

After the Car Crash - dan_the_welder
http://www.hackerfactor.com/blog/index.php?/archives/282-After-the-Car-Crash.html

======
iamelgringo
I've worked as an ER/Critical Care nurse for 15 years, and this author is
correct in saying that health care costs in this country are particularly
opaque. I have absolutely no idea how much the stuff I do costs. That can be a
good thing as well as a bad thing. I'm not tempted to ration care at all
because someone doesn't have insurance. So, if you get sick, we take care of
you regardless of ability to pay. We have to, it's the law.

But, the other part of the problem, is that people without insurance often
come to the ER when they are ill, because they haven't established a
relationship with a doctor or clinic. So, when they get sick, they go to the
ER and purchase the most expensive care possible for their earache or sore
throat.

Think about it, in the ER, we are trained and prepared to save lives in a
heart attack, keep you alive long enough to have an operation if you get shot
in the chest, or administer antidotes in case you get bitten by a rattle
snake. We have all that equipment lying around just in case, and we're trained
to use it. But, many of our patients have ear infections, runny noses, back
aches and sore throats. Not exactly cost effective care.

A big reason for the lack of transparency in hospitl billing is that there are
different tiers of payment depending on insurance. The hospital negotiates
different rates with different categories of insurers.

Out of network private insurance pays full price or at times refuses to pay
full price. In-network private insurance generally negotiates a 70-80% rate.
Medicare and state public insurance generally pays a 15-50% rate. Non-Insured
patients get billed at the full rate, but generally only 20-30% of those
people fully pay their bills. So, many hospitals will give you a discount if
you pay cash within a month or two of your visit.

Also, doctors aren't able to bill by the time they spend with you. Because of
Medicare, the whole industry pays per diagnosis. So, if you get diagnosed with
a pneumonia, Medicare pays a flat rate no matter how long you stay in the
hospital, either 1 day or 10.

Finally, most hospitals, if they are making money at all, are operating on a
1-2% profit margin. It doesn't take much for them to go under, and they often
need and get subsidized from the state or federal level.

15 years ago, I was very Conservative politically, thinking that market forces
would sort it all out. But, the longer I work in health care, the more I think
that we should just go to a single party payer system. I actually think that
it would actually _eliminate_ a lot of bureaucracy and cut a lot of costs.
It'd be a hard sell in this country, though.

~~~
noonespecial
_Think about it, in the ER, we are trained and prepared to save lives in a
heart attack, keep you alive long enough to have an operation if you get shot
in the chest, or administer antidotes in case you get bitten by a rattle
snake. We have all that equipment lying around just in case, and we're trained
to use it. But, many of our patients have ear infections, runny noses, back
aches and sore throats. Not exactly cost effective care._

That's one of the biggest goofs of the American medical system. Trying to
treat catastrophic care and routine care in exactly the same way makes it
difficult to craft a system that works. The right insurance policy to pay a
$50,000 accidental injury claim is not the right policy to get $25 worth of
tetracycline. In trying to combine an _insurance policy_ against large
unforeseen medical costs with a prepaid, tax-free, employer sponsored routine
care _spending account_ , we've created an ungainly monster that just about
does neither. Like those ridiculous "boat-cars" they tried to build in the
60's. Look! Its a boat and a car! No, its a car that barely drives and a boat
that barely floats.

------
dan_the_welder
Just to kick this one off, I have had no health insurance for almost 15 years
and go to a doc in a box when absolutely necessary. "Why that's insane!", you
say. No, the US health care system is insane. This was immediately obvious to
me when I emigrated to the US from Canada 20 years ago. The biggest hindrance
to entrepreneurial activity in the US is the health care morass. I was
discussing this with a friend 4 days ago. He just graduated college this past
spring semester and longer has school mandated coverage. Hours later he took a
mallet to the face playing bike polo and went to the emergency room where they
told him that just to look at him would cost 400 dollars. Any services would
would be more and they did not know how much more until he agreed to pay the
400 bucks. Fortunately a mutual friend is a nurse and he was able to text him
and get a surgeon to unofficially give him a look over and let him know he did
not need stitches. He was not convinced when first discussed the issue but
less than 24 hours later he agreed based on his new experience as a member of
the newly uninsured.

~~~
potatolicious
As a Canadian who will be moving soon to the US, can you give me some advice
re: medical care? I'm looking into buying health insurance above and beyond
what my employer is offering (which is quite honestly extremely poor).

I find the entire thought of the health care system being private to be
completely unnerving, and as you put it, insane. Why a man has to worry about
his bodily well-being to the extent that if he has to give up his life savings
for an accidental injury is confusing to me. This hardly even seems
_civilized_ , much less _wise_.

It not only makes no sense individually, it is also insane as a whole - by not
covering preventative care for everyone you are _increasing_ the virulence of
your disease outbreaks, and even in non-contagious diseases and conditions
you're still spending much more money in the end than if you nipped the
problem in the bud via regular checkups and whatnot.

I know most of HN is American, and you have to excuse me for saying this, but
as someone who's never lived long-term in the US your health care situation
seems like something out of a bad dream. I cannot imagine the fear that you
guys live with - the fear that I'm about to face in a couple months time. Oy.

~~~
maxawaytoolong
If you move somewhere Kaiser Permanente serves, I've been very happy with
them. For all the histronics about how bad the health care system is in the
US, I've found the care is quite good if you do some research and are willing
to pay for it. My policy is about $250 per month, covers all emergency and
severe horrible things, I can visit my doctor within a few days of scheduling,
I can get a metabolic panel and have the results emailed to me for $10, etc.

~~~
potatolicious
Looks like Seattle isn't covered by them - any other suggestions for
providers? I've looked at Blue Cross, but I'm really quite clueless when it
comes to which ones to go with and which ones to avoid. Any help would be
awesome.

For the record, the company's offering is through Aetna - and my brief
overview online comes up with some pretty bad horror stories. What's the
general impression of them on HN?

~~~
abecedarius
I had them for a couple years through my last employer ("AHF POS II" policy in
California, FWIW), with some moderate medical expenses, and I have no
complaints.

When I had to buy insurance on my own I ended up with KP after similar online
research, scared off by the stories too, but there seem to be horror stories
about _all_ the providers; as far as I can tell, at best you can only choose a
lower probability of them.

------
baguasquirrel
The tech sector had a crash (remember that one?!) and it was not based on
decades of old technology. I fail to see how the banking sector is based on
decades of old technology. If you ask my friends at GS or Citadel (who went to
CMU for CS), I think they'd give you an earful for that line. It could be
argued that the bubble was amplified by technology that made it easier to
bundle and trade CDS's. Once we snip that bit, it becomes:

 __They lack transparency; they are overly complicated industries. __

It should not be difficult to see how this encourages bubbles. In such
industries, it'd be difficult to guess the real value being created, and we
know from psychological research that people are apt to create speculative
bubbles even without being given this nugget
(see<http://en.wikipedia.org/wiki/Herd_behavior>).

~~~
nostrademons
"The tech sector had a crash (remember that one?!) and it was not based on
decades of old technology."

Was it?

I've heard a rather compelling argument that the cause of the 2001 recession
wasn't Sept 11 or the dot-com bubble, but the huge drop off in corporate IT
spending after Y2K. The enterprise software market enjoyed a huge run-up from
1996-2000 as enormous companies replaced their aging COBOL mainframes with new
Y2K-compliant enterprise Java systems. Most of the Indian IT consultancy
market owes its existence to this, and many other domestic firms (notably Sun
Microsystems) also benefited heavily from it. The consumer dot-com bubble was
a relative sideshow compared to this. And enterprise software is about as
price-opaque as you can get.

When Y2K rolled around and nothing much happened, all that spending
evaporated. Suddenly, all these companies that had hired a bunch of mediocre
Java-monkeys to do quick Y2K fixes found themselves without customers.

It does seem a bit different though; in the examples he cites, the industries
themselves collapsed, perhaps because of outdated technology and lack of
transparency. In the tech industry, the tech industry's replacement of its own
outdated technology created a huge bubble, and then collapsed once that bubble
was no longer necessary.

~~~
baguasquirrel
Wow so that Wolfram Alpha thing is good for something huh? :D

Still, the raw numbers don't paint an accurate picture of what the early US
was like. Consider this:

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

Tennessee was once considered to be "the West". Gives you an idea of how
settled the country was at the time, and the difficulty of crossing the
Appalachians in those times.

------
edw519
"Text based and code numbers? That's like my insurance company -- but half of
their software now has a GUI. (I'd also put my bank in there, but they got rid
of their text-based system two years ago.) My optometrist and dentist both use
paperless systems with pull-down menus (no code memorization) and intelligent
forms. But the local hospitals? They seem to still use text-based entry forms
circa Windows95. Sounds like old technology to me... It's enough to make a guy
sick."

Whether an application is text based or GUI has nothing to do with how
effective it is.

Paperless, pull-down menus, and intelligent forms can be programmed either
way. In fact, many text-based systems are much more effective than GUIs
because they are simpler; the user never has to worry about the mouse.

I have personally "deconverted" 3 large scale systems from GUI back to the
original text based system, then enhanced those systems to do what was needed.
In each case (which flushed over $10 million down the toilet), the PHBs
thought the move from text to GUI would magically solve all their problems.

Too bad those PHBs knew nothing about systems analysis, business processes, or
project management. Apparently, neither does OP.

