The US spends more on healthcare for no gain says new report from Johns Hopkins

I just use the term "free enough market" to describe it.

One-third of the US population is on a US single-payer system right now.

Wouldn't it always be a good idea to not pay premiums until you have a major expense then?

So what happens when you go to the ER? Obviously if it's a true emergency they'll save your life and try to bill you later, but then what?

Would it ever make sense to deliberately stop paying your premiums? If you can pay "out-of-pocket" for medical expenses, you might be better off saving your premium money until you need medical care that's actually more expensive than the back premiums. That creates an adverse selection problem (assuming that enough of your prospective customers are devious enough to try this). Even if you can't pay out-of-pocket, you could just stop going to the doctor until something serious happened.

So what happens if you don’t pay your premium but then have to use the ER? Do they refuse to take you, or are you stuck with a bill? Does that bill go away if you pay your back premiums or not!

Any sort of change towards this in the United States (and I agree, it's a good one) will be spun as losing jobs and crushing the economy, which is a very hard argument to defeat.

[1] https://www.commonwealthfund.org/chart/2017/mortality-amenab... (2014 figures)

[2] https://data.oecd.org/healthres/health-spending.htm (2014 figures)

It seems to work that way in France too, my mother lives over there half the time. She gets medical appointments and treatment almost immediately for almost anything where in the UK she'd be in multi-month long queues. I'd take the NHS over the US system any day, but there definitely seem to be useful lessons to learn from Europe as well.

I'ma huge Maggie fan, she was our best post-war PM by far, and a good candidate for best PM ever, but her market based reforms of the NHS were utter failures.

I have never been to a German doctor who didn't have some staff. It's true however that they usually do not have admin-only staff.

They have, depending on the size (and specialty) of their operation, 1-3 "Medizinischer Fachangestellte" (MFA, qualified medial employees) per doctor and maybe 1-2 "Auszubildende" (people still in training). This a qualified job which requires formal training and a diploma. Usually it's one person in charge of the appointment book and reception/waiting room and additional people helping the physicians.

They are helping during examinations, calling up people from the waiting rooms, keeping appointment books, keeping the patient files and printing out the prescriptions etc (to be signed by the doctor), and to some degree interact with the health insurers. But they also do some hands-on jobs, like they are usually allowed to apply some medications, and operate medical equipment on their own (e.g. last time I visited my dentist, the x-ray machine was operated by an MFA; she had to have a special qualification for that). They are also in charge of writing the invoices for procedures not covered by health insurance providers (e.g. additional checkups).

My GP is a single lady shop, and she hired 3 MFAs. My dentist shop has 3 dentists working there and one "technician" and has an MFA support staff of maybe 15.

So there is still a lot of admin work, after all.

>They prescribe whatever they want

Not exactly. German doctors prescribe an "active agent" (even tho a lot of times they will put a brand name). German public insurers will only pay for a max price for a given agent. So if "generics" are available, the pharmacies will likely fill prescriptions with those.

>swipe your medical card

Eh, you give your card to the doctor's MFAs and they will put it in their card reader, etc. It's not like there is a checkout line where you swipe stuff yourself.

>they're guaranteed to be paid in a week

Usually one month to four months.

It goes like this: Every physician has to be a member in the "Kassenärtzliche Vereinigung" (KV, physicians association, and KZV for dentists) of their federal state. Otherwise, you cannot be reimbursed by the public insurers. There is about 160k physicians and 60k dentists organized in the KVs and KZVs.

The physicians then report all the items (procedures, prescriptions, consolations, etc) they want to charge to the KV, which collects the information, tallies up everything and calculates the earnings based on a complicated "points" system, charges the insurers and distributes the money back to their members.

The physicians are paid once a month (usually the 15th of each month for most KVs) a progress payment, based on the estimated earnings for a quarter, estimated based on previous quarters in particular. The actual final tally is done only once a quarter where any money not yet paid through the progress payments is paid out. In the worst case, this could be a negative number, meaning a physician has to pay back some of their previously collected progress payments. That's why (AFAIK) KVs will usually underestimate the progress payments to avoid exactly this later.

>no questions asked.

The KVs will totally ask questions if your doctor starts billing a lot "funny" items (e.g. if a single doctor would charge a lot of flu vaccinations during the summer months, the KV will ask about it). And last I heard, there are spot checks/(not-so) random audits too. The KVs by law are required to make sure everything is OK, so they also dabble in fraud detection and quality control.

"there is no reason my money should pay for the care of others, but if I personally need care, then it should be of the absolute best quality and should be provided until my last breath no matter what"

The people maintain the system themselves by insisting on that, and that is the root of every other problem. Before alleviating restrictions for med school, US people should think about pulling the plug on the legions of evidently terminal patients receiving maximal care that just prolongs their intense suffering every day around the country.

Why do you think your doc does every exam under the sun as soon as you step foot in the office?

1 - if solo, more money; if networked, makes you look better for the "employer" (insurance company/hospital/HMO, etc.)

2 - if you have too many exams, you will complain on the internet. If you have too few exams and something goes wrong, you will drag the doc into court.

Weigh the incentives and I think even the most conservative person should see a problem.

The reason we spend so much on Medicare and Medicare is because people are less hesitant to use the service. On a per capita basis, the public payers have reduced overhead and costs compared to the private markets. If you have sources proving me wrong, I’d be happy to look at them.

And while the US market my be drowong in various regulations, it is severely lacking in price control regulation - the whole reasons for this discussion.

Both institutions work in tandem[0] with one another to establish pricing guidelines. That's why your hospital-purchased ibuprofen is $10 per pill instead of $6 per bottle. The insurer and hospital "work out" a price that let's them achieve the profit needed to pay their administrative costs, plus margin.

In the USA(this is all from a US citizen's perspective), there are regulations that limit what percentage(15% in my state) of an insurer's income can be profit vs administrative cost. This means that a higher hospital price results in a higher profit for the insurance provider. This provides both parties an opportunity to set prices for an optimal profit. With government-mandated health insurance participation, the pool of people paying into this system has increased.

It is what is. Tell your elected official if you think it would help.

0: Anthem, Blue Cross, and UHC executives sit on the Baptist Health(hospital chain) board of directors, and vice versa.

It's time to stop perpetuating this myth. Especially in a thread directly about how the US overpays for everything compared to literally every other developed country on the planet.

Healthcare economy is naturally inefficient if free. Information asymmetries and other market failures emerge without good regulation and mechanism design.

Some people talk about a hypothetical second workable model, which involves a massively de-regulated free market system. It's important to note that nobody has successfully deployed this model in an industrialized nation, and it's not clear if it can even be implemented in practice -- for political as well as practical reasons (unregulated medical providers tend to kill people, so voters enact regulations, and then you're on your way out of the sweet spot.)

Whatever your preferences, the important thing to keep in mind is that while both of these two points may exist, the points between them are highly suboptimal. Removing 10% or even 50% of the regulations on our current healthcare system is unlikely to produce a substantially more efficient system. It produces a new system with most of the weaknesses and entry-barriers of our current approach, but replete with massive new profit-taking opportunities and substantially worse protection for patients.

This is why two decades of political infighting in the US have failed to fix healthcare. There is literally zero chance that the working, de-regulated system is going to come into existence. There is some probability that we can get closer to regulated single-payer, since we already have Medicare and it's much more efficient than private insurance, even though politicians have restricted its bargaining power. There is an overwhelming probability that in the process of trying to deregulate the current system, you end up making everything substantially worse.

>> The goal for American healthcare companies is increasing shareholder value, not reducing costs

Reducing costs increases shareholder value. The shareholders don't benefit from these inflated administrative costs. This is money that could be converted to profit and distributed to shareholders.

This suggests something else is going on

Sort of. We also export our definitions of diseases, and since the market for new diseases is a lemon market it makes sense that other countries should pay less for the treatments. E.g. if people in other countries can't really be sure whether or not hysteria is really a real disease that affects women, it makes sense that they would be less willing to pay the full price for cure. It's just like how consumers in the U.S. probably wouldn't pay full price for a pill to prevent fan death. Overall though the U.S. probably comes out ahead by exporting its medical model.

https://assets1b.milkeninstitute.org/assets/Publication/Rese...

This btw went up fairly recently especially since Indian generics became accepted world wide in the late 90’s and early 2000’s.

The US used to produce 20-30% of the world’s drug patents now its peaking at 60%.

“U.S. consumers are in fact subsidizing other countries’ public health systems, at least with respect to drug pricing,” Jacob Sherkow, an associate professor at New York Law School, said."

https://www.ibtimes.com/how-us-subsidizes-cheap-drugs-europe...

If you don't play ball with a government, you're denying yourself a lot of potential customers. A single person? A fraction of a fraction of a drop in a bucket.

It would be if the US system was in fact efficient and good. But it's not. It doesn't work for the people. It's a huge beast that is out of control and costs billions. It will happily "research" identical drugs, worse drugs or unnecessary drugs if it means it can milk patents for a few years longer.

As it currently stands, it's more accurate to say that drug research in the rest of the world is suffering because it's being dominated (because part of the billion dollar budgets go to marketing) by the US pharma industry, including everything that is broken about it.

If we were freeloading, wouldn't we just take the useful results of your research?? But we get the bullshit too, because yes, your pharma marketing budgets are so huge they do in fact reach overseas.

By anyone's standard, they are not representative of the U.S. Pharma market as a whole.

It is. If the US starts paying what Sweden pays for drugs, there is no one left to pay the cost of developing drugs on this planet.

My dad is a conservative and his talking point about the house member who called trump a motherfucker shouldn’t have said that because she’s a woman. It’s ok that Trump swears but my dad was literally screaming about this representatives language.

EDIT: "hard to manufacture" is in quotes because it's what I said in my parent comment (though to be fair I said "costly to manufacture"), but I meant it as an umbrella term for everything that can't be substituted by generics

https://assets1b.milkeninstitute.org/assets/Publication/Rese...

As far as it’s implications on the cost of healthcare in the US I don’t think there is data for it since it’s pretty hard to measure.

Basically all equity research in the Pharma space backs up this view. Unfortunately I don't have any public data that I can share.

https://www.investopedia.com/ask/answers/052515/what-usual-p...

https://www.advisory.com/daily-briefing/2017/05/18/moodys-re...

https://www.bbc.com/news/business-28212223

No company makes trillions of dollars in profit.

But not compared to other high risk, capital intensive industries, i.e. tech.

It doesn't make you immoral, but it is important in understanding the tradeoffs of suggesting that the US switch to an NHS-style system.

> Also, is it not worth looking at why pharma R&D costs so much? The pharma industry seems to run at a very healthy profit margin compared to most other industries. Maybe the lack of market pressure is allowing the pharma industry to remain fatty? Obviously there's a fear that cutting US pharma revenue would hurt global medical R&D, but I don't see this as being a foregone conclusion. It could just as possibly be market failure and regulatory capture keeping pharma R&D expensive.

They may be doing well, but you may not be seeing all the little pharma companies that die trying. At the end of the day, investors are allocating capital where they think they can get returns. If you reduce the returns of pharma, you reduce the attractiveness of investing there.

Drugs in the US are priced at the profit-maximizing price. That profit-maximizing price has nothing to do with how much pharma earns in other countries.

And it has absolutely nothing to do with the cost of R&D. R&D is a sunk cost, has no effect on drug pricing.

It depends on whether some drugs that your system considers affordable today as generics, would have not existed without being funded by US taxpayers, I suppose.

You also have to factor in that americans take more pharmaceuticals than in other places, likely fruitlessly or even harmfully in a lot of cases.

(edit: Having said that, our healthcare costs are out of control and it's not directly because of the R&D. It has more to do with wild overhead in insurance and HMOs where only a small fraction of what consumers pay goes to healthcare.)

  we're getting contaminated meds

https://www.thebalance.com/who-funds-biomedical-research-266...

"In a Journal of the American Medical Association (JAMA) study published in January 2010, the largest study to date to attempt to quantify U.S. funding of biomedical research by the pharmaceutical industry, government, and private sources, researchers estimate that U.S. biomedical research currently stands at about over $100 billion annually.

The pharmaceutical industry is the largest contributor towards funding research, funding over 60 percent. The government contributes to about a third of the costs, with foundations, advocacy organizations and individual donors responsible for the remaining investments."

I dont think that statement is incorrect. They spend a ton on r&d (20%), which is more than pretty much any other industry

https://www.investopedia.com/ask/answers/060115/how-much-dru...

Just a small correction for accuracy; they actually patent the 50/50 mixture of both versions first. And then they patent the purified version that only contains the active enantiomer ("mirror image").

Because of how biology works, turns out that the "wrong" mirror image (that is absent from the new version of the drug) was in fact really inactive, doesn't do anything, and thus offers no advantage over the old version, except being covered by a new patent to milk.

These are the kind of drug research "advances" that the rest of the world is supposedly freeloading off of.

It's not freeloading, it's being dominated by a multi-billion dollar global marketing budget.

[1] http://thebalance.com/who-funds-biomedical-research-2663193

Healthcare is not like other goods and services because (a) it's an universal need for which price sensitivity is zero (b) no one should have to pay life-crushing bills because they had no luck in the genetic lottery and (c) even for those health risks that people can control (obesity, cardiovascular problems), we have to admit that educating the population to eat better, sleep more and exercise is a pipe dream, particularly in the U.S. where shitty food is everywhere, the lobby for junk food and sugar is rampant, labeling and advertising for food is downright evil and work is incredibly demanding (unbelievably more demanding than in Latin America or Europe).

Healthcare and Education should be entirely subsidized by the government. Everything else can just be regulated to various degrees, always with the dual goal of minimizing state intervention while ensuring the market remains competitive.

A bit over a decade ago, one very popular modern antidepressant drug used to be citalopram (cipramil). This is the racemic mixture (meaning it contains both the left and right-handed versions). The new one, escitalopram (lexapro) only contains the active stereoisomer. Its dosage is exactly half of the previous version because racemic mixture always (?) occurs in an exact 50/50 proportion.

Both drugs work perfectly well. No statistically significant difference in effect or side-effect. You just don't get the inactive half of the molecules.

Escitalopram wouldn't exist if it weren't for citalopram's patent expiring. Or maybe they were just sitting on the purified version, biding their time.

This is a straight counterexample of the argument that the insane costs of the healthcare system in the US somehow pays for new drug research all over the world.

This industry called "drug research" simply isn't motivated to improve health (not just "find better drugs"), they are just researching whatever is driven by profit.

They will just as happily waste billions of research on a drug that is almost literally identical to one that already exists and is known to work, a copy that nobody needed, only so they can patent it again.

At least they replaced it with something equivalent, instead of something worse. Because they would if they could (and given the state of reproducibility of medical research, probably did at some point or another).

That is not research, that is throwing money into a bottomless pit. Which is what the featured article is about.

Drug research in the US is no exception. You could do so much better research if it was done efficiently (and as a bonus take some pride in your work).

The fact that US drug research dominates the world market is not something that the rest of the world should be thankful for. You waste billions upon billions on such an industry, of course it's gonna dominate. Doesn't mean it's good. Other countries could do efficient drug research but if they don't get billions budgets (because you don't need it), they can't waste it on marketing and push their version of a drug no matter what.

Just because something is expensive, doesn't mean it's good.

Don't let perfect be the enemy of improvement.

Constant improvement is what the system needs, and anything that improves it is good and should be done.

Your mileage may vary. I would describe my few serious interactions with American healthcare as "nightmarish".

In the US, patients go bankrupt and physicians go bankrupt — money flows to the parasites who set prices: administrators and insurers.

Kenneth Arrow pretty much proved in 1963 that 'the free market' doesn't work for healthcare. Nothing since has produced a shred of evidence that he was wrong.

There are so many reasons why healthcare isn’t close to a free market. Here are a few:

1. All medical residents receive their salaries from Medicare.

2. It is illegal not to treat people who go to the emergency room. This actually makes the whole system socialized in some ways in that there is a guaranteed way to get healthcare without having to pay for it. It’s literally the worst way to socialize medicine though (what with preventive medicine being cheaper).

3. Within the industry itself their are drug pricing cartels, lab monopolies and facility provider splits that even some hospital administrators don’t understand. You mentioned shopping around for lab results, but I think there is only one option in a lot of states.

Forget single payer socialize the whole thing (it already is in the most expensive, stupid way).

This is a case of expectations. $200 is nominal as far as medical procedures go. Based on my last couple encounters with healthcare, $200 barely gets you in the door. I paid $2000 on my last ambulance ride. My last stay was $14,000 for a couple days. That's with insurance.

The most successful markets are a careful balance of well crafted regulations.

Healthcare in the US is not carefully balanced.

BTW, hospitals in the US begin publishing their pricing data online this year. By law.

ummmm... last year. I always ask the doctor or dentist how much something's gonna cost. (not that I get a reliable, accurate answer, but I still ask.)

https://en.wikipedia.org/wiki/Healthcare_in_Canada#Restricti...

Mr Meschemberg’s cancer is HER 2-positive (HER 2 is a protein found on the surface of some cancer cells). HER 2-positive cancer cells tend to be far more aggressive, as they divide and grow faster than normal. “That makes [my cancer] a bit different,” he said. “There are drugs that are available to help but they’re not on the PBS.”

https://www.news.com.au/lifestyle/health/health-problems/mee...