I highly recommend The Making of the Atomic Bomb. I listened to the audiobook last year. It starts with the scientific advances, beginning in the late 19th century, and continues up through the achievement of a chain reaction and the dropping of the bombs on Japan. The final part of the book, detailing the eyewitness accounts of the bombings, is the most harrowing thing I’ve ever listened to.
Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive.
The problem with our healthcare system is that too much money goes to drug companies, medical device makers, and insurance companies and not enough makes it to the people actually providing the care. Its a bit more complicated than that, I'd admit, but that's the TLDR version.
Hospitals are every bit as cynically abusive as the other players. They ratchet up prices as high as they can get away with while blaming insurance companies, the only party in the system with enough leverage to negotiate prices down, they demand huge kickbacks before giving drug companies access to patients (the #1 cost in drug development) and put gigantic markups on drugs they give to patients while pretending drug companies are the sole responsible party for high drug prices, they act like non-profits when asked to pay taxes but for-profits when they decide on executive compensation or location strategy (i.e. close hospitals in poor neighborhoods, open in rich neighborhoods), and they house a guild that has had such diabolical success in "managing" its training pipeline that it publicly condemns the policies it itself put in place to do so.
In general: If you ask the insurance companies who the problem is, they point at hospitals and drug companies. If you ask hospitals who the problem is, they point at insurance companies and drug companies. If you ask drug companies who the problem is, they point at insurance companies and hospitals.
If you look at patient costs in the three sectors compared to other countries, you see a remarkably even division of the spoils between the three heads of the beast.
Health insurance companies have taken to denying almost every claim that hospitals file. This overtaxes the hospitals claims denial departments and costs hospitals millions in lost revenue because they don't have the staff to properly review and resubmit every claim (which has to be done by a clinical specialist).
It's like taking your car to a mechanic, and once it's fixed, refusing to pay, claiming car didn't need THAT repair in the first place. Then getting away with it because you have an arbitration agreement in place with the shop. So the shop needs to employ an entire separate department of ASE certified mechanics that are dedicated to documenting that the repairs performed on customer cars were necessary. But the kicker is, YOU GET TO DECIDE IF YOU'RE CONVINCED THE REPAIR WAS NECESSARY.
Hospitals used to have small (1 person per 10k beds) claims denial departments and use outsourcing firms if case loads increased. Now they are acquiring all the outsourcing firms and increasing their staff to like 100 people per 10k beds. It's insane.
I like to retell a particularly awful denial my partner had to deal with, which was a patient had their open heart surgery claim denied by the insurance company because they determined that the patient's condition only warranted observational care (that's right, the insurance company determines what care you need/get). The hospital eventually won that claim, but they routinely lose $100k+ claims and have to eat the cost.
True story: my partner's department can't just sort denies by highest cost because they literally do not know how much the procedure actually costs and nobody in billing/finance can tell them either.
She came home one day feeling pretty good about overturning a $180k denial. She checked back a few weeks later, and found the paid in full amount to be in the neighborhood of $10k after "negotiated discounts."
The system is fucked. Had the denial gone through, that person would have been on the hook for the full 180k. (Or, to be more accurate, the hospital would have negotiated for $10k from the patient and written the remaining 170k off of their taxes)
The people I've known who needed expensive care (high-5-figures or 6-figures) were made well aware of the costs in advance, because at that point the facility wants to make sure your insurance will cover it beforehand. But it doesn't do that much for the patients - comparison shopping doctors and facilities is extremely stressful stuff and a lot of people would rather not think about it, even when some outcome info is available. And the exact details are never known up front, so then you're dealing with "it'll probably cost X more to do it at Y but there's probably a Z percent higher chance of a good outcome..." no-right-answer type serious business decisions.
Emergency care is a different matter, I imagine, insurance-coverage-wise, but pre-approval seems to be fairly widespread for planned stuff these days.
Except that medical providers don't honor the estimate in the same way an autoshop typically does and is required to do in many jurisdictions. They treat it as just that -- an estimate. You still get charged for whatever procedures are performed, which can change from the estimate when situations change or they deem something to be medically necessary in the moment.
> Your car is unlikely to experience life-threatening complications with a nearly unbounded upper cost while it's being fixed.
If you bring your car in for repair and tell them that you need to have the car's brake rotors and pads replaced, the shop can tell you that the parts will cost X and the labor will be Y hours at Z cost per hour and give you a relatively accurate estimate. They may later tell you that there were some bolts that had to be drilled out before they could remove some parts and that may increase the labor cost somewhat.
Why can't that be the same case if I go to get a chest X-ray with posterior-antierior and lateral views? If you have the CPT code(s) and the insurance information, it should not be difficult or time consuming to get the cost estimate.
> Why can't that be the same case if I go to get a chest X-ray with posterior-antierior and lateral views? If you have the CPT code(s) and the insurance information, it should not be difficult or time consuming to get the cost estimate.
It is both difficult and time consuming [0], and, moreover, often distant from the provider, because medical billing is quite often outsourced.
[0] Perhaps not in the median case, but there are plenty of complex cases, which is one of the reasons this is outsourced.
In Canada, developing an accidental MRSA infection after a routine surgery will trivially turn a $5000 procedure into a $25,000 package of life-saving treatment and associated hospital stay.
When things go bad in medicine, your bill grows really, really, really fast.
Also, unlike a mechanic with a car, your doctor can't stop working on you after they blow through their quoted budget and ask if you still want to pay for treating the complications. I mean, they can, but unless you've got a death wish, you're not going to say 'no.'
I certainly don't get more money if I accidentally introduce critical crash-to-desktop bugs, and then spend more time fixing them. I get paid to do the job to a minimum standard of quality. The customer is paying for the outcome they want, not for the amount of work it takes to get there. The Labor Theory of Value rears its ugly, no-good keister again.
If an actuary can quote me the price of a life insurance premium 40 years before a person is expected to die, such that the company doesn't lose money, a hospital can figure out how to price its services such that it doesn't go bankrupt. Those wailing about too many uncontrolled variables are just trying to suck the last available penny out of the patients. How can they possibly nickel-and-dime people to death on their itemized bills if they don't know exactly how many cm of plastic tubing will be needed for the surgery?! How can they charge $25 per 500mg analgesic pill if that is already included in the published price of the procedure?! It's really only a problem if your mission is to suck out all the consumer benefit of trade via price discrimination.
If my auto mechanic blows past their original quote, they don't stop work and ask for more money. They fix the danged problem, charge what they said they would, and try to estimate better on the next job. And they certainly don't plow ahead, replace the engine and transmission and exhaust system, laser-scour the rusted body panels, put on new tires, repaint the exterior, reupholster the interior, clean all the crap out of the trunk, fill up the gas tank, and then try to charge me $120k to get my 2001 Civic back. The doctor can't stop working, but they can stop charging extra for it. If I knew ahead of time that it would have cost that much, I probably would not have consented to the procedure in the first place.
Ah, but your chances of an MRSA infection aren't the same everywhere. Some hospitals are far better than others at preventing infection, while others are far worse. In a bill per procedure world, like in US medical billing, while I'd not expect anyone to do it badly on purpose, lax procedures that lead to more care are paid by the patient's insurance. In a government owned hospital, or if billing is done up front, it's the hospital's problem. American billing leads to no incentive to saving money, so guess what? US hospitals charge a lot more per procedure and perform somewhat more procedures than everyone else, so ultimately the price is higher.
Even if nobody had insurance and shopped around, the US style of billing would lead to very little downward pressure on prices, as it's impossible to have a clue of what you are going to pay.
Many businesses, including freelance developers, will not charge per hour, but by job. You jack up the price to end up ahead in the case of typical complications, but there are cases where you lose money, and that's on you being bad at estimates and billing. Billing by procedure in the medical system is just setting the wrong incentives, and a recipe for maximum waste, if not downright fraud.
> Doctor associations all across the country create enormous barriers to the opening of new medical schools to avoid competition.
similar to how nursing unions band together and squash efforts for community paramedicine (many of the same services at a way lower cost) to expand. "they'll be taking our jobs!" is what it boils down to.
>
Some, if not most, of this is a result of the insurance system. The insurance companies only pay x% of any given item, therefore the hospitals have to jack prices through the roof to collect enough to survive.
To clarify: Medicare reimburses rates that are below COGS, so hospitals have to increase the amount they charge private insurers in order to make up the loss.
The grandparent is describing a separate issue - note that not all hospitals will serve Medicare-receiving patients beyond their federal requirements.
Insurers negotiate reimbursement rates with hospitals, with both parties being able to leverage their size/social cachet to extract favorable terms. This contributes to the availability of certain hospital chains in the preferred networks vs. the non-preferred networks of particular insurers.
It's actually the same issue - the way the contracts are structured, insurers agree to pay X% of what Medicare charges, where X is typically something like 200% or 300%.
If Medicare rates are actually below cogs, why do hospitals accept Medicare patients? I know some don't, but the vast majority do. Something about that explanation feels off.
Some private facilities don't, but in general it's cheaper and easier to provide preventive care than it is to try to collect from these patients after they admit to the ER with a complication (where you are mandated by law to treat them).
One of the reasons hospitals accept discounted rates for insured patients in general is ease of reimbursement vs trying to chase the patient for money.
If you serve a certain rate of medicare patients, you get additional funding. It's set up this way for 'political' reasons. Like most of us politics, it's a mess.
> If you serve a certain rate of medicare patients, you get additional funding. It's set up this way for 'political' reasons. Like most of us politics, it's a mess.
That's not an incentive for hospitals to serve Medicare patients; it's compensation for the fact that the hospital sees so many Medicare patients (and therefore so few privately-insured patients, by portion) that it can't make up the difference solely from overcharging private insurers.
"The problem with our healthcare system is that too much money goes to drug companies, medical device makers, and insurance companies and not enough makes it to the people actually providing the care. "
The surgeons I see through work have very nice houses and 100k+ cars so they are part of this.
You can thank the American Medical Association for their work on artificially limiting the number of doctors. I've read some accounts that they're now trying to fix this, but it's not something you can just fix in a year or two.
> The problem with our healthcare system is that too much money goes to drug companies,
Erm no, actually you pay a lot more for pure hospital services all things considered than whatever is paid for the price of drugs. I totally agree that drugs should be cheaper for patients, but pretending drug manufacturers are the only/main problem is just far from the reality of the market. Every intermediate is inflating their prices as well.
The real root problems with the system are that a tiny minority of very sick patients account for an overwhelming majority of treatment costs; that it's difficult to prevent this from happening; and that the current care structures make it hard to take early action to incentivize these patients to improve.
It also is almost impossible to have a real discussion about this fact because it makes people uncomfortable.
There's a lot of moralizing in this, without numbers justifying it. Show me the evidence that an overwhelming majority of costs come from few recalcitrant bad actors vs things like cancers, expensive surgical or drug remedies of rare diseases, or just plain expensive end-of-life care (a somewhat separate discussion from the others, but a conversation that'll have to be had sometime).
Without that... the costs will always be unevenly distributed due to the nature of illness, that's why the only sane first-step health policy is mandated universal insurance coverage, public or private, since the main question is who is going to get the bad news that they've got the unlucky genes/mutated cells/whatever. Everyone pays in, everyone gets covered if/when they need it.
And if you pay in your whole life and never get seriously ill? That's not a reason to complain, that's a reason to thank your lucky stars you didn't have to deal with being seriously ill or injured! It's not fucking fun, like sick people are trying to get a free ride here.
The parent comment was correct when they said this:
"The real root problems with the system are that a tiny minority of very sick patients account for an overwhelming majority of treatment costs"
It's impossible to tell exactly what the parent comment meant any more precisely without clarification, whether they were talking about unnecessary over-consumption of resources (Americans have been over-healthcare'd for decades), or that eg cancer patients or elderly consume vast resources (as one would expect). However, it is of course the case that a tiny percentage of the population produces a very large share of the cost. The bottom 50% of healthcare consumers, are a mere 3% of the cost in the system. I don't know what the point of any of that is however, there are only ultimately two choices: go back to the old system that was far less expensive for the majority, but didn't properly cover about 1/3 of the population; or continue to shift toward universal healthcare with a fully distributed cost (which means significantly raising taxes on the middle class, as in every universal healthcare system).
"When it comes to America's spiraling health care costs, the country's problems begin with the 5%. In 2008 and 2009, 5% of Americans were responsible for nearly half of the country's medical spending. ... In 2009, the top 1% of patients accounted for 21.8% of expenditures."
> You can do the NHS way and forbid paying for unwarranted procedures for life extension.
Please cite which of these procedures are forbidden.
> NHS adopts this measures in the so called death panels
The US has these too, in the form of insurance companies.
I think if you're going to have them it's better to ahve them be publically owned not for profit organisations under intense government regulation, rather than profit making companies.
NHS guidelines is to not extend a terminal patient's life indefinitely. Not sure the explicitly reason is costs but having people months on intensive care is pretty darn expensive
Your first link refers to the Liverpool Care Pathway. This was only for people with end stage terminal illness. It doesn't happen anymore -- the Liverpool Care Pathway has been stopped in all hospitals in England.
Your second link is even weirder. Firstly you've linked to a local organisation that covers a population of 250,000 people. Milton Keynes CCG is not a national organisaton. Secondly, you've said this is about not funding some treatments, but you've linked to the page where people can request funding for those treatments. Thirdly, You think US insurance companies fund anything and everything?
Some treatments are very expensive and also do not work. We see this most commonly with cancer drugs. To ease the burden for CCGs there's a national "Cancer Drugs Fund", set up to provide access to the latest cancer drugs.
They do not work. They do not work, and they cause harm, and they are very expensive.
> The Cancer Drugs Fund, set up by the government to pay for expensive medicines that the NHS would not normally finance, failed to benefit patients and may have resulted in some of them suffering unnecessarily from toxic side-effects, experts say.
> An analysis in a leading cancer journal has found that the fund paid out £1.27bn from 2010 to 2016 – an amount that would have paid for an entire year of mainstream cancer drugs for the NHS.
> But medicine it paid for was not worth the money, the report concluded. The analysis in the Annals of Oncology journal looked at 29 cancer drugs approved for 47 different types of treatment (known as indications), some of which were approved to treat more than one cancer. They found that only 18 of the 47 treatments prolonged the patient’s life, and then only by an average of three months.
But assuming someone still wants it, and they apply for individual funding and don't get it, they're now in the same position as many Americans: they can crowd-fund and go private.
Mostly the expensive people are, as you say, the ones screwed by fortune or those whose health declined in the past for whatever reason and their present behavior is not going to be able to fix things even if it contributed to their present poor health. Still it doesn't make much difference to the hospital when they have to explain why a routine knee replacement is going to cost 20k.
Depends on what the market conditions are. If there is a lot of competition from hospitals then the payer may just refuse to include the hospital in network if they aren't willing to play ball, meaning they lose all the prospective business.
As a Republican elected official in a southeastern state, I have a front-row seat to what this article points at.
The road construction industry used to be a great opportunity for small business people to create for themselves a substantial income. These days, all the companies in our area are owned by conglomerates, backed by billion dollar financial institutions. If you were to risk a million or two or an asphalt plant, they will undercut your prices till you go bankrupt, then inflate their prices once again. The two companies in our area will bid on all of our projects, but it's clear they are in cahoots when it comes to their pricing.
By our estimates, the taxpayers are overpaying by at least 15% - 20%. In my mind, this robs others of opportunity and transfers wealth from tax-paying citizens to billion dollar companies.
No one points this out because the road builders give a lot to politicians. Go against them, and they'll spend enough to have the public label you a RINO which, in this neck of the woods, can get you booted from office.
I've wished for some time that someone could create a modular asphalt plant that can be packed up on trucks and taken to wherever the job site is. I think companies like this could help regulate prices and make a lot of money.
Your problem is that big business has conflated free-market capitalism with the right to monopoly and convinced your constituency that anti-trust regulation is destructive to a free market when, in truth, oligopoly leads to corruption of the free-market and a farce of capitalism.
You need to work on educating your citizenship gradually until they understand the conditions wherein capitalism actually works. That way they might see why breaking up big busines and preventing M&A is often the Right Thing™️ and conservative to do.
Pretty sure parent is aware what "their problem" is, seeing as they have a front seat to it. ;)
And "educating the citizenry" as a feasible tactic in local races is an exercise in futility. For the cost of an educational campaign, his or her opponent (or their supporters) could run attack advertising that would certainly lose parent the election.
Aggregating like businesses and pushing for change higher up the political food chain is more effective, albeit not without its own risks.
Conflated, or used the shibboleth of "free-market capitalism" as a cover for monopoly mercantilistic rent-extraction.
Having put a fairly considerable amount of study into the history of economic thought, back to Greek and Roman times (see Backhouse's The Ordinary Business of Life for a comprehensive, if dry, overview of mainstream economic thought), and with a strong focus on Smith to present, this problem is a pervasive one.
The irony is that it's practiced quite ardently by many of the loudest "defenders" of free-market systems. (Not always -- there are straight-up monopolists who have given up all pretense. Most, though, preach and act inconsistently.)
How do you keep the big companies from making the contract awards process too difficult for entrant players. I've seeb see this, for example, in [TLA] contracting where in practice some players hire full time staff at 100k+ to even get all the forms correct.
And then if the contracting award process is too easy, how do you fix the problem of keeping fraudsters out and the contractors accountable?
So problem, as I understand, is that it requires significant amount of capital to get going for independent company, and they might go under if big company cut them. And the big companies undercut independent ones so later they could raise price.
So I had this question - what if state would commit to 10-20 years worth of contracts with some kind of locked in rate (adjusted for inflation or something), not just one off contract? This way independent company would have more motivation to do major capital investment, and big companies will not be able to undercut small players on one off job, only to get all next ones for 20% more..
I've floated this idea around but what I found out was that it's against our state's laws to have such open contracts. Changing the state law would be difficult (road builders have a big voice in state government). We also, by law, have to accept the lowest bid that meets specs, even if that means higher prices in the long run. Championing accepting higher bids would be difficult come election time. The attack ads would read, "Politician A wants to give his buddies a sweet-heart deal at the expense of the taxpayer."
some places have laws were one govt contact can't be more expensive than the previous similar job. if there are no bidders, the posting should remain open for a long time (12months here).
doesn't solve everything, but the intent of those laws is to make that harder.
maybe one day an even bigger company such as Amazon will eat the asphalt companies lunch then. Their margin is someone bigger's opportunity. Or maybe 15-20% profit is just reasonable and competitive with other industries.
So is the logical end goal of this system to have a single company that makes all economic decisions as they use their excess capital to take over other industries?? That sound's like the end goal is not going to be functionally different from communism other than that the theoretical super company's goal will be to make its shareholders rich and communism government as least pretended like they wanted to help all their citizens
15-20% over the proper amount, above and beyond their normal profit. That's not all that unusual in that space. I worked in a field closely tied to the industry. I'm amazed it functions as well as it does.
That estimate is based on the fact that since the last true independent company in our area was bought out by the big guys, prices for all subsequent jobs rose 15% - 20%. I'm all for business making as much profit as possible. I'm not against profit, I'm against predatory pricing that limits competition.
