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Comment by mrdoops | Hacker News Reader

UBI is probably a bit too far in one direction to be a palatable solution. However Healthcare not being a financial concern for an individual or family is a very compelling idea.

But can a universal healthcare system resolve many of the emerging rent-seeking behavior costs peripheral to the actual hospital costs? Things like medical supplies that, in the U.S. are significantly more expensive than elsewhere. Would a universal healthcare system only further subsidize that kind of exploitative pricing?

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Things like medical supplies that, in the U.S. are significantly more expensive than elsewhere

Yes, because a single buyer has enormous purchasing power. The insurance-based system is the reason these costs are so high in the US and lower elsewhere.

Would a universal healthcare system only further subsidize that kind of exploitative pricing?

It has not in any other country which offers universal healthcare. I have no idea why people in the US are so averse to this idea - you can still have great private healthcare if you wish and can afford it, but public healthcare provides far better healthcare to the poor, lifts people out of poverty, and it's cheaper for everyone too (public expenditure per capita is dramatically lower). Everybody wins.

> The insurance-based system is the reason these costs are so high in the US and lower elsewhere.

No, that can't explain it, because it's also lower in other places that use a mixed public/private system with mandatory insurance purchase and public fallback for the medically indigent, instead of a single buyer.

It’s because most people get insurance through their employer so the costs are less visible up and down the line.

A pretty large portion of the population doesn't get it through employment or does but sees the price because they're paying part of it.

Food for thought... Japan also has private insurance/providers, mostly through employers, just like the US. But they have half our cost, universal coverage, and better outcomes. Why? The big difference is that Japan has strict price controls. Insurers and providers don't negotiate with each other (in network vs out of network in the US). Prices are set to make sure providers and insurers are both profitable but not profiteering.

Of course, such an idea here would be seen as straight-up Marxism.

Capitalism is such a core part of the ethos of the United States that we believe it is the best answer for all problems. Problem is, healthcare is about as inelastic a market as you can have.

I really think we might be close to the tipping point now. Plenty of people on both sides of the great political divide are starting to appreciate that no matter what we try, health costs continue to spiral out of control. That and the hard core folks are starting to die off.

This is why I think a lot of people on the left are misguided in their commitment to single payer solutions. They're putting means ahead of ends. It's perfectly feasible to get universal coverage and sane costs, while preserving the existing insurance/provider model - thus minimizing political resistance from both the industry and the socialism-phobic public.

There's something uniquely pathological about the US system to lead to costing about twice as much as any other industrialized nation per capita, while leaving millions uninsured, causing hundreds of thousands of bankruptcies per year (even if insured), and frankly having pretty crap outcomes. It's not just that we need a system that would be better... it's that it's hard to imagine a system actually being worse, if one is being realistic and not merely partisan.

Another thing toxifying the discourse is American Exceptionalism, that underlying believe that America is better than everyone else at everything. It's hard for a lot of people to even admit that our system isn't the best. There's a lot of "Yeah, it's expensive, but look at our technology!" I don't really know how to argue against the Exceptionalism argument.

> It's perfectly feasible to get universal coverage and sane costs, while preserving the existing insurance/provider model - thus minimizing political resistance from both the industry and the socialism-phobic public.

Single-payer has had more public support (usually majority public support) than other routes to universal healthcare all the way back to and before when Bill Clinton campaigned heavily on health care reform in 1992; Democrats keep putting up complex, unpopular insurance industry kickback schemes instead, which end up easing Republicans effort to kill them either in advance of implementation (as with Clinton's effort) or afterwards (as with the ACA's progressive dismantlement since Obama left office.)

Be careful not to assume that implementation is much simpler than it actually is. Oversimplification is a political problem for both right and left when it comes to health care.

Also, definitely avoid conspiracy theory thinking that Democrats wound up with ACA rather than "single payer" out of corruption and malice, rather than realistic political consideration. That's another pathology. I don't believe there are any Democratic politicians who want health care to be more expensive and difficult! They want cheap, universal, quality, and fair. Duh.

> It's perfectly feasible to get universal coverage and sane costs, while preserving the existing insurance/provider model

Okay, but how? I have 'good' insurance and it still blows.

My most recent example -- I had a Holter monitor for a day and I paid 50% more for the 24 hour usage of that monitor than I can buy it for brand new. And then I paid $350 for a technician to tell my cardiologist how many events were recorded (being as optimistic as possible, that most likely involved verifying that the machine counted correctly).

Contrast that to a couple weeks prior in Hyderabad India, I went to the local CARE Hospital, which is actually a precent decent place -- the equipment was state of the art, and I did not interact with technicians, but actual doctors. Had an echocardiogram done by an actual doctor, consulted with another cardiologist, as well as an electrophysiologist. Total cost? 4400 INR. Do that math on that one.

I definitely expect the costs to be lower in India for obvious reasons, but the dichotomy is nuts.

"Good" insurance is still part of a pathological system. The system itself needs fixed.

See what I said about the Japanese model. It's basically the American model + strict price controls. That appears to work very well.

You have a mandatory insurance provided by private companies in Switzerland and the prices of services outside of your insurance as well as the one billed and covered by insurance are still reasonable.

There is something else which makes American system not working. I suspect high barrier to entry, huge lawsuit risk and heavy regulation for entering the market. If there is no real competition to provide cheaper services it's no wonder existing players charge ridiculous amounts.

The huge lawsuit risk is mostly bs.

I investigated suing a doctor due to a medical error. Unless it cripples you for life or kills you no regular person would be able to win a malpractice lawsuit. It is insanely expensive. Another medical professional would need to speak against the other doctor or pharma company. Speaking against pharmaceutical companies is pretty risky for doctors.

I think the cost of healthcare is expensive due to high education debt, lack of price regulation, and very little consumer protection as far as pricing goes.

Yes, because a single buyer has enormous purchasing power.

That can't be the reason as United Healthcare (largest US insurer with 40M lives) pays much more than Canada (total population 35M).

I like that you count their power in souls, a little like landowners in feudal Russia trading in dead souls.

Back to the point, I think the purchasing power of a state entity combined with its control over the market is a powerful combination, but also the dysfunctional US market seems to reward healthcare insurers for paying more - they don't care after all if they get ever more money from the poor suckers who have to pay for insurance, they can take a larger cut of a larger pie.

I'm not saying insurance markets can't work (someone cited Switzerland above), just that the current US insurance market is out of control and needs solutions (like Obama's solution which has now been wrecked, or single payer which works well elsewhere). What the US has currently doesn't work, fails to serve much of the population, and even then is much more expensive than equivalent services elsewhere.

"Lives" is the term used in the industry.

The real answer as to why Canada gets lower prices is gov't fiat - they just say "this is what we will pay you, take it or leave it".

So the purchasing power of a state entity - exactly the solution I proposed for the US. The state has subtle levers of control over all the participants in this industry, which other players (no matter how large) simply don't have.

This is not an objection to using single-payer in the US, quite the contrary.

No, it’s the ability of the govt to go beyond purchasing power to “I just changed a law that defines how much we pay you for your other drugs, tough”.

In France, they solve that for Drugs with downward pressure by the government. Basically a company that wants to put out a drug has 2 options:

- 1. Sell a whatever price they want. But then they don't get a patent and anybody is free to legally copy it.

- 2. Get a patent. But then they must enter the cost negotiation process with the government and prove why they require a particular cost. This is the option that is almost always chosen.

Sitting in the US, it's then sickening to see the same drug developped in France go for 5x the price, just because they can sell it here for whatever the market will bear.

But then they don't get a patent and anybody is free to legally copy it.

Do you have a source for that? There are drug covered by patent in France that the gov't doesn't cover.

Did some digging... you are right (I thought there was a patent exclusion for "prix libre" drugs but I guess I was wrong). There's no reimbursement but still a patent. But in that system, no reimbursement kinda kills the market for a dug.

The book Against Intellectual Monopoly explains that the reason American and (especially) German pharmaceutical science advanced more quickly than in the U.K. and France in the early part of the 20th century is because it was more difficult to obtain patents on drugs. In Germany in particular IIRC you could obtain a patent on a manufacturing method only, not on a medical use.

> can a universal healthcare system resolve many of the emerging rent-seeking behavior costs peripheral to the actual hospital costs?

Yes. Universal healthcare systems almost all (with some notable exceptions) can and will negotiate with providers and suppliers to control costs. They are typically the largest buyer, so of course they have a lot of negotiating power.

Notable exceptions include Medicare in the US being legally forbidden from negotiating drug prices.

As Medicare is not a universal healthcare system, it is not an exception to a generality about what universal healthcare systems do.

Notable exceptions include Medicare in the US being legally forbidden from negotiating drug prices.

That's not really accurate. Medicare doesn't negotiate, they just defacto tell drug companies what they'll pay. Plus on the outpatient side, it's the private insurers who negotiation on behalf of Medicare.

At any rate, drugs are ~10% of all Medical costs. Why hasn't Medicare negotiated down the other 90%?

Universal doesn't have to mean single payer. Almost all the comments here are conflating them and addressing single payer.

Healthcare is expensive largely because the decision-maker does not foot most of the bill.

If you have a universal healthcare system that would require mandatory prices.

> Healthcare is expensive largely because the decision-maker does not foot most of the bill.

No, it's not, at least that's not the reason it's uniquely high cost in the US compared to the rest of the developed world, because that's not a differentiating factor.

Kindly help me understand my error.

Is there anywhere where (1) prices aren't fixed (2) one party decides which healthcare services to receive (3) a different party pays the bills and (4) cost is significantly less than in the US?

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