
Blame Emergency Rooms for the Out-Of-Control Cost of Health Care - tysone
https://www.nytimes.com/2018/09/05/opinion/emergency-rooms-cost-insurance.html
======
refurb
If people really want to understand why US healthcare is more expensive, I'd
suggest this detailed, if somewhat dated (2008) analysis by McKinsey which
breaks down US healthcare spending by category and compares it to other
countries, accounting for differences in GDP - in particular page4 [1].

Findings:

\- most of the extra spending, ~70%, is occurring in the outpatient setting
(which includes the ER)

\- in-patient care is only marginally higher than expected compared to other
countries (~10%)

\- the US spends _less_ than most developed countries on long-term care and
home care

[1][https://healthcare.mckinsey.com/sites/default/files/752233%2...](https://healthcare.mckinsey.com/sites/default/files/752233%20Why%20Americans%20pay%20more%20for%20health%20care.pdf)

~~~
zeroego
That was an interesting read, thanks for sharing. My own understanding, from
personal experience working in an ER, was that they charge more there to
offset the cost of the (often impoverished) people who use it for everything
from the sniffles to gun shot wounds. These people, who don't have health
insurance, typically don't pay their bills. Also, I saw many homeless people
come in simply for a bed to sleep in and a hot meal. They take up a bed and
nurses/doctor's time. ER's aren't mean't to be non-emergent PCP's or soup
kitchens, yet they often end up serving that purpose. The end result as I see
it is a bunch of expensive and poorly delegated resources.

~~~
village-idiot
It’s estimated that keeping a homeless person on the streets can cost the
local government up to $1m/year in terms of police, jail, and hospital
resource usages.

~~~
Johnny555
I'd like to see a reference for that number, $1M sounds awfully high.

~~~
village-idiot
I can’t find my old sources, and t seems like $1m is indeed quite off the
mark.

It looks like this number is wildly variable. Places like Texas spend a low of
$9-40k to jail and treat homelessness in ERs. Places like the Puget Sound
spend about $1 billion[0] a year to deal with their ~5,500 homeless people.
While that’s far from $1m, it is pretty high at $181,000 a person year.

0\. [https://www.bizjournals.com/seattle/news/2017/11/16/price-
of...](https://www.bizjournals.com/seattle/news/2017/11/16/price-of-
homelessness-seattle-king-county-costs.html)

~~~
ardy42
> I can’t find my old sources, and t seems like $1m is indeed quite off the
> mark.

I remember a source for that. From what I recall, it wasn't that _every_
homeless person cost the local government $1m a year, but that a _particular_
homeless person cost that much (due to his ER usage, police involvement, etc).
The article was about how it's actually _cheaper_ for the government to just
to give a certain subset of homeless people no-strings-attached free
apartments than to let them continue to live on the streets.

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tzs
Note that there are _two_ cost problems with US health care.

1\. It is way more expensive (both in dollars/capita and as percent of GDP)
here than it is in most or all countries it is reasonable to compare against
(e.g., those in the EU, the OECD, or G20).

2\. The costs are going up too rapidly.

There is a tendency to conflate these two issues, which I think is a mistake
because issue #2 is not just a problem in the US. The rapid increase in costs
is happening in those other countries, too.

Emergency room shenanigans like we have in the US can partly explain #1, but I
don't think the other civilized countries have similar shenanigans, so what
the hell is going on with #2?

For example, from 1970 to 2017 US went from $327/capita to $10209/capita.
That's 31.2x more expensive.

Japan over the same time went from $141/capita to $4717/capita, and Germany
went from $264/capita to $5728/capita. That's growth of 33.5x and 21.7x,
respectively.

That's not using constant dollars. Constant dollars for each country would
change the growth to 4.9x for US, 10.1x for Japan, 6.5x for Germany.
(Calculated using online inflation calculators for each country to convert the
1970 values to 2017 values, and dividing into the 2017 cost/capita). None of
those are sustainable.

Data and visualizations available here:
[https://data.oecd.org/healthres/health-
spending.htm](https://data.oecd.org/healthres/health-spending.htm)

(Uncheck "latest data available" to enable charts showing growth).

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nonbel
When I looked into healthcare spending in the US about 5 years ago, it was
almost all (~75%) chronic treatments for people over 70 years old. Does anyone
have a current reference regarding this type of data?

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mirimir
It's crucial, in the US, to research general practitioners, relevant
specialists, and hospitals in ones area that accept ones insurance plan. And
if possible, to do that before selecting an insurance plan. In most states,
in-network providers can't collect uncovered charges from patients. But it's
good to check on that too. Many providers will bill anyway, even if they can't
collect. Also, if at all possible, in situations that aren't life threatening,
it's prudent to confirm network status and coverage, before accepting care.

~~~
ceph_
How is it legal to bill on something they can't collect on? So you're just
supposed to ignore a bill and let it go to collections.

The US healthcare system is beyond fucked.

~~~
mirimir
Well, it's not exactly legal to bill for it ;) But what you do is call their
billing office, and point out their error. And then the charge disappears. I'm
not sure what'd happen if you let it just go for collection. It'd probably
hurt credit rating, even if it wasn't legally collectable.

And yes, I agree. It's beyond fucked. The health insurance industry has bought
off the government.

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village-idiot
It’s almost as if, and stay with me here, preventative care is cheaper than
reactive care.

Well, that and hospital billing is bullshit. Got charged $500 because the
doctor at the ER we went to for a sudden emergency was out of network, even
though the ER wasn’t. How the heck I’m supposed to do something about that is
beyond me.

~~~
maxxxxx
Any self respecting citizen will have a few assistants and lawyers on retainer
to handle these issues :). If you can't afford that, tough luck , you are free
game for being ripped off. That't how it feels to deal with hospital billing.
It's a full time job.

~~~
village-idiot
My company offers a benefit where I have access to assistants who will find
the cheapest medical service for me. That these jobs even _exist_ is a sign
that the market has broken down.

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me123456789
Most plans are not paying the inflated rates. Federal law requires plans to
cover emergency care by out-of-network providers, but the plan can limit the
payment to the usual and customary rate for the services. This leaves the
patient susceptible to balance billing for the inflated rates. Self-insured
employer group plans, which is what most people have, are federally regulated.
State law does not apply to them.

State-regulated plans often are required to cover the full costs depending on
state law, so the author's point is valid there.

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jeffbax
Instead of price controls we should stop giving hospitals veto power over
competitors opening up. Our regulations have been encouraging consolidation,
but incumbent hospitals generally have the right to say "no, you don't need
another hospital in this municipality" and block competitors.

Additionally we should let in far more trained immigrants who are perfectly
good at medicine and lower the credentials required to be a GP. The typical
doctor in the USA has to go through 3 more years of school than those
elsewhere to little gain in outcomes.

Medicines problem is a lack of markets, legislating what places can charge
won't fix the underlying issues as much as breaking the hospital and labor
monopoly will in the long run.

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scottlocklin
Article brought to you by Blue Cross and the American Medical Association. Pay
no attention to the cartels behind the author.

"Glenn A. Melnick, PhD

Title Blue Cross of California Chair in Healthcare Finance, and Professor of
Public Policy"

~~~
tzs
I think you may be confused a bit here. Did you by any chance think that "Blue
Cross of California Chair in Healthcare Finance" means that he holds a
position at Blue Cross?

It doesn't. In 1994 Blue Cross gave $2.5 million to the University of Southern
California to endow a chair. The way an endowed chair works is that donation
is logically kept separate from the rest of the university's endowment, and
the earnings from that separate endowment go toward the salary of whatever
professor holds the chair. Other than having part (or all, depending on how
much the endowment earns) of their pay come from that instead of from the
general university budget there is little or no difference between a professor
holding an endowed chair and one who does not. (Sometimes a donor might
specify that there will be some extras, like funding for an assistant).

The donor has no involvement after the initial donation, other than their name
is on the chair (well, not always their name...someone can endow a chair and
name it after someone else) and the title of whoever holds it. In particular,
the donor gets no financial leverage over the holder of the chair.

I have no idea where you got the American Medical Association connection from.

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caseysoftware
> "From 2002 to 2016, total billed charges by hospitals rose by a staggering
> $263 billion, to $386 billion.."

The Affordable Care Act (aka Obamacare) went into effect for the final third
of that which was a major upheaval in the health insurance system. I'd love to
see this broken down by 2002-2010 and 2010-2016 compared.

Glossing over that period without any distinction seems like playing fast and
loose with the facts when it could be important.

~~~
ddebernardy
Some data points here:

[https://www.healthsystemtracker.org/chart-collection/u-s-
spe...](https://www.healthsystemtracker.org/chart-collection/u-s-spending-
healthcare-changed-time/)

The salient bit is this: the health spending growth rate has slowed since
2010, to slightly above the economy's growth rate. During the 2000s, by
contrast, health spending grew a bit over twice as fast as the economy as a
whole.

~~~
caseysoftware
While interesting, it's unrelated - "total billed charges" as used in the
article is _not_ the same as the health spending.

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jfoutz
That sounds like an option. But after some reflection, nah. It’s more
complicated than “blame emergency rooms”. Thanks for the suggestion though.

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pimmen
I don't think we we should blame the ER, we should blame the system that
allows hospitals to exploit them.

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TangoTrotFox
This is a critical statement from the article, _" Data from California
illustrate how hospitals have exploited this situation. From 2002 to 2016,
total billed charges by hospitals rose by a staggering $263 billion, to $386
billion, even though the number of patients admitted did not increase."_.

That feels like statistical butchery. Two immediate things come to mind.
Obesity has skyrocketed in the US between those time periods and thus more
people are going to be facing more severe and more expensive health issues.
How much of the cost is due to increased severity of issues? And second, does
that account for inflation? Inflation alone, which increased 33% between 2002
and 2016, would explain the cost differences if that was not adjusted. Though
also why in the world would the number of people admitted not increase even
though the population grew substantially in that time period? I tried to
answer these questions myself, but the link provided in the article just leads
to dozens of links to other PDFs, which also inspires some skepticism. It
would be nice if they specified exactly where they information came from.

There's also a third possible issue. In the US all public emergency rooms are
required to treat and care for individuals regardless of whether or not they
can pay. I have no idea how the billing for this works behind the scenes, but
it's likely hospitals are recouped for most/all of these costs from the
government. However, that would indeed create a huge incentive to charge as
much as they could while also providing as expensive of care as possible. Not
dissimilar to how government guaranteed student loans have created an
incentive for universities to charge as much as they possibly can. In any case
if the number of people utilizing this 'benefit' increased, we'd also expect
to see a change in costs.

Articles like this just make me think of that old quote, "There are three
kinds of lies: lies, damned lies, and statistics."

~~~
tzs
> Obesity has skyrocketed in the US between those time periods and thus more
> people are going to be facing more severe and more expensive health issues.

 _US_ obesity skyrocketed in that time. It went from 30.5% to 39.6% for adults
(15.4% to 18.5%) for youth.

But _California_ obesity rates did not. I don't have 2002 numbers, but in 2003
it was 23.2% for adults, which only grew to 25% by 2016. Youth obesity rates
in California were in the 16.4-16.6% percent range that whole period.

(California did have skyrocketing rates...but that was from 1990 to 2003, when
they went from 9.9% to 23.2%. Then they pretty much leveled off).

~~~
TangoTrotFox
Really interesting! I had no idea this was the case.

Any source you could recommend for these figures?

~~~
tzs
National and state data from here:
[https://stateofobesity.org/](https://stateofobesity.org/)

