The last time I checked, 33% of US healthcare dollars went to paying people at the insurance company and people at the healthcare provider to negotiate with each other.
One way to avoid this in the US is to go with an HMO, since they can be wildly profitable and still be much more efficient than an insurance company + independent providers. Of course, the problem with that is that non-emergency care from third-party doctors isn't covered by the HMO.
A better way to solve the problem is to go with a single-payer healthcare system, such as the one the progressives was proposing during the Obamacare negotiations. (As every other first-world country has done at this point.)
Single-payer is not actually that common, it just seems that way because Canada is next to us. The UK goes beyond that to single-provider. France, Germany, and Japan have multiple private insurance companies and get fantastic results without spending too much, but they also have a national price list for medical services, no claim denials allowed for anything on the list, and a national digital medical records system.
Not every first world country has a true single-payer healthcare system. There are many variations that work better than what we have. The difference is that in the US we have accepted profit maximization as the legitimate primary goal in the healthcare system.
I think the majority of Western European countries don't even have it? Most seem to have mixed systems or no single payer at all like Switzerland (where healthcare is privatized to an even higher degree than in the US).
Switzerland is also the closest in per capita healthcare cost to the US. Though it is a significant amount lower - I think one could draw a graph of percentage private operators in the health system vs per capital healthcare costs and have a pretty straightforward correlation.
I'm not sure. Switzerland seems to spend about the same as Germany in the last couple of years (of course the German system is also privatized to a significant degree) but Swiss GDP per capita is much higher.
If we look at spending as % of GDP Switzerland is actually below both Germany and France and about on par with Britain (~11%) while US spend more than 16.5%.
Netherlands where IIRC the system is also almost entirely private just with heavily regulated pricing is even a bit lower than all of the countries I mentioned.
Then again Switzerland and the Netherlands has a quite a bit younger population than Germany (median is lower by about 5 years) which must also play a part.
I wouldn’t dismiss a comparison vs percentage GDP, but it is a little different than absolute expenditure and abstracts the some aspects out differently. Absolute per capita expenditures if nothing else seems a little less volatile.
But I don't agree about comparing absolute spending. Of course there are caveats when using GDP but you really can't expect countries where salaries and other costs are much higher like Switzerland to not spend quite a bit more than poorer countries (and this doesn't really say much about the system itself). So we should at least adjust the absolute per capita spending by PPP.
PPP is a fair consideration, but Covid I think threw a lot of gdp relative measures out of whack for 2020-2022. And of course as mentioned in other threads, many of the national healthcare systems have significant regulation of procedure and drug prices. Switzerland also iirc has enough public hospital services that it serves as an additional anchor to check private pricing.
No they the problem with US healthcare system is it's too hard for a successful/efficient player in one state to expand to neighboring states because of overregulation.
Be more specific. What heroic successful/efficient player is being stifled from fixing health care costs because they can't expand to neighboring states?
> A better way to solve the problem is to go with a single-payer healthcare system
Possibly. But there are countries in Europe where healthcare is primarily or to a large degree (or even entirely like in Switzerland, they don't even have any Medicare/Medicaid equivalents) financed through private insurance systems. Yet they manage to keep prices from spiraling through effective regulation.
Yes, but Switzerland also subsidizes premiums if your income is too low relative to the premium; and healthcare coverage is mandated by law.
I don't know Swiss politics but I also assume there isn't a bickering back-and-forth by party lines that end up distorting/underfunding any sort of healthcare.
True, however US spends huge amounts on MedicAid which sort of tries to do the same just seemingly way less efficiently and also less equitably. Capping insurance premiums at 10%(?) of income seems like a better idea than having a byzantine style system which discourages people from ever trying increase their incomes.
> I don't know Swiss politics but I also assume there isn't a bickering back-and-forth by party lines
Yeah, of course that's the real problem since we already know that any system ranging from fully private (with government subsidies) to single payer can work with proper regulation.
US Medicaid is intentionally hobbled though. For instance it is not allowed to negotiate drug costs (or maybe with recent legislation it can a with a handful over a decade amid a catalog of tens of thousands of frequently used drugs.
And don't forget the cost of health Insurance for the actual consumers including Premiums, Deductible, Co-Pays, Co-Insurance and all the other nonsense.
> Many insurers, after whittling down physicians' reimbursements, now take an additional cut if the doctor prefers — as almost all do — to receive funds electronically rather than via a paper check.
What’s the angle here? Classic rent seeking because they can? Profiteering collecting interest on the float? Banking on doctors being slow to cash physical checks?
There’s some heavy stickiness to using one of these paperwork handlers for doctors. The switching costs are significant. But you’d still think there’s enough money there for someone to step up and offer the service without the fees. There’s enough money in fee per service to eat the big guys’ lunches.
It’s ridiculously close to the payroll business and we all know what happened there over the past 5-10 years.
It's doubly strange because usually it's the other way around; if you want the paper check you have to pay for it, otherwise they transfer (slowly) electronically. Some places have a "pay you before" option that is electronic and fast and also takes a fee.
It always is the "Insurer". The middle man mafia that has no reason to exist between a Doctor and Patient except for Catastrophic situations as all insurance should be. But not in America. We pay a heavy price for that.
Imagine if we had "food insurance". Your grocery store is "in network", but the butcher sends you a bill because he is out-of-network. No prices on anything, because your insurance carrier has "negotiated" a price for you, which you only find out after the fact.
Or imagine you had Car Insurance butting in everything including an Oil change and dictating which shop you can use for the oil change. I bet it won't be a $20-$30 oil change anymore and your premiums will be much higher than it already is.
Btw, don't give the Food industry these ideas :). It would suck if we now have "Food Insurance"
That exists, they are called high deductible plans, and people still complain about the high deductibles.
The root problem is the tail end of healthcare is enormously expensive, into the millions of dollars. Insuring a car is a minor expense, max $50k for the vast majority. It is the healthcare, that could require years of therapy and work done by extremely highly qualified people in short supply, using patented medicines, all wrapped up in liability protection, because if someone makes a mistake, you are eligible for up to millions of dollars in damages.
And also, if you are under age 50 and/or healthy, you are not just paying to insure your health in this calendar year, you are paying for healthcare older and/or sicker people are receiving. Health insurance premiums are more similar to a tax than an insurance premium.
That's all true. However it's also true in the rest of the developed world, and while almost all Western European countries have older populations than the US they still manage to spend significantly less as % of GDP with much better median outcomes (of course if we only compare US as a whole, states like Massachusetts are on part or even ahead of most of Europe outcome wise but still at much higher cost)
> Or imagine you had Car Insurance butting in everything including an Oil change and dictating which shop you can use for the oil change.
This kind of already exists with insurance and car repair.
If I damage my car, I take it to an approved repair shop and they give me an estimate. It's in the car repair shop's best interest to provide a quick estimate and good repair. If they don't, I can raise the issue with my insurer who might even lose me as a customer. The repair shop would then potentially lose out on repeat business from the insurance company.
Granted, this is a better example of a not-so-free market working vs the "locked in market" of healthcare but I think it's good to provide some counter examples to "it's ALWAYS bad to have insurers with preferred vendors"
"Food Insurance" does exist in some places and cases; many colleges charge for "room and board" if you live on-campus, so you're paying for meals even if you don't eat them that day, or at all.
As an European it is unbelievable with the kind of crap Americans need to deal with. I would expect the bank to apply a microscopic transfer fee and that's it, not a normal company deciding an arbitrary insane percentage fee. It really feels like everything is trying to nickel and dime you guys over there.
I am reminded by this story of the Canadian health care billing system.
The government would pay doctors an additional 1% of the bill if it was submitted one month late. One billing software vendor had a flag to specify that bill should be sent late - and I think that it defaulted to "yes".
Plus think of all the opportunities for checks to get “sent” but “lost in the mail”, sent for the incorrect amount (always lower than the amount owed,) and not be eligible for payment at all until the provider accrues a certain dollar amount…
Medical Billing is ripe for disruption, but of note, I don't know of any startup that has made significant inroads into this market. Anyone know why its so tough to break?
1. Good luck finding a startup, especially a VC-backed one (which for this kind of market I would expect is a borderline necessity), that isn't going to charge at least this much if not more per transaction.
2. Would their customer be the insurer or the doctor? If it's the doctor, I can't see insurers wanting to reimburse anyone other than the doctor. If it's the insurer, why would they farm out their billing to this third party when they already have the capability, and it's clearly lucrative?
3. Medicine in general is ripe for disruption, but it's so heavily regulated that eats into a lot of the potential profits from any service provider. Everything is an enterprise contract negotiation and the technical talent leaves pretty quickly when they see how slow everything moves. I've worked with large hospital systems that were still running Windows 7. Recently.
Medical Billing issues are a symptom. The real cause is Middle Man Mafia Insurance companies dictating everything that happens b/w a Doctor and Patient.
Seriously? Barriers to entry are massive. The insurance lobby is not going to just let their cash cow get "disrupted." Unlike those middle class taxi drivers that got obliterated by Uber, the healthcare industrial complex has a massive war chest and plenty of political clout.
Haha, the US government? Maybe some state insurance commissioners, but the American regulatory apparatus is mostly captured. The natural result of allowing corporations to buy politicians under the hilariously stupid pretext that it is "free speech."
I could already see the scenario there. The startup gets very successful and entrenches itself as this middleman. Eventually someone figures out that this cheque system is dumb and everything should be digital by default. The startup then starts lobbying and further locks in the archaic cheque system.
* Keep trying to make the current mess work. When it only came into existence as a way of evading price controls in WW2. And it's hopelessly wasteful and expensive and ineffective.
But the US system is institutionally opposed to reform.
I was recently at a museum and I had two choices to buy a ticket. Buy a paper ticket from a real person or use a self-service kiosk which emails me a ticket for a $5 electronic delivery fee. Why??
I am always baffled by fees for electronic delivery of anything.
B/c think how easy it is for someone to say to the finance folks:
"Marginal cost of delivery for an electronic ticket is essentially zero so if we can get $5 of marginal revenue then our MR/MC ratio approaches infinity!"
You're paying for convenience. Why go wait in line for God knows how long when you can pay a fee and get it immediately? Otherwise I agree that the charges can be exorbitant.
But he said he was at the museum. At this point a paper ticket is the more convenient option, rather than have to find your smartphone and open your emails.
Possibly naive, but hopefully trying to reason from first principles:
The insurance companies are the ones paying for care. The hospital systems are the ones charging for care. The entity that pays for care has every incentive to keep costs _low_. The entity that charges for care has every incentive to charge as much as possible. i.e. The ire of consumers should be directed at hospital systems rather than insurance companies.
IIRC, insurance companies benefit from high prices, as it benefits their gross profits. I forget whether that was due to regulations sort of capping profit margins, or what the reason was. I’ll see if I can track down a reference.
It's only in the interests of health insurance companies to make costs lower if they do it in a way that doesn't make costs lower for other insurance companies. As long as costs are high for everyone they can charge more knowing the competitors cannot undercut them.
In fact it's often in the insurance companies interests to make premiums generally go up, because they make more actual money for taking the same percentage.
That is the way it used to be. For many of us in high deductible plans, we pay thousands of dollars each year for care before the insurance company pays for anything. Not to mention the thousands of dollars we pay each year in premiums to the insurance company.
The comments so far miss the point. Off-the-shelf software is not HIPAA compliant. Government restricts supply through regulation, monopolists collect rent. If HIPAA were to be relaxed, off-the-shelf software can be used and fees would plummet. Don't blame "insurers", "middlemen", "capitalism" etc; blame well-intentioned / poorly designed regulations.
So I think there is some truth to what they're saying, although I don't understand how this applies to doctors receiving payments since you're not really attaching patient information to these payments AFAIK.
HIPAA tends to create a situation where you have the minimum possible compliance (e.g. the most basic encryption that hasn't been broken or just disk-based encryption rather than doing something like individual record encryption and using a a pepper) for the highest possible cost. Companies who would provide more robust protection tend not to because of the legal risk, so you have companies that fill in the space with lower quality software but are willing to put their name on a business associate agreement.
The focus then becomes the advertising of the product as HIPAA compliant rather than making it more compliant.
You do have larger companies who seemingly have better compliance, but I remember someone telling me they had to pay $700 a month for Tiger Connect for example. There is more competition in this area today, so prices have gone down, but I remember a few years back it being pretty rough on what you could get where people would stamp their product as compliant. The least expensive options seemed like there was a "messages.php" file somewhere leaking all the secure messages.
It kind of stifles innovation in a way as well. For example, there is no secure messaging product that I know of that uses the methods that Signal uses to encrypt messages. Notwithstanding the location of Signal's data, no one in compliance is going to allow use of the app without a business associate agreement. So the less-secure apps win.
It's really about who is willing to sign a business associate agreement and take the fall if something bad happens. Complexity just varies based on the implementing-companies aversion to risk. Bigger companies (appear to) have more to lose and therefore (might) implement more robust and complex solutions. A smaller company might flout more best practices than you're willing to accept - and then you can pretend to be ignorant rather than asking for an explanation about their infrastructure and hope it doesn't bite you in the ass (since you're still responsible for vetting companies even when you've initiated a business associate agreement). Both are "HIPAA-compliant", but the smaller company probably isn't HIPAA-compliant in the way one might hope.
Of course, there are people who are very afraid of what might happen if they don't take HIPAA seriously even at smaller companies. I suppose those companies turn into big expensive companies pretty quickly.
Not sure how big rsync.net is, and no I'm not advertising, but their pricing is reasonable and I trust that they really are HIPAA compliant in the way that I'm willing to accept. So this isn't a strict rule, but I do think that there are a lot of situations where you have a non-compliant product that is more compliant than the "HIPAA-compliant" product.
Not sure if I agree with the other person, but I believe the point is that it takes more time and money to comply with regulations, which makes it harder to build that software, which means that fewer will do that, which means those that do can charge more.
It's a great time to repeal HIPAA anyway. I suspect that if you surveyed Americans, most would believe that their health information has already been leaked to the point of making HIPAA obsolete anyway.
The Europeans were doing just fine without HIPAA right up until the GDPR anyway. I seriously doubt people would choose HIPAA over the savings they could have if it was to evaporate.
That’s a terrible idea. Legally your doctor’s office owns your medical records and HIPAA is the only reason why the ER/a new doctor/urgent care/etc can access your medical history.
IMO they're blaming the wrong group for the issue though. Financial transactions should not cost much more than compute + software they run on. This is one angle where I actually respect a portion of the crypto community -- they've called out some things that were stagnant in the financial sector. Of course it remains to be seen if they can come up with viable alternatives, but agreeing on a problem is a good step forward.
I mean, sure they talk big, but isn't one of the largest complaints against crypto the fact that transaction fees are high [0,1,2] and processing times are long [3]?
Government breaks up managed care organizations so that they are small enough such that their counterparties (e.g. smaller doctor organizations) can tell them to pound sand when asked for ludicrous fees.
Government legislated that electronic ACH payments or transactions have to be offered free of charge.
Government operates electronic money accounts and electronic money transfers as infrastructure.
One way to avoid this in the US is to go with an HMO, since they can be wildly profitable and still be much more efficient than an insurance company + independent providers. Of course, the problem with that is that non-emergency care from third-party doctors isn't covered by the HMO.
A better way to solve the problem is to go with a single-payer healthcare system, such as the one the progressives was proposing during the Obamacare negotiations. (As every other first-world country has done at this point.)