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Comment by rayiner | Hacker News Reader

What I’ve always found amazing is how cheap dental and eye care is in comparison to other types of medical care. The fact that you can get laser surgery in your eyes for a couple of thousand dollars is incredible, given that a diagnostic test like an MRI can often cost that much. Clearly there is room for competition to reduce costs.

Clearly that doesn’t work for emergency services. But is there room to distinguish emergency from non-emergency services? I had surgery for a deviated septum. I don’t know what it cost, but if I had an incentive I could’ve price shopped for it. There are a lot of non-emergency procedures (colonoscopies, hip replacements, knee surgery, etc.) that could be subject to competition.

Also, the comparison to Singapore’s health outcomes is a bit odd:

> The result is not only 77% less spending than the United States but also, as Bloomberg Businessweek reports, one of the healthiest populations in the world.

Fun fact: Life expectancy for Asians in the US is 86 years (almost 90 in New Jersey!), quite a bit longer than the 82 years in Singapore.

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> But is there room to distinguish emergency from non-emergency services?

There absolutely must be, IMO. Emergency care is what insurance _should_ be for - the stuff you can't plan for, must have, and can't comparison shop for. IIRC, emergency healthcare spending accounts for around 2% of our annual totals. I just don't think we can justify our full medical pricing system on the basis of emergency care needs alone.

For everything else, though, I'd be much happier if I could just have a price list up front and shop for the provider of my choice. I did it with Lasik, and it was easily the best medical experience I've ever had, not just in terms of "knowing what I'll pay", but the outfit I had it done by was actually competing to win my business. I felt like a customer they wanted to win, not just an account number that they were going to throw at my insurance company.

By means of analogy, we carry car insurance in the case of accidents, but we don't expect car insurance to pay to refill our gas tank (even though gasoline has a lower price elasticity of demand than heathcare!) or pay for oil changes. Food has a lower price elasticity of demand than healthcare, too, but it's still cheap and we don't carry grocery insurance. Insurance makes sense to cover the unforeseen and unexpected. Why do we obfuscate prices and billing practices for routine, elective, and foreseeable care?

"Don't have insurance cover routine care" is obviously insane if pricing were to remain unchanged, but I absolutely think the fundamental problem with the affordability of healthcare in the US isn't the availability (or lack thereof) of insurance, but the way we've completely separated services from prices. Hiding the prices doesn't mean they don't exist and don't get charged - they just eliminate the forces that would otherwise exert downwards price pressure. If we could get pricing transparency on everything, and then see providers start competing on uninsured pricing, I think that could open the door to "actual insurance" plans (at far lower cost than exists today), while actually reducing prices for everything else across the board.

The problem with this is in how you classify different types of care. For example, is end of life care voluntary and thus should not be covered by insurance or is it emergency? If you say it’s the former and go to a national healthcare setup, people lose their minds shouting about death panels. If you say it’s the latter, healthcare costs go up 10-12%.

Absolutely. There are a zillion different problems to solve like this, but I don't think they're necessarily unsolvable, though.

On the one hand, you do really want people to be relatively insensitive to the cost of medical care they actually need. When you need it, you get it. On the other hand, that price insensitivity, applied indiscriminately, leads to the massive ballooning costs we've all seen. I don't think there's a way to have full price insensitivity and to keep prices in check - which means that we either just spend whatever our doctors ask (I'm not interested in that), or we start making people more price-sensitive to allow those downward pricing pressures to be exerted.

Fundamentally, you don't get away with increased price sensitivity without someone yelling about death panels. Prices are how we allocate scarce resources, which means they determine who doesn't get things. We can either pretend prices don't exist (and get the status quo), or we can acknowledge that they do and that sometimes, people can't or won't pay those prices. Neither is emotionally attractive, but I think being realistic about the existence of prices and allowing consumers to actually exert some market pressures is preferable than just being held hostage to whatever the insurers demand we pay this year, just so that we don't have to think about costs at the point of service.

> Absolutely. There are a zillion different problems to solve like this, but I don't think they're necessarily unsolvable, though.

They are solvable, but with regulation, and they will sometimes get an edge case here or there wrong, which will inevitably result in a low-effort, sensationalist news article which will decry the situation, degrade people's support of the systems, and damage the institution.

> I don't think there's a way to have full price insensitivity and to keep prices in check

Maybe I've misunderstood you but how can there be no way to achieve what almost every other country has achieved?

Well, I don't think other countries have achieved actual price insensitivity, in the sense of "fully inelastic demand". Fundamentally, for any scarce resource, supply, demand, and price are necessarily linked. Medical care is scarce - consuming a unit of medication or a time slot with a doctor precludes someone else from consuming the same. The allocation mechanism can be monetary (price), temporal (wait times/backlogs), or regulatory (restriction from certain services or treatments), but there must be an allocation mechanism. As far as I know, there's no country in the world where you can get all the medical care you demand when you demand it without consideration of price; if you're not paying monetarily, you're subject to rationing or restrictions that otherwise limit the demand you can place on the system.

In Singapore, for example, Medisave only covers drugs that the government has deemed cost-effective. Need a high-cost experimental medication? Not permitted. Denmark has notably bad cancer survival rates, much a consequence of long wait times for screenings and treatments. The US, by comparison, has some of the highest cancer survival rates in the developed world, arguably because Americans can (and do) spend on tests and screenings at far higher rates than other countries. IIRC, Americans get medical imaging scans at a rate roughly 100-1000% higher than patients in other first-world nations. Most of those scans don't find anything, and if you're a government bean counter deciding how to allocate this year's medical budget, they're going to be high on the list to cut or ration - but when they find something, those early warnings and immediate access to aggressive (and expensive) treatment make a significant difference.

What if you offer the option of a lump sum payment upon death to anybody who is faced with a disease that will most likely end in imminent death? So, if it costs $250k for treatment of a cancer where the patient is going to die in, at most, a few years, then offer them $125k payable heirs upon their death (where it would then go to heirs). In return, they elect to have only end-of-life care performed.

I bet there's a lot of people who would take this. And it would both save money and make a pretty big difference in the lives of people who still have a lot of life left to live.

> For everything else, though, I'd be much happier if I could just have a price list up front and shop for the provider of my choice.

Well the price list should be up front, but that's the case regardless of whether you're paying for all of the care or just some of it.

> Emergency care is what insurance _should_ be for - the stuff you can't plan for, must have, and can't comparison shop for.

Wouldn't that discourage preventative care?

> Well the price list should be up front, but that's the case regardless of whether you're paying for all of the care or just some of it.

Agreed.

> Wouldn't that discourage preventative care?

At the margin, yes. OTOH, paying less in insurance premiums and known/lower costs for services would leave more money for elective care (or whatever else you wanted to spend it on), which would apply pressure in the other direction. Most routine preventative care doesn't have to cost particularly much. Additionally, there's no reason why we couldn't have pooled cost systems for routine care like our existing insurance plans today for those that prefer to amortize their costs, but IMO, they should be separate from emergency care. Emergency care insurance isn't practically optional.

What I don't get is how hospitals can justify the costs for a lot of the shit they charge for...

Example if you have a baby and ask for an itemized list you might see something like $49 for chest to chest time with baby... they're fucking charging you to hold your damn baby.

Or $35 for a single ibuprofin for pain. Seriously? 100x markup? I can get a bottle of 100 ibuprofin's for < $10.

Some things should just be free because it's a hospitality industry right? I mean you go into a restaurant and ask for extra napkins they just give them to you. They don't charge $2/napkin. Or at the very least - at cost.

Hospitals are "hiding the umbrella."

Contracts prohibit them from raising prices on some items, so they shift price increases to other items sometimes in the ridiculous ways you list.

Can you explain the metaphor "hiding the umbrella"? Google didn't turn up any obvious meaning.

If I had to guess, it's a reference to the joke about turning in your expense report, after being told they won't reimburse you for the umbrella you lost, and so you overstaet expenses enough to cover the umbrella's cost. But that never made sense to me, since they demand receipts anyway...

Your guess is correct. And perhaps the metaphor isn't perfect (though many places don't require receipts below a certain value) but it gets the point across.

The justification is that hospitals have enormous fixed costs, and somebody has to pay for care for people who don't pay and people on government plans that pay below cost. Also, nobody actually pays those prices, so hospitals have no incentive to give a shit about making them make sense.

I can see if the chest to chest time is between the father and baby. The breast tissue of a mother regulates its temperature to maintain the baby at the proper body temperature. A father's chest does not and a baby can easily become overheated. When father to baby chest to chest time happens best practice is for nurses to regularly check on the status of the baby during this time. This means you are utilizing additional staffing resources which is what the charge is for.

I think Lasik is an outlier example. I couldn't find out how much of the population is a good candidate for Lasik, but 61% need corrective eyewear. The process is basically a commodity, it's almost exclusively a quality of life elective procedure, and it's basically a one-shot deal (I know people who traveled for it).

I completely agree emergency care is one thing insurance is for, but I think more generally it's "catastrophic costs" which often includes ongoing things. A lot of issues require follow up costs (I've heard insurances are switching from itemized costs to a fixed cost for the whole procedure. Similarly, I see a lot more "continuity of care" in healthcare).

As an example, let's say someone had vision loss for a couple minutes. An emergency room visit finds them to be ok in the immediate term, but it was because of a blockage in the heart causing a minor stroke. Which means there's a lot of follow up, with large costs. How do you best incentivize this? It's not "emergency care," there is time to research cost, but putting the cost burden on the patient is more than they can handle (hence insurance). Insurance tries to use cost signals like co-pays. An ongoing cost like dialysis will be optimized around convenience if you don't expose the cost, but exposing the cost may bankrupt them.

I think tying healthcare to employment and pushing it as a benefit is the worst offender for the skewing of the market--masking the cost of routine care. Fixing that alone would make me much happier (I also think it would be an economic benefit because of people tied to their jobs and the drag on starting a small business).

I think this misunderstands the point of insurance. Insurance covers rare, but high-cost situations by spreading the risk around to the entire population that's subject to that risk. It's not necessary that the situation be a surprise.

People with chronic diseases aren't subject to an emergency, but they're far more expensive to provide medical services for than otherwise healthy people because they need so much more medical care. Same with people with cancer: cancer is not an emergency in the sense you're describing, but no amount of comparison shopping is going to make cancer treatment affordable for one person. What does make it affordable is that a huge pool of people are paying for it.

> It's not necessary that the situation be a surprise

setting aside the american/healthcare market with the inflated prices for the sake of the argument, wouldn't be more cost effective, for planned expenses, to go with savings or a loan?

No? Most people would struggle to save up hundreds of thousands of dollars to pay for the cancer or any chronic diseases they plan (?) to get at some point. Aside from that, you have no idea what medical conditions you're going to get, and when. Even if you can save the money, it's a massive amount of money sitting around in cash (can't invest it because you could need it any time), which would be a huge waste. And some people would save it all up and never end up needing it.

> if I had an incentive I could’ve price shopped for it

In my experience hospitals and surgery centers can't or won't tell you what something will cost up front.

That is one of the main points of the article.

most in the US won't, although some do e.g. https://surgerycenterok.com/pricing/

I'm pretty sure though they have to supply an 'itemized' list if you ask for one, which you can contest anything on the list and a lot of times take them to court over if they don't budge. Often they will because they know $35 for an ibuprofin is absurd but most people don't think they can win against a big bad hospital.

In the United States each provider has up to 12 months to provide a bill and nobody is required to tell you who all of the providers were.

Here's how it went when I tried to do it upfront. My wife was pregnant, so we had 9 months of routine, scheduled visits. I asked "how much will this cost ignoring any unexpected costs." My insurance had a helpful PDF showing $650 as an out of pocket example with an asterisk saying not to use this number for reference. Reading up, some places offer a "package deal"--our's didn't. I was told to call the doctor's office and write down their itemized list of procedures. Then call their billing office to get an itemized list of billing codes. Then call my insurance to get the out of pocket cost. The final cost was a few multiples of that cited value (although there were additional, unexpected costs).

In my experience during a time when I had no insurance, they often can't even tell you after the fact. Everything has to go through a dozen or more layers of bureaucracy before you get a bill.

I agree with everything this article suggests, but to be fair to hospitals, they can't really tell you what some procedures will cost for obvious reasons. A delivery may ordinarily cost $x, but if a caesarean is required it may be $x + $y.. etc. A car mechanic will give you an estimate for what it will cost you to fix something, and then call you if it turns out to be more expensive. In a delivery (or a surgery) they can't really ask you if you are OK with an additional cost that may be required, they have to just do it.

However, a hospital could provide a list of prices that are commonly billed. What a list of prices would do is give you a sense if one hospital costs a lot more than another in general. If you knew you might change which hospital you go to and.. you know markets etc.

Your first example is funny, considering that the hospital where my son was delivered sent us a letter about a month before his due date with an estimate of the cost for both normal delivery and caesarean.

Of course it didn't cover every possible contingency... That's what an "estimate" means by definition. But that doesn't mean that it's impossible or even unreasonable to provide a baseline price, along with some of the more common events that can modify that price.

Most billing departments won't provide prices without the billing codes for the procedures. How do you get the billing codes? You have to see a doctor and get a treatment plan. How do you find out how much seeing the doctor is going to cost to get your treatment plan? You call the billing department for a quote.

We went through this during a very stressful time when my SO found a lump in her breast, and it took the kindness of a nurse that worked between the doctors and the billing department to give us a possible list to get a ballpark of what to expect. She called us after hours to tell us because she didn't want to get in trouble with her manager.

Once we had that information, we called several hospitals for quotes and ended up being offered 40-70% discounts. It went from thousands to hundreds to ultimately having some of the tests comped... all because we had a little information and asked the right questions about the process.

This is a disgrace and not how you treat people's health.

This is why direct primary care is becoming a thing. Doctors are opting out of the insurance system in order to see fewer patients and reduce overhead. For $50-$75 a month, you get unlimited access to your physician, including via video call, access to wholesale meds and labs, and reduced cost diagnostics.

These costs and incentives are often ridiculous. I got a Teledoc pamphlet from my insurance last year. Awesome! Often, when something happens or if I'm sick, I never know when to go to the ER, Urgent Care, or make an appointment. If I feel terrible for 5 days, should I wait it out or see someone? Especially with young kids, I've made the wrong call in both directions. It turns out a video/phone appointment is way more than seeing someone in person. I figured my use-case wasn't what they were targeting and couldn't imagine a scenario I would prefer it.

Alternatively, you could have a system like a lot of the rest of the world, where medical care is simply provided as needed, hospitals are public entities, and health-care has no price (since there is no market), just a cost, that is payed for from taxes.

This way, all the money going into the system is actually spent on healthcare, instead of having profit extracted from it. You also get rid of the stress of money from the already bad situations of major disease, and the complex bureaucracy that insurance brings with it.

Edit: tone and some extra details.

But then someone can't build a total useless and redundant service and get rich.

> Alternatively, you could have a system like a lot of the rest of the world, where medical care is simply provided as needed, hospitals are public entities, and health-care has no price (since there is no market), just a cost, that is payed for from taxes.

Almost no countries have such a model. The closest one is the UK. But the U.K. still rations care aggressively to control costs. (The government uses formulas to decide whether the benefit from a treatment is worth the cost.) In Germany, where the government subsidizes multi-payer insurance, more than 2/3 of hospitals are private. Even in Sweden, which had a system like you’re describing until 1995, more than a quarter of hospitals are private.

The price differential for the same procedures depending on whether I go to an urgent care center, or my primary care, or a hospital ER is what makes me insane. Urgent care is a flat fee $50, whatever they do, whereas the hospital starts at something like $800, and goes up from there.

I forget what the primary care costs, although I think it is more than urgent care; I can't get an appointment with my primary care without a couple months of lead time, so it's pretty much moot.

> Clearly there is room for competition to reduce costs

Unless you know the average outcomes and standard deviations choosing procedures based on cost is suboptimal.

I've never met a pre-op individual that knew how to properly choose LASIK procedures. They all use price signaling and word of mouth from post-ops.

The same is true for me in medical areas where I do not have expertise.

I think that reducing procedure selection to cost and expecting competition to fix it is an error.

But are "Asians" who live in the US a representative sample? Or might there be some distinguishing characteristics of immigrant families, compared to those in their home countries? Also, Singapore has two main ethnic and socioeconomic groups with different culture, cuisine, genetics, religious habits, and so on, which is almost certainly not the same composition as "Asian-Americans" however that is defined.

> a diagnostic test like an MRI can often cost that much

In non-emergency situations where you can do advance planning MRIs are cheap. It all started around 15 years ago when some college professor set up a company a2zimaging I think it was called that sold idle MRI capacity to anyone. I believe he eventually shut it down but there's now several other companies willing to do a full MRI for anywhere from $320 to $1500. Google "cheap mri" and choose one.

If you are brought into a hospital after a car accident and use their scanner without making arrangements, you can end up paying $10-$20k for the exact same scan.

There are also state laws requiring a "certificate of need" that artificially limits the number of MRI machines, keeping the cost high.

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