You cannot get a better deal on health insurance on your own than through your employer. If you want to take a summer off the amount of money you would have to save up to pay for that is much higher. If you are thinking about changing jobs for more money you have to not only compare salaries, but also a complex benefit system that isn't really explained in the job offer.
If you want to see transparent pricing get the employer out. Buy your insurance directly from whoever you want (or maybe from the agent you like). Of course it will take years for things to change after this, don't expect things overnight.
Edit: as others have pointed out, it is the large companies who benefit at the expense of small companies and employees.
And of course some lobbyist was able to put a stumbling block into the ACA: companies can't reimburse your ACA premiums (they can give you a raise but it's taxed).
It's only huge companies that want this system to remain.
For smaller employers, it's better to just tell the employees to go to healthcare.gov and reimburse them for premiums they pay. Less paperwork, and employee gets to pay for health insurance with tax exemption.
This is completely wrong. The amount of money that employers have to pay in order to subsidize public insurance (which is the literal reason that prices are not transparent) is orders of magnitude more than what they can quantifiably get from you working that extra summer, or what have you.
In general a trip to the doctor and medicine is $10-20.
I paid $500 for a 4 night stay in hospital (appendicitis)
> the government decides the costs of all procedures and medicine
That's a simplification. There are rules for pricing. Drugs in Japan will typically be priced somewhere between EU pricing and US pricing because the PMDA benchmarks across different countries, so Japan drug prices can't be massively cheaper or something. Companies know that very well and on purpose do not let Japan get a first approval for any kind of major drug, as benchmarking vs EU/US will enable them to secure higher prices in Japan. There are whole teams working on optimizing the rollout of drugs worldwide just based on maximizing pricing strategies.
Plus, the article clearly mentions:
> The relatively low incomes of those covered by government insurance make it difficult to raise premiums
The ones who benefit the most from large healtchare payments have close to no income (retired people), so they can't bear any cost at all basically. This means massively increasing premiums for a minority of the population.
Per capita healthcare costs in Japan are still less than half of the costs of the US. Because of the age heavy demographics in Japan, that should be more difficult to handle than the US.
We recently did this for my spouse who had to have surgery that ended up not being covered by insurance due to it being classified as 'elective'. It was 100% NOT elective, and I decided to dig.
After almost a full year (and being sent to collections for non-payment as I refused to pay until I had an itemized bill) I received a bill that was actually itemized. The surgeon/staff coded the surgery as the wrong procedure.
But because there is never, ever a bill that lays out what you're paying for, I was never presented with an opportunity to question charges. Luckily I have a position that allows that much flexibility, but not everyone is that lucky.
The opportunity to question charges arises when you get your day in court. But, as you have discovered, the collection agency won't ever try to get a judgement in court because they full well know that the charges on the bill are bogus and the judge will throw the whole thing out if they pull up in front of one. That's how it works.
Just how calorie counts are required on menus in many states, it might seem that price lists might be legislated similarly.
Our main disagreements are about "who" pays. Or at least that's what all of our major political fights seem to be about. Its a great distraction, because it sucks up nearly all the air of public conversation.
As a result, no one is ever having that conversation about why we need someone else to pay in the first place. The whole system is setup so that the sticker price of everything is unreasonably expensive, such that an intermediary to "negotiate prices" has become mandatory. Almost regardless of who is actually footing the bill in the end.
The system is completely broken.
But you need to factor in your monthly costs into the equation.
If you never experience a severe illness or accident then you're paying $3,020 ($250/month?) a year to see a doctor once for a routine checkup, or ~30k for 10 years, or nearly ~100k for 30 years.
The total cost calculations that show the US system to be twice do include taxes spent on health care, naturally.
As always it's the implementation not the concept, the NHS has been a political football for decades, The left wing party (Labour) get in and increase funding to offset the damage the Right wing party did (the Conservatives) by underfunding, then they swap back and forth.
Even with all of it's problems it's a very efficient system at scale but it could be much better.
For what it's worth out of 600 odd MP's (our version of Congress people) I'd maybe piss on two or three if they where on fire, the rest can burn.
To reword your statement, "My sandcastle building is going great except every once in a while this jerk comes over and kicks over my sandcastle, I guess there's a problem with my sandcastle" and the correct answer is that the problem is the jerk.
We had a referendum on proportional representation vote and you should have seen the adverts from the against camp, it was depressingly expected though.
How we get to that point I'm not certain of.
But one hilarious thing in the US is a trend lately of people submitting ballot measures, those ballot measure passing, and then the conservative held government refusing to honor those ballot measures. I don't personally thing direct democracy is a good general solution, voters generally won't have the expertise to decide intelligently, but when an issue is prominent enough that a plebiscite is called going against that is incredibly undemocratic.
Discounts, bundling, rebates, or preferred pricing of any kind should be illegal in health care.
Telecom I completely agree though. Some of the fake fees they charge (that are worded to look like taxes/regulatory) is almost criminal.
I'm talking about removing hidden fees being passed around behind closed doors.
Fees like what visa will charge your merchant and kick back to your bank.
What other fees am I paying for indirectly without my knowledge? If I could see them maybe I could shop around for a bank that doesn't shaft merchants leading to a healthier economy and more jobs, you know, actual trickle down.
From what I gather in the US issues are e.g. weird shit banks do when processing checks and other payments, e.g. reordering transactions to generate unneccessary overdraft fees.
In Germany we for example long had the problem that ATMs of banks not in your network (e.g. when using a Deutsche Bank ATM with a Sparkasse card) were not required to show the fees associated with withdrawing cash. IIRC it needed EU regulation to finally fix this.
Once they found I had insurance, they said I couldn't just buy it without using my insurance (probably a lie). Is it the pharmacy ripping me off and getting double paid, or is insurance getting a kickback on the copay? I think the first explanation is more likely.
Apparently, this is a common thing, but I found it to be puzzling.
Just another anecdote of how screwed up our medical system is here in the US. Imagine going to a store and paying higher than retail for an item...
I once witnessed a situation where a relative of mine had insurance and the price of his prescription was $14.50 with insurance, but it just so happens the medication is also available over the counter and sells for $11.00.
This wasn't an "almost" match either. It was the exact same brand, exact same dosage, exact same quantity but in a slightly different box (due to store branding). It even said "prescription strength" right on the OTC box.
The really crazy thing is the original prescription the doctor wanted to prescribe was $600 for a 5 day supply of something that needed to be taken for 6 weeks but the insurance company denied it (meanwhile he pays $400 a month for basic insurance). Medical treatment is beyond broken in the US.
And this for a medicine that she'll literally die without. I see red even thinking about this. I don't understand how to get the broader populous to realize how dangerously broken this system is if they haven't by now.
People generally just purchase insurance and think they're "covered." If the whole population only knew how dirty the system is, there'd be change. But simply because of the obfuscated nature of the system, there is no good reason for why things are the way they are.
FYI, a few years down the line a generic of my drug came out and my price went down to 3$/90, so these costs are just 100% BS and caused by artificially enforced monopolies, as soon as actual competition was allowed in the prices quickly leveled out to a sane amount.
(Aside, I'd prefer a socialized system in the guise of Medicare for all or what-have-you, but it amuses me that this market is so messed up that even just letting crazy free-wheeling laissez faire market effects to work radically reduces costs)
A lot of independent pharmacies do things like that. For pharmacies, it's usually better to go with a chain than your local shop.
Also, Walmart has a decent list of $4 medications:
Get it in writing if they say they will accept it or try and pay in advance or something. Pharmacies are up their with mechanic shops for being overwhelmingly comprised of scumfucks.
At our medical clinic, doctors review first line and second line drugs whenever they are prescribing. Along with this they discuss the cash prices based off of goodrx.com, but we're looking into commercial drug databases as well for more detailed pricing. (if you're looking for an open source project to start, create a drug interaction database as all of them are commercial and ludicrously expensive)
About a quarter of prescriptions are cheaper if you pay in cash rather than use insurance. If I were in your shoes, I would have taken the prescription to another pharmacy and asked for their cash price.
The doctors I’ve talked to said “it’s too hard to figure out what a patient’s insurance pays for”.
I can’t count the number of times a doctor has prescribed me a costly branded drug without even trying a generic drug first. The difference even with insurance is often significant.
But this spread exists as a powerful incentive for PBMs to push down profits at pharmacies, which is exactly why payers work with PBMs rather than reimbursing pharmacies directly. It's also why the major PBMs mentioned in the article are all owned by huge insurers and pharmacies; when PBMs first started to grab margin away from those businesses, the companies bought or built their own PBMs. CVS' proposed acquisition of Aetna would create a PBM integrated at both ends.
The existence of PBMs is most painful for independent pharmacies, which are forced to work with PBMs in order to get paid and will thus continue to get squeezed. As much as I'd like to support neighborhood pharmacies, the reality is they are probably incapable of the major efficiencies in procurement and distribution that the giant corps can do, and over time they'll be pushed into a model that is more like uber - small providers of a storefront and licensed pill-packing services, built on a network that captures most of the value.
In theory, competition among PBMs for the business of payers like the jail mentioned in the article would drive lower costs for payers. Is there a failure of competition among PBMs? Are payers like this jail simply incapable of selecting a good PBM or are there barriers that could be solved, like monopolies or information asymmetries?
I noticed that all of the spread graphs in the article were going down and to the right. Even though the spread was increasing, it seemed that prices were going down over time.
Seems plausible that if you looked at non-PBM pricing for these drugs over the same period you might find that the PBMs do in fact reduce volatility and accelerate price stabilization, i.e. they are doing their jobs. Or maybe they're not. But the fact that underlying price volatility implies higher spread seems like something you'd just expect with a PBM model.
An example is my Echo cardiogram experience in a span of 3 months:
USA: $700 out of pocket, with a blue cross blue shield insurance by an employer with dependent (premium is ~$400 per month). Insurance company paid for the echo: $2000
3 weeks: Total time taken from Cardiologist suggesting echo, to getting echo done, to cardiologist receiving reports and sharing diagnosis.
India: Without insurance or any other bs, cost of echo, was ₹1200 (less than $20), which I was informed upfront. Total cost with doctor charges was ₹ 2200 (~$30). When they mentioned the echo cardiogram cost, I had to double check to make sure I didn't hear it wrong.
3 hours: Total time taken, including one hour wait even though I was on time for appointment, Cardiologist has an echo cardiogram machine in the same room. Echo taken 15 mins before cardiologist arrives, and Cardiologist gives me the diagnosis.
If only there was a portal between US and India, that competition to cheaper access to healthcare would improve the costs in the USA.
I'm not American, but have enough exposure to US politics that I can imagine how any scenario to change this will go:
- Republicans don't want to upset donors and thus leave uncompetitive market in place, despite preaching the free markets all the time
- Democrats don't want to upset donors and thus leave uncompetitive market in place, having taxpayers pay ridiculous prices and pretending this is "free".
- Anyone who tries to encourage competitors to charge, say $50 for a liter of saline (still a very healthy markup for purified salty water) instead of $98 (the normal price for purified salty water) will be hit by politicians (funded by PACs) that are 'looking out for the safety of Americans' by limiting the market to existing players.
Nothing will ever happen and Americans will never have competitively priced healthcare.
As for your point about costs being drastically different in other countries for the exact same thing: I totally hear you, and wish there were more competition. How do you hit that healthy balance of competition and quality, though? Regulation is one way that comes to mind.
Then I flew home to the US a few days later, got a Holter monitor for a day and a visit with my primary care physician and a cardiologist. Billed a couple weeks later, 1000 USD. After insurance.
For what it's worth, I could buy the Holter monitor and a bunch of disposable supplies for it for about half what I was charged for borrowing it for 24 hours.
Our system is so terribly broken.
The main difference with this experience in India and in US is that in the US, the tests and treatments needed may cost a million dollars, but I'm not asked to pay up front. In India, no matter the cost or severity of the situation, unless I pay up front in full I wont get the healthcare attention that I need (unless I have a private insurance)
Having seen what regulation did to taxis in US, and how Uber broke the transportation service industry off it's shackles, I think US healthcare market is ripe for disruption. Replicating the Indian healthcare model is certainly not ideal, but there are enough things that can be copied by the US to improve the certainty of costs for treatments and tests.
The key problem with drug reimbursement is knowing what price the pharmacy paid. Drug manufacturers have list prices, but offer discounts and rebates to drop the price, particularly when a drug goes generic.
So if the list price is $100, the pharmacy might have paid anywhere from $95 to $5 for the drug.
In the past the PBMs are correct, that spread went to the pharmacies. That’s less of a bug and more of a feature - it incentivized the use of generic drugs.
Basically the PBMs inserted themselves in the process and grabbed the spread for themselves.
In theory this is an area where PBMs can add a lot of value, because they have broader visibility into the pricing of these drugs (both by researching manuf pricing and negotiating prices with pharmacies).
AWP (average wholesale price) = "ideal" list price, excluding discounts
WAC (wholesaler acquisition cost) = supposedly realistic wholesale price, excluding some discounts
ASP (average sale price) = supposedly realistic market price, including all but the best hidden discounts
Generally, AWP>WAC>ASP. And real bottom-line prices may be below ASP. Because of bundling and other well-hidden discounts.
I think that Medicare and Medicaid now use ASP. Medicare used to use AWP. For Medicaid, some states used AWP, and some WAC. Both were getting screwed by AWP-ASP and/or AWP-WAC spread, and they sued the drug industry over it.
The problem here is that PBMs are still allowed to bill at AWP or WAC.
AWP = an antiquated number currently defined as WAC+20% (it has been as high as WAC+25%, but court decisions changed that). It was the "list price" that distributors used when selling to pharmacies and was created to give them a 20% margin back when there were thousands of wholesalers and costs were higher.
WAC = this is the public list price the drug companies set. Most wholesalers get at least 1-2% off this price (prompt pay discounts, etc), but many drugs are discounted much more (up to 90% off).
AWP was the standard for reimbursement (payments to a pharmacy when they fill an Rx). Then Medicare realized they were paying AWP, when the real cost for the pharmacy was AWP-80% for some drugs so they created ASP for physician administered drugs (not pills that pharmacies dispense).
ASP = an average of the actual price paid by pharmacies for drugs, excluding some special discounts mandated by the gov't like 340B or the Federal Supply Schedule discounts.
Medicare uses ASP for all physician administered drugs (Part B) as do many private insurers. For pharmacy dispenses drugs, it's all over the place and can be AWP-X%, WAC-X% or something else. Medicaid is moving to actual acquisition cost (AAC) where the pharmacy needs to share with Medicaid what they paid and they are reimbursed that plus a dispensing fee.
I had no clue that Medicare was still using AWP and WAC for pharmacy-dispensed drugs. That's too stupid for words. But it seems that Medicaid has figured it out.
You are correct that some drugs were being discounted 95%+ below AWP and the entire spread was being pocketed by pharmacies.
For a very fascinating story, google Ven-a-Care Pharmacy. Their entire business model turned in suing drug manufacturers on behalf of the gov't under the False Claims Act. Since they were a pharmacy, they had visibility into both the prices that drug manufacturers charged and the reimbursement the gov't paid. I believe most of their cases were related to the drug manufacturers not correctly reporting their prices to the gov't, thus causes Medicaid and Medicare to overpay.
Last I heard they had collected over $300M in whistleblower settlements.
What I know comes from a "you won't believe this!" conversation in some hotel bar at a conference, some years ago.
It'd be a problem if there were no other pharmacies, and there is the separate problem of the pharmacy benefit manager space (perhaps) getting over-consolidated.
Standard Oil is a great example of a company that used vertical integration to prevent any actual market competition.
It's not perfect, and there are a few drugs we get a raw deal on, but overall we all get decent access to whatever medication we need without blowing the budget.
Healthcare is basically a right here though, so it's hard to compare to the USA.
Briefly, since the late 1980s, the market for prescription drugs has evolved from one where pricing was close to list price, to one where pretty much everyone gets a large discount.
(By everyone I mean any kind of insurer or bulk buyer)
The effect is that the market has become completely lacking in transparency, as the discounts are not public.
Also, in many cases, the discounts end up in the hands of middle men, such as Pharmacy Benefit Managers or Insurers.
That suits them very nicely, as these discounts account for a large part of their profit and are hidden, unlike their premiums and insurance plans.
Fentanyl comes from pharmacies, not the black market.
The ecosystem that makes this reasonable and normal also normalized the last "zombie (drug) apocalypse".
If this dies, by clear public visibility, any group making radical profits above normal price can be made grossly visible. This would make folks like the Pharmacy in West Virgina that gave out 1500x more opiates per capita than the average across the nation - stick out like a vast sore thumb. And it could be stopped, early.
Dry up non-value-add cost increases, and healthcare might get less bad for humans.
I would not be surprised to find out that a Chinese pharmaceutical intermediates lab with ties to the US was also selling fentanyl illicitly.
The contracting process between pharmacy->PBM and PBM->insurer allows for significant margins to be made by super chains like Walgreens and CVS (and their associated and owned PBMs), and at the end of the day, the customer gets hosed (via their insurance, or via paying cash on predatory "cash pricing" schemes which are massively profitable to the pharmacy itself). Independent pharmacies, unless they are in a particularly great location or have some other specialty, are more or less toast on their prescription business, and instead rely on front of house revenue.
But even this is nothing when you dig into the hospital side of things, and some of the pricing programs that are available there. There are even specific drug pricing programs (like the 340B program) that are specifically designed to allow hospitals to save money on their pharmaceutical spend for certain classes of patients, but these programs can also be extended outwith the actual hospital's environment to the retail pharmacy.
None of the anecdotes I just shared are Medicare/Medicaid related (more or less), and much of it (like 340B) are bandaids designed to try to help disproportionate share hospitals that act as a safety net for care for uninsured or indigent populations around the USA.
My point is this - this is just the pharmacy side. The USA healthcare system is so complex, and involves so many layers, all of which are skimming profit in a nontransparent way, that it is no surprise that American healthcare is the most expensive in the world. Even diehard free market capitalists would be absolutely amazed if they truly knew what was happening under the hood, and whatever waste that exists in state run, single payer systems like the UK's NHS (or hell, even Medicare in the USA) pales in comparison to the profits being raked out of the system.
Especially considering that there are plenty of examples around the world for doing better. When you look around Europe they all are very different but none of them is even remotely as f...ed up as the US system is.
Refusing health insurance is also not an option unless you accept to pay full cash in an emergency. Or you need to accept not to get any care.
Is there anyone in the US that has any sort of chronic condition or has had a large medical expense that is vehemently in favor of the current system, or vehemently opposed to some flavor of "medicaid for all"? I seem to only ever read/hear/see healthy people who are against some form of basic universal health services.
Of course, the system is flawed so...