
Bitter Pill: Why Medical Bills Are Killing Us - OGinparadise
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/
======
dougk16
I live in the US and am currently in Poland with my wife and 1-year-old
visiting friends and family. Shortly after arriving, my son got a bad enough
fever that we sought medical care. This past Monday night, at 9PM, an hour
after the call, in the suburbs of a mid-sized city, a doctor came _to our
house_ and treated him (he's fine now). Cost us 140 zlots, or about _45
bucks_. No bullshit paperwork where you fill out your name and address 4 times
either...quick, professional, in and out.

I experience situations like this again and again while travelling abroad from
the US, but this one put me in shock.

~~~
OGinparadise
Yes, but how much is $45 in Poland? You can find clinics in USA that treat you
for a flat $50-$100 fee, problem is specialized care.

~~~
gambiting
It's an equivalent of 2 days of work for an average person.

But my dad had to have few operations for cancer,and now takes a very
expensive drug called Glivec($3000 for a box of 30 pills, needs two boxes per
month), everything is completely refunded by the government as a part of
public health care. He also needs to travel to Warsaw at least once per month
to pick up his medicine from the hospital there(you can only do it in person
because of how much it costs), which means he has to take a 4 hour train
journey - he gets it completely refunded.

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rogerbinns
It amuses me that the US is considered the land of free markets and
competition. The complete opposite is the case for hospitals. For example if
you wanted to open a new hospital that is more cost effective you most
probably couldn't. You would have to get a certificate of need which
essentially ensures that the existing hospitals remain profitable.
<http://en.wikipedia.org/wiki/Certificate_of_need>

Due to most health care being employer based or provided by the government
(medicare/caid, military, veterans etc) there isn't really any individual
choice, and you can't really take your business elsewhere.

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DanielBMarkham
Very interesting case study in how simple changes lead to emergent complex
systems. Who would have thought that taking health insurance away from the
person and assigning it to the employer would lead here? With every band-aid
we put on the system, it just flows around and makes itself more complex. All
of these systems, the paymaster, the insurance companies, the employers, the
drug companies, the trial lawyers, etc -- they live in an ecosystem we have
created over time. This ecosystem was continually adjusted to solve one
problem, thereby creating more complexity for all other areas.

For that reason, I do not believe a list of remedies is the way to go here.
Especially trying to increase hospital taxes -- that has as much chance of
working as spitting in the ocean increasing global sea levels.

Whatever we do, we have to fight the complexity actively -- even if it doesn't
directly lower costs. We can understand these things as basic software
architecture principles. A couple of small suggestions:

\- Eliminate needless architectural tiers. Make it illegal for anybody but the
patient to pay healthcare providers. If you have insurance, fine. The
insurance company pays you, then you pay the provider.

\- Decouple the hospital (building and administrative staff) from the services
being provided

\- Standardize components. Mandate that all services provided must be in a
free and open market. That means open pricing (bidding), public consumer
reporting, outsourcing if possible, and so forth.

\- Require interoperability. One provider cannot require that another provider
be used. It's the provider's responsibility to interface with other providers

\- Establish naming conventions

You get the idea.

The point here is that we've been playing whack-a-mole. Some guy goes out and
writes a wonderful article about the complexities and problems with the
market. So new adjustments are made to fix them. They only create more
problems, which some _other_ guy goes out and writes about. Each iteration may
take many years. Over time the amount of cruft and inefficiencies is
staggering. If we continue with this strategy of fixing the problem it's just
going to get worse.

This method of problem solving hurts. Let's not do that anymore.

~~~
JulianMorrison
Just switch to a national health service. The whole idea of paying as an
individual, or having individual insurance, is just wrong. Society should
insure society.

~~~
jebblue
So the government can tell you how to run your own personal life health care
like they can tell you how fast you can drive, how powerful (weak) your cell
phone can be, etc.? That's not a world I want to live in. Isn't that the kind
of world liberal loons thought Bush was going to lead us to? LOL too funny and
too ironic. It seems liberals think as long as a liberal is in the Whitehouse
then it's ok for government to take over our lives. Either way having our
lives controlled by a conservative government or a liberal government; they
are _still_ the Government which is supposed to be _us_!

~~~
cpleppert
>>So the government can tell you how to run your own personal life health care
like they can tell you how fast you can drive, how powerful (weak) your cell
phone can be, etc.?

I'm not sure if some of that was supposed to be irony. In terms of healthcare,
the government pays almost half of the cost of providing care in this country.
Not only does it give massive tax breaks to employer provided health insurance
plans it also directly writes the regulations that govern almost every aspect
of healthcare. In a sense, the government is already running your healthcare
if not outright paying for it or compensating the hospital then running the
system that provides or incentivizes the structure of the health insurance
plan you have.

~~~
jebblue
Breaks? One of the medications I was paying for on my personal plan recently
is costing my new employer 3 times !!! what I was paying. Breaks? Puh-lease,
are you brain-washed by deep thinkers like John Stewart?

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marknutter
I blame a large part of our problems on barriers to entry for the medical
field. The AMA keeps doctor supplies artificially low and there's an enormous
amount of red tape involved with providing medical services to people. The
lower the barriers are for an industry, the higher the innovation and
efficiency. Although, lower regulation does mean more risk for the consumer,
so the game becomes making it easy for the consumer to navigate a risky
terrain.

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FireBeyond
As an EMS provider, I see the same thing. I saw a man the other night who was
"sick". An older gentleman, not a "frequent flier", but someone who genuinely
should be in the hospital. He was suffering dizziness, and had passed out
getting out of bed, and was now experiencing abnormally high blood pressure, a
racing pulse, and while an ECG was clear, there was concern over heart issues.

I suggested we take him to the hospital. He refused. "I can't afford that.
They're already chasing me for $16,000". He worried that they'd refuse to
treat him. I informed him that legally, they were obligated to, but of course
that would cost money.

In the end, he stayed home. His wife promised to either call us again if he
got particularly worse, but both of them were reluctant, even then, for him to
go via ambulance - "At least that way we can save about $1,000".

It is a sad day in a civilized, modern society when fundamental decisions on
healthcare are made purely on finances, not quality of life.

~~~
jrogers65
> It is a sad day in a civilized, modern society when fundamental decisions on
> healthcare are made purely on finances, not quality of life.

I don't understand how you were sold on the idea that you are in a civilised
society when one of the fundamental aspects of living in one is that your
neighbours will help you when you can't help yourself.

------
skore
A very good article that reminds me of an understanding that I've come to a
couple of years ago - that free market capitalism and health care just don't
mix.

Having the option to choose against a service, or being physically able to
choose another service vendor if one is ripping you off are some of the core
rules keeping the worst absurdities of capitalism in check.

Without them, the result is that people are being held hostage - pay here or
die here. People aren't usually inclined to choose the second.

~~~
jpadkins
How is the US Healthcare system in anyway like a free market? It's by far the
most heavily regulated industry, every aspect of it. I believe government pays
~ 1/3rd of all healthcare costs.

Free market healthcare is veterinary, plastic surgery, lasik or maybe even
dentists. Those sectors haven't seen skyrocketing costs.

~~~
michaelochurch
Corporate capitalism exists to provide the best of socialism and capitalism
for the well-connected, entitled corporate elite and the worst of both systems
for everyone else.

~~~
Roboprog
Odd, I prefer the term "corporate communism" for monopoly/oligarchy: A central
board plans some aspect of the economy, just like Soviet Russia, once you get
to a monopoly, with similar efficiencies.

Anyway, the US would probably benefit from a hybrid system: government
provided baseline care with option to purchase private upgrades.

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OldSchool
The billing practices of medical providers in the US are appalling. I have
seen statements where the "billed" amount was $15K and the "contract" amount
actually paid (and accepted as full payment) was $1300 for one aspect of a one
hour outpatient procedure.

The $1300 seems reasonable considering the people and resources involved but
the game of financially destroying people without insurance in a nation where
people are denied independent coverage for something as trivial as allergies
needs to end.

Access to group health insurance alone can be reason enough to choose a
corporate job over an entrepreneurial lifestyle once you have dependents.

------
Futurebot
"If you could figure out a way to pay doctors better and separately fund
research … adequately, I could see where a single-payer approach would be the
most logical solution,” says Gunn, Sloan-Kettering’s chief operating officer.
“It would certainly be a lot more efficient than hospitals like ours having
hundreds of people sitting around filling out dozens of different kinds of
bills for dozens of insurance companies.” Maybe, but the prospect of
overhauling our system this way, displacing all the private insurers and other
infrastructure after all these decades, isn’t likely. For there would be one
group of losers — and these losers have lots of clout."

A big lesson here is that once you create an industry - no matter how
destructive it turns out to be - you cannot easily get rid of it without huge
political costs due to the number of people who would wind up unemployed if
you got rid of said system/industry (and who would wind up hating your and
your political party, which may mean you start losing elections.) Who is going
to risk that except for fanatics?

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gambiting
As a person coming from a EU country, I have absolutely no words for this.
Like seriously, what the actual fuck America?? You will fight to the death to
preserve your right to bear weapons,but any suggestion to make health care
public and not let idiotic situations like this happen are fought with
ferocity. What the hell.

~~~
astrodust
If only the Second Amendment was "A healthy and fit population being necessary
to the security of a free state, the right of the people to universal health-
care shall not be infringed."

------
toolslive
An economist called Akerlof has shown in 1970 that markets whose players have
asymmetric information are doomed.

The private health insurance market is a well known example of this.

<http://en.wikipedia.org/wiki/The_Market_for_Lemons>

------
booz
This part really upset me - "Unlike those of almost any other area we can
think of, the dynamics of the medical marketplace seem to be such that the
advance of technology has made medical care more expensive, not less. First,
it appears to encourage more procedures and treatment by making them easier
and more convenient. (This is especially true for procedures like arthroscopic
surgery.) Second, there is little patient pushback against higher costs
because it seems to (and often does) result in safer, better care and because
the customer getting the treatment is either not going to pay for it or not
going to know the price until after the fact."

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anuraj
India had a process patent regime earlier. The result - generic rituximab
costs around 0.7$ in the country. Compare it with the story where the price
was $13702.
[http://www.healthkartplus.com/details/drugs/30975/reditux-50...](http://www.healthkartplus.com/details/drugs/30975/reditux-500-mg)

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JumpCrisscross
A significant step forward would be requiring hospitals to disclose the cost
of each procedure and then aggregating those data at the state and national
levels. The marginal cost for this compliance should not be astronomical,
given they're already itemising receipts. Or is there a Medicare cost
database?

~~~
refurb
This is exactly what Castlight Health is doing. They are collecting cost and
outcome data and partnering with employers to setup the most cost effective
insurance they can.

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viveutvivas
The cherry on top: 100,000 Americans die from hospital-acquired infections
each year.

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OGinparadise
_like $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray,
for which MD Anderson is routinely paid $20.44 when it treats a patient on
Medicare, the government health care program for the elderly._

A 20+ times difference? how can they justify it

~~~
Shivetya
Because the government can force a cost upon a hospital that is not
sustainable? Which in turn requires the hospital to recoup the costs
elsewhere. One of the claims opponents have to ACA is that it will force
private insurance out because the government will mandate its costs forcing
private payers; companies and individual alike; to pick up the tab through
higher billing from service providers.

Still one has to flinch when you see the pay some NON doctors get. Then again,
its the same in education too. Some of the highest paid people in public and
college education are not educators.

~~~
sneak
The article addresses that.

The real question is why new hospitals don't open up and charge less than
these hyper-inflated retail rates and compete on price?

I'm only on page 3, maybe that's addressed too - but I doubt it.

~~~
bhauer
I am going to go out on a limb and suggest barriers to entry.

You don't just get a group of skilled doctors together and say, "let's make
our own hospital!"

Rent-seekers + regulation agencies = regulatory capture = barriers to entry =
no competition.

~~~
carbocation
You essentially cannot, in the United States, get a group of doctors together
to form a hospital as of the passage of Obama's healthcare reform act.
(Technically, you can, but that facility cannot become Medicare certified,
which is usually a death knell.) [1]

[1] = <http://www.ama-assn.org/amednews/2010/06/28/gvsa0628.htm>

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michaelochurch
Private health insurance and hospital bills are a brilliant, evil robbery.

Who is least likely to fight back against robbery? Sick people.

Health insurers get the best part of the deal. Knowing that sick people often
don't have jobs and, as a group, rarely have money, they take the money when
people are well.

