All that money is pocketed by businesses run for profit. It's pocketed because it can be. It can be because untreated a sinus infection can kill you. Not a bad business to be in by the standards of business.
Its not ethical business but ethics doesn't matter much these days (devil's advocate here); heck one can argue even legality doesn't matter, as for example Wells Fargo has been getting away with daylight theft that would put a single person in prison for one million years.
1. assume businesses cannot be ethical. 2. so, telling a business to be ethical is pointless 3. to encourage prosocial behavior amongst businesses, they must, therefore, be regulated 4. but, since businesses cannot be ethical, they can use their power to control regulation
how to stop this hellscape? is it possible that assuming businesses cannot possibly act ethically was a lie spread by said companies?
tldr; then what's the solution, assuming regulatory capture is a thing?
To provide healthcare you need doctors, who need money to pay rent and student loans. You need an office to put the doctors in. You need drugs and medical devices, and researchers to come up with them. You need lawyers to keep the doctors from conducting the Tuskegee Experiment. And nurses and lab techs and janitors etc.
That is all business stuff. Paying employees and managing offices etc. If you don't pay the employees enough then they get another job and quality of care suffers. If you pay them too much then costs get out of hand.
The way you determine how much is the right amount is by letting people choose how much to pay for it. If you have a runny nose and the doctor wants ten million dollars to see you for five minutes, you blow them off as unreasonable and get a different doctor. If you demand to see them for $10 and that isn't enough to cover their costs, they blow you off as unreasonable and get a different patient. Somewhere in the middle there is a price above what it costs and below what it's worth where you neither die of a sinus infection nor sell your first born to have it cured.
There are a lot of reasons this works poorly in the US. Low deductible employer-provided health plans making consumers price insensitive, lack of price transparency, an excessively burdensome FDA approval process that impairs competition between pharma companies, etc. But those are specific failings that could be addressed.
Switching to central planning just adds a new problem without solving the existing ones. If consumers pay nothing, not even actual cost, there is even less incentive to forego unnecessary procedures. Setting prices by committee is a sure way to either overpay (and waste money) or underpay (and get supply shortages). If drug companies still set prices then costs remain high, but if they can't charge the prices they do and still have to go through the same very expensive approval process, you stop getting new drugs. And then you add another trillion tax dollars to the budget which every campaign donor in the country will have a chance to divert a chunk of away from actual medicine and into their own pockets.
> All that money is pocketed by businesses run for profit.
The significant majority of that money typically goes to employees, not shareholders. The costs are too high, but it's not because the average medical practice is turning a huge profit, it's because the existing regulatory environment causes providing medicine to be unnecessarily labor intensive (i.e. inefficient).
Then the question is, do you want to decide that amount for yourself, or have someone else deciding it for you?
But that's not a stick up, it's a lack of price transparency. So how about we get a price transparency law?
The "stick up" scenario is limited to emergency care, and there is an argument that emergency services should be provided by the city for that reason. But most healthcare is not emergency services, nor would having your city do that require any kind of national policy -- you can go implement that right now.
It's the exact thing that works perfectly at the local level, because the stick up scenario itself is what prevents arbitrage. People in Houston can't vote to cut local emergency services and then go to the emergency room in Boston when they have a heart attack, because it's too far away.
Now add to that a field of experts, fused together by a lethal threat to their profession (lawsuits with expenses for life if you do damage) - forming a Wagonfort - and you get the perfect mess.
In the UK for instance, we do not have access to the best drugs because they are too expensive.
A large part of US insurance expenditure goes to pharma...
Moreover, ban drug marketing if you like, but keep in mind two things. One, the marketing is primarily so "worthwhile" because of the price insensitivity. Patient requests equivalent but better-advertised drug even if it costs $75,000 more dollars, when they're not the one paying. So fix that and the marketing budgets drop along with drug prices. Two, marketing increases the number of "customers" by more than the cost of the marketing (or why do it?), and the extra money is what both encourages and pays for more R&D.
Yet the US medical system is a giant clusterfuck of burned money, and the US food system can provide food at some of the lowest prices in the developed world. US chicken is half what I have to pay in Europe.
But it does not need to be as expensive as in the US i.e. twice as expensive as anywhere else and no better outcomes. Insurance companies are not the party that is benefiting the most. They make money and probably more than they should but this does not explain the difference. Most doctors are also not swimming in money. So where does it go?
One is Pharma companies who are then using that money to do marketing. So Pharma Marketing gets a share including doctors taking money from that source (another whole can of worms).
Larger hospital organizations and their management as one of the stronger buyers of services being able to push for high rates and low salaries.
Bill adjusters, debt collectors, partly working in insurance companies (where they contribute to insurance cost) to deal with the chaotic billing, payments and non-payments.
There are many, many who earn a good living who would not be able to get similar jobs in other advanced countries as these jobs simply do not exist. The US system is inefficient but there are powerful incentives for many to keep it going.
It is really important to separate access from payment. Otherwise small wounds will fester until it is too late or really expensive. A good compromise imho. is having some small access fee (in Germany we had a once per quarter 10 Euro fee on top of a 5€ per prescription fee. That was too much for low income and too much paperwork and the former was scrapped) as we know there is a huge difference between demand for free services and services that cost $0.01.
1. https://www.advisory.com/daily-briefing/2018/07/23/administr...
2. https://www.athenahealth.com/insight/expert-forum-rise-and-r...
True, but isn't that the entire point of hdhps, to minimize unnecessary visits?
They still provide no additional cost annual physicals, so you'll get the required yearly screening.
Additionally, many offices have no cost phone or email advice.
I'm personally quite happy with my family HDHP - and it is nice to have additional retirement savings.
But you have to have a savings mindset; many people don't which is what leads to medical spending increases when a refund comes in.
Well, until you find out that you can only get the physical for free, and physicals are really not worth much. If you discuss anything at all with your doctor that is outside a routine physical, ask any questions, get any advice, and he codes it when he submits the bill -- it won't be free at all, it'll cost you a couple hundred bucks. So there is incentive not to bother.
HDHPs are a great deal for anyone who can set aside the deductible’s value in cash. They are a bad default. But a good thing to consider if you can set aside some cash.
(The problem with HSA-compatible plans is they have a maximum deductible. They’re thus almost as expensive as non-HDHP plans.)
Relatedly, it seems like there's roughly some 'max' insurance expects you to pay each year, and you can decide whether to take the risk using a high deductible plan, and potentially not have many expenses, but lower premium, or have higher premium up front.
8 years ago, our HDHP was ... $280/month. It's now north of $800, and the deductible went up. Yes, we're a bit older, too but it's still a bit crazy.
$280/month, with high deductible, meant that, in a bad year, we might have $15k in expenses before the insurance covered everything else. Now, it's more like $10k per year in premiums, and another $10k+ before insurance really would kick in. Catastrophic need? It's fine - I don't want to have to face a $400k bill. Day to day? This stinks.
Many people had policies with $100k yearly limits, any serious condition and they basically didn't have insurance.
Because it means I get to choose between $500 a month with a $6,500 deductible, and HSA-compatibility, and $150 a month with a $8,000 deductible. The latter is a better fit for my risk profile.
Unfortunately, my experience, at least in my state, is such that none of the premium options are remotely affordable now. $2000/month with a $1000 deductible per year, or $1300/month with an $11000 deductible. Neither of these are anywhere near 'affordable' in my book.