Hacker News new | past | comments | ask | show | jobs | submit login
Employer health plans are getting pricier and skimpier (axios.com)
259 points by hhs 18 days ago | hide | past | web | favorite | 522 comments



Imagine if grocery stores forced us to choose one of a few dozen grocery "insurance" memberships to buy groceries, and negotiated directly with the insurers. No prices are labeled in store, they just detect whatever you take and send you a bill at the end of the month. (Differing brands of the same food product are not available in store of course.) Individuals are charged 3-100x more per product than negotiated rates, but can't find out until afterwards. Grocery "insurance" would then become a necessity. People would trade away disproportionate amounts of their salary to get good grocery benefits from their employers, i.e. to not get price-gouged by virtue of being an individual on the market. Stores would run discount programs for the very poor, which they could point to when people get outraged (as drug companies do now.) When politicians would threaten the system, grocery stores would fund ads about the "long lines" and limited food availability that would occur. Instead laws would get passed reinforcing the system by making sure everyone gets grocery insurance, as its a necessity (and it would _be_ a necessity).

I'm not saying that health care _could_ be exactly like grocery stores, with many alternatives, transparent pricing, and customers making the final decisions, but that it would have to be much _more_ like grocery stores to call it a free market. What we are working with now is just a system of pricing cartels supported by fear and lobbying. It needs to go.


This is a good analogy because it highlights the important problem. Insurance companies are incentivized to have healthcare prices increase so long as they get a discount. Why? Because it increase their value to the consumer to the point of necessity.


Also they are only allowed to make a certain profit margin: cost plus. One way to grow your profits is for the underlying cost to increase.

"The Affordable Care Act kept profit margins in check by requiring companies to use at least 80 percent of the premiums for medical care. That's good in theory, but it actually contributes to rising health care costs. If the insurance company has accurately built high costs into the premium, it can make more money. Here's how: Let's say administrative expenses eat up about 17 percent of each premium dollar and around 3 percent is profit. Making a 3 percent profit is better if the company spends more."

https://www.npr.org/sections/health-shots/2018/05/25/6136857...


From the consumer perspective, calorie needs are stable and predictable, fundamentally different from what insurance is for.

From the supply chain’s perspective, there is a very sophisticated insurance system to smooth out issues with crop yields, weather, etc. called the commodity futures market.


Both of your points are true of healthcare. No, not everyone will break a leg or need major surgery, but everyone gets old and dies. Flu shots come out at the same time as pumpkin spice lattes. From an aggregate standpoint I would wager healthcare needs and costs are predictable and forecastable, just like commodities.


Can you explain to a Non-American what forces this system of employer insurance onto the US? Why don't independent insurance companies emerge that offer other models of insurance?


There's both historical and insurance-business (underwriting) reasons.

The history: wage-price controls implemented during WWII as labour was taken up by the military and companies had to find some basis other than pay on which to differentiate. Benefits, including health care, were excluded from wage consideration.

Insurance itself is the business of assessing, managing, and sharing (or "pooling") risk. In the case of health care, the typical costs that a given population will face are predictable based on age, gender, and various exposures. Given a sufficiently large number of people, a group or policy cost can be assessed. Along with other groups, this results in pooled risk.

I'm not an actuary, but "large pool" risk is fairly low, I suspect it's on the order of 30 or so people. Smaller pools can be formed (or more likely: aggregated to form larger ones), down to a small number of members, as few as a handful or so.

The idea being that in any given pool, what's called "adverse selection" (people specifically looking for insurance due to high risks) are less likely -- you're dealing with the average population.

In individual markets, all of this becomes much less predictable, and/or the transaction and administrative costs of individual insurance simply add up.

Since a large share of the population works, or lives in a household with someone who does, allocating healthcare group insurance through employment has more-or-less stuck in the US.

The fact that it provides yet more leverage and control by employers over employees is another factor, of course.

Source: A long time ago in a galaxy far, far away, I studied this at uni. Plus more recent experiences / exploration.


I don't think the size of the pool is that relevant. The pool from the perspective of insurance company is all insured people, so it doesn't matter whether it's a company of 5 or 5 individuals joining, it's still a huge pool.

Adverse selection is the big reason. An individual signing up for insurance can be used as a signal that means "individual is sick" or "individual is likely to need insurance soon". If a company policy covers all employees (or all employees above a certain level), the signal is "person works" which is orthogonal to "person will need insurance" (in fact, it's probably slightly anti-correlated, a.k.a. "person is fit enough to work").


Adverse selection among groups is an issue, given adverse selection: individuals or small groups with high but non-evident risks may emerge.

"Small-group" coverage is generally 50 or fewer (in some states, 100) members:

https://www.healthinsurance.org/glossary/small-group-health-...


I think people who are already sick should be covered by a kind of charity (or social services). It doesn't make sense to ask insurance companies to insure people who are already sick.


An alternative is to have random-lot assignments, at least so long as you care to preserve a private, for-profit, insurance sector. That is, members of a given population is assigned, at random, to a set of insurance providers, who have minimum performance and obligation standards.

Otherwise, the socialised version already exists, in most industrialised countries, in some form or another. Within the US, Medicare for the elderly, Medicaid for the poor and children, and in many states, "high risk pools" which are state managed.

More generally, a problem is that the bulk of health benefits do _not_ accrue from direct or acute medical treatment, but from public health and preventive measures, _especially_ well-mother, well-baby, early childhood, municipal sanitation and environmental measures, and general (workplace and elsewhere) safety provisions. Insurance companies of and by themselves don't address much of this.


Great comment. I’ll agree and add that the pool of people working full-time itself serves as a beneficial selection process for the insurance pool. It includes (expensive) births but excludes a lot of expensive debilitating conditions so long as that condition precludes someone working full-time.


One major factor in the US is that, from the perspective of an employee, employer plans have a massive tax advantage compared to anything the employee could buy outside their employer.

If your employer pays your insurance premiums, this doesn't count as taxable income for you. So you effectively have a choice that looks like:

- Your employer directly pays $200/mo for your insurance, or

- Your employer pays you $200/mo as cash, the government takes $40 (adjust as appropriate for tax bracket) out as income taxes, and you have $160/mo left over to pay for health insurance.

I can't really speak to the political forces that keep this subsidy in place, though.

https://www.taxpolicycenter.org/briefing-book/how-does-tax-e...


So if you insure yourself privately, you can not deduct it from taxes? That would be an issue then, but seems easy to fix. Why isn't that part of the health care discussion?


You can deduct it, but there are a couple of distinct minimums in the tax code for how much you have to spend before it starts reducing your taxable income. ( https://www.insurance.com/health-insurance/health-insurance-... )

Also, for simplicity, I left out payroll taxes, which are invisibly paid by your employer directly to the government ( https://squareup.com/us/en/townsquare/payroll-taxes-defined ).

So the choice from earlier is actually more correctly stated as:

- Your employer directly pays $220/mo for your insurance, or

- Your employer pays you $200/mo as cash and pays $20/mo directly to the government in payroll taxes, totaling $220/mo. Then the government takes $40 (adjust as appropriate for tax bracket) out of your paycheck as income taxes, and you have $160/mo left over to pay for health insurance.

The payroll tax issue would apply even if you could fully deduct the $200/mo from your personal taxable income.

> seems easy to fix. Why isn't that part of the health care discussion?

I am as mystified as you are.


If employers can deduct more for health insurance than private people, it seems unfair and rigged.

Payroll taxes are another matter to me, that's mostly window dressing. Either employer pays the tax to the government, or pays it to employees and they pay it to the government. The outcome is the same.

I think payroll taxes exist mostly to hide the amount of taxes they pay from the population.


Big business likes the level of control. Employees are limited in their job mobility, especially to small companies. It restricts competition, it also suppressed wages.

Big business in the U.S. gets what it wants, and if they didn’t want employer provided healthcare it would be gone, but it’s not gone so it means they like it.

If there was universal healthcare in the U.S. there would be an explosion of small business. Most small business can’t afford to provide healthcare, and if you have an existing health condition there is no guarantee that the plan from your new employer, if they have a plan, will include your doctor, or that they agree with the old doctor’s treatment plan.


How can "big business" prevent alternative insurance companies?


Lobbying for preferred tax treatment.

If insurance costs $500/mo, either your company can pay the premium for you directly, with no taxable event for you; or, they can give you $500 more as a part of your salary, but the government will take $150 of that (or whatever, depending on your tax bracket), and then you have $350 to cover a $500 expense.

Individuals can deduct medical/insurance payments on their taxes every year, but: 1) the rules are complicated with some payment minimums that mean a lot of people couldn't take the deduction at all, and 2) you have to come up with the extra $150 every month for 12 months before you get that money back (since the US tax system is pay-as-you-go with per-paycheck withholding), which is a real burden for many Americans.

Alternatively, your company can give you $715 per month, the government will take $215 of that in taxes, and then you have $500 left over to pay your $500 insurance bill, but: 1) your company would very much rather pay $500 instead of give you $715, and 2) that $715 is actually not a hard number, but will vary depending on each employee's personal tax situation, which can change throughout the year, and your company likely doesn't care to deal with that (this is less of a big deal, since it could be outsourced to a piece of software written by a payroll company).

Why do Americans put up with this? Many of them (most?) just don't understand how this all works, and so don't even know they're getting screwed. Many have no concept of systems in other countries that handle this better, in part because they don't travel and don't have friends or family abroad, but more because of concerted misinformation campaigns around any kind of changes to our health care system that would threaten the incumbents.

I guess big business doesn't "prevent" alternative insurance companies; there are plenty of available options for insurance that individuals can purchase on their own. But it generally costs more (because you're not an HR benefits person negotiating on behalf of your 500-, 1000-, 50000-person company), and you end up with the bad tax consequences described above.

If you're an enterprising individual who wants to set up an alternative insurance company that charges very low premiums for great plans, you run into the problem of having no negotiating power with health care providers, who are used to charging high prices because the traditional insurers will pay them.


You can adjust your withholding amounts by filing form W-4 with payroll, so that in-year cashflow issue is largely a red herring. (It’s solvable now and would become standardized/automated if the overall system changed.)

Other (more concerning) items you itemize are the real blockers.


In practice, most people do not actually understand how the boxes on W-4 translate into withholding amounts. There'd be a lot of trial and error involved if done manually.

Regardless, there's a reason why I marked that issue as "not a big deal" -- because it isn't -- the other issues I mention are the meat of it.


The issue you appear to have marked as not a big deal is calculating the gross-up that would be required to keep employees whole not the per-paycheck withholding cash flow issue, which you labeled a “real burden” for some (unless I’m misreading your post). I agree both are manageable and would be automated if things switched models.


Another factor that hasn't been mentioned yet is adverse selection.

Individual health insurance plans do exist, but few healthy people buy them, so the pool is sicker than average, so the insurance costs more, so even fewer healthy people buy the plans, and so on.

Employer group plans cost less in part because the pool is generally healthy.


Tax laws. When healthcare is paid out from payroll, it is FICA exempt which means you don’t have to pay Social Security or Medicare taxes on it.


Consumers using grocery insurance would have no real say or insensitive in what groceries they get - it doesn't matter if all they need is some chicken and a cheap wine. All the grocery store sells are filet mignon and Dom Perignon, and that's what everyone gets.


With healthcare, it goes the other way too.

When my kid gets a deep gash, disfiguring an eyebrow or messing with an important finger, I'd be willing to pay extra for a surgeon to sit there with a microscope putting all the little capillaries and nerves back together. I'm offered a staple, or some glue, or maybe a couple stitches. No, I really don't like zig-zag eyebrows and stiff numb fingers.

Anybody know how to get the good treatment?


This isn't a bad analogy actually.


Then imagine that there are some people who can't afford the food they need in the grocery store and are going to die.

Alternatives and transparent pricing isn't going to make brain surgery affordable to the average consumer.


Solving the problem of care that a person can’t afford is a completely different issue than fixing the problem of routine affordable care being exorbitantly expensive.


According to Wikipedia, there are only .5% of all physicians in the US who can perform neurosurgery. So it's probably safe to say the demand for brain surgery is much higher than the supply.

This incentivises people to become doctors that perform such complecated procedures as it takes a lot of time and a lot of money to be able to do those things.

If you were to force doctors to perform work on people that can't afford it, then presumably they will earn less money. If they earn less money, there is less incentive to do that kind of work as they will pick something easier and more profitable.

You will end up with fewer people to do brain surgery.


There are two parts here that are not clear, and potentially misleading for folks unfamiliar with how doctors are minted in the US. The first is the cost to the individual to become a neurosurgeon. The second is around the supply side of the health market.

First, to become a practicing doctor of any sort one first completes med school then a residency and (depending on specialty) fellowship. The med school part is more or less the same for all physicians from your GP to brain surgeons to psychiatrists. Many folks take out loans to cover med school.

The residency and fellowship parts are paid. In practical terms this means a person becoming a neurosurgeon needs no more loans or upfront cash than a person becoming a GP. (I assume everyone is familiar with opportunity cost so will leave that part unsaid)

As an aside, much of the funding for these programs comes from the public (via Medicare).

All this means, the cost of becoming a neurosurgeon is about the same as any other specialty.

As for the supply side entry to med school and selection to residency programs are the big bottlenecks.

Med schools are accredited via doctors trade bodies. This means doctors (not market forces) decide how many new folks can become doctors.

As previously mentioned, residencies are largely funded via Medicare already. However, the number of residents has been capped since 1996. In that period of time the US population has grown by about 60 million (25%).

You may have been familiar with all this, but I think the context is important for discussing market solutions to healthcare — there are a lot of distortions around the US having anything resembling market behaviors.


I suppose that the amount of doctors graduating each year is below the supply-demand equilibrium, and this us because the artificial supply-side limitation. Most doctors are overworked, despite their very high throughput and medical offices' efficiency.

This gives doctors a way to pay out their colossal student debt, though!


How did you come to your concluding without looking at demand?

I don't need brain surgery every tuesday.


This article suggests that there is a gap, and is widening. Only 1 to 61,000 people. It also mentions that they tend to be clustered in more populated areas, leaving some places without any coverage.

https://aansneurosurgeon.org/departments/neurosurgical-workf...


If money were the only incentive to life no one would become a schoool teacher. Your summary is missing something.


Someone will still become a school teacher, they'll just be incompetent at it: https://www.thestar.com/yourtoronto/education/2016/05/13/for...


If money were the only incentive tons of people would become school teachers because school teachers make significantly more than the average. Other incentives, like having to deal with kids and get a degree, is what keeps people out.


Entry-level teachers earn over $40,000 according to Payscale. Median income for the lower class is about $25,000. Anecdotally, it's not unreasonable to become a millionaire in real estate by the time you retire on a teachers salary.

https://www.pewresearch.org/fact-tank/2014/12/17/wealth-gap-...


That is true, but if you're the type of person that likes to help others it's much easier to become a teacher than doctor.

Also, if you are a doctor and your primary motivation is helping people, wouldn't you want to help many people with simple problems, than few people with highly complex problems (which most likely have a higher risk of failure)? There is already a shortage of doctors doing the easy stuff.

I just don't see the incentive for doing difficult procedures other than with money.


> Also, if you are a doctor and your primary motivation is helping people, wouldn't you want to help many people with simple problems, than few people with highly complex problems (which most likely have a higher risk of failure)?

Your analysis completely falls flat here. Not all doctors are motivated by the same things and yet most of them would consider their primary motivation helping people.

Neurosurgeons are a prime example. They would very much prefer few complex cases (not everyone gets a brain tumor thankfully) as their way to maximize benefit rather than manage cholesterol meds for 100s.

Speciality surgeons by their nature are motivated by a certain degree of risk.

The incentive for doing difficult procedures is often because they are challenging. Compensation for doctors in the US isn’t fully correlated with difficulty either... with no offense to my dermatology colleagues making more than most general surgery sub specialists.


> Not all doctors are motivated by the same things and yet most of them would consider their primary motivation helping people.

That's fair. I probably over-emphasized the money part of it.

> The incentive for doing difficult procedures is often because they are challenging.

We can assume that since doctors aren't doing this for free or at least cheap already, that they require at least some amount of compensation. To return to my original point, if you force doctors to perform procedures on people that can't afford them, and the amount they receive is less than they want, then there be a greater shortage of such doctors.

> Compensation for doctors in the US isn’t fully correlated with difficulty either... with no offense to my dermatology colleagues making more than most general surgery sub specialists.

Not directly anyway, it's probably more supply/demand. Low supply of neurosurgeon means high cost. Whether that's from artificially suppressing the supply of these doctors or because it's very challenging is up for debate.

I'd guess dermatologists make so much because people are more willing to spend money on that sort of work.


No, but alternatives and transparent pricing allow us to weigh alternatives and to have an adult conversation about all of us will die someday (save singularity). Then we get to negotiate about what it's worth to extend that date of death forward 1, 2 .. N days for $N .

Next we look to that "scorecard" (bank account) which is the value provided but not called upon and get to see if we can call in enough "favors" to afford the healthcare


As I see it, there are two solutions. Either all medical costs are "free" for the consumer and paid for via a tax, or you have a proper insurance system where consumers participate in a transparent market for non-urgent medical care and buy insurance only for things they can't afford. The latter needs some extra regulations for emergency care where you can't compare prices.


Then imagine there is a government aid program to help those people. For the sake of argument we'll use the term "food stamps".


There are people who can't afford groceries now - we don't fund that by having the government pay for all groceries for everyone.


universal healthcare is sort of the equivalent of free food. What if your medical condition is malnourishment?


Food stamps (or the equivalent value in cash).

Now s/food/health


This would be great if health choices were being made by rational consumers. But when I break my leg, I want services quickly and I don’t have time or energy to price compare ambulances. Healthcare is not a marketplace that will have compassionate outcomes if we allow deregulation.


Yes, because in countries where health care prices are 3-100x lower it is total anarchy. People lie on the streets for hours, browsing price comparison websites while bleeding out.


in most countries you don't get billed your quarterly wage when an ambulance picks you up for a 10 min drive to the hospital.


This isn’t a very good analogy.

In a just world, nobody would go hungry, nor would anyone die prematurely or suffer needlessly due to lack of care. We can obviously afford both, in this country, just like they can everywhere else in Europe or Canada. So this entire argument about insurance is a straw man.

It’s not the doctors who set up this world. It’s people who want to pay less taxes, but blame doctors.


Why shouldn't doctors and the medical industry take the blame in the US? They artificially limit the supply of Doctors in the US and have the audacity to claim that building more medical schools will ruin their already lucrative careers.

The whole industry is a shame.


Regarding Europe, which I happen to have friends all over: it's not exactly as rosy.

European countries do have more doctors per capita, which is good.

They don't have nearly as much resources in the system, though. Come to a doctor with a bad cough, get a prescription for Paracetamol. You got to have a pretty bad infection to get a prescription for an antibiotic. Endure a long discussion with a doctor to renew an antidepressant prescription made in another country.

Lines are pretty long, too. Wait for two weeks to get an appointment about your coughing and sneezing. Have a deteriorating chronic condition and be prescribed painkillers and be told to wait for a year. You're not yet feeling so bad as the people who are currently being treated and who take up the capacity; these people also waited a long time.

All are examples from my friends dealing with the health systems of Netherlands, Sweden, Germany.

The US system has a ton of issues, but I still take it over these European systems. Have I been floored by medical bills? Yes, from my dentist, from my wife's heart surgery. But I somehow managed — and we both received instant, high-quality help.

Even the Russian system is better, or used to be back in the day. You could buy local insurance, and the choice was reasonably wide. You could pay upfront in cash, and the sums were manageable — Moscow definitely not being a cheap city, more expensive than many EU capitals.

Of course, I'm talking from a perspective of a well-earning software engineer who lives in metropolises, not in countryside. Still I think that either system has downsides, and the European systems are not superior, but just suck differently.


I'll chime in with my experience in Austria:

* If I have a cold, I go to a doctor without appointment and if I'm unlucky, I have to wait for 2 hours. Usually it's 30-60 minutes.

* If I have a specific thing that requires a specialist, I may or may not have to get a referral from a general practitioner first. Most specialist don't really need it, but for an allergy test I needed to get one. This puts me at 2 x 60 minutes wait time.

* Costs are close to nothing. Drugs will cost a little, up to around 6€ for a pack of meds. I have to pay 2€ for a doctors visit due to the specific insurance provider I have, which is okay. I needed to pay 12€ for an x-ray because it wasn't an emergency.

* My austrian insurance provider payed more than half of a hospital trip I had to take during vacation in Taiwan. Total cost of the trip to the hospital without insurance was 130€, which included check by the doctor, pain medications and some medical equipment. I had travel insurance, but I didn't use it because I was left with a bill of just 60€.

* A few times I was angry because a doctor only took 5 minutes time, prescribed some pain meds and sent me on my way. Told me all I can do right now is wait until it gets better. Turns out, that was the case.

* If it's an emergency, you get treated immediately.

I wouldn't trade our system for anything. It's not perfect, but it's perfectly fine.


Can confirm. I am from Slovenia, which just copy pasted this system (mostly), and it works decently.

we are not as ritch as Austria and that shows, so if you don't have emergency wait lists for certain things are longer.


Exactly the same experience here in Belgium, only the doctor visit costs are way higher. Instead of €2 it's more like €25 per visit or I think €35 for home visits. I don't have experience with costs abroad so can't comment on that.

What is correct is that in Belgium you also don't get antibiotics because you ask for them. Only when the doctor deems it necessary you will get it.


In the USA, at least in my experience. If I have a cold I still had to make an appointment which would be 2 to 3 days later. I got around this by joining a doctor in a clinic and they'd let me see any doctor if my doctor wasn't avaiable but i'd have to sit in the waiting room for 1 - 2 hrs.

In Japan I have had mixed experiences:

Good:

* It's relatively cheap. Apprently the government sets prices. The government offers medical insurence. It costs based on previous year's income. i've paid as little as $15 a month and as high as $300. I don't know the range. It only covers 70%. My employeers have provided insurance that covered more.

* Fast. There are no appointments or a least I've never made one. Just walk in, usually no more than a 20 minute wait. Did have one long wait 1998.

* Some pretty good tech. Had back problems once. Got an MRI immediately (Japan has/had ?x more MRI machines than USA). Last week had an unusual pain in neck, went in, got immediate endoscope pictures inside neck.

Note that in Japan, unlike the USA, hospitals are a place you can just walk in for a cold. (you can also go to small clinics and private doctors). The advantage of going to a hospital is they have more specialists and equipmnent. The disadvantage is sometimes longer waits and probably not as close. I only bring that up as a contrast to USA where a hospital is someplace you don't go unless it's an emergency or surgery or something else really serious.

Bad:

* Bar to be a doctor much lower. Have had several very quack doctor expeiences in Japan. Have not yet had a quack doctor experience in USA

* Unclean. Have been to several facilities that seemed unclean to me. Machines that looked like people had coughed on them for years and had never been cleaned. Not all places but enough the experience has stuck out. No idea what that's about but just surprised since my experience in the USA was that medical services are or at least appear spotless.

Unknown:

* Nurses require no training (or so I was told by a nurse). You just go apply for job like a fast food job. Is that better (lower cost) or worse (less training).


> Unclean. Have been to several facilities that seemed unclean to me.

The thing I like about it is that you can just leave the unclean facilities behind and find a new doctor, and it will cost you exactly the same as the old one.


>> In Japan I have had mixed experiences:

Replace ‘Japan’ with ‘metro cities in India’ and its almost the same. I can’t still fathom why there would be no walk in facilities for ailments like cold.

I still remember my shock when in US I realised from a colleague that for my cold I need to wait because I can’t walk in and need to take an appointment.


I noticed recently in the USA places like Walgreens you can see a doctor for colds. That seems like a great idea to me. I guess that's similar in Thailand and maybe Malaysia.


What does a doctor do for a cold? In the UK and I wouldn't dream of going to the doctor's for a cold. You just wait it out don't you?


I don't get this either. If I have a cold, I just take acetaminophen a couple times a day to suppress the symptoms until it goes away. Sure, if you're elderly or have an autoimmune deficiency, you may want to see a doc for everything, but that's not that common.

(Amusingly, I was in London a few years ago and came down with a cold. One of my local colleagues told me about this amazing thing called paracetamol that was just magic and would make me feel better. I was astounded that we didn't have it back home in the US... until I looked it up and realized it's just acetaminophen under a different name.)


YES?! What the hell? Especially considering, the kind of sinus clearing pills which are forbidden (classed as a narcotic) in Sweden, they handed out in jars like candy at the US office.


Walk in facilities do exist in the US, but wait times can be 2+ hours because the supply is so constrained.


There's no reason to visit a doctor for the common cold. Stay home and get some rest.. Do you take your car to the dealer or local mechanic to put air and washer fluid in your car?


>There's no reason to visit a doctor for the common cold.

That's such an american thing to say. A flu can be swine flu and fever can be Malaria or Dangue and one day delay can mean losing your life, so people in many parts of the world take fever and flu seriously.


A common cold and a flu are two different things.


I live in Eastern Europe so it's a bit like a third world country compared to Germany or Sweden. But let me tell you, it's not like you describe it at all. First of all, you don't get antibiotics just because you think you need antibiotics. And then, there's the private sector which has normal prices. And they treat you like a VIP.


>The US system has a ton of issues, but I still take it over these European systems. Have I been floored by medical bills? Yes, from my dentist, from my wife's heart surgery. But I somehow managed — and we both received instant, high-quality help.

You are not the norm.


I think you are mis- characterizing the European systems. I say systems as each country is different - some better than others for sure, but from what I've seen from both the US and European systems, I prefer the ones where my family going bankrupt does not depend on one of us getting seriously sick or not. The cost of healthcare per capita is way higher in the US, and outcomes generally poorer (see infant mortality rates for example).

The state of insurance for health in the US has far reach ing, society altering negative effects too which are often not considered. My sister in law would like to stay at home for a few years woth her young kids taking a career break - but cannot as she'd loose her insurance, despite her husband's income being enough to support them, it's the insurance holding her back. This absolutely would not be an issue anywhere in Europe I can think of.


I agree that the "cost disease" is bad enough.

It's strange to hear about not getting an insurance if staying at home. That's exactly what my wife did when our child was small. She had the same insurance as me, because I was able to add her to my employer-sponsored insurance policy.

What really sucks is to be a small-scale entrepreneur, a garage-stage startup founder. You're cash-constrained, and there's no employer to give you a cheaper insurance plan. Obamacare is said to have helped recently.


In this case she is a teacher in CT with very good benefits, but her husband, while on a decent salary has pretty terrible benefits, so she could not switch to his insurance is she stayed at home. Crazy situation when you think about it


Wait for two weeks to get an appointment about your coughing and sneezing.

Here in the UK you can get an appointment to see your GP the following day most of the time, and we have walk-in clinics for same day check ups if you don't care which doctor you see. Availability varies a lot around the country but its mostly good.


This was not the case in Bristol when my GP took 2+ weeks to see me for the first time, then upon arrival, pawned me off on a nursing assistant rather than a doctor, then happily prescribed antibiotics for an “STI”, and then ignored my asks for a follow-up appointment for 2+ more weeks.

It turned out to be cancer. Original complaint stated when trying to book the appointment was “I have a testicle the size and hardness of a golf ball”.

Through that now, but the NHS is dysfunctional compared with U.S. healthcare. I have several relatives with bad hips or knees in U.K. who got prescribed stronger and stronger painkillers for >6 months because the waiting list for surgical intervention in their cases was so long.


> You got to have a pretty bad infection to get a prescription for an antibiotic

That's because of antibiotic resistance. Increased use of antibiotics means they're less effective in the long term.


> Come to a doctor with a bad cough, get a prescription for Paracetamol.

Good. Most coughs are viral, and that's the appropriate treatment.


> but that it would have to be much _more_ like grocery stores to call it a free market.

Except not really. If I'm poor I can choose to eat nothing but ramen. I might not like it, it might not be the best for me, but it'll keep me alive. If I'm poor and have a heart attack I can't choose to just take tylenol, I do need that bypass surgery.

The ability to walk away from a transaction entirely is what makes the market free, and because health care is life or death there is simply no way to make it a free market, you are compelled by your life to make (many? most?) of the transactions.


I don't think that's a great analogy.

There are plenty of medical conditions where there are several options for how to manage it. With insurance, people usually choose based on risk of failure or complications, recovery time, etc. Without insurance, someone might choose primarily based on price, and a poor person might go for the cheapest option. For some non-life-threatening issues, a poor person might refuse treatment if the cost for even the most minimal intervention is too high.

This is obviously not what we want -- ideally, we want some reasonably-high minimum level of care so people don't have to choose between, say, starvation and permanent disfigurement -- so, as the parent says, we don't want health care to be exactly like a grocery store, but this kind of thing would be more like a free market for health care.

(And even in your example, you still have to buy and eat that ramen. Sure, you don't have to pay for steak, but you have to buy something. You can't just walk away from the transaction entirely.)


Have you ever actually tried to do this? It is hard.

A family friend, a smart guy with excellent insurance, was recently diagnosed with Parkinson’s Disease. Since I’m a neuroscience researcher, he asked me for advice. Despite working in an immediately adjacent field, at a Parkinson’s Centre of Excellence, with access to experts and tons of relevant training and literature, I found it very difficult to make a recommendation, even between the options his doctors had already laid out. I can only imagine how hard this would be if I had to consider the price of these treatments too.


No one said it was easy. Regardless, I'm not sure this particular example is relevant: you cherry-picked something that actually _is_ hard to decide about.


The problem is that there is not a single reason that healthcare is so expensive. Even if you list the top 15 reasons, you still have to apply the "5 whys" to each of them to find root causes and possible solutions.

- Doctor's are paid too much... why? - Well they need to be paid a lot because medical school debt is 250k or more... why? - Medical schools/the AMA are artificially limiting the number of students and residents for their own ends (keeping wages and scarcity high) so they need to charge a lot... why? - I honestly don't know.

But the current political climate in the US is incapable of dealing with any kind of multifaceted problem.

One thing that will not make healthcare less expensive is "Medicare For All". It will just shift the bill to different people. Now, you can argue it's the morally correct course of action, or those people who will be forced to foot the bill (upper middle class taxpayers) are more capable of doing so, but you cannot credibly claim with a straight face that it will make anything cheaper. In fact, the opposite will occur.

(I don't want to hear one thing about negotiating power. That is a debunked line of reasoning. Medicare/Medicaid cover more people than many single payer systems in other countries, and their costs are still outrageous)


> One thing that will not make healthcare less expensive is "Medicare For All". It will just shift the bill to different people. Now, you can argue it's the morally correct course of action, or those people who will be forced to foot the bill (upper middle class taxpayers) are more capable of doing so, but you cannot credibly claim with a straight face that it will make anything cheaper. In fact, the opposite will occur.

Having every person under the same plan that has the negotiating power of 327.2 million people will definitely drive costs down. Don't want to pay what the government says it is going to pay? Good luck finding customers then, because the government is bargaining on behalf of all of the customers in the US.

People who say this stuff are the same people who proclaim there is no solution to a problem that the only occurs in the US. Literally, every Industrial Nation has addressed this problem for much lower costs with better out comes.


> Having every person under the same plan that has the negotiating power of 327.2 million people will definitely drive costs down. Don't want to pay what the government says it is going to pay? Good luck finding customers then, because the government is bargaining on behalf of all of the customers in the US.

So my mom and her boyfriend are both under Medicare now, as was her late 2nd husband. My mom and I had both generally been Medicare For All supporters (with some reservations in my case), but I got an earful recently about how people who support Medicare For All don't know what they're in for...

The problem is with Medicare's system of billing codes. Sure, if a hospital doesn't like the reimbursement rate, they can't go find other customers. But they can - and will - find other procedures. Not making enough money from that doctor's visit? Well, we better do some tests, then, just to be sure there's no lurking problem. Oh, there was a spot on that X-ray - more tests. We didn't find anything serious, but there was a benign growth that you probably should get taken care of. Don't worry, it's a quick procedure, it could potentially be done as an outpatient but you might want to make it an overnight hospital stay just to be sure. Shit, you contracted an infection in the hospital? Gotta extend that stay until you're better.

Basically, if they can't raise prices, they will find ways to do more procedures. My mom's description of what modern American health care is like as a senior citizen is truly terrifying - basically they manufacture illnesses so that they can cure them and bill for it.

I came to the conclusion (reinforced by every corporate scandal you read about on HN, and my time in the financial and tech industries) that the problem isn't health care per se, but something is deeply broken in American culture. People don't give a shit about their fellow Americans as people, only as dollars, and as a result no matter what system you institute it will end up being gamed in harmful ways. The U.S. is falling from a high-trust to a low-trust society, and there are few if any ways to bring it back.


>But they can - and will - find other procedures. Not making enough money from that doctor's visit? Well, we better do some tests, then, just to be sure there's no lurking problem. Oh, there was a spot on that X-ray - more tests. We didn't find anything serious, but there was a benign growth that you probably should get taken care of. Don't worry, it's a quick procedure, it could potentially be done as an outpatient but you might want to make it an overnight hospital stay just to be sure. Shit, you contracted an infection in the hospital? Gotta extend that stay until you're better.

Right. This is exactly what we want (save the MRSA). The problem with the American healthcare system isn't just that it's expensive; it's expensive and still has worse outcomes than in other industrialized countries. Part of the reason for that is that patients cut off their care for financial reasons, and not because they've reached a satisfactory conclusion about their state of health.

The way you describe the mindset isn't a function of Medicare per se, but of the fact that there's still a profit motive involved, even when receiving Medicare funding, in a system that is largely privately-funded. Maybe releasing that source of pressure and competition and scarcity will change the way people on both sides of the doctor-patient relationship approach their care.


This sounds like an ignorant view of getting proper healthcare.

There are more things to check because older people have more medical problems, therefore more tests, more treatments, etc.

We would have to see what would happen if you gave a 25 year old medicare in this country, I doubt it would be the same experience that an elderly person would have.


There is a very strong correlation between which additional tests are requested and what the hospital can charge under Medicare reimbursement codes. (My mother's boyfriend is a former doctor, and intimately familiar with the health-care system from the other side of the table.) Both of them are also in fairly good health (my mom has no pre-existing conditions, her boyfriend has some issues with his back but nothing unexpected for an 80-year-old), and were definitely not treated like this while on private health insurance.

What do you think would be different between 25-year-olds and elderly people? The incentives are the same in both cases, produced by the billing code.


And yet for all that, Medicare is vastly cheaper per capita than private healthcare. You get more service for less money? Sign me up.


25 year olds have fewer health problems that need treatment than 80 year olds.


My point is that people are being treated for health problems that are not problems because the provider can then bill Medicare for it. That's not going to go away because there are fewer health problems; the whole issue is that it doesn't matter if there are health problems, the provider will find or create some that they can bill for.


Oh, okay. I can't speak to that specifically, that seems like an unethical healthcare provider if they're genuinely performing unnecessary procedures. They should probably be reported to the state medical board.

I think there is also a matter of what you view as 'necessary medical care'. Preventative medicine is vastly cheaper (and more effective) than reactive procedures to fix things that have become serious issues.

(It makes practical sense, right? You properly maintain your roof so it doesn't leak, that's cheaper than fixing the damage caused by the leaking roof).

This is particularly true with older people who have higher incidence of cancer, heart disease and major organ problems.

So yeah, they may send you for a battery of tests that they can charge the state for, but it might be preventing a much more expensive (and traumatic/painful) surgery down the line.

But people seem to focus on the collective bargaining and price aspect of everyone having proper healthcare, which is weird because it shouldn't be about that, it should be about increasing the efficiency of the overall system and quality of life of the people involved.


You're not wrong they are deeper problems, but you say these things as if M4A would cause them when they are happening now. I was recently asked by a dentist if I wanted a special kind of cleaning. She then nervously admitted that it wasn't necessary, but she "wanted to make sure." M4A won't fix all the problems, but it would definitely make things better, and hopefully, lead to people demanding more.


So your conclusion is that we shouldn’t fix the part that we can fix because people will still be assholes?


> Having every person under the same plan that has the negotiating power of 327.2 million people will definitely drive costs down.

Why do you think this would be true? Why do you think the bargaining power would work the way you think it would?

If you were correct, then cop cars must be fairly cheap compared to normal cars. Is this the case?

What about other goods? Laptops? Cruise missiles? etc.

Actually is it true for any good which the US Gov is the sole buyer? Can you think of even a single good where your supposition is true?


Perhaps this is a good reason:

>Literally, every Industrial Nation has addressed this problem for much lower costs with better out comes.


But why those nations have lower costs isn't so simple. If you remove all profit and admin overhead from the US system, its still something like $5000/person more expensive than other countries (I think that that was vs Canada).

A large component of healthcare cost in the US is simply healthcare use. We are deeply, deeply unhealthy with 75% overweight rates and absurd levels of pre/diabetes, which are the largest comorbidities of all, and comorbidities of each other. Costs will never be comparable until overweight/obesity rates and usage are comparable too. They are not.

High prices in the US are very unfortunately largely explained by usage, and no amount of profit-reducing or cost cutting will work unless you are cutting usage itself:

https://randomcriticalanalysis.com/2016/09/25/high-us-health...


It's not just about cutting usage, it's about cutting the right kinds of usage as well.

Lots of Americans, anecdotally, skip out on regular checkups or checking on minor ailments because of anxiety about paying copays. And then eventually something that could've been easily treated when detected initially blows up into an expensive ER visit or requiring specialists.

A good chunk of this could be solved if we stopped using the ER as the catch-all emergency net for literally everything.


In the UK the NHS negotiates prices for drugs. NICE have to approve all drugs and if a drug is too expensive, the manufacturer either has to lower the price so that the benefit outweighs the cost, or they lose a large market.

This is why hand waving away "bargaining power" ignores one of the sources of high costs.

The other is that our doctors are mostly either employed by the NHS, or employed by a private provider who is paid by the NHS ... yes, there are doctors who do private only work, but they are fairly small in number.

Perhaps our student loans system also helps - fees are £9k a year, but you start paying them back at 9% of income over £25k ... so it's essentially a graduate tax and they are fully written off after a set number of years if you don't pay them off.


The difference in drug spending between countries amounts to a small fraction of overall healthcare spending. $1200 a year in the US versus $900 in Switzerland or $800 in Germany, Canada, and Japan.


It's incidental what the numbers are. Given how effed the US system is, I would fully expect that $1200 being spent on the entirely wrong things, like a few super expensive drugs, and a lot of antibiotics which should have been dirt cheap getting a ridiculous markup, or on Oxycontin.


Doctors should earn enough to pay the loan off


Really? So there are zero people from other industrial nations that come into the US for health care?


Zero people from other nations come to the US to save money on health care. The ones that do come are looking for specialists for some exotic condition, not because they love the level of care or the price tags.


And do you think those specialists would exist here if we had medicare for all? no, evidence: all those other countries that have that and no such specialists.


Yes they would. The Americans also go to other countries to seek treatment in special cases.

Also, if our healthcare works well to treat rich foreigners in special cases, but sucks otherwise — I say, we should scrap it.

But sure, we can cherrypick metrics all day long.


This is a great point more people should make. There’s nothing “America first” about preserving the inefficiencies of a system just so that very wealthy people from everywhere can get care and leave (and ultimately specialists would anyway still exist, even if their treatments aren’t covered by Medicare)


Actually, that's completely what "America first" means by those who say it, at the least the ones who are in on the deal.


if everyone had that specific knowledge, there would be no specialists. no, different countries develop different specialties. famously, Kobe Bryant went to Germany (a country with national healthcare) to get a knee procedure from a specialist.


It's not a one way street, though. Americans go to other countries like Canada or Cuba for health care, including, famously, GOP Congressman Paul Ryan.


Cop cars aren't collectively bought. For one its on a state by state basis, and then in some states individual PDs are responsible for their own vehicles, they just get a budget to buy and fix them.

That means they usually end up in an imbalanced power relationship of small 20-30 person local PD force approaching Ford / GM asking for their police cruisers.

Some states, of course, do collectively bargain their service vehicles like that, the USPS is probably the most prominent example of collective bargaining on a national scale - the post office bought 140,000 of them over 7 years for below consumer grade vehicle pricing. Even nowadays when they are reevaluating replacing their fleets it only averages out to about 41k per truck for a new model and that includes having to refit garages and post offices to accommodate them.

I'm also pretty sure there are licensing deals between US auto makers and various state bureaucracies to price control service vehicle costs, but its still never like a private automaker is getting an order for 80k cop cars from one entity.


What other goods is the US Gov the sole buyer of, for which the sellers can't easily shift to other customers? Cop cars clearly doesn't apply, as carmakers have other customers. Doctors, hospitals, and pharmaceuticals will face true monopsony, which means sell at gov rates or quit entirely. Some suppliers will quit entirely, but most won't.


Wait, how much are you paying for cruise missiles? I always feel like my cruise missile guy is ripping me off.


This is how the NHS functions and it has far better rates.


Sure, the government can say they'll only pay half as much as they do now, so providers will only provide half the care. Have you ever actually done any government procurement? Saying the government can just wave a magic wand and lower prices because "they said so" will only hurt the quality of care patients receive in the US.


The 'quality of care' you receive in the US is entirely dependent on your wealth and it's only the upper class that actually benefit from it.

You know what quality care I got as a poor person? Nothing, because my family couldn't afford it. I was given the privilege of going through highschool and college with teeth quite literally broken down to the gumlines and abscessed because it was either that or not being able to have a future.

I'm tired of hearing nonsense about quality of care because for a lot of people the quality is set to null.


Every time I read arguments online of people defending the American system, I almost always get hints that they are wealthy people, usually because they admit they can actually afford the care instead of essentially going broke over it. Healthcare debt is the leading cause of personal bankruptcy in the US, so it is statistically true that it is too much for the people below the median. Even for people in the middle class.


Did something happen to your teeth that basic maintenance like brushing and flossing wouldn't have prevented?

What you're describing doesn't sound very normal, even if you never went to the dentist in your life.


Genetics and diet seem to be large factors in dental health.

Poor people tend to not be able to afford healthy foods and will often eat foods high in sugars, which are terrible for your teeth. Perhaps their parents couldn't afford toothpaste regularly, or floss at all, or could only replace their toothbrushes once a year or two. Perhaps the parents work all the time, and don't have as much time or energy to instill strong daily tooth hygiene habits in their kids or police their brushing.

As an anecdotal data point, a friend of mine always goes for regular dental checkups, and brushes and flosses daily, but still has tartar buildup and gum issues. He had to get a deep-clean, and was in pain and bleeding for several days afterward. I (foolishly) avoided going to a dentist for many, many years, and in that time did a mediocre (at best) job of daily maintenance. When I finally started seeing a dentist again, I got away with two minor fillings (my first ones, and they didn't even numb me at all for the drilling) and a deep cleaning, where I had no bleeding issues and the pain was gone within a few hours (aside from tenderness around the anesthetic injection sites). My gums aren't in great shape, but are better off than my friend's. Unknown as to why the outcomes are so different. I can't imagine what my friend's teeth would be like if he didn't go to the dentist and didn't have good hygiene habits.


The quality of care is already so low that you're better off financially and health wise just flying to Europe, or fleeing to Canada.


Thailand. Some of the best medical care of any developing nation, at around 10% of the price for most procedures. A night in a very clean, modern Thai hospital can be less than $100/night.


> Having every person under the same plan that has the negotiating power of 327.2 million people will definitely drive costs down. Don't want to pay what the government says it is going to pay? Good luck finding customers then, because the government is bargaining on behalf of all of the customers in the US.

That explains our highly competitive, low profit margin defense industry.


Peter Attia discussed this issue pretty extensively Mart Makary on his podcast. It seems like most of the medical community agrees this would drive down costs in the near-term. The issue is what happens to care, choice, and price long-term in a single-payer system.

I think is we force the disclosure of what every company or individual pays for specific treatment or medication, this transparency alone should be a big step in the right direction to normalize costs.


There are 60 million people on Medicare. If you can’t negotiate with twice the population of Canada I don’t think the problem is not enough beneficiaries.


You know Medicare sets separate prices from normal insurance, right? See [1]. For most procedures, there's the "we make up a number to charge to insurance companies" price and then there's the negotiated Medicare price with associated billing codes.

[1] https://www.healthcaredive.com/news/cbo-reports-show-private...



This episode of planet money talks about this https://www.npr.org/2019/09/04/757645741/what-medicare-for-a...

Because of redundancies in the US system, there are like 5:1 administrators for each doctor. That’s a huge source of the costs.

Medicare for all will likely cut a lot of those jobs to gain the savings. This show talks about if that’s good or bad for society.


It amuses me when people think that letting the government run something will make it more efficient. I do not disagree there is tremendous waste in the current system. I strongly believe that expanding the government's role will only make it worse.


If only we had examples where the government running something like healthcare resulted in a better outcome for citizens.

Perhaps a country in Europe, as developed as the US is. I mean, a country that we literally border with would be too much to ask for.

Perhaps some of us would be less amused by the concept of government-run healthcare.

Too bad we don't have the example of literally all of Europe, Australia, and Canada to kill that amusement vibe.


To play devil’s advocate, those nations are also good at providing other services that the US provides poorly.


In my opinion, the best yardstick for a health care system is how long you have to wait to be treated for cancer. By that yardstick, countries like Canada and England stack up quite poorly when compared to the USA. Canadians don't come to the US to save money on health care. They come to the US because they have an expensive potentially fatal medical condition, and they might not survive a six month waiting period for treatment.


The wait time for cancer treatment for the poor in Australia is the same as the rich, whereas the wait time in the US for the poor is "have you made funeral arrangements?"

Having had a family member just go through the Australian health system for breast cancer, her treatment was on a time-scale of a few weeks, but she had the time and was being checked often. In the US, we'd be making funeral plans and bucket lists because they'd not be able to afford treatment.


The wait time thing is a total canard. Countries like Canada do have long wait times for things that do not require immediate attention. As an example, often you make your appointment for a physical a year in advance. And then, people who like to twist the facts into a false narrative point to the "year long wait time" to get a physical. Nonsense.


>In my opinion, the best yardstick for a health care system is how long you have to wait to be treated for cancer. By that yardstick, countries like Canada and England stack up quite poorly when compared to the USA

I don't know who told you that about Canadian healthcare, but it's simply not true.

When my mom was diagnosed, she underwent surgery within days, and was getting chemo/radiation as soon as was medically safe.


>In my opinion, the best yardstick for a health care system is how long you have to wait to be treated for cancer.

To quote a famous movie: well, you know, that's just like uh, your opinion.

Why would the wait time (and not treatment outcome, or rate of occurrence) for one group of diseases be a good metric for evaluating the overall performance of a healthcare system?

In my opinion, it's a horrible metric. To give a car analogy, the 0 to 60 time in snow while towing is surely a metric, but there are other things to consider as well when you are buying a vehicle.

>[Canadians] come to the US because they have an expensive potentially fatal medical condition, and they might not survive a six month waiting period for treatment.

A lot to unpack here! But, first, the TL;DR is no[1].

More specifically:

1)Cite sources on people and England and Canada having six-month waiting period on cancer treatments in cases where urgent intervention is deemed necessary ("might not survive").

2)Look at the number of those cases.

3)Compare and contrast with similar cases in the US when people don't get treated because they don't have the money.

4)Look at the numbers again.

5)Look at how many Canadians do come to the US (in absolute numbers, as a percent of the Canadian population, and as a percent of patients seeking the particular treatment).

6)Stop perpetuating misleading opinions.

I won't cite the numbers - that's your homework when making bold claims. I found the numbers hard to find, which means to me that your claims are likely not substantiated.

I'll be glad to be proven wrong here.

[1]https://www.washingtonpost.com/news/fact-checker/wp/2016/10/...


Rather than pull up the specific data regarding US/UK/Canada, I'll just reply with a link to a general overview of how free (but rationed) government provided health care compares to what exists in the USA:

https://www.forbes.com/sites/johngoodman/2019/03/05/what-soc...


I'd expect more from someone with "numbers" in the username.

Your source is wonderful. Here's my favorite part:

> In Canada, when patients see a doctor the visit is free. In the U.S., the visit is almost free

If someone can tell me how to move to that US, I'll be packing my bag right away!


You realize there multiple working examples of a national healthcare plan right? Including one very obvious example to our northern border. You're arguing like this is some huge open ended problem like climate change.

Almost every developed country has a national system that provides excellent care for far more reasonable costs. Except the US, of course.

I'm starting to realize why America will never get its shit together. Too many people without facts in the debate, believing they are correct, without any evidence at all.


Switzerland doesn't have nationalized healthcare and Singapore has a hybrid model. In a ranking of top 5 healthcare systems, on average you will find some that are nationalized and some that are not.

One thing that is unequivocally a mistake in healthcare in the US is making it a "free market" and then having employers pick the insurance for their employees.


If you do not want to hear one thing about negotiating power then you are missing the main reason why medical costs are skyrocketing.

Medicare/medicaid does not negotiate drug costs down because it is prohibited by law from doing so. This is because of a law signed by the Bush administration (https://en.m.wikipedia.org/wiki/Medicare_Prescription_Drug,_...).


In a sense, wasn't the choice to not negotiate drug costs itself the result of a negotiation? I believe the way it works is that health insurers and providers threaten to fund fear-mongering attack ads against politicians who support laws that don't like. The politicians cave and carve out rules for the industry.

So it's not that the Medicare drug care costs aren't negotiated, its that the chance for lower costs was traded away by Congresspeople of the past (many of whom aren't in office anymore) in exchange for campaign funds. Not literally a campaign fund check, of course, but countering an attack ad costs campaign money that they could be spending otherwise.


> (I don't want to hear one thing about negotiating power. That is a debunked line of reasoning. Medicare/Medicaid cover more people than many single payer systems in other countries, and their costs are still outrageous)

It is illegal for Medicare to negotiate drug prices. That needs to be fixed.


I was going to comment the same thing. Pointing to Medicare/Medicaid as examples for why drug negotiation doesn't work is an impressively incorrect line of thought.


Medicaid mandates drug prices at a fixed percentage of what private buyers pay.


So just raise prices.


Private buyers won't just automatically pay more, so they can't "just raise prices".

Of course prices will still be raised, but the point is that Medicaid drug spending is rather directly linked to negotiated prices for drugs, not just based on whatever the manufacturer asks.


The private companies that administer much of Medicare drug coverage in fact do negotiate prices. CMS can't step into those negotiations.


And Medicare costs are lower than private healthcare. OP just seems to be arguing that it's not low enough?


> Medicare/Medicaid cover more people than many single payer systems in other countries, and their costs are still outrageous

I appreciate your reasonable breakdown, but I don't understand this one. I've seen many reports talking about how the costs of basic supplies and procedures are dramatically higher in the US (and vary wildly within the US). Things like X-Rays, MRIs, etc, being off by an order of magnitude or more (though I'm sure if the median price differences are less dramatic than the extreme examples, the results I vaguely recall said there was still a noteworthy difference)

How does this not indicate some fundamental difference between the US and other "developed" nations outside of the factors you list above? (Honest question)


MRI is like 5x cheaper here (I paid less than 300$ for both knees) without any insurance just doing it privately. The reason I think is that it's easier to open a medical business here, people can't sue for damages (or they can but will never be awarded anything substantial), there is less regulation you need to comply with and the doctors and technicians make less money. All this makes it possible to provide medical services at reasonable price.

We have public single payer healthcare. The quality is low and lines are long (it's several months at least if you would like to get free MRI using that option and then like a year or more to get actual arthroscopy). Still I think shitty but somehow working public option keeps private providers in check because they can't charge arbitrary amount as there is always shitty option to fall back on.

To give you an idea about prices here if you go private: typical doctor visit: 40$, dentist (one tooth filling): 60$, arthroscopy: 1000$, full blood panel with about everything under the sun included (hormones, vitamins, minerals, insulin response etc.): 200$. The quality of service is low but higher than in major metro areas in US (according to my sister who lives in NYC). This is Poland so low wages are surely one component that makes cheap services possible but I think not the only nor the most important one.


> The quality of service is low but higher than in major metro areas in US

This is always my question when I hear about service being "great" or "terrible" - relative to what? I honestly have no idea if my healthcare is "good" or "bad", because I've only experienced one system. I have plenty of complaints, but there are also lots of things that don't go wrong that could.

People complain about lines in other countries, but me/my family has had waits of 2-6 months getting appts for new ob/gyn, dermatologists, rheumatologists, sleep specialists, etc. Mental health experiences have been worse until we stopped trying to do it through insurance at all and just ate the costs. Involved treatments (e.g. at a hospital, even outpatient) involve multiple, pricey bills.

So when you say "quality is low", what does that MEAN?


I am assessing it in two ways. One is comparing it to other services: do they have modern equipment? Is bureaucracy a burden? Do people working in those services generally act like decent human beings? Are doctors/technicians competent? Is it easy to imagine a service at higher quality and how much would it cost? Using those criteria I think medical services in my country are low quality, especially the public option.

Another way is comparing to other countries. I have family living in US (both immigrants from different countries, now US citizens, having children there) and very close friends living in Switzerland. Both lived in Poland for many years and often visit so we are all in good position to make comparisons. Both US and Poland suck in comparison to Switzerland in all imaginable respects. They comparison between US and Poland comes out about equal at least according to us.


Healthcare is driven by profits in the US and in the absence of any safeguards companies will charge as much as they can get away with.


He's comparing the higher per-person costs of elderly care to lower per-person costs of whole-population care.


I think we agree. I'm just saying it's not a single fundamental difference between the US system and other systems, it's myriad differences that combine to make things way more expensive in the US.


But you eliminate negotiation as one of those factors using other countries as a reasoning. I've never heard that this is debunked (though I don't expect that it is the sole factor). Do you have sources?

Or did I misunderstand and you are just saying that negotiation (or lack thereof) alone isn't responsible for all the cost headaches?


> Doctor's are paid too much... why?

You can also branch off here: because malpractice insurance is insanely expensive. Why? Because people sue over absolutely everything. Why? Because lawyers in this country are vultures.

If anything is overly expensive, you can usually track it back to insurance costs somewhere, which can typically be tracked back to the fact that we live in a litigious society.


Malpractice insurance is < 3% of total healthcare cost in the US. Considering malpractice occurs and has an actual cost, not even all of that is wasted.


they sue and get awarded insane damages, which is probably something that could be regulated more strictly, but then what do i know.


At the same time doctors are given immense authority and depending on circumstance very limited oversight in their administration of care. People will go to three different practices and get radically different diagnosis and prescriptions. There are substantive and documented biases amongst medical practitioners as well, including how women are substantially less likely to be treated for a heart attack because many doctors don't believe their reported symptoms.

Medicine is also a precipitously massive field of study and in the same way a programmer isn't expected to know every language and technology - hell, most are not expected to understand even the full breadth of the standard library or code base they are presently working in - few doctors are actually as informed as they like to act. A lot of it is cultural, doctors are supposed to be authoritative, but the US has a very problematic medical culture of assumed authority that has people putting blind faith in doctors who "trust their instincts" and end up being completely wrong and hurting people for it.

Remember that medical malpractice lawsuits are still overseen by a judge. If there is a settlement, there often was a mistake made. The solution to malpractice costs is not have doctors make mistakes but to reduce how often mistakes happen.

A lot of those remedies require a reform of culture though, and that is one of the hardest challenges to approach. And don't think I'm just "blaming" practicing doctors here, its structural to the industry and is why MDs are being put on 18 hour highly stressful shifts where its unbelievable they make as few mistakes as they do in such unreasonable working environments.


This is compounded by our high medical costs. People who sue often have chronic medical conditions as a result of the malpractice, and the settlement is basically paying them for their extortionately expensive medical care.


You think the government should cap the price of suffering? What do you think should happen with malpractice or medical errors?

For example, take this recent news story and pretend this was in the USA, where a woman goes in for a routine procedure and ends up with an abortion.

https://nypost.com/2019/09/24/doctor-performed-abortion-on-w...

How would you like to strictly regulate damages for that? What do you think is reasonable for that situation? How about if someone is rendered disabled or impaired? Marred? Dead?


People like to point to malpractice and lawyers and blame it all on that. Every actual study I've read totals the cost of tort liability (insurance, law suits, damages, etc.) at about 5% of total health care spending. Significant to be sure, but not the bogey man people like to make it out to be.


It sounds like an industry argument that would be introduced by insurers to benefit insurers, since it would obviously benefit them.

I see no benefit to the patient to limiting medical error liability, but I'd be interested to hear the arguments in favor.


> I don't want to hear one thing about negotiating power. That is a debunked line of reasoning. Medicare/Medicaid cover more people than many single payer systems in other countries

That's... not true at all. In European countries, single payer covers almost everyone, and the government has negotiating power to drive down prices. This is proven workable and effective in many places, including Canada. Literally every other industrialized nation has solved this problem.

If you don't agree with universal healthcare, fine, whatever, but don't go throwing around clearly obvious falsehoods.

This is like one of those "we can't solve it" arguments like gun violence where literally every developed country except for the US has solved it.


> But the current political climate in the US is incapable of dealing with any kind of multifaceted problem.

I fear this may be true of all political issues now.

Sound bites and catch phrases that way oversimplify complex issues to the point of absurdity seem to sway a lot of voters.


> One thing that will not make healthcare less expensive is "Medicare For All".

A large part of what makes American per-capita healthcare costs so outrageous is how much is treatment rather than prevention. Because going to a doctor is so expensive people just don't go, and then mundane problems that could have been fixed with at worst a routine surgery end up in an emergency room on life support expending a hundred thousand dollars of resources a day to correct.

Thats in addition to substantive productivity losses incurred by people being sick all the time without the financial resources to actually fix their ailments.

Even when you have health insurance the absurd deductibles mean you can't see a doctor anyway without being out the equivalent of half the months food or your entire utility bill.

It is absolutely imperative that any nations people have affordable access to medical professionals before they are suffering ill from all the things they noticed were off but didn't want to become indebted over.


> Medicare/Medicaid cover more people than many single payer systems in other countries, and their costs are still outrageous

This is not a fair comparison. Medicare/Medicaid predominantly covers the elderly. You can't compare their price spend to a mix including many more healthy people covered in single payer systems in other countries.


There is a WHY (or at least a general why): Obfuscation.

- lack of clarity on competitive pricing

- obfuscation by adding multiple layers in buying process (broker - insurance - claims adjuster - hospital)

- obfuscation through too-many-options syndrome (Obamacare versus Medicare versus state-driven healthcare versus emergency-only healthcare)

- lack of clarity when being billed (getting several bills from several different departments)

There's also the problem of insurance companies being a for-profit enterprise that answers more to stockholders than to patients.

This is the result of "free market" idealists at work. Health is something that everyone needs, so businesses want a piece of the big pie by trying to wedge themselves somewhere in there. Only massive government overhaul can fix this.


>This is the result of "free market" idealists at work.

Huh? I can't think of anything less free market then the American medical system!

Ok, maybe defense contracting is less free market. But at least that is paid for out of federal tax money.


The typical insurance company returns are pretty small (~5%) so that alone doesn't seem to explain why prices are so high.


But that's the return (net margin, not gross cost that the insurance company is adding to the whole system). You have to look at gross, which is way higher (~5x).


The AMA is a cartel, and we (in the US) are all suffering for it.


> One thing that will not make healthcare less expensive is "Medicare For All". It will just shift the bill to different people.

One of the myriad reasons healthcare in the US expensive is the middlemen who stand to profit from taking as big a cut of your premiums as possible, while paying for as little care as possible. Without this fundamental force driving healthcare prices it doesn't seem clear to me at all that prices would stay the same. Your dismissal of single-payer plans like M4A glosses over the largest proposed change to the structure of medical billing.


>One thing that will not make healthcare less expensive is "Medicare For All". It will just shift the bill to different people. Now, you can argue it's the morally correct course of action, or those people who will be forced to foot the bill (upper middle class taxpayers) are more capable of doing so, but you cannot credibly claim with a straight face that it will make anything cheaper. In fact, the opposite will occur.

Isn't the NHS or Canada's system better? How are they different from 'Medicare for all' ?


Define "better".


Substantially cheaper, with similar patient outcomes.


> so they need to charge a lot... why? - I honestly don't know.

Does anybody else know the answer to this?

> Doctor's are paid too much... why?

Are US doctors paid too much when compared to say... Japanese doctors? European doctors?


> > so they need to charge a lot... why? - I honestly don't know.

> Does anybody else know the answer to this?

They don't _need_ to. But they do charge a lot because they can -- they know that doctors can afford to pay it using future earnings. And now we're back up the stack in terms of explaining high costs.

Part of it is the Baumol effect as explained by Tabarrok et al [1]. But I believe most of it is due to the nature of the healthcare industry when there are no govt-imposed limits on prices: there is no incentive for hospitals and doctors to lower their prices, since they are not in competition with each other for patients. The insurance industry is just passing the cost to the employers. I could even argue that this explains some of the wage stagnation -- costs went into health insurance premiums.

[1] https://marginalrevolution.com/marginalrevolution/2019/06/sp...


In many cases US doctors make 2x (or more if you're a specialist) than their European counterparts. The outcomes are not materially better in most cases.

(Also, I'm just picking on one small reason for healthcare costs, the point is that is just one of many)


> In many cases US doctors make 2x (or more if you're a specialist) than their European counterparts.

That sounds outrageous but isn't the same for software engineers as well?

Senior level software engineers in (not San Francisco/New York/Los Angeles) can easily make $80k - $160k.


The salaries given relate back to expenses paid. Doctors in Europe broadly don't pay anything for medical school and thus don't have a mcmansion of debt to recoup after graduating.

Developers throughout Europe find their salaries regularly pegged to cost of living wherever they are. In the US salaries are distorted for 2 reasons - most major global tech companies are here and thus there is higher demand for developers here than elsewhere - and two that those tech companes congregate in the most expensive cost of living places on Earth due to NIMBYism and Americas broken city planning culture.

In general almost everyone in the US is paid, comparatively, more than their European counterparts because their raw income has to afford to cover potential medical expenses that nobody else abroad has to contend with. Americans also get much reduced food, utilities, and housing benefits compared to the broader first world.


> Developers throughout Europe find their salaries regularly pegged to cost of living wherever they are.

Even if that is the case, if you compare salaries for mid-level developers in cities like Miami and Amsterdam, I think the pre- and post- tax situations are pretty drastically different.


Software Engineers in the US often make 2x as much as our European counterparts, yet we don't have any artificial limits on the number of people able to study Software Engineering. I'm not disagreeing with you the point on the AMA, but even if they removed their limits -- would many more people want to enter the field? It seems extremely intensive, not only during your education and residency, but on the job too. 12+ hours days, multiple days per week? No thanks.


>In 2011, 43,919 students applied to medical schools. However, only 20,176 of those applicants were accepted into at least one medical school. In other words, 54% of applicants got rejected to every medical school they applied to.

Even if we remove the bottom 10% or even 20% of un-accepted individuals (who we might assume, unfairly or not, are not cut out to be doctors) an absolutely significant number of people would enter the field.


I wonder what’s the graduation rate for medical school? You’d think it should be difficult enough to flunk out 2/3 of the students (like engineering), but I’m guessing that is not the case.


I also used to assume it was a field full of highly intelligent people, but when I told this to my cousin who is a doctor he laughed and said something to the effect of "The medical profession selects for mediocrity", and went on to point out that being a doctor is a fairly rote profession; most of their work does not involve creative problem solving or critical thinking. It is a very challenging profession in terms of having to learn an enormous body of material, work grueling hours in dangerous and unpleasant environments, and deal with customers who are definitionally unhappy to be your customer. But it's a set of challenges that a fairly wide portion of the population can rise to.


It's practically 100%. Once you're in, they'll do everything in their power to graduate you (legitly). Every incentive they have points at a perfect graduation rate.

EDIT: In the US, anyway. Things are different in, say, Caribbean medical schools.


I read someone mention that French medical schools are easier to get into but the graduation rate is much more like engineering schools. About 1/2 to 2/3 of students drop out or fail. Said the result was French doctors were functionally better in general than US ones and happier.

Since I don't have any experience with French medical schools I don't know if that is true or still true.

I do have experience with US doctors and about half of them are just phoning it in every day.


Software engineers are in such high demand in the US that we can't train supply fast enough. In addition, most tech companies tend to be clustered in areas with the highest cost of living in the country. Those two things combined are what serves to push salaries up.

If there were more doctors, they wouldn't have to work 12+ hour days. They are overworked and have to pack patients in because of the limited supply of doctors.


Speaking for Canada rather than Europe but I imagine the argument is mostly the same. The supply and demand ratios are different. Canada has very few pure software firms like Google or Amazon compared to the US, so there is significantly less competition for the engineers that work there. This drives prices down - or rather, prevents prices from being driven up.


What I've noticed is that everybody in the system cries poor and believes that someone else is gouging us. But the system is so labyrinthine that nobody can figure out where the money is actually going. And every group (e.g., doctors) has an investment stake in the other groups (e.g., medical and malpractice insurance companies), or is a partner in an LLC that makes money by buying a machine and billing for its use. Etc.

The likely answer is: They are all gouging us.

One potential benefit of a single payer system is simply being able to untangle that mess and put every player on a reasonable footing. For instance, make medical school free, but then doctors get to work for the government for a decent professional salary. It might even change the mix of people who are willing to become doctors -- more middle class. The primary expenditures of the medical system should be materials (capital and consumable like drugs) and salaries.


”The likely answer is: They are all gouging us.”

Exactly. It’s pointless to spend time on trying to find a single culprit. Corruption is spread throughout the whole system.


And what's more - look at the UK where we spend half as much per capita on healthcare and achieve broadly similar results. Yes, if you get a sporting injury you're going to be waiting 6-8 weeks for physio, but if you have a heart attack, cancer, are in a serious accident there is no wait.


The official NHS target for cancer treatment is that patients should get it within a month of the decision that it's necessary. The NHS has been missing that deadline quite a lot: https://www.theguardian.com/society/2019/jan/10/nhs-england-...


Oh the thought of going to the doctor without that time of uncertainty about the bill that'll be coming. $200? $500? No, no bill is coming.


When you don’t pay for a service, you are not the customer but the vector to get to the real customer.

Think: Television, radio, Google, Facebook, healthcare.

There are gigantic pools of funds out there in quasi-private insurance, Medicare, and Medicaid. Costs explode. Similarly, gigantic pools of funds are available thanks to subsidized student loans that cannot be bankrupted. College costs explode. Being uninsured is terrifying because the individual healthcare buyer is competing with deep-pocketed insurers and government programs who are much less price-sensitive.

Healthcare is expensive because the patient is not the customer. Insurance is going crazy because insurance is legally compelled to pay for oil changes and basic maintenance, so insurers must accept more exposure.


You're forgetting that medicare for all also comes with a lot of promises about free education. The artificial barriers for education will be slowly removed and the supply will quickly match up the demand.

The solution isn't going to fix everything immediately, but it IS required for a full solution.


Nothing about removing tuition costs to universities changes the AMA artificially restricting the number of medical doctorates issued every year.


Except now starting a training program does guarantee you'll have students that don't need a ton of money to pay off their loans. It becomes less risky.


Part of the problem is that Medicare/Medicaid pays market prices. Its a pricetaker not a pricesetter, because of poor regulation, in spite of its larger position. If you pay market prices, expect inflation every year on top.


No they do not.


>Medical schools/the AMA are artificially limiting the number of students and residents for their own ends (keeping wages and scarcity high) so they need to charge a lot... why? - I honestly don't know.

The AARP advocates for social security... why? - I honestly don't know.

Imagine if you put the teamsters in charge of infrastructure spending, every road in the country would be under construction perpetually. It would be illegal to shovel your own driveway without paying someone in the union to sit in front of your house and supervise.


>- Doctor's are paid too much... why?

Haven't doctor's historically had high salaries? Becoming a doctor requires years of training which leads to a low supply of doctors for a field that has always had high demand. Likewise, Doctors seem to be overworked so I'm not sure I can say they are being overpaid.

I don't think all the money that is being spent on healthcare is actually being funneled into doctors pockets.

You did say there are a top 15 reasons, but I think doctor salaries are a bad example.


No, the low supply of doctors is caused by the AMA, which keeps the number of accredited medical schools low. In the 90s, they were instrumental in getting Congress to pass laws that cap the number of residencies permitted per year. Medicare pays much of residents' salaries, and the law stipulates a maximum number it will pay for, a number that was fixed in 1997, and only changed once, in 1999 (and then only for teaching hospitals in rural areas).

The US population has grown by around 25% since then, but we're still getting the same number of new practicing doctors per year that we got over 20 years ago. Doctors are overworked because we have a shortage, not for any reason inherent to their profession.


> One thing that will not make healthcare less expensive is "Medicare For All". It will just shift the bill to different people.

This is what happens with corporate healthcare plans already, those costs get past onto the consumer (middle to upper middle class) and they pay a hidden healthcare tax on every purchase.


Heathcare costs are part of employee compensation. The tax is on employees.


Any evidence of this? Some quick googling and I couldn't find anything about about employees with healthcare plans being paid less than employees without them.

If I understand the history of it properly, healthcare was always meant to be an extra incentive from a period where they weren't allowed to pay more. It's never been a tax on employees.


Ask yourself this question: why does anyone get paid more then minimum wage?


I don't think negotiating power is debunked.


No reason? Hey, let's assume you're running a business. Only it's a special business. The customers really need your service. And they don't pay for your service. Someone else pays the bill for them. And they are extremely interested in acquiring the absolute top quality possible when using the service. So when you charge $50, but the guy across town charges $500, the customer will fight tooth and nail to get in and use your competitor instead. Call it 'reverse capitalism.'

That's insurance-supported medical care in the US. No one wants to go to the cut-rate bargain-basement doctor. And the majority of patients aren't paying their own medical bills. The insurance company is footing that bill. So when their kid gets sick, they're price-shopping in reverse. They only want the premium level, and offering a good deal actively stops people from using the service.

And that doesn't even get into the price-fixing that insurance companies engage in, entirely legally, because insurance is determined to be "not commerce" and therefore exempt from all antitrust laws. There is definitely a reason why Americas sub-standard care is so expensive - insurance.


"Medical schools/the AMA are artificially limiting the number of students and residents for their own ends (keeping wages and scarcity high) so they need to charge a lot."

That is the peril of this type of analysis. Clinician cost is only 20% of total healthcare spend. Your premise is flawed so your conclusion is invalid.


His premise is not flawed; yours is.

Looking only at clinican costs is akin to saying that a sandwich should only cost $1.50 because that's the cost of the ingredients.

Doctor wages tie into personal health insurance, medical malpractice insurance costs, hospital system insurance costs, and more.

Even if you were correct on the cost bit (you aren't), you're completely ignoring that artificially constraining the SUPPLY of doctors causes massive cumulative ripple effects adding up to significant costs across the system.

The AMA is absolutely a cartel restricting supply and artificially keeping wages high. Have you taken a look at any other health care system in the world?


You just proved my point, you know that right? It's the healthcare delivery and the markups along the way. If you paid doctors $0 tomorrow, healthcare costs would go down by 20%, at best, and probably less. Your analogy is perfect, actually. The problem in sandwich cost is rent, utilities, administrative expenses, marketing, an acceptable return on investment to the owners, etc, etc. The actual good being sold, a sandwich, probably costs 10% of what you pay retail.

Your repeated use of the phrase "cartel" is not impressive or convincing to me. In every other field: civil engineers, lawyers, real estate agents, accountants, teachers, police, and countless others have licensure, education, and training requirements.

And thanks for you concern, but I am familiar with many other global heath systems.

I notice you ignore LNPs and PAs in your analysis.


On the contrary, you proved mine. I worked in medical devices and hospitals for a significant portion of my career, and I really don't care that you aren't impressed by the term "cartel", that's your prerogative to turn a blind eye to the facts. It's a combination of inflated salaries plus numerical shortage of doctors (the two are related) causing the root issues here. You claim to be familiar with other health systems; care to explain why in every other developed nation where doctors are not so overpaid, health care costs are reasonable?

NPs and PAs are not allowed to perform a significant number of medical procedures; I see you ignore that, conveniently, and bringing it up isn't much other than a red herring.

The "cartel" term has been used both colloquially and in academic literature for quite some time:

https://www.jstor.org/stable/2352286?seq=1#page_scan_tab_con...

Here are some other reading links.

http://www.jparksmd.com/blog/a-massively-overpaid-cartel

https://wallstreetpit.com/5769-medical-cartel-md-salaries-hi...

https://www.forbes.com/sites/timworstall/2017/06/04/milton-f...

https://fee.org/articles/the-medical-cartel-is-keeping-healt...


For the record I want to say that the second link you pasted - http://www.jparksmd.com/blog/a-massively-overpaid-cartel -actually argues against even more effectively than I was able to.


I'm very glad you pointed that out; I mean, jparks makes the same claim you make - that salaries aren't the problem - and doesn't address the artificial restriction of doctors at all. In other words, he fails to refute the "AMA isn't a cartel" claim. If you prevent the AMA from artificially restricting doctor supply, the overall cost of health care drops significantly, and the health of the population increases considerably.

As a consequence of the overwhelmingly positive benefit of lifting the artificial supply of MD (or DO), doctor salaries will naturally drop, as necessitated by economics.


I think you're focusing a bit too hard on this. If we broke the AMA cartel, prices would not magically fall to be in line with other developed nations. The AMA cartel is certainly a factor, and not small one, but it's not the only factor.

We also need to fix the high administrator-to-doctor ratio that adds costs.

Insurance companies provide little value and just extract money from people. They need to go away.

Many low-income people skip out on preventative visits because they can't afford them. This leads to high-cost illnesses later down the road that could have been prevented or mitigated with proper care.

So yes, doctor salaries are inflated, there is a shortage of doctors, and the AMA is a cartel that limits supply. But there's more to it than that.


With more doctors (and consequently lower salaries) the cost of preventative care drops, no? And perhaps just as importantly, the EASE and time-delay of getting an appointment drops.

Blue collar workers tend to wait, as you said, until an illness becomes critical - because they have to work 9-5, the same hours doctors work. With an additional 25 or 50% of MD workforce, we can easily begin offering preventative care services outside of 8-5, allowing low-income people to get the preventative care they deserve without affecting their livelihood.

We should strive for primary care visits to be available 7am-7pm (at least), 7 days a week, in every hospital/clinic in the nation. And specialist visits should be bookable in ~2-3 weeks max, not the 6+ week timeline many individuals requiring a specialist face.

I agree with all your points, and definitely the administration costs I hope will drop as we get better ML/AI technology. I don't personally see a realistic way to get rid of the insurance companies, but they can be quite harmful. Finally I also would like to double down that the "cartel" aspect is the single largest contributing factor.


> The problem is that there is not a single reason that healthcare is so expensive.

I'm recently fond of saying that the ultimate root cause of all suffering is greed.

If you follow the money, I'm sure that is exactly what you'll find.


> Well they need to be paid a lot because medical school debt is 250k or more... why?

You are doing something called confusing cause and effect.

Medical school costs a lot because doctors earn a lot of money.


> Medical schools/the AMA are artificially limiting the number of students and residents for their own ends (keeping wages and scarcity high) so they need to charge a lot...

That sounds like a strange conspiracy, do you have evidence to support that?

Keep in mind 20+ years ago that insurance was much cheaper, deductibles were almost nonexistent, and care networks were giant. Talk to your US parents or grandparents about their costs of health care, you'll still be stunned at how much cheaper it was. Medical schools and the AMA still existed then too BTW.


The AMA quite literally fits the definition of a cartel. It's quite absurd to use the term "conspiracy".

Academic papers going back to (at least) 1977 have suggested this: https://www.jstor.org/stable/2352286?seq=1#page_scan_tab_con...

Here are some other reading links.

http://www.jparksmd.com/blog/a-massively-overpaid-cartel (this doctor attempts to refute that the AMA isn't a cartel by making the point that doctors are "overpaid" in the US as compared to Europe by the same factor as for many other professions. He however intentionally avoids the point of the restricted supply, which is the root cause of the issue, the artificially high salaries are simply a symptom of the disease)

https://wallstreetpit.com/5769-medical-cartel-md-salaries-hi...

https://www.washingtonexaminer.com/thanks-to-doctors-there-a...

https://fee.org/articles/the-medical-cartel-is-keeping-healt...


Look up what "match day" and the NRMP is.


Yep, and what people don't always realize is that because employer health plans get more expensive every year for employers, it negatively impacts wage growth. You are paying for it even if you don't necessarily feel it.


This is really important. Pulled from the underlying study[1], employers cover 82%/70% (individual/family) of the cost of healthcare. Those numbers are down just slightly from 86%/73% in 2019.

Or, put another way, employers have borne 69%/80% of the cost of healthcare increases. You complain because your individual plan has gone up by $986 in 20 years? Your employer's cost has gone up $4,005. Oh, and that's with cutting the underlying coverage ("skimpier").

It negatively impacts wage growth because that extra $4k is a bottom-line benefit (or cost of employment, if you want to think about it that way).

Finally, note the disparity between individual and family plans. Employers are offering 2.5x more benefit—nearly $9,000 more—to workers with families.

-----

[1] http://files.kff.org/attachment/Report-Employer-Health-Benef...

Fig. 1.10 shows premiums increasing from $2,196/$5,791 in 2019 to $7,188/$20,576. (Note also that 72% of that is attributed to premium increases vs. inflation and worker earnings, per Fig. 1.14.) Fig 6.1 shows % of premium paid by workers going from 14%/27% to 18%/30%.


The benefit for employers is there are a lot of workers who are there now solely for their family health insurance coverage. I have a feeling this has prevented earlier action by employers, but now it’s past the tipping point.


> Finally, note the disparity between individual and family plans. Employers are offering 2.5x more benefit—nearly $9,000 more—to workers with families.

Interestingly, my employer discloses the full premium that they pay to the health insurer every year. As an employee without a partner/dependents (I just graduated college/started my career), my employer spends ~$17k/year less on my health/dental/vision benefits than employees with a partner/dependents.

That effective pay difference makes me mildly salty.


It's an interesting topic, particularly as it relates to employers being women/family-friendly. How do you feel about parental leave, for instance?

Of course, this is a benefit that's within your control: just get a partner/dependent! And the flip side is that even individual employees might value knowing that the company "has your back" as your family situation changes.

Or, more bluntly, your company has to offer disparate benefits, because other employers do, and no employee with a family would work for your company otherwise.

Of course, all this masks the REAL problem that employers and healthcare are so intertwined. Even this article puts some of the blame on employers, when really it's the healthcare companies and the overall rising cost of care.


It’s likely the reason why real wages have been stagnant over the past few decades while total compensation has grown quite vigorously.


But the individual policies on the exchange have increased year over year as well, and a lot of those insurers on the exchange went out of business/disappeared after 2-3 years anyway.

(from 2017-2018 for example insurance on the exchange increased 32% for silver plans and 20% for Gold plans)


I don't understand what that has to do my comment. I never mentioned anything about the exchanges. Health insurance policies generally get more expensive year over year for everyone, whether an employer is paying for it or you as an individual.


You seem to be highlighting employer provided insurance costs increase (which they do), but historically they increase at a lower rate than individual plans (i.e. the alternative).


What does that have to do with what tempsy wrote?


The articles is about employer health plans getting more expensive, the comment was about employer health plans getting more expensive...whats the alternative to an employer provided health plan? An individual private plan, I thought it seemed relevant those are increasing in cost too (at a much higher rate).


> whats the alternative to an employer provided health plan?

There are a number of alternatives:

1. Government health plan at the state level (i.e. the Canada model)

2. Compulsory private insurance (i.e. the Switzerland model). But employers don't provide it and insurers have to insure everyone who pays. Single, larger, and more diverse risk pool instead of 3 separate pools - one with working age people and children, one with old people, one with everyone else

3. Government-owned and -operated hospitals and clinics, free at the point of use (i.e. the UK model)

4. Government health plan at the federal level (i.e. the France model)

All four have been found to cost less per patient for similar or better outcomes.


Doesn’t the fact that vastly different systems perform better than the US possibly suggest that our problem is something other than the payor model? What is the theoretical reason why US costs would be higher than Switzerland? Premiums for private insurance should be much lower in the US, given that Medicare takes high cost people out of the private pool.


The US hasn't had compulsory private insurance up until about 10 years ago. Before that costs were going up even faster[1]. Even then if your employer is providing your health plan the amount of "shopping around" you can do is limited - most companies have 2 or 3 options (a PPO, an HMO and something with an HSA). This leaves only the uninsured (i.e. the poor) or previously uninsurable (pre-existing conditions) in the actual open private insurance marketplace. It's not surprising that premiums there will be crazy high and it's not really that close to being the Swiss model.

> our problem is something other than the payor model

I partially agree with that - the payer model is one facet among many. There are other problems with healthcare in the US. Hospitals can veto opening of competing hospitals in the area, complex billing, not enough residency spots leading to a shortage of doctors, whatever the F is happening with prescription drugs etc. GP was only asking for alternatives to employer healthcare though.

1. https://www.thebalance.com/causes-of-rising-healthcare-costs...


> What is the theoretical reason why US costs would be higher than Switzerland?

In Switzerland, people actually shop around regularly and change insurance providers. That probably keeps premium costs down.


The difference between Switzerland and the US is that in Switzerland pricing is regulated. The free market does not work when your life is at stake. You can shop around as much as you like for a butt enlargement and skip it if it's too expensive, but if you find a bat in the bedroom you need a physician straightaway, and then he will overcharge you.


There are some procedures where shopping around is conceivably an option.

Once you're in desperate need (say, when it's bad enough that you're calling an ambulance), or unconscious, it's not realistic to suggest price-shopping.

Markets of the mostly-free sort work well enough for commodity products, like the kind of peanut butter you're buying a jar of every few weeks (though even that's regulated, from things to food safety to nutrition labeling); for everything else, government's a fabulous tool to make sure people aren't taken advantage of, whether it's through heavy regulation (e.g. Switzerland, as someone mentioned) or offering the service itself (e.g. UK).


The vast majority of health care is a commodity product. Unless you have some super rare condition, whatever your problem happens to be it's extremely likely to receive more or less the same treatment from a large number of potential providers.


Yes, it would be great if US employees had those options, but they don't hence they aren't alternatives. The main alternative in the US to an employer based group insurance policy is an individual plan.

One day the US may catch up to the rest of the world, but unfortunately, the US seems content with millions of uninsured, healthcare related bankruptcies, and milking those who can afford coverage more every year in exchange for less.


This is absolutely the biggest story in America, and most people aren't talking about it.

An entire generation is draining their savings to keep up with premium costs.

Not to mention the millions of people locked into careers they would otherwise get out of, if not for the health coverage.

This situation is probably going to lead to unbelievable outcomes.


> Not to mention the millions of people locked into careers they would otherwise get out of, if not for the health coverage.

Replying with a throwaway for obvious reasons. I work at one of the big tech companies -- I'm paid well, but the benefits are very good. I just got an offer from a startup that I really like. It's a job I would like to take.

I'm going to have to turn down the offer. Part of the reason I'm going to have to turn it down is that even though it offers insurance, its coverage isn't as good as what I have and the subsidy offered will add $15k a year minimum to my health care expenses. My partner needs surgery (an expensive surgery), and I'm the primary bread-winner (for now) -- I have to make pragmatic decisions because of stuff like healthcare, even at the expense of my own aspirations.

And to be clear, my scenario is significantly better than so many others who are stuck in truly terrible places (where I work is not terrible by a longshot) or in careers they would like to change, because the truth is, health care in the US is a joke.


Insurance on healthcare.gov is really not bad - just get $20k more from startup and buy your own insurance. Assuming idiot republicans don’t fuck it up in the next few months.


Sounds like this could be solved, if the startup could offer a higher base salary, bonus, or a combination.


Yes, but that isn't the root cause is it?

Even if the current employer is big enough to negotiate lower prices or deals for its coverage and that's a barrier to entry for the startup, both companies could be set one a level field in a universal healthcare system removing this cost center from both companies. Even if the cost is (partially) rolled into something like payroll or income taxes, it would still impact the big company and the startup much more equitably.

Barriers to entry are one item this site and many of its users and are fighting to better disrupt industries and create value. If you can't get talent because you can't provide healthcare and a solution for that exists in most developed nations (universal care), why are we not engaging that?


Large employers are self insured. The insurance companies just manage the benefits. In that sense there is no negotiation, beyond a manager fee. Price is determined by health of employees and benefit level.


I'm assuming the unspoken point here is that, after negotiation, the startup couldn't make up for enough of the difference for the parent to be able to seriously consider them.


> ... and most people aren't talking about it.

Have you looked at a newspaper since, say, 2007 or so? You will find that many have politics sections which have spent an awful lot of time covering the matter. Other news sources frequently cover it as well.


I just want to tack on: People being forced to skip simple preventative medicine, potentially building up a ticking time bomb when those conditions become more expensive to treat.


> An entire generation is draining their savings to keep up with premium costs.

Knock on wood but, myself and pretty much everybody I know has insurance covered ~75% through our full time employers. I think my portion of my insurance is about... $100/mo? I've never had to use it way/shape/form in the past... 5-10 years.

Isn't the truth that the most unhealthy people are what drives health care costs?

It'd be interesting to see a visual of who uses their insurance and how much of it they use. Let's not forget that lack of exercise, obesity, and heart disease are rampant in America.


> myself and pretty much everybody I know has insurance covered ~75% through our full time employers

So your continued physical health and financial health is utterly dependant on your current employer.

Do you not see any problem with that?

(I'm not American, I think it's vile, and closer to slavery than I have any interest in touching)


> Do you not see any problem with that?

No. I have a set of skills that the market finds valuable. Part of that value is providing health insurance. Any employer I choose will pay me a salary, and have healthcare benefits.

Somebody has to pay for it... and it currently isn't the billionaires like Democratic candidates wish it was.


Do you not see how much this limits your mobility and freedom to do as you please?

If health care (and insurance) were de-coupled from your employment, you would have much more freedom to move around jobs, or even go without a job for a time if you so chose, etc.

Would you be OK with your employer paying for your housing? education? food?

Your employer being in control of your health (and those other things) is sickening. They are just taking power and choices away from you.


> Knock on wood but, myself and pretty much everybody I know has insurance covered ~75% through our full time employers.

That is money that would otherwise be given to you in the form of salary, so, yeah, you're paying for it even if it doesn't seem like it.

Historically, the main reason for employer-provided health insurance in the U.S. is that it provided a loophole to increase effective employee compensation in a tax-free manner.


My employer dropped dental insurance a few years ago. They never gave me a pay bump to compensate. Now I spend $1,600/year on cleanings for a family of 4. At least it is out of my HSA, so pre-tax.


They likely dropped it due to budget issues, so of course they weren't going to give you a pay bump. If they had dropped it simply because there was no need to give it to you, you'd probably see a pay bump, or at least faster salary growth in future years.


$400 for a cleaning?! You gotta negotiate better!

That is an outrageous price!


Multiple times a year with multiple people, not so extreme. I pay $160 for myself alone 3 times a year for periodental cleaning


It’s $200 per person (4x people, 2x a year), that sometimes has x-rays and sealant.


This isn't universal and it's also not inclusive of those people who have spouses/partners or children/other dependents. Your employer may cover your premium (or most of it), but it won't always cover those of your dependents at the same percentage.

And I say this as a person who is, with few exceptions, healthy. But medications for common conditions and emergencies , can radically change the cost of all of this.


It seems to be more the exception, rather than the rule, that you will continue to be fine without medical coverage for eternity. One day, something is going to happen. Consumption of health care tends to be back-loaded in life.


Yeah, I really wonder where that $10,000/person figure comes from when you remove obesity and smoking related illnesses, so, the two highest and most preventable causes of death in this country.

I always believed you should be able to qualify for lower costs (or be charged higher) depending on how you take care of yourself. Annual physical fitness test. I'm a little sick and tired of paying high premiums for people to have healthcare that don't take care of themselves.


> I always believed you should be able to qualify for lower costs (or be charged higher) depending on how you take care of yourself. Annual physical fitness test. I'm a little sick and tired of paying high premiums for people to have healthcare that don't take care of themselves.

Better hope you never get in a car accident or similar accident or get diagnosed with cancer or a chronic condition.

Congratulations for being in perfect health and not needing any sort of medical care. There are plenty of people who don't smoke and aren't obese and can still be bankrupt by standard medical treatments.

I would bet money (let's say the value of my annual insurance premiums) that if the two of us took a physical fitness test or compared overall "health" in areas that are more controllable (weigh, cholesterol, body fat percentage, amount of exercise, and other indicators like smoking/drug/alcohol use), I would be considered healthier than you.

But I have an endocrine condition that requires very expensive medication and annual tests that cost a lot of money.

You're selfish, and that's fine. But the second you ever actually need health care, I hope you remember how quickly you dismiss "people who don't take care of themselves."


HN, where you can find paranoid vegans blaming people for getting sick


Many of us who won the genetic lottery are sick of paying for those who didn't

Where do you draw this line ?

If someone cannot afford to eat or live a healthy lifestyle do you kick them while they are down ?


The brotherhood of "we can all band together to pay for each other" falls apart when the line to McDonald's is wrapped around the corner in my eyes.

If you take in over 3,500 calories a day of pizza, soda, cheeseburgers, or candy then follow it up with little to no exercise/movement, you are contributing to the "health insurance crisis".


It's rather painful to watch from this side of the Atlantic.

I guess that I need to acknowledge this is really what most people want in America.


It isn't what "most" people want. It's what the rich people in power want.


It’s also an absolute moral disgrace that we’ve decide the profits of insurance industry and other for profit entities are more important than many people’s lives and the suffering of many others. Anyone who wants to argue in favor of the continued existence of this system should have all of this hung around their necks.


[flagged]


We've banned this account for repeatedly posting flamewar comments to HN and ignoring our requests to stop.

https://news.ycombinator.com/newsguidelines.html


Hi. Do you have any sources for any of this? Otherwise it sounds like quite the racist rant against anything foreign


Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: