If patients are being charged this much for anything, the money must be going to someone? Who's making all the money? Drug companies? Hospitals? Health insurance? Doctors or nurses? Why don't people honestly follow where the money end up and actually solve the problem once and for all. Increase the supply of X or many other bottlenecks by deregulation and result in decreased price?
There are a lot of reasons for the inflated costs, but a big one is the way the billing system itself works.
Legally, providers have to charge patients the same amount in an initial bill, regardless of insurance status. They can reduce it later, but they can't bill different amounts.
Medicare and Medicaid reimburse less than COGS, which means that providers start off by losing money per patient on publicly-insured patients. To stay afloat, they increase the amount they bill, so that private insurers essentially cover the difference.
Uninsured patients are collateral damage here - they end up paying the sticker price that's intended for insurers as a highball starting point for negotiation. The insurers end up paying something around 3-10 times what Medicare pays, but less than the sticker price.
This system is unfortunately unlikely to change, because any efforts to increase price transparency would decrease Medicare's ability to pass on costs to private insurers, and they would oppose that heavily.
Who is 'they'?
Currently, Medicare is able to balance its own books regardless of any increases or decreases to its tax revenue, because they can set the prices they pay unilaterally, with no mandate to cover their own costs (which is why they already don't cover their own costs). Any decreases in revenue purchasing power, whether due to tax cuts, budget cuts, or inflation, they simply lower their own reimbursement rates, and eventually private insurers will be forced to cover that difference.
Medicare - and those who benefit from posturing themselves as supporters of Medicare politically[0] - would frame price transparency as cuts to Medicare. It's not really a cut to Medidcare's revenue; it'd be a reduction in their ability to reduce costs by extracting money from private insurers, but the latter doesn't really roll off the tongue, so they'd be pretty successful in messaging it as "cuts to Medicare".
[0] which is not the same as people who actually benefit from Medicare or supporting Medicare, as we already know.
They want to move everyone to the bankrupt medicare system that which be a catastrophe for everyone
Basically, treatments / devices are developed without market demand, priced at a premium, and adopted because they are incrementally more effective than the previous version — but the people paying for them ultimately just pass the costs on to another middleman in the form of insurance companies. Patients often have little / no choice in the treatments they receive, but they’re the ones ultimately paying for it. This causes people to avoid the medical system until they’re deathly ill, which ends up costing the whole system more.
Edit: also, the laws don’t help. For example, health insurance companies are required to spend 85% of revenue on direct medical expenses, which means they get 15% to fund operations and take a profit. How do you get more profit with the same operations spend? Just increase medical spend, and increase premiums / copays (revenue) accordingly. They actually have a disincentive to keep costs down. Things are starting to change but I suspect Amazon Health is going to be revolutionary for this reason alone.
You can probably find articles for "X is driving the cost of health care up" for at least 6 different values of X, and the more I've personally dug, the more I found that all of those contribute and there's not obviously a single X that contributes to more than say 20% of the difference between the US and other wealthy countries.
"Ask your doctor to prescribe you this"? what the hell.
The pharma business used to have spectacular margins, 20 years ago. The ROI of new chemical entities has been falling since the 1990s. Pharma companies have been shedding personnel and facilities and merging for a long time to keep stock prices up. They're having a hell of a time coming up with new patented products that are broadly useful and better than generics, so direct-to-consumer advertising is one of the few avenues left to boost revenue. It's funny how corporate arrogance and desperation can look so similar.
This is a great example of what my comment is saying. There is no obvious silver bullet because everything in the US costs more than in other countries.
[edit]
Also, per-capita government expenditures on health care in the US are actually higher than in Germany[1]
1: https://data.oecd.org/healthres/health-spending.htm#indicato...
Yes.
edit: forgot a "slower than"
That said, a masters in nursing isn't easy, a good nurse earns their pay.
https://www.bls.gov/oes/current/oes291141.htm
The majority of nurses are RNs and make well above median wages. LPNs still make better than average money.
They aren't getting incredibly wealthy, sure, but they aren't working for peanuts either.
It's anyway probably not a great argument if you are trying to make people making 5-10x the median wage some kind of baseline.
Sure nurses and Doctors make money but if you know anything about that job any good one is probably underpaid.
An example of where it goes:
"On June 24, 2013, The Wall Street Journal reported that McKesson Chairman and CEO John Hammergren's pension benefits of $159 million had set a record for "the largest pension on file for a current executive of a public company, and almost certainly the largest ever in corporate America." A study in 2012 by GMI Ratings, which tracks executive pay, found that 60% of CEOs at S&P 500 companies have pensions, and their value averages $11.5 million."[1]
> Increase the supply of X or many other bottlenecks by deregulation and result in decreased price?
Unfortunately, I suspect that increasing the supply of CEO's would somehow be totally ineffective. They seem to exist outside of the usual supply and demand dynamic.
There is economic consensus on healthcare costs already. Pharma is one of the biggest by far.
This is an interesting thing for me as non-american, because both Bernie Sanders and Rand Paul blame the limitation of pharma for very high expenses in the american economy. They are opposite spectrums for state action but both agree on the same issue, and neither has consensus to solve the problem.
Why? Because it has to be politically unprofitable for everyone else in the middle to say "We are going to open up importations and lose a bunch of pharma jobs". That I put on the public.
For example, if $X gets billed it is seldom the price that gets paid. Usually insurance has negotiated rates of 0.1-0.2X and pays that. Different insurances pay different amounts for the same procedure. Hospitals know this and internally amortize expectations (to, say, 0.15X) pretty well.
Now for the stinky part: someone without an insurance gets a strong push and occasionally a threat to pay the full bill. The patient might push back, but success varies and poverty is the only high probability way to successfully lower the bill. It is a BIG pain for both sides, as it usually takes years to collect even a part of this and any money will likely be shared between hospital and any organizations that help collect.
Many hospitals would gladly take say, 0.2X upfront (their amortized expectation is $.15X). But they must bill same amount to everyone; thus they bill an outrageous amount and the few without insurance lose BIG.
The most noticeable one is pharma though. If the US allowed for free drug importation from overseas, you would slash healthcare costs in an unprecedented way. The only thing needed today to reduce the problem significantly is for the government stop doing something.
None of which should be construed that they don't contribute to the problem. They just aren't the primary villain.
http://slatestarcodex.com/2017/02/09/considerations-on-cost-...
I have a game I play when I go to the Dr.: Estimate the ratio of Dr.s to administrative staff. In the US there are offices where I've seen with two admins per Dr.
In Canada (where I'm from) I usually see two Dr.s per admin.
There are other costs. Too few Dr. having too high a salary
Another fun game to play. Find a recent list of Drs per capita for the various countries and go throught the sorted list. English speaking countries fare really bad, but the US does very well among English speaking ones. Why? It's a lot easier for an English speaking Dr. to move to the US than an non English speaking one.
ObamaCare was mostly a failure. I had it in between jobs for a few months, it's gotten worse since. It really doesn't make sense for a young person to buy it unless you have a per-existing condition.
Bush also made it worse by prohibiting drug re-imports (and letting pharmas charge medicaid whatever they want??)
Ultimately too many too powerful people have interests in keeping the US health care in the state its in, so it'll continue like this until it collapses.
Those are very good questions. Unfortunately the people and groups the money can be followed to have a very strong monetary incentive to not change things