (hospitals, pharmaceutical companies) if you want to lower costs.
Why would they turn productivity improvements into lower costs, when they could instead turn them into higher profits? Big health insurers such as UHC practice "intercompany eliminations", as it's known; they own those providers you mention and use increasing charges there to get around the limits on how much of the insurance premiums they can keep for themselves. It's in their interests for the charges to go up, especially on anything that's actually cheap. Productivity improvements is just more profit to launder through the providers they own for the purpose of laundering those premiums.
This seems like a good spot to start with policy changes:
> In interviews with ProPublica, federal judges criticized a system that fails to address problems that arise in court case after court case. They faulted the Employee Retirement Income Security Act, which governs many insurance claims in court, for not allowing for punitive damages, the sort that can rise into the millions of dollars and deter companies from bad conduct.
> To one federal judge, who like others spoke about cases on condition of anonymity, doctors and the insurance companies they work for essentially get off scot-free. “They might have to pay 10 claims,” the judge said, “but if they can avoid paying a thousand claims, then why would they change anything?”
Middle class Americans have been dealing with this awful middleman for decades. Peaceful protesting got us nowhere. Politicians are bought by these conglomerates. Court systems give these companies a slap on the wrist.
Only thing I have seen work: full sending 3 bullets into a healthcare industry CEO. The subsequent public indifference was quite eye opening. Didn’t matter if you identified as Liberal, Democrat, Progressive, Conservative, Republican - it was a unified response across the nation. Conservative talking heads getting ripped apart by own audience for being “out of touch.” Democratic leaders (Tim Walz for example) getting ripped a new one for fake sympathy.
We are well beyond “policy changes”, especially as we go into this next administration.
Reminds me of a joke i once heard: a regulator walks into an insurance corporate office and exclaims "wait a second, you're supposed to be running a racket! instead, you're committing fraud!" while in a parallel universe, the same regulator walks into the same office and exclaims "wait a second, you're supposed to be committing fraud! instead, you're running a racket!". the regulator then slams his head against the wall, and realizes that there is no parallel universe - that insurance corporation is indeed blatantly running a racket AND committing fraud on a massive scale.
These "doctors" should be barred from practicing medicine. I am not a lawyer, but it would seem that this practice also borders on criminal negligence.
> Having the weight of an MD behind a decision can be powerful, but lawyers and judges who’ve handled these sorts of cases say it can be misleading. Although doctors ultimately determine whether to cut off insurance coverage for a particular treatment, those decisions are generally not considered the practice of medicine and therefore cannot be challenged in a malpractice lawsuit. The doctors advising insurance companies can’t be individually sued on medical grounds, even if something goes wrong after the denial. As a result, their names are cited in lawsuits filed against the insurers, but they are not defendants in suits brought by people denied insurance.
That's a very different scenario than a doctor who is being paid to provide an expert opinion on the medical necessity of care. That obviously should be considered practicing medicine with all the normal liability.
These insurance doctors are not really evaluating case particulars. They are not second-guessing the diagnosis, they are looking at whether the proposed treatment is the "standard of care" for the diagnosis, and that customary less expensive/invasive treatments have been exhausted. Medicare and any other potential "single payer" government plan would do this also because sadly fraud by clinicians does exist.
For example when I had an injury I had to do 6 weeks of physical therapy (without improvement) before they would authorize an MRI scan and then surgery.
This is all just semantics. Arguably, the arbiter of what is "medically necessary" is practicing medicine. They have chosen to intercede in your care, and they should be liable for the decisions that they make leading to your health outcomes.
The legal system could just as easily have seen that the determination of which procedures are "medically necessary" is indeed part of medicine itself. It's a miracle of delusion and corruption that it went the other way.
If you were designing a legal system you probably wouldn't want for profit insurance companies to decide who gets to determine if a patient needs treatment, due to the obvious conflict of interest.
But that doesn't mean applying the same "malpractice" framework to the people deciding what's covered under the program is necessarily the right approach either.
We're fine with insurance companies sending adjusters out to inspect property damage or collision damage. We don't just expect them to pay for whatever the contractor or body shop says was necessary.
And if their adjustment conflicts with the body shop, but it turns out the body shop was right and I die as a result? Who gets that liability? That's what I'm talking about. You can make adjustments, but you are practicing medicine when you do so.
Unfortunately there are many examples of fraud on the part of practicing doctors. The insurance companies (whether private or government) can't just pay for whatever the doctors say they want to do.
Being an expert doesn't mean you are "practicing medicine". Suppose the medical standard is "you must examine the patient in person when creating a treatment plan."
We're going to apply that to some insurance job function operating outside standard medical practice how exactly?
It's not that I'm defending our medical system, it's just that applying "medical malpractice" concepts to the practice of financing of procedures seems to me to be a bit of a stretch.
A doctor at an insurance company isn't deciding the "final call" on anything. The patient can pay for it without insurance, insurance company management could say "ignore the doctor and pay for it", the patient's medical team could say "You can't afford the procedure and insurance won't pay for it, that's okay we'll do it for free!"
It's not that I'm arguing against some way of holding insurance companies accountable, I just don't think what doctors are doing there is practicing medicine.
If I hired a Hitman, if that fact were discovered I'd be prosecuted for murder or attempted murder, despite not pulling the trigger, despite not knowing if the intended target actually dies.
I don't think I can accept that people knowing or almost certainly knowing the outcome of their actions and taking those actions regardless should not responsible for the outcome under our legal system.
For a vast majority of people, and especially so with the sort of things that a) save lives and b) make the bean counters cringe, “won’t pay” is the same as “won’t get”.
These are licensed doctors (required!) being paid to explicitly evaluate the case, though, to determine if treatment is "medically necessary". Seems like a deeply different scenario.
Denying care is the default state. It's the basis of the Hippocratic Oath, "First, do no harm." I.e. the determination of whether a treatment is beneficial is made by comparing it to doing nothing.
In these cases, a clinician has already decided that care is needed. It is a third party, who is not responsible for providing care, that is making the final determination. This has little to do with the Hippocratic Oath.
It's also how first responders deal with feeling responsible if someone dies on them. They did more than nothing, so their presence improved the odds even if the result was the same.
I'm guessing it's some thin veneer of bullshit like "well, the patient can still pay $500k directly out of pocket, so we're not technically interfering with the care, just the payments!"
More light needs to be brought to this, and serious action needs to be taken on behalf of insurance policy holders, NOT on the behalf of shareholders of "insurance" corporations.
True. This makes me think long list nothing burger achievements that IT/ Software/Agilist folks put on Linkedin seems inspired by medical field where everyone is hero and saving lives.
In many jurisdictions in the US, there is a requirement for the casino and lottery operators to pay a certain percentage (typically 90+%) back as winnings.
Do health insurance companies have to follow similar requirements? If so, individual cases of insurances denying insurance would be bad, but would indicate that the overall system is still working reasonably well.
Unfortunately unintended consequences have resulted in that meaning it benefits health insurance companies to increase the cost of care so their 20% share is more.
Health insurance companies conspiring with each other and with providers to drive up costs is not an unintended consequence of the ACA, it is a predictable consequence of monopolistic collusion. Imagine saying "all the grocery stores are intentionally increasing the cost of eggs in order to increase their cut" -- that's just straightforward illegal behavior that should be a slam-dunk anti-trust suit. Don't blame the ACA for that.
The tragedy at the heart of this "hate health insurance companies" is that they aren't even very profitable businesses. Their margins are actually below average, and pretty poor investments compared to things like tech and finance.
Question for the techies here: Due to lack of political will and deep-seated corruption I believe a lot of issues in the US system are almost unfixable but I always wonder why it has to be so convoluted (besides being hyper-expensive).
Why can't the insurers have an app where the patient (or the provider) can type in the procedure codes they are planning to use and then the insurer returns the co-pay, co-insurance and other cost based on the plan the person is in? The insurer must have these systems already internally so why not mandate to give access to the calculations to patient? I had several occasions where I tried to figure out how much something would cost and the answer was "we can only tell you after the procedure was done".
Insurers have an app where the patient (member) can type in a procedure code and see prices for local network providers. It's literally right there in every member web portal! Every health plan has sent out multiple notifications to their members! How are people still not aware of this?
In my experience this behavior is due to the fact that they don't really know on the insurance side how the care provider is going to code something until they have actually done the procedure and have submitted it with the coding. And there is a very high wall between the insurance/patient billing side and the care providers, even in a case like Kaiser where they're all employees of the same company.
Trump actually forced hospitals to release their prices during his first admin. There are a few problems. First, quite a few hospitals refused and just took the fine instead. More importantly though, theres no standardization of codes. Your procedure might sound routine but there are usually quite a few different things being billed and there usually isnt a one to on relations hip between codes at different providers. Even if there was standardization a lot of the time unforeseen stuff comes up so you cant just get an out the door price before the procedure.
The absurdity of American healthcare industry can be summed up by this series by “Dr. Glaucomflecken” on YT. Some of the videos are even based on Propublica journalism.
The entire medical system when it comes to the court system is unbelievable. I live in one of the largest medical centered cities in America.
Yet I had multiple doctors tell me and did things to me other doctors told me should be considered medical malpractice.
When I went to try to sue I found there's literally one judge who could deal with it but they refuse to even try to deal with my case in the court system.
Then the doctors try to shame me for dealing with my issues without taking the meds which the Doctors themselves told me would make my situation worse.
Instead I get a ride through Charlie's Chocolate factory showing me how America works.
<< To do so, court records reveal, the insurers have turned to a coterie of psychiatrists and have continued relying on them even after one or more of their decisions have been criticized or overturned in court. >>
...ok? Is ProPublica seriously trying to assert that they should be barred after a single decision ("one or more" includes "one") has been criticized ("criticized or overturned" includes "criticized but upheld")?
Everyone is born, and, at some point, will get sick and die. Why does each of these cost tens or hundreds of thousands of dollars? I've heard American doctors at conferences describing their system as "the worst imaginable". Every American I know hates their system. It costs a lot more, has worse outcomes and shovels money and privilege towards the rich.
Why don't you change it? What are the reasons why moving to a single payer system is so bad? Denmark has the same system as the NHS, puts more money into it than the Brits do, and has some of the best health outcomes in the world. If a politician seriously suggested copying them -- with an income tax deducted at source with employee and employer contributions -- what would happen?