YC Research: Universal Healthcare
blog.ycombinator.com
blog.ycombinator.com
I'm not sure what the solution is short of a total swamp draining, but our startup went overseas to develop/trial our product in a country with a single payer system. Not perfect, but much more amenable to finding efficiencies.
Anybody thinking software is going to solve that is way in a bubble.
http://healthaffairs.org/blog/2016/09/19/the-politics-of-med...
First off, Medicare Part D plans are run by private insurers and they certainly do negotiate on price. In fact, they tend to get better prices than commercial plans. Those savings are used to compete for Medicare dollars to cover those patients (i.e. savings are passed on to Medicare).
Second, physician administered drugs are paid for at a rate that is the average of what private payers pay. So no negotiation, rather a piggybacking on discounts to private insurers.
Finally, if you roll in the 340B discount (23% minimum), Medicare is getting a pretty good deal on drugs.
I would argue that unless Medicare threatens to NOT cover some drugs, it won't reduce costs one bit. Currently there are a number of protected classes where Medicare HAS to cover those drugs. That needs to be fixed first.
If you don't believe me, look at the CBO estimate of savings if Medicare is allowed to negotiate. Their findings were "minimal savings".[1]
CBO estimates that enacting S. 3 would have a negligible effect on direct spending and would result in spending from appropriated funds of $2 million in 2008 and less than $500,000 annually in subsequent years. Enacting S. 3 would have no effect on revenues.
[1]https://www.cbo.gov/sites/default/files/110th-congress-2007-...
Medicare Part D plans are run by private insurers and
they certainly do negotiate on price.
physician administered drugs are paid for at a rate
that is the average of what private payers pay.
From http://www.cnn.com/2015/09/28/health/us-pays-more-for-drugs/
-- Gleevec (a cancer treatment): $6,214 (per month/per customer) in the United States, compared to $1,141 in Canada and $2,697 in England.
-- Humira (for rheumatoid arthritis): $2,246 in the United States, compared to $881 in Switzerland and $1,102 in England.
-- Cymbalta (for depression): $194 in the United States, compared to $46 in England and $52 in the Netherlands. In fact, there is also a generic version of Cymbalta so these prices reflect having a cheaper alternative.
Some molecule. Different price.
Look back at the last paragraph in my response above. Medicare is required to cover a number of classes of drugs. they can't say "no, we're not paying for it."
As a result, Medicare has no negotiating power. Unless you can walk away from the table, why would drug companies budge?
And if Medicare did have the power to say "no", how would that work politically? I'm guessing the AARP would be up in arms if Medicare said "no, we're not paying for that drug, find an alternative."
And the price you quote are comparing list prices in the US to net prices (that's usually what's published in the EU and Canada).
Humira is significantly discounted in the US. 40 to 50% discounts are not unusual for large payers.
A great example are the HCV drugs. When a 2nd class of products entered the market, the drug manufacturers rushed to discount their products to maintain market share. As a result, the US price is lower than the prices in Europe.[1]
[1]http://www.forbes.com/sites/johnlamattina/2015/12/04/for-hep...
Those statements are only true for drugs with no alternatives - which doesn't apply to all (most?) drugs. And, even for those, couldn't the government say "we're not going to pay $(RANSOMPRICE) for drug X. If you insist that we do, we will not buy any other drugs from you but will instead source from your competitors at all times."
https://www.congress.gov/amendment/115th-congress/senate-ame...
You can see who voted for / against it: https://www.congress.gov/amendment/115th-congress/senate-ame...
US suppliers sell to Canada at a different price than they sell in the US.
If 'borders were open' - the price in US would go down, the price in Canada would go up, roughly to the same price.
I understand that it seems odd, but I reject the idea that it's 'corrupt' to sell to one country at a different price than another.
Drugs are essentially IP, so it would be like the US selling Canada the 'Superbowl' and then Canada selling and broadcasting it to the rest of the world at a discount.
I think something should be done about that - but drugs are not like most goods. And of course, many goods have different controls and regimes.
Another aspect: it's not really 'free trade' when a government entirely regulates the economy for a good. So when gov of Canada 'sets prices' for a good, it kind of flies in the face of regular trade rules and potentially gives one side or another advantages, so it really doesn't fit well under things like WTO or NAFTA.
Surely we could have some new thinking about this though ...
As a result, a lot of pharmacies (and some gov'ts) restricted sales to out-of-country patients to prevent shortages in their own countries.
Medicare is socialized medicine, and should be single payer, yet insurance still manages to get in the middle and increase costs while reducing patient outcomes.
Specific example that almost no one talks about: Medicare Insurers come to town and start buying up primary care practices, then, then the Insurer cancels contracts to the remaining providers and those who don't sell. This means patients lose their doctors of years and are stuck going to the primary cares the Insurance companies own, and then provide waterdowned care to patients (e.g. RX that is cheaper for the insurance company even when the Med is proven less effective, less refferals to specialists than the market average, etc...).
There have been some lawsuits against Medicare insurers for this specific behavior, but to my knowledge those have resolved in settlements where the insurers temporarily agree to allow existing patients to continue seeing their doctors, but unfortunately the reality of those cases are the doctors aren't fighting for their patients but seeking their own buyout from the insurers.
Wait, what? Medicare Advantage (the portion of Medicare that is privatized) consistently beats Original Medicare on cost, medical outcomes, and patient satisfaction scores.
Amusingly, when people talk about the high patient satisfaction of Medicare, they're talking about the high patient satisfaction of privately-insured Medicare patients, because even the very lowest satisfaction score of all the major injurers who provide Medicare plans is still higher than Original Medicare's satisfaction rates.
http://thehill.com/policy/healthcare/237492-poll-seniors-mor...
Ironically it was GW Bush who got Medicare Part D done (which is the antithesis of fiscal conservatism, and many might remember Bush losing a lot of support from his own party, though many say it was just politicians in the pockets of insurers). Alternatively, Obama originally wanted to do away with Part D because of the cost/waste (forcing millions into situations where again they would lose drug coverage would have been the antithesis of social liberalism, for this reason it was controversial within the party). Luckily there was compromise and instead of dismantling Part D Obama tried to flush out the waste using tools like Star Ratings and mandates to insurers to provide services like Medication Therapy Management to Advantage Chronic Care Patients, which alone has had substantial positive impact on patient outcomes, costs, and the competitive nature of the insurance markets (now insurers are rated based on quality metrics, insurers lose contracts with Medicare due to poor outcomes and only those with the best metrics and ratings can serve the market year round). Still its an inefficient system because of these middlemen, in fact it is arguable many of the "quality metrics" that give insurers better ratings are actually the things leading to bad behavior like buying up medical practices and cancelling contracts with other primary cares in the area to drive down the cost of care.
I'm talking about Medicare Advantage, not Medicare Part D. Most Medicare Advantage plans do include a Part D plan, but not all do.
> not because of insurance companies or the market is privatized.
People like Medicare Advantage because they are actually able to book appointments without horrendous wait times, and they're able to see a better selection of higher-quality doctors. And the outcomes back this up - Medicare Advantage consistently outperforms Original Medicare on medical outcomes, not just on patient satisfaction.
I like a nice website as much as anybody. I think YC has done real well with their websites. If they wanna move fast and break things, I'm gonna wish them godspeed. I still think they're crazy, but that's the point, right?
Of course, you can say "who cares if Medicare drives prices too low, the drug companies will just have to deal with it." But in the long term, that's bad for the customer. All around the country you can see regulated rates that are too low and drive out investment. A great example is water utilities. Almost everywhere, water rates are far lower than they should be, and as a result water infrastructure is crumbling, customers are drinking water through lead pipes that haven't been replaced in a century, etc.
This is literally our system:
When you're healthy, you get for-profit health care through your job. If you become infirm and cannot work, usually through age, but for whatever reason, you get expensive health care through the state after you have bankrupted yourself.
The entire premise of health insurance is having healthy people pay for the sick people to spread out the risk. But our system is "private insurance takes all the profits and the government takes all the costs".
And people wonder why things aren't working out.
It's too simplistic to blame this on government regulation. The rest of the world also regulates utilities, and far from all of it has the crumbling water infrastructure problem.
I'm not blaming the fact that government regulates utilities. I'm pointing out that using government regulation to simply drive prices lower is bad in the long term. Government regulation can work when prices are set at levels that balance investor incentives and consumer welfare. Doing that is really hard.
When the U.K. privatized British Telecom, it created a regulated monopoly (now BT Openreach) that owned the wires into peoples' houses. They spent a lot of time and intellectual energy into determining how to set BT Openreach's rates. As a result, that monopoly is more profitable than say AT&T (even including AT&T's lucrative wireless division). Unsurprisingly, BT Openreach has aggressively built out FTTN in the U.K. whereas U.S. telephone providers have been trying to limit investment in their networks.
It would mean that the US uses its leverage to push drug prices down to marginal costs, which would almost be the last domino in payers willing to pay for something like the value of new drugs. But drug development doesn't make sense if you can only charge marginal costs.
The downsides of such a policy are going to be felt long-term; nothing is as simple as "we pay less and they get less".
It also means that a large number of people could actually afford medication, doctors, etc. I have friends who can't afford going to the doctor, can't afford medication, so go without. Their quality of life would greatly improve by them being able to get into the system.
I was only trying to establish that it's not a matter of "here's a single, obviously bad policy that can be clipped out and which only has downsides for greedy capitalists".
Viagra was originally developed as a medication for cardiovascular disorders and hypertension, which are major problems in both the "third world" and in developed nations. It was only later on that they discovered its use for erectile dysfunction.
As for marketing Viagra - why is that a bad thing? Given that they've already done the bulk of the R&D for it, making money off the blockbuster drugs is exactly how pharmaceutical companies can afford to pour research into drugs that are a lot less likely to succeed, or which target poorer populations.
Or, if you don't want to look at Pfizer, look at Gilead. While it's easy to criticize them for charging so much money for Sovaldi (or charging so much for Tenofovir a decade ago) charging the patients who can afford it for the early years is exactly how they recover their costs and justify things like clinical trials for PrEP (which, it's easy to forget today, were a massive risk at the time), or direct market subsidizes of PrEP for people who can't afford it otherwise. I wouldn't be surprised if they did something similar for Sovaldi in the next decade as well.
I don't think anyone would dispute that that's a major way that research is currently funded, but it's fundamentally stupid. You've got a bunch of free riders, and it obscures where and why costs are actually incurred.
Allow negotiation, and then figure out clear, rational funding mechanisms.
It's exactly how normal (non-monopsony) markets work in every context, including markets for intellectual works/IP.
Note: in this context, "negotiating" means "turning the national market into a monopsony". It's generally recognized as not-a-pure-good-thing when e.g. Walmart comes close to doing that and forces sellers to nearly take a loss in return for access to Walmart's market.
(And before anyone makes the obvious point, yes, I know "health care ain't a can of beans etc etc etc". But with respect to the dangers of monopsonies, it's close enough.)
On the flip side, Medicare sets reimbursement rates for services essentially by fiat[0], which can be below the marginal costs of providing service. Most providers cannot legally refuse to treat Medicare patients, so they are forced to accept the rates that Medicare sets (they have no ability to properly negotiate). Medicaid is a whole different system, but in this aspect, it also works the same way.
This turns into a system in which privately insured patients subsidize Medicare patients through their premiums[1] (separately from their tax money, which also goes towards Medicare)[2]. Medicare has no incentive to change this, because it allows them to increase their (effective) operating budget without requiring Congressional approval.
The reason Medicare drug price negotiation was blocked is that people (both pharmaceutical companies and policymakers) were afraid that it would turn out just like Medicare's "negotiated" rates for inpatient and outpatient services.
[0] And private insurers are legally prohibited from reimbursing less than Medicare does
[1] And uninsured patients receive the same (inflated) bills that private insurers receive. (Whether or not they actually pay their bills is a separate matter).
[2] If you've ever wondered why the sticker prices for inpatient services seem so high, this is the underlying reason. Privately insured patients and uninsured patients aren't just paying for their own care (and for the care of others in the same risk pool). They also have to cover the amount of money that providers lose on Medicare and Medicaid patients.
Yes, private insurers don't pay entirely what they're billed. Though they still pay significantly more than Medicare pays. The negotiated agreements between private insurers and hospitals are almost always pegged at multiples of Medicare (e.g. "200% or 350% of Medicare rates for $X service").
My understanding is that doctors can choose not to take Medicare patients. Do you have a link or something that explains this?
Sort of. For example, most emergency rooms in which physicians have admitting privileges to an associated hospital are required to take Medicare[0]. And those emergency rooms are prohibited from refusing patients based on insurance status. So right off the bat, that's an enormous source of patients who could be publicly insured (Medicare/Medicaid) or uninsured, and they have no legal way to refuse them. (Once a patient is in the ER, if they need to be admitted, you can't (legally!) refuse to admit them based on their insurance status).
I'm kind of oversimplifying, because there are a lot of tricks that hospitals try to use to stop the bleeding - for example, Bellevue is a public hospital, and it operates an emergency room, but its private counterpart that is literally across the street does not. NYU can do some (perfectly legal) maneuvering to keep most of the patient population of Langone limited to privately-insured patients. As a result, Langone has undeniably better[1] care, despite having access to the same set of medical staff[2] and being associated with the same medical college.
It's true that private practices can refuse Medicare for outpatient services easily. And incidentally, many do. There's a reason that, except in "critical access" areas[3], most of the top physicians who operate purely private practices don't accept Medicare. However, private practices are a dying breed, so that's a moot point in 2017.
[0] Conversely, free-standing emergency rooms are prohibited from accepting Medicare. A rather cynical view of this would be that Medicare does not want to encourage free-standing emergency rooms, because it's much more difficult to use private emergency care to subsidize Medicare care than it is to use private inpatient care to subsidize Medicare care (the orders of magnitude in costs are vastly different).
[1] More expensive, but vastly better
[2] Well, sort of. Staff isn't shared between the hospitals day-to-day (a nurse at Langone will typically only work at Langone unless he or she also has a job at Bellevue), but the allocation draws from the same pool a priori.
[3] Rural hospitals that Medicare pays handsomely, because otherwise those regions would have no medical access at all.
It probably is; it's quite common for fair numbers of hospital staff (e.g., OR staff that are needed only for certain types of procedures), AFAIK, to be provided by third-party contractors that provide service to multiple hospitals in the same area, and the same staff may work at different hospitals on different days based on need.
One reason for the inflated chargemaster prices (e.g. $100 for a tylenol) is that payers (Medicare is a big one) simply negotiate by saying "I'll pay you 50% of your chargemaster". Then when the hospital updates their chargemaster, they tack on another 20% and the payer comes back and says "I'll pay you 25% of your chargemaster".
It's a vicious cycle where the chargemaster prices have no bearing on reality.
An insurer last month for a relative's pediatrics practice announced that they were having difficulties with their accounting system and so they would only be making a half payment on their outstanding AR (and naturally, they announced this problem right before the payment was due to be sent). My relative's practice has no practical recourse other than to wait for the full payment to be sent. This is not an uncommon occurrence. My relative's practice is regrettably not able to use the same argument for their bills that are due.
It costs my relative money to administer vaccines in their peds practice, i.e., most insurances pay less than what it costs to purchase and give the vaccine. My relative continues to offer many vaccines at a loss because they believe vaccines are one of medicine's greatest gifts and because they have good success in persuading unsure parents to vaccinate their children. From a pure numbers perspective, it is a mistake.
Insurance companies not paying physicians on time as agreed drives up costs. Insurance (Medicaid included) not paying what it actually costs for a procedure drives up costs. Insurance companies arguing against the best course of treatment for a patient, requiring additional staff to be hired in order to deal with the pushback, drives up costs.
Maybe we need to drop kiosks into pharmacies that can read biometric markers, get doctor approval, and deliver vaccines.
We should also work on removing arbitrary barriers to entering the supply side of the market. Not just for individuals that want to be a doctor or other sort of provider, but certificates of need and such too. Currently, lots of states dictate who can operate a CT scanner.
Imagine you go in for an oil change. You ask how much it costs, and find out it's $20. Great. You get the oil change. One month later you get a bill for "environmental disposal" for $35. The next month you get another bill for "Safety specialist" for $15.
This is how healthcare works in the US. If retail worked like this, we'd be in a worldwide depression in about 6 months. Lunacy.
I went for a routine doctor's visit a month ago, and paid the $30 copay or whatever it was before the visit. Today I got a bill for $208 where my insurance covers $193, which comes out as them wanting exactly $15 extra from me.
I have Kaiser insurance, I went to a Kaiser facility, saw a Kaiser doctor. It is completely incomprehensible to me how they couldn't know that my visit was actually going to be $45 beforehand, such that I could have paid that instead of the $30 I did. The $208 is obviously just a bullshit number some system pulled out of its ass, and the insurance coverage is just bullshit - 15. I don't get it, it's pure madness!
They did not know of a facility where this procedure could be done at first. They had to 'research it'. They found a facility, but when I called, they could not perform the procedure because it called for a 'pediatric echo', which they were NOT allowed to do (mind you, it's like the same echocardiogram that you and I would receive). When I presented this information to my insurance company, they had to again, research it. I ignored it, and found it on my own after calling the heart group at one of the teaching hospitals in my state (NJ). So, I asked my insurance company how much it would cost, they refused to tell me. They indicated that they do not dictate pricing; this is the job of the provider. I noted to them that I did not believe them because I knew that they have contracted rates with all of their Tier1 and Tier 2 facilities and they knew exactly what they would reimburse for. They flatly denied that they had any knowledge of pricing and that this was the responsibility of the provider. My response was a question: so, if the provider charged you 1 MILLION DOLLARS for this procedure, you would, in fact, pay it. They indicated that they did not have any pricing knowledge whatsoever. I ended up getting a second opinion and found out the echo wasn't necessary based on follow up findings. It was one of the most frustrating examples of federally mandated RIPOFF I had ever seen. My son's health was at stake, and they simply wouldn't help me. The doctor's are literally at their mercy because they control the money and EVERYONE lets it fucking slide. It's a crime.
What do Americans think of the typical European system? (Paying more taxes and receiving almost free healthcare & education)
In the US you get to see the cost of care every time you have reason to see the physician - there's the copay for the physician visit and medications, and then there's the explanation of benefits, where you, as a patient, get to reconcile accounts. In NIH Britain OTOH, you get to see nothing of that sort (except a small copay for medication), and healthcare costs are better contained. It's the US that is the outlier, and shifting even more burden on the patient won't fix matters, it hasn't fixed matters in the past.
I feel it's important to point out that you see the cost in the bill. There's no reliable way to see the cost beforehand.
There's at least one exception:
* Shop around
* Plan your cashflow around the healthcare expense
The problem is that the customers cannot see the prices, and thus can't negotiate before hand. This isn't just for emergency care, but for stuff that shouldn't be too hard to get pricing for. There's a nice Vice(?) video about a couple having a baby. They find it impossible to get even an indication of cost before hand.
This patient choice stuff made its way to England, and frankly it's dumb. People don't change their utility suppliers even though they'd save large amounts of cash. They don't change their GP unless they've moved house; they don't have enough information to make an informed choice of hospital if they need to go for surgery. It's a lot of bureaucracy that has very little benefit.
I do agree that a single payer system that mandated prices would also likely result in lower prices, but I think that is less likely for the US than incremental changes to our current system.
It would, but it would be politically infeasible. Medicare would never let it happen, because providing price transparency in the private market would undermine the convoluted system that allows them to use private insurers to subsidize the care of Medicare patients.
And then in reality fraud rates seem to be quite low, at most a few percentage points of overall Medicare spending.
I meant cases like the late night commercials "call now and get a free motor scooter! Just fill out a simple form and we will bill Medicare."
And more relevant are the cases where hospitals bill medicare huge amounts for long patient stays. Medicare always pays what they are billed, after all it's the government paying, they just write a check.
Meanwhile if you bill an insurance company they will negotiate, argue, refuse to pay, deny coverage, etc. If you bill an uninsured person they can also just decide not to pay in favor of paying more important bills like food and shelter.
So, the hospital is actually fine with this, they simply write off the unpaid amount on their taxes as a charitable expense, and increase rates, which Medicare will pay.
So, as you can see, Medicare (plus tax breaks) create a situation where the government subsidizes and distorts everyone else's health care costs.
Speaking of lack of info about pricing you might find this interesting: https://www.statnews.com/2017/02/06/health-insurance-high-de...
Personally I'm pretty happy with my HSA, because now the list of things I can spend my healthcare dollar on is much longer:
https://www.irs.gov/pub/irs-pdf/p502.pdf
Lots of those things would not be covered by a traditional health insurance plan.
But of course, it means we have chosen to forego health care and services in some cases, like the author of the article above. In one case we turned down an ambulance and drove ourselves to the hospital, which saved some money.
Only in America do you choose to forgo healthcare when you are at a conference and caught food poisoning because you aren't really sure if the hospital will take your health insurance. Where do I apply for my medal for saving the system some money?
Longer than what? 8 years ago, I could use HSA funds to pay for over the counter medications. Not anymore, and OTC is generally the first step before visiting a dr or clinic, but OTC is not HSA-usable.
But they came about to protect the consumer from high prices.
If I own a hospital and buy a $300,000 MRI machine I need to make that money back over the 10 year life of the machine. I charge one price if it's used by 10 people a day; I need to charge double if it's only used by 5 people a day. The extra supply reduces demand and thus increases prices to the customer.
And it's unethical to just scan more and more people, because of the problems of overtesting and overdiagnosis.
EDIT: Citation that CONs came about to reduce prices: http://www.ncsl.org/research/health/con-certificate-of-need-...
> The basic assumption underlying CON regulation is that excess capacity stemming from overbuilding of health care facilities results in health care price inflation. Price inflation can occur when a hospital cannot fill its beds and fixed costs must be met through higher charges for the beds that are used. Bigger institutions generally have bigger costs, so CON supporters say it makes sense to limit facilities to building only enough capacity to meet actual need or demand.
The US Federal government tried them in the 1980s and quickly decided they were counterproductive.
Please give me one other example in an unregulated market where your MRI machine example makes sense. It sounds good on paper, but that doesn't happen in any other market in the western world.
If there are two competing gas stations, prices get cheaper. Two competing airlines, prices get cheaper.
I'm literally quoting the Americans who support certificate of need laws.
Mental health in this country is similarly crippled by rapid societal changes, but that would take longer to explain in detail.
Most of the "light" and "healthy" foods in stores are LOADED with sugars or starch. The FDA really needs to revisit the weight given to carbohydrates when creating the total calorie count.
* Subsidies for ethanol increases the cost of all food, including corn.
* Subsidies for corn for lots of other things[0][1] decrease the direct price of corn to consumers and food manufacturers.
As a single data point, I come from Kansas, from a family of farmers. It used to be known as the "Breadbasket of America" because of all the wheat that they grew. Its number one crop is now corn[2].
[0] https://farm.ewg.org/progdetail.php?fips=00000&progcode=corn
[1] https://en.wikipedia.org/wiki/Agricultural_subsidy#United_St...
[2] https://www.nass.usda.gov/Statistics_by_State/Kansas/Publica...
> US corn ethanol subsidies are between $5.5 billion and $7.3 billion per year.
Doesn't that mean most non-ethanol uses of corn aren't really subsidized too much?
It does also list: "Feed grains, mostly corn 2,841" (million)
Am I right that that is just $9 subsidy per citizen, and lots of it is going to feed farm animals?
The numbers are all from different years so there could have been some major changes.
It is however possible to consider at least some technology solutions - build a more transparent system. Let patients do some cost comparison and incentivize them to find cheaper (but good options). People do care about their health and they can and should be trusted to make these decisions.
Start more clinics like the One medical group (just an example) to make preventative care easier and accessible.
If I could buy health insurance separately from my company I'd look into it. I know my company pays at least as much as I do for my insurance, but if I go off the company plan I can't get that money to use for insurance I like.
The result of this is I have incentive to not care what anyone charges. The only thing I can do is lower my satisfaction job rating if the doctor I want to go to isn't covered by my plan. If I actually could choose insurance I would would look into cheaper plans - if they tell me the doctor I want is more expensive so I need a more expensive plan to cover using him I would then have incentive to choose: see if I like a cheaper doctor, or pay more for the one I like.
The result of employer providing my health insurance is a large source of dysfunction in the health care market. I illustrated one, but there are others. (Note, there are other dysfunctions in the health care market - always it is complex)
So a middle-salary employee is looking at a 25% increase in healthcare costs due to paying with after-tax money.
You can. It's probably not in your best interest, because the individual market plans are more expensive, but there's nothing stopping you.
> I know my company pays at least as much as I do for my insurance, but if I go off the company plan I can't get that money to use for insurance I like.
That's your employer's choice. They could provide a cafeteria plan, which would give you the choice (but again, since individual plans are always going to be more expensive for the same level of coverage[0], they'd have to pay more money overall to provide the same tier of benefits).
[0] simply due to basic actuarial math
You can always venture away from your employer and visit healthcare.gov or a relevant state exchange.
From what you're describing I think what you're looking for is an HMO - either a branded facility like Kaiser or a "provider network" that agreed to guarantee prices to that specific insurance company.
You won't gain much transparency though - every provider works off the master price list, and the insurance company then negotiates a discount highly correlated with the size of that insurance company and general presence in the region.
While I agree with your points in general, this point is wrong. There are far more applicants for medical school (both MD and DO programs) than there are slots. I've been told this was done by the AMA to keep the supply of physicians in the US low to maintain high wages (and arguably high quality).
I do think we could allow students to go to medical school directly after high school, which is what some nations do.
Blaming the AMA is a dated view. I believe that used to be the case, but certainly isn't any longer. They are in favor of legislation that would increase the number of residency slots.[1]
edit: Forgot to add that US medical school grads aren't only competing against each other for residency slots. Foreign doctors that want to practice in the US also have to do a residency here due to licensing requirements.
[1]: https://www.ama-assn.org/content/ama-applauds-members-congre...
It's both dated and wrong. The AAMC, not the AMA, formerly capped the number of medical students in the country. But over ten years ago, they decided to lift the cap.
As you said, though, the residency slots are the bottleneck, so exactly what has happened is that we now have even more people graduating with debt from medical school who are unable to train in residency and eventually practice medicine.
Residency funding is subsidized by Medicare, so they're the ones who have the power to expand GME, if they want to.
You're right, but the reason that doesn't happen is that the price (ie, expected future earnings) is effectively fixed[0], and the current trajectory of that is already on the threshold of discouraging people from entering the field. As it is, a person who enters medical school at the age of 22 can reasonably expect to pay off their final student loan payment in their 40s[1]. That's a pretty hefty gamble to take at that age - you're assuming (against all evidence![2]) that medicine will continue to pay roughly the same in the future as it does today, and based on that assumption, you have to be willing to take a gamble that won't even break even until you're past normal childbearing age. That's a really tough sell, and I say this not hypothetically, but from experience.
It's similar to the "engineering shortage" in Silicon Valley - we know for a literal fact that the largest companies colluded to suppress wages, but simultaneously complain that they can't find enough workers that price. Except, we don't have to take out large amounts of debt before we can start working, whereas would-be doctors do.
[0] Not exactly fixed, but far from an actually competitive market that would allow proper consumption smoothing like you describe
[1] There are a lot of factors that determine this, like which specialty you choose, and where you practice, but that's a pretty reasonable rule-of-thumb estimate for someone who's still only thinking of applying to medical school in the first place.
[2] Physician earnings have been dropping steadily over the last few decades
You're right about the AMA limiting the number of medical school students. DO schools are not regulated by the AMA. Unfortunately, there are not enough residency spots for all the DO and MD students that graduate each year and they compete with foreign students. Increasing the number, which the AMA is doing without increasing the residency programs is just going to leave more students with 100,000s of thousands of student loans and no income.
0 - One medical, which charges an annual fee, makes preventative care more accessible? How do you possibly draw that conclusion. (I say this as a happy subscriber).
1 - purchasers of insurance, mostly still employers, do care about costs
2 - insurers aggressively negotiate with hospital groups, so you do see pricing power differences in action. Fewer hospital groups and condensed ownership in a geographic region gives hospital groups more pricing power. See eg Boston public employees insurance group attempting to cap payments at 160% of medicare [1].
3 - It's well known that for many common procedures, regional hospitals vs teaching hospitals can offer 3-4x price differences with no (or even better!) outcomes at the regional hospitals. It's the insurers choice not to pass any of those cost differences, except in the broadest sense, ie narrow vs wide networks, on to insurees. Insurers also exercises unilateral control over that decision.
4 - People aren't incentivized to get into med school? That's news to the many applicants. The admissions are capped, in many ways, by government choice: see medicare resident limits.
[1] http://www.bostonglobe.com/business/2017/01/23/state-health-...
One thing that bugs me is how limited my choices are. I believe that over-regulation drives that. Getting an x-ray for my dog is much, much cheaper than me getting one, which is just one example of an unregulated market (relatively, obviously there are licensing & safety standards)
Seems that this would be a shot. If it doesn't work, lets try something different. I'm not wedded to any solution, but I think we probably agree that healthcare is mostly broken in the US (and was even before Obamacare).
Final note - I don't distinguish between healthcare & insurance for sake of simplicity in this post.
You might not agree, but that is how society see it.
Except for the doctors that can't afford to treat Medicare patients due to the criminally low/skewed reimbursement rates for some services. There's a reason so many private practices don't take Medicare patients...
Quite the opposite - if the entire country switched to Medicare overnight, Medicare would have to dramatically increase its reimbursement rates, or else hospitals would literally go out of business, and doctors would close up shop. The only reason most can afford to stay in business currently at all is that they can make up the money the lose on Medicare by treating patients on private insurance.
This would result in extreme tax increases - not the proportional amount that you'd expect to cover the remainder of the population, but enough to make up for the difference that's currently being subsidized by private insurance premiums.
The system embodies large amounts of collective dissonance; a natural reaction to the soft corruption that has to be practiced to satisfy policy. Cost shifting is among the most pernicious causes of this; there is little to no correspondence remaining between actual service and the fee that gets billed; it's all about who the patient's payer happens to be, what policies are in play and how much providers can get away with in each case. The seemingly arbitrary outcomes have to get reconciled somewhere and in the doing of that we build up a lot of scar tissue.
Whenever you have a $500 bottle of orange juice, I think it screams that you're not in a competitive market.
I think this is made harder to see by a certain stripe of market fundamentalism that almost blends into the background for many people at this point. At this level of analysis, it's assumed that every transaction is cooperative in nature and competing interests are correctly balanced if not aligned by the time a transaction takes place. Since that's the general assumption, of course it's the specific assumption that the market will do the right thing (regulated or unregulated -- the regulations are just clothing on the incentives).
I'm talking about the general level of lay discourse that defends the recent history (and even the ACA status quo), of course. Scholarship and policy research recognizes the problem.
I find it difficult to consider healthcare a true market, since you get to find out the price/cost many weeks later. You generally have transparency over primary care visit prices, etc, but anything complicated is a total crap-shoot w/r/t what you'll be charged, by whom, and whether everyone involved is in/out of network. Ever have surgery? You get bills from parties you've never heard of all of them coming independently and its rocket science to even figure out deductibles at that point since there is no centralized ledger or central party to deal with.
I can see why -- I've had the same terrible experience with billing shrapnel -- and I almost put a clause in my comment knowing this kind of response was almost inevitable.
What I did put in instead was that a lot of our details are different kinds of clothing on the fundamental incentives.
I strongly suspect that if you started a system from scratch around the central assumption that medicine should be handled as a market for medical products/services and the financing behind it should be private & for-profit, my guess is that you'd get very much the same thing.
The skill investment required for some interventions would lead to several consequences: required specialization to be effective, and a proliferation of specializations. Since the skill investments are costly, those costs are passed on in the form of high service rates. Few people know in advance which interventions they'll need, which makes planning for financing care risky, so an insurance market would develop. Insurers would have the same basic incentives to sell to those who are least likely to need their services, avoid those who are likely to need them completely, and independently negotiate their own payout deals with providers, which of course, varies by insurer, so few patients are going to be really sure how much anything costs even if they do understand how all the specialists interact in a given intervention.
And at that point, you have the recipe for the billing shrapnel problem everyone hates.
Worst attempt at an analogy I've seen.
I cannot stress this enough: technology is not the hard part.
Do they have outdated software? Yes.
Can you build better software? Yes.
None of that matters if you can't get it into their hands. Procurement is the hard part. Can you empathize with the needs, fears, desires, quirks, and crazy of ten different stakeholders? Pry proprietary API specs from the cold-dead hands of one-off contractors? Educate users who's technological proficiency peaked at SMS to manage a full-featured SaaS product in 2017?
Don't focus on the software. That isn't the hard part. People are the hard part. People are always the hard part.
No. Not at all.
The point of this project is to create trust; trust that healthcare consumers can get the services they need, and trust that government will spend healthcare dollars judiciously.
Might not be a way in all cases, but if you offer people a new system (people and software) that is a viable alternative, they will start to jump ship.
Perhaps some combination of eliminating medical school tuition, exemption from liability, and long term contracts could be used to recruit the talent.
It turns out that patients are very good at figuring out which health care will improve health and which won't - the high copay group had no statistically significant difference in health from the low copay group, and spent about 30% less money. What a crazy magic bullet, huh?
http://www.rand.org/health/projects/hie.html
We ran a directionally similar experiment in 2008, and got much the same result: low copayment causes people to consume a lot more medicine, but with no objectively measurable improvement in health. (Subjectively, people with insurance feel healthier even if they never go to the doctor.)
In both cases we ignored the result because we don't like it.
Cost sharing in general had no adverse effects on participant health, but there were exceptions: free care led to improvements in hypertension, dental health, vision, and selected serious symptoms. These improvements were concentrated among the sickest and poorest patients.
Personally speaking, I'm very much in favor of concentrating benefits among the sickest and poorest patients so as to minimize avoidable suffering. The pursuit of economic equilibrium on healthcare is a chimera because the conditions for perfect competition do not apply; patients cannot choose when to be sick, and thus lack the discretion on when they enter or exit the market; nor are competing therapies or competing providers of the same therapy offering a commodity product that can be freely selected between, just as if you suffer a catastrophic injury you won't get a timeout to make choices about which emergency room offers the best bang for the buck.
Like any sane person I want to minimize the overall cost of healthcare, but I also want to minimize avoidable suffering. I would much rather pay a bit more in tax and have a system that was somewhat less fiscally efficient but more accessible to those in the greatest need. This isn't just a matter of altruism or anxiety about high healthcare costs; if you have a maximally efficient healthcare delivery system then it's likely to fail in the event of a black swan public health crisis because all the gains from efficiency have already been booked for profit.
nor are competing therapies or competing providers of the same therapy offering a commodity product that can be freely selected between, just as if you suffer a catastrophic injury you won't get a timeout to make choices about which emergency room offers the best bang for the buck.
The vast majority of medicine is not emergency medicine. This idea that patients are unable to price shop and compare providers is completely debunked. India's free market health system represents 1/6 of the world and Indians do this every day.
Like any sane person I want to minimize the overall cost of healthcare, but I also want to minimize avoidable suffering.
As RAND and Oregon show, free and reduced cost healthcare do not minimize avoidable suffering (at least suffering caused by medical conditions) any better than high marginal cost plans.
This isn't just a matter of altruism or anxiety about high healthcare costs; if you have a maximally efficient healthcare delivery system then it's likely to fail in the event of a black swan public health crisis because all the gains from efficiency have already been booked for profit.
Can you provide an argument why a more efficient medical system - specifically one where patients don't visit the doctor for frivolous/moral hazard reasons - would be somehow susceptible to black swan events?
As RAND and Oregon show, free and reduced cost healthcare do not minimize avoidable suffering (at least suffering caused by medical conditions) any better than high marginal cost plans.
Unless you're poor or chronically sick. You have made it abundantly clear time and again on HN that you do not believe in altruism but think that all economic decisions should be made on the basis of self-interest; I think that approach is bunk and so we are not going to agree on a common goal any time soon.
Can you provide an argument why a more efficient medical system - specifically one where patients don't visit the doctor for frivolous/moral hazard reasons - would be somehow susceptible to black swan events?
If you're maximally efficient there's nothing to cut when the shit hits the fan. I think critical systems should include some excess carrying capacity (ie waste) because it's faster to reallocate resources internally than to get additional resources under time pressure.
As a simple example (from which I am not attempting to generalize to the secotr as a whole and which I am not going to get into any nitpicky arguments about), there's a good argument that we have a bit of a doctor shortage these days: https://www.quora.com/Why-dont-we-train-more-doctors
It would be rather inefficient to have a public health system with too many doctors and nurse practitioners. They wouldn't be as busy and wouldn't make as much money as they could at equilibrium, and you can easily imagine various second-order effects of such an inefficiency, and the fact of a cumulative social cost.
But if there is a public-health crisis, would you rather meet it with too many doctors or too few?
And this is handled by the high copay, high cap model proposed by RAND, Singapore and myself. You still have not identified any "fundamental economic problems" or misrepresentations of the behavior of the healthcare market.
Unless you're poor or chronically sick.
False - the group studied in the Oregon experiment was poor. Oregon explicitly studied a medicaid expansion. RAND included poor folks too - in fact, one conclusion you can data mine from RAND (if you are so inclined) is that low cost medical care increased certain health problems for poor folks.
(Of course, that result is just as shaky as all the other data mined results.)
You have made it abundantly clear time and again on HN that you do not believe in altruism...
When did I make this clear? Are you confusing my opposition to harmful or wasteful altruism as opposition to all altruism? You are confusing my criticism of bad implementations with opposition to solving the problem.
Concretely: I have no major objection to effective altruism - perhaps something like Singapore's model. I object to wasteful feel-good measures that don't have any measurable benefits, like Obamacare's medicaid expansion.
As for things like maintaining an excess supply of medical pros to handle crises, if that's necessary I don't think it should be provided via random inefficiency. It should be explicitly planned in.
I think this encapsulates a key difference in our worldview:
As for things like maintaining an excess supply of medical pros to handle crises, if that's necessary I don't think it should be provided via random inefficiency. It should be explicitly planned in.
I used to think that, but now I favor a little general random inefficiency because we don't know what we don't know. My inclinations are utilitarian, but sadly my ability to predict the future is limited so I systematically distrust my own utility calculus.
How much is an office visit for runny nose? USD 50, USD 100? And how many frequent flyers are thee in the population, one out of ten, perhaps? It's just not plausible that it's the doctor-fetishists that cause US healthcare to be 4 times as expensive as the rest of the developed world.
Turns out medical consumption is well beyond the point of diminishing returns, and people are quite capable of determining what medical care is necessary.
Edit: My apologies for sounding a bit antagonistic. The ACA is currently making use of high copays for that reason and more. It also hopes to force more transparency as well as most people want more than a icd-10 code when they have to write a check for $4k.
I've been told Singapore's forced savings + cat coverage plans are reasonably close to this, however. Hardly surprising given how well Singapore tends to govern.
But your broader point (or perhaps my steelman of it) that high copays are not incompatible with socialized medicine is absolutely correct.
Offer free dollar bills, and a line will form until the cost of staying in line burns more than $1. Medicine isn't costly because it's inefficient, rather it can end up inefficient because the limited supply means it must somehow end up costly.
It is not possible to solve the healthcare crisis without somewhat deregulating the supply of healthcare and allowing it to increase. Until then, every subsidy just raises the price, and every efficiency improvement just creates room for more inefficiency elsewhere.
You can't solve the housing problem in San Francisco by building more efficient software for selling houses. Only interventions that somehow increase the total supply of living space can cause more total people to be able to live there.
But it sounds like at least some of those inefficiencies involve: 1. People getting unnecessary orthodontic treatments (eliminating those cuts demand [not just quantity demanded]) 2. People getting ineffective treatments and needing a second treatment (same as 1) 3. Orthodontists being allocated in a way that lowers their overall productivity--empty time in their schedules, doing stuff they're less skilled at, etc.
If my orthodontist spends less time on administrivia or repeat procedures, he can fix more people's teeth without us training a second orthodontist.
Similarly, if there are apartments sitting empty for a month because it's hard to match people with apartments, better software can fit more people into San Francisco. (Going deeper, my bedroom is empty 12+ hours a day. I could totally sublet it to someone who works the night shift. I just need an efficient system to find such a person who's as interested in saving money as much as I am. Or as much as I was a few years ago. Now, I might not opt for this plan.)
I'm (moreso, but not completely) sympathetic to this argument when we're talking about (significantly) lesser skilled providers such as barbers or taxi drivers.
But in the context of health care providers, you're hand-waving the inescapable fact that there is a fundamental limitation in the supply of persons capable of acquiring the education and skills, and delivering competent patient services.
I've worked at a top 2 US dental school. I've seen that - even there - there were students that couldn't hack it and failed out. Others failed to graduate on time, requiring remedial and/or additional work.
The relative quality of students generally correlates with the relative quality of the school. So it's relatively downhill from there.
Now, maybe the natural limit is higher than the limit you cite. (Is that even some kind of mandated (by whomever) limit, or is it simply the result of the limited number of seats available in accredited dental schools. If it's the latter, is it really honest to say "allowed")?
Or maybe the work in orthodonture could be unbundled in such a way that much of it could be delivered by lesser skilled, and thus less costly providers.
But this is a poor - and lazy - argument.
Sorry, I forgot to pretend that all the other developed countries haven't figured out healthcare already.
Geez.
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Oh and btw, when you have a universal healthcare system payed by taxes (none of that bullshit insurance crap that only ends up being costly regulation/financial bloat) you can have entire and fully private hospitals and health clinics where you can get service for cash, and surprise, surprise, it's ridiculously cheap because it has to compete with the effectively free public healthcare system.
That's not true. Most developed countries have some form of privatized system, falling into your 'semi-privatized' definition. It's more cost-effective.
* pay for private health insurance, or
* pay an additional 2% surcharge/tax on your income
This is to encourage people who can afford it to purchase private health insurance, to lessen the load on the publicly funded system where possible.
The reason that private elements exist at all are NOT because they are more cost efficient. They exist just because some people like to have more comfort and are willing to pay for it. Not sharing a room in a hospital doesn't make you healthier (and is certainly not more efficient), it's just nicer.
I'd agree with your parent-comment that most states have actually figured out that public health care is the most efficient option. Private health-care providing necessary treatments is the more expensive option for society.
Germany, on the other hand, has a regional and national market system with compulsive health insurance, much like the ACA attempted. It's not a public only system by any means.
It's not about sharing a room, actually. It's about reducing the burden on the state, providing more efficient service for cost for everyone.
Further, the main issue with public-only systems is wait times. In Canada now the wait times are extremely long - in the area of 20+ weeks. http://www.ctvnews.ca/health/healthcare-wait-times-hit-20-we...
That's not about comfort, it's about getting treatment.
The difference really is in who negotiates. In the US, it is usually individuals organizations or companies - in Germany it is mostly the state, though people still have choice. It's not administrated by the state, though - it's administrated through public/private partnership. Personally, I think it's a great system, and I wish the US would have implemented a version of it more successfully.
It has always seemed like this was the end goal; to build a proof of concept healthcare delivery platform for the third world. Very exciting!
EDIT: Sidenote: Thanks YC for funding Watsi as your first non-profit and attempting to tackle a hard social problem.
We know how to make healthcare more efficient. We know how to remove the administrative overhead. Other countries already have these systems in place. Look at Taiwan for one example. They have digital medical records and an extremely low administrative overhead because of universal care.
Healthcare will continue to be broken no matter how many YC research programs there are - because the US population lacks the desire and political will for universal healthcare.
The problem isn't the people, it's the politicians. Specifically the Democrats, who refuse to push for anything but the weakest, most ineffective compromise policies.
Honest question from a non-American (in the social democrat Europe, Sanders seemed like the no-brainer option to like 99% of the people I know...).
Might these two things be linked, though? If a specific policy is not often seriously proposed, it will be more rarely attacked, and therefore not tainted by the political back-and-forth that colors proposed legislation that has a more serious chance at becoming law.
A website where you upload your medical bills and it compares the costs to costs in other countries (UK, Canada and Australia for example).
The main problem with the attitude in the US seems to be that not only do people not want to pay for other peoples healthcare but they also don't want other people paying for their own healthcare. By comparing both the individual and taxpayers costs across other countries people will see that not only do they pay less, but so does the taxpayer.
So in Canada, I'd be jogging on a busted knee making it worse for 12 weeks, after I got to see an orthopedist (after a 20 week referral wait), before I found out I had destroyed my knee by not resting for 6 weeks.
Our system here in the US is really screwed up, but it does have its advantages (if you can afford it).
Nailed it.
One unfortunate fact is that a small proportion of people 'consume' most of the medical care. Operational inefficiencies, the concept of health insurance, a byzantine cost structure, and in the US, after-the-fact billing conceal -- or at least spread out over time -- some of the financial pain of care. This is a sort of societal compromise to avoid confronting the problem: a society either shoulders (i.e. subsidizes) the cost of care for its most unhealthy, or lets them perish outright.
Today, most civilized societies tiptoe around this subject by subsidizing medical care for the elderly for political expediency, where the marginal benefits (even for the particular individual) of life extension until funds finally run out quickly diminish, while leaving folks of prime working age bear a large portion of their own costs in case of misfortune, to say nothing of underserved minorities and the economic poor.
Perhaps the best value of conducting this trial in a developing country isn't solely to get away from the political machinery of a mature healthcare system, but to escape the political baggage of a post-industrial society and see if technological solutions can work if morals and politics aren't in the way.
It is the same with car insurance. The elderly are almost as bad as drunk drivers for accidents.
Some time ago Ontario spent a massive amount of money on computerizing healthcare and it yielded nothing. I figure all the regulations, privacy issues, and overall complexity of the system makes it a tough Goliath to handle. And whatever happened to Google Health?
I feel that the solution has to come from the grassroots: get a bunch of health care providers to sync up for certain simple services, and go from there. Keep adding features little by little, keep expanding the number of participants. Do it using published and open source APIs and software. Don't try to be everything to everyone. Break a few rules, ignore some complicated standards if it can help get you there quicker. Hmmm, maybe for the latter to be possible it makes sense to start in less sue-happy countries.
We try not to break any rules, but you're spot on about the grassroots thing. We decided we couldn't wait for the policy to catch up to the serious problems with our healthcare system and decided to tackle them head-on!
Has it been easy? Not at all. Is progress being made? Absolutely!
A few years ago I even subscribed to get all my test results online; I avoided an unnecessary doctor's appointment because I could see the results myself.
Things may have changed since.
You can see this borne out in the fact every developed country with a universal healthcare plan gets cheaper prices, often for the same or better outcomes than the USA. Including number of doctors per capita, which disproves the "shortages" myth. Domestically in the USA, Medicare squeezes doctors far more than other insurance companies. A "medicare for all" would do even better.
After the libertarians and anarcho-capitalists try to claim superior economic knowledge eventually they must admit simple supply and demand drives prices down in a single payer system.
But then I get the following objection: what about all the R&D that we do? Perhaps all that expensive health care in the USA results in better procedures and medical equipment, better trained doctors etc. ?
To this I say ... OPEN SOURCE DRUGS! http://magarshak.com/blog/?p=93
If you can introduce a patentleft movement in drugs the same as you have done in software, then innovations can come from anywhere.
And failing that, we can always do this compensation model: https://qbix.com/blog/index.php/2016/11/properly-valuing-con...
Have they decided what country (or countries) in which this will take place?
While I'm sure there are many worthy candidates worldwide, applying the same type of program to under served communities within the USA would be great as well.
I'm skeptical it could reduce healthcare costs significantly simply because of the massive effort required to change the healthcare behemoth in even small ways. However, given the exorbitant costs of healthcare (currently paying $1800/month for a family of 4), it's worth certainly trying.
Is there a time frame on this experiment?
Barely an issue of such a periodical could pass without dire warnings of a future in which big pharma and insurance interests would convince us, through advertising, that we were foremost consumers of "healthcare".
What happened ?
The progressive left is now fully, fervently convinced that "healthcare" is a basic priority of human life. It is a rampant consumerism that reaches far beyond - and profoundly deeper - than the fears that good people have always had.
It didn't have to be this way.
The parent seems to conflate healthcare with pharmaceuticals and other specific forms of healthcare. IIRC, the warnings were that big pharma was pushing pills on people, something that has some evidence behind it. As an analogy, I think an effective military also is essential, but that doesn't mean I don't think big military contractors don't push needless or dangerous products on the public.
Universal healthcare is already possible.[1] Reducing waste is a noble goal but this is a startling sentence from a health tech startup team. It implies that the primary obstacle to universal care is cost, not political will, which fails to comprehend how universal care was achieved in most of the industrialized world.
[1] https://en.m.wikipedia.org/wiki/List_of_countries_with_unive...
Your inefficiencies are someone else's revenue.
Or to say another way:
Healthcare is ~20% of US GDP
Reduce spending by 40% would reduce US GDP by almost 10%. That's a tough sell politically you have to admit.
No, it wouldn't, because most of that would go straight back to labor and result primarily in increased consumer spending, and secondarily in increased consumer investment (which leads to increased business spending.)
It's not like the money not being spent on healthcare inefficiencies is going to just vanish out of the system.
But that's not really analogous to eliminating health care inefficiencies.
It's like a natural disaster or oil spill: there is good chance a natural disaster or actually increases GDP short term. People aren't better off for it however, since that money could have been spent better elsewhere.
http://www.investopedia.com/ask/answers/08/broken-window-fal...
Not to mention you're actually making a point for not giving GDP too high a value when looking at economies.
This sounds like a great project. I love the idea of building technology for healthcare in a small, controlled, active care environment, and then scaling those tools to a larger audience.
The bigger issue in healthcare IMHO is that the American healthcare model, while hugely inefficient, seems to be the system that best incentivizes innovation. We pay 10x what Sweden pays for medical devices, but the US market is the only reason those device companies can be profitable. If we move to a single-payer system in the US, the economic incentives for innovation go way down.
If someone can figure out how to lower costs, while still providing a profitable market in which drug and device companies can innovate, we'll all benefit.
Lies, lies, lies, and more lies. This is always quoted, especially in the context of pharma. It's wrong. Americans pay for advertising (which is illegal in most first world countries) and for the yachts and islands of the big healthcare execs.
I work at the intersection of biotech and healthcare. Currently working on a healthcare product that will be rolled out in the EU before the US and will be profitable from day 1 without being "subsidized" by Americans.
I can't go too much into the product, but there is a solid strategy behind the rollout.
And of course it's easier to be profitable in the US, there is a gravy train of money in healthcare here. While great for healthcare companies, it is AWFUL for consumers.
With respect to the initial comment I replied to, everyone (ie government officials and business owners) claims that changing the US healthcare industry will decimate innovation and every pharma/medical device/etc company will utterly fail!
I've been in this industry less than a decade and have experienced this rhetoric often whenever certain bills come up at the federal and state levels. Everyone freaks out! And then the bill passes....and everything is fine. We just have to innovate a little more, which is a great thing for the consumer!
If unit_cost > unit_price, then increasing n hurts, but in cases where unit_cost > unit_price, increasing n moves your margins to the positive, unless marginal costs increase--which is admittedly sometimes the case, but in many cases they go down.
Start with Tuskegee, Alabama, poorest town in the United States.
From a manf process standpoint, there are cheaper ways to create these compounds. Generic drug manufacturers have proved that ignoring the cost of research, the drug itself costs next to nothing to make, market and sell.
From an economics standpoint, healthcare costs are a significant part of GDP. In an ideal model if all research is funded directly via government grants and the key research is licensed through a free licensing - It should create a very competitive drug cost model.For a healthcare practice standpoint, legislation can really help. Stripping down some of the malpractice laws are a good starting point.
Additionally, the monopoly on medical education should be broken - Making medical education a national priority is a key step. We also need to make sure, that doctors are not the only healthcare providers. Enabling entrepreneurship among non doctor(nurses, mid wives etc) medical practioners can increase the market supply.
These 2 actions in theory should create more doctors and reduce the cost of practicing medicine.
Negative outcomes resulting from drug trials -- as well as approved drugs -- are routinely litigated by the aggrieved parties, which result in expensive settlements or the risk of high damages (in some cases, punitive).
Further, to promote public interest, patent protections on medication in most countries usually expire after 20 years, which limits the window of time in which the makers can recoup the cost.
'Tort reform' proposes (among others) to reduce the monetary risks associated with drug trials by limiting lawsuit payouts of limiting grounds to sue -- to its promoters, this benefits society at large (and the drug companies) while hurting a few individuals who happen to have found themselves embroiled in such a case.
To its opponents, tort reform is an instrument to dismantle regulatory protections and results in little to no societal benefit, perversely incentivizing drugmakers to both a higher absolute quantity of drugs to drive overall revenues, while reducing the average quality of drugs to be less safe, and leave seriously injured people with no viable recourse. It's a complex problem with no easy answers.
and after that, when society chooses to prioritize the health care of all its citizens high enough to give equal care to all.
This doesn't usually happen, even in societies where the consistent waste of resources exceeds the total cost of universal healthcare.
Considering the resource shortage or surplus, when healing treatments are not denied to any needy members of society, that could be a fundamental marker of civilization, and an obvious measure of which societies are more advanced and which are more retarded.
That is to say, could someone start a not-for-profit health insurance company that offers excellent coverage for affordable rates, and build it from the ground up with a culture of clarity and transparency? At a bare minimum they should have a searchable database where you can type in "broken arm" and find out what price this company has negotiated for casts, x-rays, and doctor time, and what it will cost you in co-pay.
It seems like insurance companies are so universally bad and corrupt that there would be no trouble signing up a critical mass of users by simply being a little better than the norm, and once it's the biggest insurance provider in the US, start applying muscle to hospital administration.
Yes, I know I'm oversimplifying it. Can anyone think of a way that it might be possible, though?
It seems like someone could implement an open source system of smart contracts that automatically pay out healthcare costs and distribute expenses in a transparent and agreed upon way. The organization could have an extremely decreased overhead compared to a physical company because it would need almost no staff or infrastructure, and if everyone can see the source for how money moves as well as the distributed ledger for how spending works it would be highly corruption resistant while still allowing for security of doctor-patient confidentiality due to the encrypted nature of blockchain.
Of course it would by default being extremely susceptible to external abuse, would have a ton of complexities in interfacing with the healthcare system, and wouldn't be viable until/unless blockchain and related tech matures and gains mass market acceptance.
I could be totally wrong about the approach, but I'm really hopeful for the tech world to be able to make a dent in this mess. Hopefully some people with more experience have better ideas.
The bigger issue is that insurance is the wrong business model. Insurance is supposed to protect against a catastrophic risk, like a car crash or an earthquake, but we use health insurance in this country to cover routine and ongoing care. Whether there even is a "business model" to treat people is debatable. Sick people as a group tend to earn less than the healthy.
I hope they don't try to reinvent the wheel in some areas (sounds like it from the post). It would probably be a good idea to benchmark how hard it is to set up a functioning and operational GNU Health system in community X for example.
There's a lot of potential for replacing nothing/no doctors with machine learning, especially in developing countries. Especially in areas where mobile phones are spread I can think of a couple of use cases. Take a picture of your swelling/strange looking skin/whatever and have a classifier tell you what it could be. Last time I checked the algorithms actually beat expert panels (for skin cancer). Could probably be coupled with a "doctor as a service" system that optimizes routes based on this sort of data.
The more I think about it the more I should catapult working in this area up my job application list :)
Hardly - if that were the case, we wouldn't see so many private practices (and even hospitals) going straight out of business.
> but doctors actively prevent foreigners from being allowed to practice medicine in their jurisdiction.
This isn't really true either - it's true that there are restrictions around practicing (e.g.) in the US without completing a residency here. But contrary to popular belief, that restriction isn't within the control of physicians or any representative body of physicians. And physicians are generally rather apathetic about the topic - they don't like the idea any more than HN likes the idea of foreign developers working in the US, but physicians themselves aren't inclined to take much action on the topic.
[1] https://www.theatlantic.com/health/archive/2014/11/doctors-w...
Not really - I didn't say that the barriers don't exist. I said that doctors aren't the ones responsible for them.
Requiring one year of residency in the US is not an unreasonable requirement, for a number of reasons. But the bottleneck in the number of residency slots is the funding for them (which is subsidized by Medicare), and doctors aren't even responsible for this requirement anyway.
The AMA, by the way, is not a representative body of doctors - only 25% of doctors actually belong to the AMA.
The AMA is like many other trade organizations, in that it often acts as one of many lobbyists for industry interests.
They need to make browsing for potential patients easier. After 22 pages of "View more patients" my browser starts to bog down.
A search would be good. As well as a map to select a country to view those in need.
IMO.
But really great startup!
Any system where the consumers, the providers, and the payers are not accountable to each other is never going to operate efficiently.
This isn't a problem tech can solve. It's a problem only politics can solve.
That said, it's not super efficient and the incomes vary greatly between employees with strong lobby groups and laborers covered by legislation only.
B) More people will enter the health care professions globally if there's a bigger market for their services.
That sounds like any politician ever, campaigning for office by promising to do the above, for government in general, the Defense or Energy or Education department, etc.
Good luck, and I sincerely hope it works. This time.
I did YC fellowship with a healthcare startup in the clinical trials space. I am one of Watsi's biggest fans(zero hedge) and excited to see them go after this.
Here's some hard things I learned over 8 months entrenched in industry, meeting everyone from Hospital execs to drug development experts.
* The top of the funnel is screwed by food environments in the USA. Completely preventable metabolic syndrome accounts for a large percentage of clinical trials research.
* One of the unfortunate realities in the USA is that a lot of our advanced drug research is financed by metabolic syndrome related drugs. There's 8K clinical trials a year and a non-trivial percentage are from metabolic syndrome related problems.
* We have a patent system that encourages developing drugs that interact with a small number of enzymes and molecules that we already know and understand how they operate. Low, if not zero risk.
* The rules around patenting pathways, treatment methodologies, research tools, and assays are flawed/seem poorly designed. As an outsider looking in, these things seem like a paralyzing bottleneck for the industry. These need to be looked at much closer.
* GPO Squeezing. The manner in which GPOs squeeze medical device companies to create an artificial monopoly and drive prices up has to be examined in a much closer way.
* Ground game & Synthetic chemistry- The reason startups in the pharma space get acquired based on my dicussions with R&D folks at multiple Fortune 500 pharma companies is two fold. 1/ The drug companies have enough sales reps to push product fast. There's massive room for some sort of disruption here to allow small scale medical device and pharma startups to push product. 2/ This one's tough, but the large pharma companies have enough money to do all the synthetic chemistry to go from lab to scale. That's changing though. What used to be a $400M requirement has shifted to a $100M requirement, but we'll see how this evolves. It's a lot different from software. The know-how is extremely well hidden behind private walls.
* Aggregated healthcare and genomic data has little value. There's 68,000 genetic marker tests on the market and 8-10 new ones come out each day. Knowing what they do and/or how they create proteins that block/assist efforts is a monstrously tough problem that isn't waiting for computation, but is waiting for actual experiments on humans.
* The mathematical complexity of drug discovery is hard. Even if the data is maximized, the throughput of discovery is low. We have 7Bn people, 15K diseases, and 3Bn genetic base pairs. Bonferonni Corrections and Family wise error rate abound. We're not waiting for super computers or for an ease of aggregating data.
* The tricky part of selling to hospitals is that you have to create ROI within 6 months.
If anyone here is building a healthcare venture or drug discovery venture and believes I can help, don't hesitate to reach out.
Godspeed.
So much for vetting out naivete.
It seems that if you just form a large enough public insurer it could soon start undercutting the prices of the private insures.
They accept donations to fund healthcare for people in the third world, while being radically transparent (there is a Google Docs link out there with the details for every procedure they've funded).
They're also exceedingly good at weeding out fraud, and are transparent about that as well (when fraud has occurred, the resolution, and how they fix the problem moving forward).
They are, quite frankly, how you would build a single payer healthcare system as a startup.
They do; through 2014, like other federal employees (and most employees of large businesses) they had a choice of the private plans contracted by their employer. Since 2015, they've been limited to ACA exchange plans.
http://www.factcheck.org/2009/08/health-care-for-members-of-...
In any case I think it was intended as a joke.
The ones that don't probably have bigger problems than access to healthcare.
Every OECD nation except the US has universal healthcare; many have generally comparable outcomes and all have lower costs (both per capita and as a share of GDP) when compared to the US.
So, I'm not sure what your binary standard of "work/not work" is, but universal healthcare can and often does work better than what we have in the US.
I spent over a year backpacking after being out of the US for four years. I never worried too much about health care, because the few times I needed to go to a doctor, they'd tell me prices up front for uninsured foreigners. In one country, even though I wasn't a resident, my work visa did give me a discount.
I've been back in the US for a year and want to go a big road trip. I have a ton of savings, but my health care is terrible. I got a contract job with a $19/week "minimal effective coverage" plan (preventative only; the 'legal for less' type car insurance plan that is ACA approved).
After three months they gave me the PPO plan options which started at $400/month. Thankfully I haven't broken an arm, but in the 12 months working and not getting on that overpriced PPO plan, I've saved enough money even after tax that I could probably pay for a broken arm out of pocket.
I looked at ACA plans, but they were $200+/month with $6k deductibles. By not going that route, I've saved enough to actually pay that deductible.
When I quit my job this spring, I might be able to get a real plan by saying my yearly income was what I earned up to that point. But I don't plan on staying in this state at all, or any state for more than 2 ~ 3 weeks after. Since so many of these plans are tied to states/networks, what good is that anyway?
In the US you have to work .. work work work just to have basic health care. Either that or just be desperately poor. No other high income country requires this. They take care of all their people.
The USA stands out horribly. I can't even imagine why anyone would choose to live in a country that did not offer universal health care.
Or wait- other people already have!
Skim through this paper and let me know what you think.
https://www.oecd.org/els/health-systems/Universal-Health-Cov...
Every time healthcare is discussed on reddit, slashdot, etc, most of the people commenting on us healthcare debate it in the form of : "not with my hard earned money, you lazy commies, why don't you start working".
What's interesting is that it isn't their fault.
From the outside, the system looks a bit rigged against the common person, and the dog eat dog mentality is propagandized heavily.
I sometimes wish that our fellow Americans experience better, see that it actually works, and engage more against the corrupt system that milks them, instead of the rest of the fellow human beings.
What amazes me though, is that HN seems a decent place today for a discussion like this one.
So it's not even saving your tax money to avoid universal coverage.
http://visual.ons.gov.uk/how-does-uk-healthcare-spending-com...
> Despite less than half of the USA’s total healthcare expenditure coming from government expenditure or compulsory insurance schemes, it still spends more per person on these financing schemes than the UK- £3,111 in the USA in 2014, compared with £2,210 in the UK. In the USA spending on privately-funded healthcare is over five times more per person than in the UK.
Heck, it's so overdone that even the burden of finding the counter arguments lies with you.
I'm just tired of seeing this conversation turn in circles.
Calling all universal healthcare non-competitive is like calling building roads non-competitive. We have government roads and private toll roads. The same goes for many services we take for granted.
A more advanced basic level of healthcare is something we are able to achieve because of our wealth and success. We already have sanitary toilets, housing, heating, clean water. Every generation has built upon what we can join together as a society to provide in order to promote our health.
In my opinion, Buffet, Gates etc. are the heroes of our time for standing up as rich folks to advocate giving back more to society. They don't view government as the enemy; rather, it is the result of our working together.
Roads are a major one-time investment with occasional upkeep. Everyone can use the road without the permission or assistance of anyone else. If we develop fully robotic medical treatment, this analogy may work, but as long as medicine requires direct, many:one human interaction to be worth anything to anyone, it's not a piece of infrastructure.
>A more advanced basic level of healthcare is something we are able to achieve because of our wealth and success. We already have sanitary toilets, housing, heating, clean water. Every generation has built upon what we can join together as a society to provide in order to promote our health.
We have sanitary toilets, housing, heating, and water without nationalizing home builders, plumbers, or utility companies. All of these things are subject to sensible regulations like municipal building and zoning codes, licensing, and local utility oversight boards that have arguably done a lot to keep the little guy from getting fleeced. Maybe we could take that approach, which is a bit short of writing a blank check or setting fixed prices for all medical providers nationwide?
>In my opinion, Buffet, Gates etc. are the heroes of our time for standing up as rich folks to advocate giving back more to society. They don't view government as the enemy; rather, it is the result of our working together.
Look under the veneer on Buffet, Gates, etc. They like government because it furthers their business interests (this is especially true in the case of Buffet) and because it's easier to exercise control over money sitting in a bureaucrat's coffers, especially when you're a big name like Gates or Buffet, than money that is dispersed among the private citizenry, who really don't have any special reason to care about your opinions.
It's also very useful PR to go on TV as the richest man in the world and say "I need to give the government more of my money". What would the backlash be if he said the opposite?
While Gates and Buffet surely have legitimately laudable humanitarian interests, it's misleading to pretend that they're saints. They are free to donate to the government as they wish. Suggesting that everyone else be forced to match them percentage-wise is a different story.
I don't know how anyone can with a straight face argue that the US healthcare system is efficient with regards to money, time, or outcome compared to most single payer systems.
Currently wait times are too long. This is because i) Social care has been chronically underfunded for many years ii) The NHS has been chronically underfunded for many years.
Here's the wait times for IAPT (short form talking therapy for mild to moderate mental health problems -- usually CBT).
http://www.content.digital.nhs.uk/catalogue/PUB22842/IAPT-mo...
> 87.8% waited less than 6 weeks and
> 98.3% waited less than 18 weeks to enter treatment
That's too long, and considerable pressure is being put on trusts to reduce those times.
There's a wealth of data just about IAPT here: http://content.digital.nhs.uk/iaptreports
Have a look at the English NHS. You have a national organisation providing best current practice guidance (NICE.org). You have the Department of Health that funds NHS England, who fund the Clinical Commissioning Groups. The CCGs buy services from health trusts. The CCGs don't have to buy from NHS providers, they could buy from private providers. (See some inpatient eating disorder services; some forensic units; for examples of private providers commissioned by the NHS).
English health care workers are dedicated, skilled, hard working people.
The US is also pretty much the world capital for a number of drug development and medical research areas simply because it's much more profitable to do there - taking away that profitability may have a negative impact on Healthcare advancement - not just in the US but world wide.
Some kind of balance needs to be reached here. I thought Obamacare went a lot in the right direction, but it seems that's a big mess of its own.
If you want to skip the queue you pay for it.
An argument from my side would be that basic income and health may give a person means to give a dignified life, but are not going to let him buy a Ferrari.
I have heard from friends that in Northern European countries, there are people who live their whole lives on welfare. But, we also have very productive people from these societies.
Maybe you only care about money so that clouds your understanding of human behavior.
This is obviously not a sustainable or mature solution to the problem, but it's a band-aid that appears to relieve much of the burden involved for patients.
I broke it out once and my net salary would be about $1k less than what I receive now if I lived in Canada instead of the U.S. I know that those extra taxes aren't all directly attributable to the health care apparatus, but the unverified impression is that a lot of it goes to that.
There have been periods when I've had to pay more than $1000/mo on medical bills on an ongoing basis, and there's pretty much always at least $500/mo going out to medical payments of some type or another in our family of 7. Our credit has also been routinely hounded by the medical industry's inability to figure out its own billing. Is avoiding all of that worth a net loss of $500/mo? Probably.
The polarization in America is really sad. We need to acknowledge that these are legitimate issues. Republicans need to take their heads out of the sand and quit just shrieking that "we have the best health care in the world!!!! We're America, bitch!", and Democrats need to respect that Republicans don't think "Just have the government pay for it and increase taxation commensurately" is an acceptable solution. Let's get away from each others' throats and try to figure this out constructively.
IMO the best option is to outlaw non-catastrophic medical insurance, set up new, temporary medical device and pharmaceutical suppliers who sell brand-name products at a loss, make serious revisions to the terms of drug patents, remove any applicable governmental subsidies that encourage reckless, unsustainable expansion of medical facilities, and make a law that says medical bills cannot be included in any credit worthiness determination.
This converts everyone to self-pay, which means medical providers will have to charge prices that real people can actually pay, it will end the absurd pricing showdowns and billing shenanigans between providers and insurers that often leave patients as collateral damage, it will undercut the supply chain that ratchets up the costs for everyone on the way down to the patient, it will discourage hospitals from building extravagant campuses that rival universities and instead focus on affordable, utilitarian designs, and so on.
I can hardly think of a worse solution than "just make everyone get an insurance policy and leave everything else essentially the same", aka Obamacare/Romneycare.
That should take us a long way to a sustainable, market-based solution. But it's clear at this point that some governmental action is needed to grease the wheels here.
That kind of system promotes poor and expensive health.
http://visual.ons.gov.uk/how-does-uk-healthcare-spending-com...
Government spending (not including insurance)
> Despite less than half of the USA’s total healthcare expenditure coming from government expenditure or compulsory insurance schemes, it still spends more per person on these financing schemes than the UK- £3,111 in the USA in 2014, compared with £2,210 in the UK. In the USA spending on privately-funded healthcare is over five times more per person than in the UK.