The Mark Cuban Cost Plus Drug Company
costplusdrugs.com
costplusdrugs.com
We're planning to introduce a lot more drugs with transparent prices later this year, cutting out monopolistic middlemen in the supply chain and alleviating pharma drug shortages, particularly for rare and orphan disease conditions.
We are looking for a few devs (fullstack, frontend, and backend). If anybody is interested, drop me a line at alex@costplusdrugs.com
In the meantime, happy to answer questions if anyone is interested!
What is the stack, what kind of developers are you looking for?
Maybe post a link to your job listings.
Would be looking for folks to help make a more robust consumer facing site as we add products and different types of customers.
We've been focusing mostly on filling roles for the sterile fill-finish facility we are constructing in Dallas (QA, formulation specialists, etc.) and have put building out the dev team for the web sit kind of on the backburner with me just kind of personally managing it at the moment.
While Hacker News is looking though... :-)
Compare it to JSON:API or GRPC.
With Apollo it also solves a lot of frontend caching and state management problems so you can somewhat use it as an alternative to Redux.
Basically, there's is an international shortage for one of the most effective treatment for severe depression because of an unfortunate series of events, the drug's long history as a generic and the manufacturers' willingness to replace the drug class, and constantly produce new patented molecules with chemical tricks(ex. just taking one isomer in the citalopram->escitalopram case, or even metabolites in the case of venlafaxine -> desvenlafaxine case) like they are 'annual smartphone model releases', except efficacy even goes down.
You can read more about it the drug itself on the blog of Scott Alexander (the rationalist/Bayesian psychiatrist guy) as well: https://slatestarcodex.com/2015/04/30/prescriptions-paradoxe... And now some years down the line after his observation, the price has exploded, very few new patients get a prescription due to uncertainty and there's no alternative. Your options are either taking taking an atypical antidepressant like vortioxetine or an experimental ketamine.
God I hate myself for being that guy, but neither of the drugs you’ve listed are actually MAOIs. I’m sure the point still stands though.
I'll edit my parent comment to make it clearer.
How good is it, I cannot say as not a lot of people prescribe it anymore. The problem with it is that a risk of hypertensive crisis, especially in combination with tyramine in aged foods, or inducing an overload in combination w/ any other drug that raises monoamine neurotransmitter levels, i.e. SSRI's etc. It's become kind of a bogeyman. So the original source seems to be trying to fight that particular "meme" in medical education. I'm not about to wade into pubmed regarding how often hypertensive crisis happens in a 60 or 70 year old drug, but there may be a point in that as medical students, we memorize the "quick bites" of some of these things as our time and attention is extremely limited in figuring out what to study for the boards. and if we do want to prescribe it, we have a pharmacist pushing back on the other end of the phone because it has this thing as a big scary Black Box Warning on the drug.
I will say, MAO-B inhibitors (at least those studied in anti-parkinsonian trials and doses) don't seem to do anything. No hypertensive crisis, but we haven't been able to see a huge therapeutic effect either. The psych people dose them at 6 times the parkinsonian dose though...<shrug>
The other potential angle on that post is...this may reflect on some aspect of an unregulated generics market. Aside from phenelzine, I seem to see weird swings in availability and pricing of generics in the past few years.
I'm not sure drug importation will work though, not because it's a bad policy per se, but I'm not sure that other countries will let the US import their low-cost medicines if US law changes in order to protect their domestic supplies.
There's Canada as an example case. We have ~10x the population of Canada, and California alone could use up all of Canada's medicines. Not sure Canada would go for it.
Think it's worth a shot though. I know there are some trial programs going into place in Colorado and Florida around allowing drug importation. Will be cool to follow and see how they play out.
Cross-border drug buying works well in the EU, where any European country can buy drugs from any other European country, so whoever has the lowest price usually wins the market.
As a private company, your incentive is to maximize profit for shareholders. Since all you have to do is undercut high drug prices a little, what will stop you from the same price gouging that all other US drug companies perform?
On the technical level, we incorporated as a public benefit corporation, so we are judged not only on how profitable we are for shareholders, but how well be maintain our social mission. That is actually in our charter documents and is a legal requirement.
On a practical level, Mark Cuban is our lead investor and his interest is very much focused on helping people and fixing system issues in healthcare. We also did some screening to ensure our other investors are socially minded and prioritize social benefit as well as profits.
My mindset is that we need to be profitable to be sustainable and grow enough to help the overall system, but we won't be extortionate.
Also he got to write his name on it
In the longer term, success in the health space could add prestige to his name, ala the Nobel prize.
> The results show that the average annual price of top-selling cancer drugs in 2006, adjusted for inflation and secular changes in drug prices, have increased by US$154 and US$235 for branded and competitive brand drugs, respectively, following the 2010 ACA; however, generic oncology drug prices showed no significant changes.
Cost of advertising is a serious problem for generic drug makers. There are a lot of drugs where there exists an identical, cheaper, generic version, but the more expensive one gets sold because neither the doctors nor the patients have any idea that it exists. Hence all the "ask your doctor for x" ads, but the problem is that advertising on that scale, especially for low-incidence conditions, is very expensive compared to the amount of money you make, an so will result in just another expensive drug.
A celebrity putting their name on a drug company and then maybe mentioning it a few times publicly in places where normal people hear about it may make people who are facing very expensive drug bills look up the site and see if they make something useful for them.
If it’s the case where there’s an older generic and a newer product still under patent, that’s a discussion with your doctor: Is the newer product worth the money, or should I stick with the older thing?
Couldn't Canadian drug companies increase supply if the demand was there? In the short term, sure, they would not be able to handle our level of demand, but unless there's some constraint I'm not aware of they could always just scale up and make more animal insulin or whatever.
The history is that Canada used to have "compulsory licensing" for patented drugs. Anyone could manufacture a patented drug in Canada and pay a ?6?% or whatever royalty to the patent owner and they just had to deal with it.
Over the years, first 4, then 10 years of exclusivity were provided to the patent owner.
Then the WTO came along, and presently, everyone has agreed to ~20y exclusivity and charge/pay the median price of OECD countries before it's a royalty-free free-for-all.
http://publications.gc.ca/Collection-R/LoPBdP/BP/prb9946-e.h...
Canadian generic drugs today aren't usually cheaper than US generics, except where patent exclusivity mismatches.
Depends on the country. For example India is the largest generic drug manufacturer and has a population of over 1 billion, and they already export their drugs to many countries.
In effect, it's about 're-importation' of drugs, not so much regular import.
The Government of Ontario negotiates drug prices for it's citizens, as to other entities elsewhere.
By selling to XYZ regime at ABC price, drug companies create a situation wherein 'the resulting price will be the lowest price we sell to any regime' - because of course everyone will want to import from there.
In many cases, the price sold to XYA regime isn't quite a very good measure of net market prices.
Ergo, it's a weird law, but it's rational on a level.
To start - there could be a slew of laws requiring transparency on pricing for everything in the medical domain. That would be a good start.
More challenging - Americans could actually get together and start negotiating hard on prices. This may require some legislation.
So the 're-importation' issue is an artifact of an odd system, not in and of itself the issue.
OHIP negotiates the prices of all drugs on behalf of Ontarians by being the sole purchaser, and then drugs are sold at that rate (cost plus, I believe) in pharmacies. Further, the cost of all services is listed on the OHIP website. [1] Not that anyone needs to worry about that as they are fully covered for everyone - not the drugs (yet, fingers crossed), the procedures.
[1] http://www.health.gov.on.ca/en/pro/programs/ohip/sob/physser...
Almost all expensive drugs end up being on a special permission list, where you must to beg the government for access.
Not any different than dealing with an insurance company, really. At least you can sue an insurer.
However of course consider delays in getting a drug to market aren’t always provincial; Health Canada has their own timelines and schedules for approvals, sometimes it’s faster than in America and sometimes it’s slower.
The difference is frequently you’re forced to sue insurers as they have a profit motive to screw you. The province only cares about getting you healthy within their means.
Ambien is not available in Canada for example.
One of the things about hard negotiations is that sometimes the other side will call the bluff and walk away.
And of course in rationed systems you don't get things that 'the masters' decide you don't need, like Ambien.
In the case of Ambien, I don't care, I question the real medical value of it, but you can see how that could get out of hand with other things.
It would better to solve the 're-import' problem with better regulation - and of course, initiatives such as the the MC Company here.
I think the Cleveland Clinic and some others like it are technically non-profits, there are models that work.
Re-importation shouldn't be illegal, but it shouldn't be necessary - it's really kinda dumb. Other countries have solved this problem by making healthcare universal, and forming a bulk purchasing group which strong-arms providers into charging something the system can bear. The end user doesn't have to care how much that is, because most developed countries simply pay for the drugs people need in the first place.
The ideal way to obsolete this problem is to follow their lead - get Medicare for All to happen and restore Medicare's ability to negotiate the price of drugs directly with manufacturers.
Then nobody has to pay for the drugs directly in the first place.
I doubt the American people (or American industry) would ever allow such a truly free market system to transpire, but I know for a fact it can work.
Labor is cheaper in Tanzania obviously, but even if you adjusted for the more expensive labor, a free market system (vs the crony capitalist system we have now) would probably be 10-100x cheaper.
Also, even controlling for median wage, the drugs are vastly cheaper in Tanzania vs America. A median worker there might make around $5-10 in wage, so most drugs for a month supply would be only a day of work. Median hourly wage in America of $15 would correspond to drug prices between $60-120 dollars, much cheaper than most medications without insurance. In reality, it should be much cheaper, as the marginal cost can be reduced a lot through online pharmacies (remember that $5-10 cost in Tanzania not only factors in product cost and labor cost, but a staggeringly inefficient distribution network).
In short, I don't believe there's any theoretical reason why generic drugs couldn't be dirt cheap and affordable by all in a free market system. After all, capitalism has done a stellar job at reducing the cost of consumer goods over time, and medication should be no different.
If everyone could buy lightly regulated pills from alibaba, it would definitely be a win from a utility standpoint. But of course such a thing would never fly, as maximizing total utility doesn't get people elected. Everyone might win except one guy who died from bad pills and the whole gig would be up, even though the total utility function of every citizen in aggregate was being correctly maximized.
The strong needs of the few always trumps the weak needs of the many. If everyone paid one $1 dollar per day in order to prevent one death, I'm sure some politician would call it a massive win, even though that's an aggregate loss of 100bn dollars annually and the money saved generated more utility than the utility lost by that one guy dying.
Unfortunately, human beings are unable to make correct statistical/utilitarian decisions and support so many policies that are a net negative utility wise.
Aligning prices with purchasing power allows pharmaceutical companies to get _something_ out of the markets they'd get nothing out of. And with large numbers, that something might turn out to be a bit more.
Sure production cost is usually low and that technically allows to sell to poor countries essentially at cost plus a tiny margin.
But that's only half the story. Drugs need to be developed. From idea to market only a tiny fraction of medication makes it. You need studies ovet studies, and most of the time a drug does not make it through that process because it's ineffective or dangerous or both. The few that make it need to compensate for the cost of this process, not just their own but all of those that didn't make it.
So, in "rich" countries, a pill that costs $0.10 to produce can easily cost $1000. That's a necessity to finance the whole process of getting there.
After that is all done and established, sure, you may get that same pill for $1 since it's either that or no sale. But that does not mean the whole system would work for $1 per pill everywhere in the world. Then the pill would not exist in the first place.
Can't or won't?
Lot of drugs are manufactured and exported from India.
I've heard the argument that Americans effectively subsidize drugs for everybody else. While it may be true, it still seems like a terrible situation to me, even as a non-american. There's got to be a fairer way to work this out.
If so, would that include manufacturing the active pharmaceutical ingredients or will you be sourcing them from generic manufacturers and then making the final drugs at your plant?
Our initial drugs are supplied on "private label" arrangements where other companies actually do the manufacturing, and we just add our labels and our own NDC code so we can set the price. Since we don't go through middlemen, that price can often times be a lot lower.
We'll have to source API (active pharmaceutical ingredients) elsewhere for now. At some point, would like to completely internalize our supply chain, but one step at a time. :-)
He planned to pre-fund several coronavirus vaccine manufacturing plans _prior to FDA approval_ just to speed up vaccine production. He expected several of those would end up being wasted money. [1]
Perhaps he would find this valuable too?
[1] https://www.weforum.org/agenda/2020/04/bill-gates-7-potentia...
Honestly, something that's advertised as ruby/python and HTML will probably put a lot of devs off that used to happily do that all day, and so a company might have to pay higher for good talent, or put up with worse talent applying for the same salary.
You might actually be worth more not knowing react. Communicating that to prospective employers might be hard though.
In other words, you can probably make really good money slinging COBOL if you know it and can communicate your talent sufficiently for the same reason, but more extreme.
(I'm not saying React is as useful as a hammer, but if it genuinely makes building and maintaining websites faster, it's a skill worth paying for).
Here's a brief video that breaks down some of it though: https://www.youtube.com/watch?v=15IQO_jTMUM
For example, one thing most other developed countries do is have a central state agency negotiate prices for drugs for the whole country at once, which exerts a lot of buying power to drive costs down.
The idea of Medicare in the US doing that has been proposed several times, but has been blocked, most famously during the initial ObamaCare debate.
The stated reason for blocking that is that decreasing reimbursements would decrease the profit motive for pharma companies to innovate and create new drugs. The more practical reason is.... probably just that lobbyists exist.
But that is just one policy among many. We are simple folk here at the MCCPDC, we just charge less. :-)
https://www.lexology.com/library/detail.aspx?g=fcf817fe-192b...
> Ultimately, scientists traced the contamination back to a change in valsartan’s synthesis. The antihypertensive drug contains a tetrazole ring, which is an aromatic five-membered ring with one carbon atom and four nitrogens. For many years, the synthesis for this compound, developed by Novartis, used tributyltin azide to form the tetrazole, with xylene as a solvent. However, in 2014, China’s Zhejiang Huahai Pharmaceutical, which makes valsartan for some companies, filed a patent for an improved method for forming the tetrazole ring.
https://cen.acs.org/pharmaceuticals/pharmaceutical-chemicals...
It's all blood pressure medications like Valsartan, losartan and irbesartan, and metformin the diabetes drug.
These are just the ones that have been tracked. Sometimes the drugs come in with higher doses than they should, or less than they should. Or sometimes the pills are mislabeled.
Our daughter has a life threatening condition that I’ve posted a lot about on, a complication from spina bifida where she holds her breath when she gets upset. Many kids die from the condition.
There’s a medication, piracetam, that a child with the same complication uses in the UK. It’s safe and has greatly helped the little girl in the UK. When we mentioned it to doctors we were immediately shut down and told it was impossible to get in the US.
Any chance of the Mark Cuban Cost Plus Drug Company seeking FDA approval for piracetam and drugs like it?
From my very limited understanding of the regulations, a company would have to spend the million+ dollars it costs to get FDA approval, but then wouldn’t be able to recoup that cost by selling the drug exclusively because the patent has long since expired. The US has this class of drugs that just never got approved and no drug company will ever pay to get approved, even if they are commonplace in other nations.
[0] https://en.m.wikipedia.org/wiki/Piracetam
[1] https://medcraveonline.com/JPNC/peac-prolonged-expiratory-ap...
[0] https://www.fda.gov/patients/learn-about-expanded-access-and...
A few times we’ve missed a day and it’s not a fun experience. Something as innocuous as a diaper change can mean giving her getting upset, turning blue, pulling out the a bag and mask, and giving her oxygen and hoping she’ll come to. Then she’ll sleep for hours. If it’s especially bad, like it was before, she’ll forget words which is super scary.
The tyranny of prescription required isn't worth it.
From the reddit discussion https://www.reddit.com/r/Nootropics/comments/hkn7v2/piraceta...
Articles like this one are driving their actions. https://jamanetwork.com/journals/jamainternalmedicine/articl...
But I had a similar condition in my childhood. Many doctors thought it was some form of complicated asthama or something but couldn't figure out what exactly was it.
Then my parents put me in an breathing camp (yoga retreat kind of thing). I was there for six months and we were convinced there that breathing is life. Breathing is the most important thing in and for life. And slowly, the condition disappeared.
The condition was more of an impediment in the brain blocking the breathing command when I got upset unlike some incurable damage to the lungs. Just teaching and reminding us to breath every second for six months made things a lot better.
If there's no such camp/retreat in your country, you could try India.
I’m the Founder of mailmyprescriptions.com (now rebranded as geniusrx.com) the second online pharmacy / first wholesale online pharmacy (similar cost plus model) - just sent you an email. Love what you guys are doing, would love to help. Keep driving those prices down!!
I'm assuming most drugs are priced high to start due to the R&D costs, and (I hope) they eventually decrease their costs over time as that's recouped.
If Cost Plus comes in and reduces the costs significantly, then the original manufacturer has no incentive to create these medicines to start.
Or is that not at all how this works :-)
How is the example cost of Albendazole right? Technically, it's a generic drug, and the cost is 10c (locally in India, atleast). What marks this up 130x in the US?
This is a misconception. There are dozens of different drugs people refer to as Insulin, some new insulin analogs are better, and expensive. You can still get old synthetic formulations very cheaply. Walmart famously sells them for $25.
https://www.medicalnewstoday.com/articles/311300#drugs-for-t...
Sometimes I'm so happy to live in Ireland, I know we have our faults. But at least with some things, we seem to get it right.
Diabetics in Ireland have 0 cost associated with it. They can go to any pharmacy, and get anything related to Diabetes for free, and as much of it as they need.
This should be the case for any life long illness - or any illness for that matter, in any country; in my opinion. Healthcare should be free for all, it amazes me that this is not yet the case. I do know deep down that it will be eventually though.
Why are you amazed? It's impossible to provide a valuable product or service for free without institutionalizing either slavery or robbery, and not everyone agrees on that trade-off.
Regardless of where you fall on the spectrum of opinion regarding this, it shouldn't come as a surprise that there are some people with philosophical objections to encoding nonconsensual interactions like slavery or robbery into the fabric of our society.
Many reasonable people agree that providing healthcare (or other important services) for "free" to all people is more important than not having the government rob people to pay for it.
Many reasonable people agree that that is a bridge too far, and that we shouldn't be robbing people, regardless of what the stolen money is used to do.
Both are sincere positions held by sane, reasonable, intelligent, empathetic people.
The newer, better insulin costs around €7 (~$8.50) per pen in Europe. That same pen costs $180+ in the US. The markup these companies charge is criminal.
The status quo isn't criminal: changing it to make things cheaper and more efficient is.
1) The FDA grants a single company the exclusive right to manufacture, distribute, market and sell a generic version of a drug. In this case, the price will be lower than the brand drug, but not by much, since there's only one maker and no competition.
2) Several drug companies are allowed to design their own versions of the brand drug. Because there are several competing brands with essentially the same product in the marketplace, competition causes the prices drop.
If your company targets the first type, you replace another company as the sole producer of the generic, and there's still no competition to drive the price down.
If you target the second type, you become an additional competitor to the other generic drug makers, so the market gets a bit more competitive, but the prices in theory were already competitive because of the number of makers. For example, the Lexapro generic Escitalopram has many makers, so you can get it for as low as $10.
So in terms of generics, the options are either single source agreements where pricing won't be competitive by design, or multiple makers, where the pricing is likely already competitive. Having said that, which of those does your company want to target, and how do they plan to tackle it?
I suspect their intended mission is to cover their costs with only a modest profit and thereby drive down prices where they are most inflated.
Given the proliferation of people like Martin Shkreli and companies like Purdue, there's a lot of pharmaceutical fruit out there to be pulled down and made low hanging once more.
And can you export the drugs to other countries (for sale)?
Thank you!
Every time I go to the doctor I wish I could take myself to the vet instead.
What I’m getting at is that for most animals the owner can be compensated for accidental death easily. (How much is a head of cattle at auction?)
Not that this explains all the discrepancy, but it may explain a non trivial percentage.
Here's some FDA guidance on how to translate doses from animals to humans: https://www.fda.gov/media/72309/download
I generally agree with your sentiment - regulation and insurance overhead are big costs. I do think some people should be able to do the basics at home if they wanted. Basic sutures are a pretty good example, you could even save that $150 that you mentioned.
See the reviews on this product page: https://www.amazon.com/InstaMorph-Moldable-Plastic-6-oz/dp/B...
The service needs to be available in some form at least for folks like me that have an essential tremour or otherwise are limited in fine motor skills.
This also contributes to the amount of emergency room treatments that could have been trivially handled with earlier intervention. A boil that has gone septic is a very serious medical condition, but nearly all boils can be trivially resolved with a short regimen of antibiotics.
A sterile suture kit is about $2 as well.
If you cannot afford US dental care, and you are not super poor, get a 1 way ticket via Kiwi.com to a more “eastern” European Union country like Croatia or Poland. If you use scripts from GitHub or are very good at searching you can get such tickets for $200-$250. You can find extremely excellent dentists with great qualifications and reviews in countries like that, and many have amazing reviews and are super cheap.
A lot of people from EU countries, that do not have “socialized dental care” go to countries like that a couple times a year to get dental care.
> If you use scripts from GitHub or are very good at searching you can get such tickets for $200-$250.
This is the average cost, per tooth, of the work I had done here 2 years ago, in the US, at a dentist where I paid cash.
> You can find extremely excellent dentists with great qualifications and reviews in countries like that, and many have amazing reviews and are super cheap.
I’m wondering how cheap they have to be in order to make it cheaper to fly to europe. How much would be an extraction or a filling replacement?
When I lived in the US, I had an individual plan through Costco (Delta Dental) that was quite a good deal. It was a Dental HMO plan, though. Really, the only thing I noticed that it did not cover was implants. However, Costco only offers it in a handful of states: https://www.costco.com/dental-insurance-services.html
Alternatively, you can get an individual dental plan through Delta Dental Plan in any state here: https://www1.deltadentalins.com/individuals.html
In both cases above, if you get the Dental HMO, it has no annual or lifetime maximum dollar limits, no waiting periods, or pre-existing condition clauses.
Anyways, I used my American dental insurance to get cleanings, X-Rays, and fillings. I go to Europe a couple times a year at minimum anyways, so I use that to my advantage by getting more advanced dental care there.
Dental implants, especially Swiss implants, can be 8 times cheaper than what some dentists charge in the US. A Swiss implant, when all said and done, costs about $1000 USD in the more eastern EU countries.
You may want to check out this website: https://www.whatclinic.com/dentists/worldwide
I would stick to European Union countries, as the quality of materials is very high. There is some website like the link I posted above, that has implant success rates posted, by dentist. I just do not remember the website's name. Anyways, you take your time and do extensive research before you choose your dentist.
Anyways, I have a very rare immune-mediated disease affecting my autonomic nervous system, which affects salivation, so my teeth are totally jacked up, even though they look really nice. I also have type 1 diabetes, and it makes my teeth naturally more prone to infections. So, cost-wise, I am screwed when it comes to dental care. I know somebody with the rare disease I have, that has about 20 implants in her mouth.
But, if your teeth are really jacked up, and especially if you need implants (of course it is better than dentures), it is way cheaper to go to European Union countries. This is even for 1 implant. If you may need thousands of dollars in dental care, you may be better off going to the European Union to get that care.
You spend more time with your dog than most people, and I certainly care about him more than any person who is not in my immediate family.
Some of the bills that I've run into have still managed to approach the cost of routine visits at some specialists when billed to my HSA.
I had to get an MRI from a vet hospital in the past. It was still over a thousand bucks, and in the range of quotes I'd gotten for human MRIs before.
I wonder what similar stitches in an urgent care vs a primary care office vs an ER for a human would cost.
You'll hear medical professionals claim imaging is expensive because the machines are expensive. Which just says to me that medical professionals aren't accountants.
Consider a dental w-ray machine. $15-30k. That's the cost of Prius used as a Taxi. You don't pay a couple dollars for a 15 minute Taxi cab ride.
An MRI machine, I forget how much those cost. But whatever, lets compare one with a modern passenger airliner. Cost is about equivalent on a 'per passenger' basis. And an airliner requires highly trained professionals to keep it running.
A new MRI costs ~3 million, has an operational life of 10 years, performs 5000 scans per year, for a total 50,000 people trips.
The people operating the MRI machine are probably payed more than anyone working on the airplane and take vastly more time per passenger.
You seem to be off by a factor of 5 or 10.
https://info.blockimaging.com/bid/92623/MRI-Machine-Cost-and...
https://www.pasadenanow.com/main/lab-in-emerging-biomedical-...
Here is a link for a 7 million suite to house one of the machines https://www.dignityhealth.org/sacramento/about-us/press-cent...
While costs for these machines are going down, even more expensive 7 and 10 Tesla machines are starting to be installed, going up to $14 million
Anyway, your estimate seems to be way off, basing it on a 6 year old puff piece for a cutting edge model that was deployed in a lab. The cost for a typical new MRI is more like $500k.
If you ask "How much does a car cost?" The answer is not "Here are some articles about people buying Lamborghinis that cost $250,000".
Most people are using a middle of the road 1.5 T machine.
If your point is that MRIs less than 3T exist, I agree. If your point is that cheaper MRI exist, I agree. If your point is that nobody has spent 3 mil on a CT, then I disagree. A link showing the price of used machines 10-15 years old isn’t going to change that.
[0] https://www.careerexplorer.com/careers/magnetic-resonance-im...
I agree that it is a very strange comparison between MRI and a plane, I was just chiming in on the capital and employment cost for each could be comparable on a per trip basis, not that MRI prices are where they should be.
In my personal opinion, a major problem with US healthcare is a race to the top, where the newest and best care is sought irrespective of the price. A judgement call needs to made somewhere on cost/marginal benefit, and post-procedure reimbursement debates is the worst way to do it. CT machines can cost between 250K and 14 million, as I mentioned in a sibling post. Similarly, MRI costs can range from $170-$5,500 [1]. In the current system, almost nobody is incentivized to keep costs down. Doctors and insured patients want the best care, as costs are externalized to the insurance pool. Insurance companies want to maximize costs, because their profit margin is limited by a % of spending.
https://turquoise.health/service_offerings?q=MRI&location=90...
My dog had MRIs and ultrasound recently. Each event was $700-$900 a pop.
I take my dog for routine full checkup that includes MRI and Ultrasound whenever I travel to south america. They use the same machine brand as in the US, with same diagnostics. I pay $50-$85 over there for the same tests.
Vets over in SA (not business owners) make about $500-$1000 USD per month.
It would seem the huge cost is not from the machine. Its the labor. I think these are the 2 key differences:
a) Based on my understanding, getting licensed in this SA country is a nonissue. There is in fact an oversupply of vets because its easy to practice.
b) The price for the vet studies is on the 2k-5k year for a private U. Compare with US Colleges.
Regarding quality: Our vet in SA diagnosed my dog after seeing the US diagnostic test reports , over whatsapp. She was correct on her diagnosis from the start. It took 4 different US vets, 3 separate facilities, 4 days of hospital bills ($5000) to arrive at the same conclusion that I got from a whatsapp.
It is not the machine problem. It is a captive market with huge costs related to labor.
Re: the large patient, yikes!
The bores are really small: 55mm or so is not uncommon, so a mouse would fit, but nothing much bigger. Other animals are usually scanned on a machine meant for humans (sometimes even the exact same ones, very early in the morning or late at night).
The $2000 place is associated with a local hospital chain that is well regarded. I guess that is how they could negotiate $2000 for an MRI with insurance and the other place (that I went to) was only able to negotiate $500.
Honestly, the price for health care in the US is all funny money. I've gotten a single shot, of a very common drug, that was billed at $20k, knocked down to $10k with the "insurance discount", so my 10% co-pay ended up $1000, with insurance!
I had a surgery that was billied at $250k where the "discount" was over $150k. That $250k price is clearly not real.
The highest medical bill I've ever paid is £8.50. Of course I pay National Insurance to cover the costs of the healthcare system. But as far as I can tell that's no more expensive than what people in the US pay despite their insurance having not nearly the same coverage.
They have insurance. And if they don't, they declare bankruptcy. It's not permanent. It's a seven-year ding on your credit rating.
I am genuinely interested.
And please don't take any of this as a defense of the current abominable US system. I lost my dad to complications of untreated diabetes because he didn't have health insurance. What I'm saying is that people who should declare bankruptcy often don't, because they think bankruptcy will ruin their life. It won't. It protects you from predatory lenders and gives you a fresh start.
Isn't the issue that health insurance often doesn't cover everything. And that it's very difficult to get health insurance at all if you have pre-existing or chronic conditions (exactly the people who need it the most).
I have never declared bankruptcy and there isn't really a situation that I can foresee where I will need to.
And yes, dental care is all over the map— it feels very much like what I imagine US healthcare to be, with co-pays and mystery charges and having to log into my insurance company's online portal to do stuff. The NDP made a bunch of noise in the last election about a national dental plan, though even that effort would only have covered family incomes up to CAD$90k [1], so it wasn't anything like the universal no-questions coverage we have for core healthcare.
1: https://www.cbc.ca/news/politics/ndp-dental-plan-fact-check-...
Do people in the States not pay for pet insurance?
We sure did go for it in Toronto. Vets seem to charge by the pound (wait, sorry, kilogram, immigrant…). Large dogs seem to come with large medical bills, and we were strongly advised by friends and family to go for pet insurance.
Now, I am not actually sure that pet insurance, versus setting up a dedicated savings account that we sock money into, was the best idea. If anything, we went for it because I am from the States, and I assume any non-trivial medical issue will be cripplingly expensive.
For me, the cost of routine care, spay/neuter, and a certain amount of unforseen expenses should be part of what you plan for when you get a pet. Beyond that, it's a judgment call as to whether the cost of some treatment is worth it. I know people who have spent thousands of dollars treating cancer in an old dog, and others who have euthanized younger pets who developed expensive but in theory treatable health problems. I don't think either approach is wrong, it's up to the owner.
Funny enough, dental insurance in the US is very straight forward. I have always gotten quotes up front with very clearly explained charges. The way it has worked is dentist talks over with me what they want done, billing person runs the numbers and gives me paper with estimates, and if I agree I pay whatever balance I owe on the way out.
Amazingly straight forward, kind of like how everything else should work...
FWIW Eye doctors and insurance on glasses works just as well.
An example of my frustration with dental: I went to my usual dentist for a checkup, but then he referred me to a specialist. The specialist appointment wasn't going to be for a month, but then they call suddenly and have a cancellation the next day. I end up having to pay full price for the specialist appointment because my insurance doesn't like that I had two "assessment" appointments back to back.
On another occasion, I was quoted a procedure, and my decision for when I wanted to have it done was driven entirely by which insurance-year it was going to fall under, rather than by my convenience or how urgent it was, or anything else.
I know these are fundamentally "insurance issues" and I suppose better supplemental insurance could make them go away, but at the end of the day, just like with Americans, my insurance is chosen by my employer and I have basically no control over it.
It's uncommon here in Norway, unheard of in fact as far as I am concerned. I have a checkup once a year that includes a really thorough cleaning procedure and x-rays. That costs about 120 USD. If I need a filling that will probably add about 100 USD at the most and the two crowns (milled ceramic done on site, on demand) that I have cost about 500 USD each so over the last thirty years I have spent about 6000 USD on dentistry, so an average of 200 USD per year.
They can, but they vary. I'm a citizen of both countries and there's one allergy medicine I take where the generic price in the US is the same as the name brand price in Canada. The name brand in the US is 7x higher than the name brand in Canada.
The vet always guilts me into some sort of stupid test. Usually I walk out of there $300 lighter.
Seems pretty similar to the vet. But that's just an office visit. The expensive stuff is at a hospital when the CYA care shows up.
Which is why they spend 5 minutes on you, 90 minutes after your scheduled appointment time.
In the countryside people tend to have a more utilitarian view of animals and would simply get a new one rather than wasting money keeping a sick animal alive.
I'm not.
When it was our cat's time too, I was struck by his end of life experience versus that of a human. Whereas a human could have exhausted their life savings on futile treatment or end of life hospice care, Denver cat went quietly into that good night on his favorite blanket surrounded by his loved ones.
I'm currently in need of some very common medical treatment, but the maze of providers I need to go through in order to get a referral just ain't worth it. Versus, if I were a cat or dog, I could simply go to the area university veterinary hospital and likely get my answer same day.
Pieter Hintjens (of ZeroMQ and AMQP fame) chose this option when diagnosed with terminal cancer, and wrote about it extensively at [1] and [2].
I suspect there is an order of magnitude in the difference in level of care that goes into the average person vs dog. I mean, for one, it is very common to hear things like - "well, you have to remember, their lifespan is short. They only have a year or so left to live." This just isn't a discussion that is had with people.
Except doctors. Doctors refuse life extending treatments at a much higher rate than general population of patients.
Find a 4-5 story parking garage and stand up on the edge. That part of your brain that kicks in and tells you to get back down to safety will also tell you to pour every cent you have in to buying a few more weeks.
This can change when there is no "back to normal" available. When your quality of life is shot and you know that tomorrow won't be better than today.
In a suicidal person who jumps off that building we consider this a tragedy because there's usually no physical reason that those feelings couldn't have passed, why their life couldn't have been normal again.
But in someone with a terminal condition and a body that's just done... and especially if they're well informed about the realities of their medical condition... yes, there can be things you care about more than throwing every cent you have into extending the pain.
But I think there's truth to both points, and every single case will be different.
I believe the only blocker to allowing euthanasia in the developed world is a potential for abuse.
Part of this could be that pets are limited in their ability to communicate details of their feelings to humans, making it harder for humans to tell the difference between a pet that is acting off because of something that they will recover from without a trip to the vet and one that is acting that way because of something that is serious and is going to go downhill fast if you don't take them to a vet soon.
This leads to vets first going to the vet for a given illness later into that illness than a human with a similar illness would have went to the doctor, hence a greater chance of it being too late.
With my cat (and this would likely be the case with any of my cats...) we took a reasoned look at the medical options and the quality of life choices. It wasn’t exactly cheap, but we basically bought him a year of life. If it had been a human family member, we would have gone through exactly the same decision, IE: do you want to keep fighting and do you want to go through this procedure or not?
I plan to go back if I ever need a major medical procedure.
I've always opted to be treated locally when needed - but I also pay for an emergency evacuation service that puts my butt on a jet back to the states if things go pear shaped.
You might find this interesting too. https://slatestarcodex.com/2020/04/20/the-amish-health-care-...
Edit: why is this downvoted?
Healthcare in the US is a scam. There's no other way to look at it.
Because they don't have to pay for their education. Governments there recognize that having lots of doctors is a public good and don't saddle them with hundreds of thousands of dollars of debt from medical school.
Doctors aren't the ones who pay that medical school bill (if they get a job). It's their patients who pay the medical school bills.
The problem of medical expenses in the US is a very complex one. It's essentially at the nexus of a whole bunch of problems with our society. Higher education is too expensive. We have too many middlemen. Strong intellectual property laws make drugs and devices expensive. Patent laws make evergreening more profitable than innovation. Intense regulatory requirements for approval make competition very limited for pharmaceuticals. The government doesn't maintain control of the products resulting from the blue-sky R&D it funds. etc etc.
The US system is absolutely lousy with corruption and ends up diverting a large amount of money toward marketing which is rather baffling - whether a treatment is appropriate or not is a decision I'd rather my doctor made on the basis of efficacy - not because one of the companies had a catchy jingle or because one of them recently took him out to lunch.
Hospital administration does cost a fair amount, but be careful here - it's like education - some of those administrators have moved up the seniority chain to positions where they essentially do nothing and get paid for having their ass in a chair - but a lot of that administration goes to fighting against the extremely aggressive tactics of insurers and manufacturers. While those administrators would ideally be unnecessary due to better regulations being in place they do provide justifiable savings for the hospital (it's cheaper than not having them in many cases) under the current system.
It's all really complicated and murky.
Pharma companies enjoy a profit margin averaging 26%, medical device companies 12%, and hospital groups (which includes non-profits) 8%. Insurance companies are closer to 3%.
https://www.americanprogress.org/issues/healthcare/reports/2...
In the current system you walk in and hand them your card (insurance, Medicare, medicaid, etc) and they treat you. You get mailed a bill later.
Tax funded systems would be similar. Walk in, give them your ID/card and get treated. Get a bill if it's a taxable condition (like Italy).
Obviously there are other non-payment related differences like scheduling and what's covered.
The thing you're missing is that the current system in the USA is in no way like this.
I'm glad we now agree that the current system in the USA is in no way like this.
Or (until recently), you go in for surgery where the surgeon is covered, but then get billed for an out-of-network doctor that consulted without anyone asking you.
Also theres none of this in-network vs out of network chaos. Emergency care always covered, doesnt matter where you go.
It feels like youre trying not to understand how a public option could be better.
This statement assumes a public option (which varies wildly depending on the one) is better.
The parent comment wasn't about a public option or getting a card. It was a complaint that recieving care at a provider is extremely complicated. At that stage of the process, that claim is incorrect.
I have, among other things, asthma. I'm a 1099 contractor; I buy my own health insurance. Prior to the ACA, which people keep threatening to revoke, I could not buy insurance that covered my asthma. I tried. I shopped around a lot. The same company that provided complete coverage at a previous employer had a pre-existing condition rider on the same policy.
After the ACA, my policy now covers my pre-existing condition (Yay!), but I'm paying $750 or so per month for it. If I could not afford $750/month, my options would be considerably narrowed. (And that's before the prescriptions for my pre-existing condition.)
Yes, I go in, I get treated. But my situation demands a pretty hefty bill anyway, or potentially a very large bill. Possibly enough to make me consider not going to get treatment.
Another point is that the people with lower incomes qualify for subsidies under the ACA.
Yes, the mechanics are the same (go to doctor, get a bill), but your purchasing power as individual patient is really small compared to a whole country.
Where is the individual's purchasing power a part of that scenario? Regardless of the group or person paying the provider, the bill is still substantial. The main money saver between the types is in system efficiencies like removing overhead, or instituting restrictions.
I agree, we should remove the overhead created by the existence of private insurance companies.
I've been using the ACA marketplace here in good ol' Alabama, and I've had the opposite problem. There are four choices, all from BC/BS.
Note: I love the ACA. I will fight for the ACA unless and until I'm presented with an actual better option. Prior to the ACA, I had options from other companies, none of which covered my major problem.
The part where you are one of the people who doesn't have a card from insurance, Medicare, Medicaid, etc.
* I walk in, and they can tell me right away whether I will be billed or not. There's no "we'll see" and then maybe I get a bill in a few weeks.
* I walk in to a different doctor's office and the answer as to whether I'm billed or not is the same as at the other doctor.
* Because of these first two items, I walk in and they can tell me ahead of time what my bill will be.
* We can now replace "walk in" with "check their websites (or call) and comparison shop".
Maybe they can't tell me if my treatment is taxed until I'm diagnosed, but that still gives me the option to find out my bill before treatment. Once I'm diagnosed, if it's non-urgent I can shop around.
Price transparency is non-existent in US healthcare. There's no big mystery as to why that would cause inefficiency and absurd costs.
Edit: Why downvote? It's all true.
Apart from being extremely expensive.
The NHS does demand management with waiting lists instead. Basically it's amazing for things that can be easily identified and given cheap medication for (insulin, antibiotics etc), amazing for emergencies which can be resolved with surgery, OK (but variable) for obstetrics, does a decent job at screening for common conditions, but tends to leave anything that won't actually kill you to wait.
I've never had to think about billing.
I think the best demonstration of the quality of the NHS is that despite the low cost of private insurance in the UK, and despite the fact many companies offer health insurance as a perk, only about 10% of the population has any kind of private cover.
There is so much regulation around anything even remotely medically related. Just look at the HIPPA mess.
Edit: why are you downvoting without rebuttal? Its utterly false to claim the system is libertarian.
How is any of this libertarian? The libertarian solution would be that only individuals would be allowed to purchase insurance, that insurance would distribute funds to the individual (not the doctor or pharmacy), all fees would be provided prior to service being rendered and individuals would purchase meds without a prescription.
I work close enough to healthcare that I can say that while insurers do take cost of treatment into account they are looking to minimize ongoing treatment costs - if there is a 5$ pill and a 500$ pill available for treatment the insurer may prefer to trial you initially on the 5$ pill if it's been proven effective for a good proportion of patients, but they do use calculations to minimize those ongoing costs that includes costs from condition escalation (i.e. if you have a boil you're absolutely going to get antibiotics covered since dealing with a septic boil is an emergency room visit.
Note: I've spent on the order of 30 hours on the phone over the past couple months trying to get things sorted out between my doctor, my insurance, and the provider of the drug that I need for my vision. The folks at the insurance can't always help, but they've always been willing to discuss things and see what they _can_ do.
What should have happened is that they should do the ultrasound right there, on the spot. But, the dr's office can't do ultrasounds. That has to go to the imaging department, which had to be scheduled 4 weeks out. Sigh... I won't keep going, but this whole situation is stupid and engineered to extract as much money as possible.
The next time something like this comes up, if you're feeling up to it, try pushing back. If you have the time to throw at it, the worst outcome of trying is usually just staying where you started.
At the end of my many hours on multiple phone calls getting everyone to agree to pay for treatment I need... the company in charge of making it called to let me know they've been retasked to making COVID vaccine and won't be making the drug I need for at least 3 months. So no treatment for at least that long. So that's fun.
To me, libertarianism is simply “might makes right,” with the liberty part being everyone has the opportunity to grow into a bully. I’ve never seen a SINGLE libertarian policy that couldn’t be interpreted this way, and I’m quite open to being corrected.
Libertarianism basically sees two possible crimes: force and fraud. Totally incompatible with "might makes right".
(Dejaque, the founder of libertarianism called Proudhon, the founder of anarchism, a "moderate anarchist, liberal, but not libertarian")
How about Kelo vs New London? This was the Supreme Court case establishing that the government could use eminent domain to seize people's homes and hand the property to private developers, in the interest of raising tax revenue for the city. Libertarians were against it; liberals were for it. Is that "might makes right"?
Which is lovely and all, until those doctors tell you vaccines are worthless and dangerous, and to slather a mixture of beef tallow, garlic, leek, and honey on your injuries.
We could split the difference and expand existing med schools or start new ones with similar standards.
1) independent rating agency for med schools
2) independent rating agency for doctors (i.e. med school was irrelevant)
3) patient reviews for doctors
(1) and (2) have the usual "who watches the watchers?" problems, which are fairly isomorphous to the problems with (3). And even without those issues, who wants to have do this level of research? Yeah, I know, libertarian nerds (meant with all possible respect). But almost nobody else.
Part of the point (not all of it, to be sure) of things like the AMA, the FDA and other governmental regulation is to make people's lives simpler. Stop worrying about whether the doctor you're going to see has even met a basic level of medical qualification, and focus on whether you like their personality and approach, for example.
Since we already deal with “who watches the watchers” problems in our current system, I see no problem here.
> And even without those issues, who wants to have do this level of research? Yeah, I know, libertarian nerds (meant with all possible respect). But almost nobody else.
Anyone who wants a good physician.
> Part of the point (not all of it, to be sure) of things like the AMA, the FDA and other governmental regulation is to make people's lives simpler. Stop worrying about whether the doctor you're going to see has even met a basic level of medical qualification, and focus on whether you like their personality and approach, for example.
If those things worked, this would be a point. Currently people can’t even afford to go to medical school, or afford to see a doctor, and when they get past the gatekeepers they are so desparate to get treatment that they can’t really even fathom rejecting a doctor because of a poor bedside manner.
Other countries with socialized health care systems (i.e. doctor credential gatekeeping) do not have these issues (certainly not to anything like the extent that we do). I suspect therefore that changing the credentialling process is unlikely to have much impact on these issues and/or is not the most effective way to impact these issues.
> Anyone who wants a good physician.
I'm 57 years old. I've never, ever met anyone who isn't a libertarian nerd (I have friends ...) that checks to see what medical school a physician attended. If they are "checking" at something approximating that level, they do so via clinical affiliation (e.g. "anyone at the Mayo has to be great").
> Since we already deal with “who watches the watchers” problems in our current system, I see no problem here.
Not really. The "watchers" in our current system are government agencies, not private (potentially for-profit, or at least for-big-salary) corporations. The incentives align in significantly different ways.
The easiest way to expand medicine access would probably just be to remove government restrictions on the number of medical schools, the number of hospitals, and the number of physicians. I don’t think we need to dismantle the credential system.
> I'm 57 years old. I've never, ever met anyone who isn't a libertarian nerd (I have friends ...) that checks to see what medical school a physician attended.
This why we have to be careful about generalizing from our own experience conclusively :)
> If they are "checking" at something approximating that level, they do so via clinical affiliation (e.g. "anyone at the Mayo has to be great").
There’s how things are, and how things should be. People ought to take more responsibility for their healthcare and that includes who provides it.
> Not really. The "watchers" in our current system are government agencies, not private (potentially for-profit, or at least for-big-salary) corporations. The incentives align in significantly different ways.
Perhaps you haven’t noticed but the watchers in government agencies and the for-profit, big salary corporations they are supposed to be watching are the same people. its called “regulatory capture” and “revolving door”.
This seems to suppose one (or both) of two things:
1) access to medicine is limited because of the supply of health care providers, so more providers would help
2) access to medicine is limited due to cost, and more providers would force the cost down, as per "supply and demand", "the market" etc.
> This why we have to be careful about generalizing from our own experience conclusively :)
Certainly in general, this is true. But when the claim is that "anyone who wants a good physician" would do this, not so much. Falsifiability, and all that.
> People ought to take more responsibility ...
This is a moral statement, not some sort of fundamental statement about the nature of reality. Not only is the level of personal responsibility up for the debate, but so is the form such responsibility should take. Citizens in many other countries have chosen to "take more responsibility" for their healthcare in different ways than you are proposing (by taking aggregate action to create socialized health care systems that delegate many things to the system, intentionally).
> Perhaps you haven’t noticed but the watchers in government agencies and the for-profit, big salary corporations they are supposed to be watching are the same people. its called “regulatory capture” and “revolving door”.
Speaking of over-generalizing ... also, "There’s how things are, and how things should be." I do not believe that regulatory capture is an inevitable outcome of a democratic-ish governmental structure.
I’m really not sure what to make of this, there is already a market for things such as emergency care. Even with all the regulation, when you get in an ambulance you can tell them to take you to a specific hospital.
When people are treating non-emergency conditions, the same regulated market offers them even more options. Ikm not really sure what you mean here.
> Many volumes have been written by people much smarter than me that explain the many reasons why health care is not really susceptible to what are supposedly "normal market" behaviors and benefits.
Many volumes have been written on how the four humours can be used to diagnose and treat disease. However modern medicine no longer uses the four humours model. Perhaps it is also time for modern medicine to embrace the scarcity management aspects of markets rather than looking for answers in musty old volumes.
> I'm not aware of much evidence for (1), though I don't deny that it is possible.
It is not only possible, it is the case. The bottleneck is at schools, at residencies, and at licenses. Possibly elsewhere. In a basic simple mathematical way, fewer providers means less access to care.
> Certainly in general, this is true. But when the claim is that "anyone who wants a good physician" would do this, not so much. Falsifiability, and all that.
Certain values of “want” may not be sufficient, as with anything else. Anyone who wants a good physician enough to look for one would perform the due diligence required to obtain one. Kind of like now, actually.
> This is a moral statement, not some sort of fundamental statement about the nature of reality. Not only is the level of personal responsibility up for the debate, but so is the form such responsibility should take. Citizens in many other countries have chosen to "take more responsibility" for their healthcare in different ways than you are proposing (by taking aggregate action to create socialized health care systems that delegate many things to the system, intentionally).
Yes, its a moral statement. And its an interesting question whether people who entrust bureaucrats with healthcare have taken reaponsibility or shirked it.
> Speaking of over-generalizing ... also, "There’s how things are, and how things should be." I do not believe that regulatory capture is an inevitable outcome of a democratic-ish governmental structure.
The problem is that things like social planning of healthcare provision are evidently flawed in every respect due to the belief that they can’t be trusted to markets. We don’t want to believe we are getting competent care because the government says so, we want to have confidence we are getting competent care because the incentive structure is aligned witn the outcome from the patient’s perspective. We don’t want to believe we are getting the best price for drugs because a bureaucrat claims to negotiate on our behalf with his cronies, we want to know that we get the best price in drugs because they are sold in a competitive market where companies are rivals for the business of patients.
A) you may be unconscious B) you may not know anything that would allow you to differentiate ER facilities C) you almost certainly have no information on the current wait times at an ER facility, let alone specific physicians on call D) you may be unaware of the intersection between your insurance and hospital choice (for example, I had insurance once that only covered care at a (very fine, major urban) hospital that was unable to treat my amputation accident).
So really ... just no.
If you're going to start dismissing the fact that smart people have written smart stuff on a topic by saying that we revise what is considered smart, then I'd just do the same in reverse, and say that none of the worldview/policy view that you're arguing for is supported by anyone worth paying attention to, since it's all just out of date and/or will be consigned to the trash heap of history very soon.
The books I am talking about are not "musty old volumes".
Here's Forbes from 2017: https://www.forbes.com/sites/chrisladd/2017/03/07/there-is-n...
Somewhat older, here's Krugman from 2009: https://krugman.blogs.nytimes.com/2009/07/25/why-markets-can...
Here's (supposedly) a libertarian on the problems in 2018: https://thehealthcareblog.com/blog/2018/08/02/a-libertarians...
And here's perhaps the oldest (recent) paper that got things rolling, "way back" in 1963: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2585909/
> In a basic simple mathematical way, fewer providers means less access to care.
That's a response to a completely inverted point. If there are already enough providers, then more providers doesn't mean more access to care (certainly not based on access to providers, rather than cost).
> The problem is that things like social planning of healthcare provision are evidently flawed in every respect due to the belief that they can’t be trusted to markets.
You're on the edge of a no true scotsman argument here, which means I'm going to bed.
I guess the true libertarian answer is that we don't really need certification at all, or that anyone should be able to start their own certification board. Like Rand Paul and his fake ophthalmology board he started to give himself credentials.
Nothing is ever libertarian enough until we've removed all the regulations and let quacks practice medicine, is it?
https://www.washingtonexaminer.com/thanks-to-doctors-there-a...
Calling it libertarian shows you know nothing about either healthcare regulation or libertarianism.
In general, the US has a problem where it pretends to love free markets, but when you look under the hood there's horrific regulatory capture and crony capitalism.
An equally imaginary number that gets hauled out during debates so that health care providers can pretend that insurance companies are the ones responsible for price inflation. If you actually try to obtain the cash rate, they'll give you a 2% "lol nice try" discount off the billed rate.
https://www.federalreserve.gov/publications/2019-economic-we...
BTW, there's no out of pocket cost for preventive care for those with insurance in the US. There hasn't been since the Affordable Care Act became effective.
By contrast your odds of a catastrophic collision have more to do with drivers and driving collisions than they do with whether you got an oil change recently. If they were insuring your cost of major repairs and buying a new car, then they would have an incentive to get involved with routine maintenance as well.
Alas, those checkups and screenings still cost the same, regardless of who is paying for them. So when you decouple payment from benefit, you create adverse incentives.
So it's not entirely out of the question that they could give discounts for properly maintaining your vehicle, if that were a major cause of accidents and it could be tracked.
I think the two practical problems with this view are (a) what's routine to you might be catastrophic (or at least seriously detrimental) to someone else, and (b) missing routine care often leads to catastrophic outcomes.
Whether a cost is insurable is not subjective. The gp observed that insurance only works to manage risk. Insurance against a risk of 100% certainty costs more than managing the risk itself. Insurance that covers doctor’s visits takes a certain expense and runs it through a system designed for uncertain expenses, thereby adding essentially parasitic loss.
> missing routine care often leads to catastrophic outcomes.
As a sibling comment observed, this is already something that insurance companies deal with. Failure to obtain regular and preventative care makes one more likely to need intervention, which means the cost of insuring the patient is more. Therefore people who are actually paying for catastrophic insurance can save money by going to checkups. This would decrease costs, rather than cause them to baloon like insuring high probability events.
You’re using a very narrow definition of insurance that doesn’t cover health insurance in the US.
It's a healthcare regulations being used as corporate welfare problem.
The NHS was to an extent a statistical fluke (right politician in the right place, just post-WWII) that the right wing has been trying to dismantle for decades, without WW2 I’d be surprised if we had anything like the NHS.
Basically you need politicians to ignore the lobbyists and do their job of regulating this shit for a better society.
Sadly I don’t see it happening though there are some hopeful trends.
We need a lot of doctors, more than what we are producing. It's baffling you need 100s of thousands of dollars to become a Dr in the US.
Remove the undergrad requirement to apply for med school, like most of the world, and fix the college affordability problems.
If the amount of money to produce doctors keeps escalating, it's not surprising medical care only goes up.
Even with those problems we spend about half per capita on healthcare with about equal outcomes, also the US gov in one form or another already foots about 50% of the bill itself.
> Results The UK spent the least per capita on healthcare in 2017 compared with all other countries studied (UK $3825 (£2972; €3392); mean $5700), and spending was growing at slightly lower levels (0.02% of gross domestic product in the previous four years, compared with a mean of 0.07%). The UK had the lowest rates of unmet need and among the lowest numbers of doctors and nurses per capita.
https://www.bmj.com/content/367/bmj.l6326
They do more for less with less and mostly do it well.
Compare that to any other major country and it’s good, compared to the US system it’s very good.
Does the US have amazing doctors, hell yeah of course but do they have a fair system when on average everyone gets what they need if not always what they want, I’d argue no.
During the war the US froze wages in order to try and prevent skyrocketing salaries due to the extreme demand for labor.
To compete, most employers started offering generous benefit packages in lieu of the raises they were no longer able to offer.
After the war, the larger employers found that the generous benefit packages were more cost-effective at retaining employees compared to higher pay, so they became "fans" if you will, and have supported the employer-based benefit programs in the US ever since.
One concise reference: https://www.nytimes.com/2017/09/05/upshot/the-real-reason-th...
The Australian private insurance system also works like that. Private insurers have to offer pre-defined tiers with pre-defined coverage.
The average American has $432,000 in net assets, is the second richest in the world (behind Switzerland), and can trivially afford such an expense.
Did you mean that around 12-16% of the population can't afford an immediate out of pocket $400 expense? Because that's the real figure according to the Federal Reserve study that's constantly misquoted.
The median American has a higher net worth than either Germany or Sweden, and among the highest disposable income of any nation.
https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_...
The US is 22nd by median net wealth.
The US is the only "developed" country where 10 are uninsured: https://en.wikipedia.org/wiki/List_of_countries_by_health_in...
Another N% are under insured, or hampered by high deductibles, copays, limits etc.
Whats the point of having a "high median net worth" if the basic needs of the people aren't met?
The US is including in their life expectancy data cases of stillbirths or nonviable fetuses at birth, which are not recorded in EU numbers, for example.
" measurement problems arise in international comparisons because the data are not consistently gathered or reported. Although the World Health Organization (WHO) has a formal definition of what should be included in the infant mortality statistics, anecdotal evidence suggests that countries do not use consistent practices in measuring these data (Haub and Yanagishita, 1991; Hartford, 1992). "
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4193257/
https://www.nber.org/bah/2015no1/why-infant-mortality-higher...
New patient visit: $400 MD or $300 PA
Follow up visit: $200 MD or $150 PA
Labs: $25 draw fee + laboratory cost
(I know this because they screwed up billing the insurance company and got denied, and tried to switch me to cash and bill me the higher amount instead. I love our healthcare system.)
A lot of countries have much better health systems, with people fully insured (this is really designed for people who are underinsured), with significantly better outcomes, than the US. The US lifespan is also significantly trailing compared to other developed countries, and we are not a “normal” country at all. It’s going to be more appalling by 2040.
Anyways, the place to study this data and information is https://www.HealthData.org
You can spend hundreds of hours studying the data on that website, along with extreme specifics about medical care. I used it to inform my decision of where to live in Europe with rare immune mediated neurological diseases and type 1 diabetes.
This is the way it works for a lot of therapy and mental health services and it’s horrible. Prices are absolutely insane, practitioners are not accommodating to patient schedules, and patients have absolutely zero bargaining power.
In some ways doing it through insurance is kind of like a union. You all agree to accept certain inefficiencies, bureaucracy, etc., (and associated cost) in order for better collective bargaining terms.
Of course people with great jobs usually don’t care about unions. They don’t need the collective bargaining power and thus figure the bureaucracy cost is just a loss they don’t need.
Same thing with very healthy people and insurance. If you’re healthy you just figure, give me cheap catastrophe insurance, what do I care? But if you’re in the depths of the medical industrial complex because you need frequent treatment for chronic conditions, you quickly learn that papering everything over with lots of bureaucracy to adhere it to better collective bargaining for patients is way better, and I’d rather take the nasty, churning quagmire of price inflating insurance than deal with spartan libertarian mini-insurance that essentially just results in rich-get-richer (i.e. genetically lucky healthy people just get to save money while everyone else suffers).
The long term trend is not good; why become a psychiatrist when you can earn more as almost any other specialist? (With exception of pediatry). Jails are collectively America's largest mental health service providers. If there was money in psych work you'd see even private equity pump it up like urgent care chains.
Even with single payer or heavily regulated universal insurance schemes there's often a mental health services gap.
I think that is more a supply/demand issue.
I am not sure why people aren't rushing to become psychologists, it seems like it'd be a profitable field, but there is certainly a huge shortage, at least in major metro areas.
I'd really like to read a proper analysis of the situation...
As I understood it, she was saying basically this:
1. therapists typically just want to work freelance, make their own hours, and don’t mind having very few clients / taking extended breaks from working many hours.
2. therapists don’t want to deal with “challenging” clients (who generally are the most in need of therapy in the first place). “Ability to pay out of pocket” is a good filter to implicitly reject “undesirable” clients.
3. therapists want to externalize the labor burden of coordinating with insurance onto the patient
4. None of this has any connection to charging higher prices - that’s a separate supply & demand phenomenon based on the talent of the therapist, population & demographics of the area, and specializations that deal with issues more correlated with wealthy clients.
My impression from all this has been a massive negative opinion of “working class” therapists and counselors, to the point where I believe they should be required to accept insurance and they should be required to manage the paperwork process of insurance claims as a regulated condition of practicing therapy - it’s a matter of public health that’s in all our collective best interest to enforce with regulation.
Try to find a psychologist, not therapist (there are many paths to get qualifications to become a therapist, and not all of them are exactly HQ), in the pacific NW some time.
The wait time is in months.
You know how a drug can be tier 2 ($25 copay) or tier 3 (20% coinsurance)? That often the manufacturer offering a lower price in exchange for easier and cheaper access for patients.
Drug companies can also rebate on the back end. If an insurance pays for 1,000 vials of drug, they get a 10% rebate. 2,000 vials, a 20% rebate.
Wonder no more:
https://www.theatlantic.com/magazine/archive/2009/09/how-ame...
"For fun, let’s imagine confiscating all the profits of all the famously greedy health-insurance companies. That would pay for four days of health care for all Americans. Let’s add in the profits of the 10 biggest rapacious U.S. drug companies. Another 7 days. Indeed, confiscating all the profits of all American companies, in every industry, wouldn’t cover even five months of our health-care expenses."
Medicare + Medicaid costs US taxpayers as much per capita as the NHS costs UK taxpayers per capita. Only the NHS provides universal cover for that cost.
US taxpayers are in effect paying twice.
My dad is a PCP who switched his practice over to that model several years ago. From what he's told me he prefers it a lot over the traditional model specifically because it allows him to have a subscription based model rather than charging per-visit. That means that his revenues are more consistent but also has the benefit of aligning the patients' and doctors' incentives more directly: the doctor makes more money when their patients are healthy than when they are sick so they're incentivized to do a better job.
It also meshes well with telemedicine and chat-based consultations. He was offering both of those options to his patients well before covid because it tends to save both doctor and patient a lot of time, and there's no concern over "how much do I bill for telemedicine vs a normal visit, and how do I bill insurance for it."
Have I ever experienced that "come back in an hour" phenomenon? You bet. Then I went to a different pharmacy.
For instance, with the manufacturers of insulin, none of them are American and they offer to sell the insulin to everyone at the same price.
The problem is that the large insurance companies use just three middle-men drug buyers called Pharmacy Benefits Managers (PBM) who DEMAND growing discounts every year from drug manufacturers, so the drug manufactures have to raise the prices to the US market every year to keep making a profit.
Novo Nordisk is willing to sell insulin much cheaper, but the drug buyers demand about a 75% discount off of the wholesale cost or they'll make the product not covered by the insurance companies they represent. To compensate, they raise the wholesale price in the US so after the forced discounts, they still make the same amount of money.
The people who suffer are the ones who don't have insurance.
The solution, at least in the case of insulin, isn't cheaper prices from the manufacturer, it's for the US to pass a law that prevents insurance companies from dropping a product based on the refusal to discount the product if it's under a certain price-per-month.
This article seems to cover the finger-pointing between the manufacturers and PBM's and insurane companies very well: https://www.healthline.com/diabetesmine/pharmacy-benefit-man...?
https://www.americanprogress.org/issues/healthcare/reports/2...
But the regular uninsured consumer sure gets screwed.
I think this is why there are now self-pay “codes” you can give a pharmacy to get a significant discount off retail price. Sometimes less than your co-pay, but of course then it doesn’t count toward your deductible.
I wish they would simply ban these pricing gimmicks as part of a price transparency law.
There should be one price and one price only the manufacturer can charge in the USA per dose of an FDA approved medicine, with no ability to do price differentiation, period. No more negotiating, no more kickbacks. Insurance should have to show you the actual price they paid, and no other. And then you pay the patient responsibility of the bill based on your standard policy formula.
The same pricing transparency should be applied to labs and procedures where it should be illegal for a given facility to charge two different patients two different prices for the same product or service.
https://www.fiercehealthcare.com/payer/industry-voices-why-i...
All the insurers have profit margins in the 3% to 5% range. Where is all this extra profit that the middlemen are making?
Even if the PBM division is earning more profit than others, it's simply offsetting losses elsewhere.
Consider CVS Health which owns Aetna (an insurer), Caremark (a PBM) and CVS (a pharmacy). Aetna is required to spend 80% on premiums whereas Caremark and CVS face no such constraints on their profit margins.
There's a reason why there's so much M&A in this space while consumers are simultaneously facing higher premiums.
United health at 6%
https://finance.yahoo.com/quote/UNH/key-statistics/
Similarly, Anthem at 4.22%, CVS at 3%, Cigna at 3.38%, Humana at 5.58%, Molina at 4.57%, Centene at 2.12%.
The reason there’s so much M&A in this space is because there’s no margins, so it’s either go big and win in economies of scale, or go home and go out of business. And people face higher premiums because more people are getting more access to healthcare. There’s no lifetime benefit maximums or pre existing condition exclusions anymore. And the highest premiums are capped at 3x the lowest premiums.
Net income is a poor metric here. It includes acquisition costs (and interest paid on debts for said acquisitions).
https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g...
I don’t see a lot of juice to squeeze in insurance companies in general.
The 5% that you quote is after those acquisitions (and taxes) and is not a true indicator of profit.
But very funny when someone comes in and wants to pay cash. While that would be SO much easier than dealing with the agency - you got to charge them 4x so some politician and HN posters can go on about how much money the govt "saves".
I just wish prices (cash paid) had to be posted publicly.
So we went sliding scale uninsured, and despite being in the top end of the scale, I ended up paying about 1/3 less than I would have through insurance. I probably still ended up subsidizing some kid who needed fillings worse than I did, which was the only silver lining in that whole stupid affair.
Wikipedia says (lightly edited here for brevity): "Civica Rx is a nonprofit generic drug manufacturer .... started by national philanthropies and leading US health systems. By [EO] 2019, over 45 health systems representing 1200 hospitals were members of Civica. Member ... pharmacists and clinicians help prioritize the medications Civica makes.... By the end of 2019 Civica had 18 medications (28 SKUs) in production, and plans to bring over 100 medications to market in five years through various manufacturing approaches such as partnerships, developing ANDAs, and building its own manufacturing capability. ... The first shipment of Civica private-label medication was vancomycin, delivered to Riverton Hospital, a part of Civica founder health system Intermountain Healthcare, in October 2019." ( https://en.wikipedia.org/wiki/Civica_Rx )
(edit: somebody else here also mentions civica and has a couple of other links, in their comment.)
Does Tablet, mean one, single pill? ( Just making sure )
And they sell Albendazole for $225 Per tablet in US?
And quote
>our cost to make and distribute the drug is approximately $13.00 per tablet
It cost $13 to make one Tablet, or one pill?
And this is low cost?
Anyone from Europe or UK living in US could sort of explain a little bit here. I know US medication are expensive, but this is... something else. I cant comprehend what I am reading here.
Note that retail pricing is an unreliable indication of actual cost to consumers. They jack it up so that they various plans can claim huge discount policies. Some of these plans are free, so there's very few people who are paying this "retail" price.
The pill makers get paid by the consumers and, in most cases, by the plan-owners. And such agreements are made exceedingly complicated. IMO, only to make them more opaque and more difficult to regulate.
Unfortunately, such a system is highly regressive as the richest tend to have the best plans, the poorest tend to have a meager plan, and the transient have no plan other than showing up at a hospital.
* hospitals run as non profits, so they dont pay federal taxes
* they still pay local taxes, so they need to generate a large loss to offset these taxes
* insurance companies negotiate huge "discounts" on list prices, and then go back to their customers (large corporations) and boast about these discounts, meanwhile the hospital gets its tax writeoff
This entire system is rigged to also grow the number of hospitals/ the overall size of healthcare in america.
Pharma companies play this game too, and anyone who doesnt have insurance can quietly get a "coupon" from them to bring down the cash price to the same as insurance.
No politician will close hospitals, so at this stage any move to "single payer" will just move the boasting role to the government.
If this were the case, I wouldn’t be as opposed to it.
~This medicine is for sale here in the Netherlands, over the counter, for $3.3 dollars. No that period is not a mistake.~
~That's for a pack of 6 tablets. How the heck do they end up at $13 cost?~
Edit: Google autocorrected to a similar drug. This specific drug is actually $4.50 per tablet here and prescription only. That's still a massive difference.
Relevant sidenote: it's fully covered as well so I wouldn't even get a bill.
Yes. It is like someone told you a can Coca Cola Coke in US is $220, and their latest innovation is to give you the same for $20.
All while you are picking one up at a convenience Store in EU for $1 and you can get a pack of 8 in a large supermarket for $3.
As you walk out of the convenience Store while drinking your coke, you are left wondering what the hell is going on with people and the world across the pond.
The pharmacist was clearly unconformable with the discussion that needed to happen. They informed me there would be a charge for the medicine. After some back and forth because neither of us was fluent in the other's language, it turned out they were asking me to pay the cost of the drug, an amount of money less than my normal copay, and something like 5% of what my insurance claimed the drug normally cost.
The pharmacist was most confused why I was happy to pay. I don't think they believed me when I tried to explain how much it normally cost me.
The pharmacist told me that they were having a hard time confirming my insurance. After a ridiculously long delay, I asked how much the drug was to pay for out of pocket... It was $12. My copay was $10 anyway. So both the pharmacist and I wasted a lot of time and hassle trying to save me $2.
It's one reason why there's prescription-strength ibuprofen. I can personally just go buy OTC ibuprofen and take the required dosage, but some people can't afford that, so they get the prescription strength where their out-of-pocket cost is $0.
though I do miss the giant packs you get in the US, all pills come in small blister packs with purchase limits in all shops, to make overdosing more difficult
Poverty is real and for them every dollar counts.
How much?
30.
30 dollars?
30 rupees (~40 cents)Here's Boots, the UK pharmacy chain, selling a 4-pill course of the closely related mebendazole for 8 pounds: https://www.boots.com/boots-pharmaceuticals-threadworm-table...
8 pounds. For 4 pills. With markup for the pharmacy. In Britain, in a first-world regulatory environment.
Meanwhile here we see people defend the intolerable state of US healthcare. Why is that?
https://www.fda.gov/drugs/news-events-human-drugs/generic-dr...
If you take Cost Plus at its word:
"We will let everyone know what it costs to manufacture, distribute, and market our drugs to pharmacies. We add a flat 15% margin to get our wholesale prices. This makes sure we remain viable and profitable. There are no hidden costs, no middlemen, no rebates only available to insurance companies. Everybody gets the same low price for every drug we make."
I guess we'll get to see where the price comes from.
Yes, medical care is absolutely insane here. Like jaw dropping on a nearly daily basis insane. Lots of Americans just don't realise how much they're being screwed by the system that has been built, and they buy in the narrative they constantly get told about it being the best health care system in the world, and that coming with a cost.
Note: few people will pay that $225. Most of that gets handled by your health insurance, who will often also have bulk purchasing deals with medical companies that helps drive down the cost to them. You do have a co-pay to cover, plus a little extra, so it's still more expensive than you'd pay in the UK for medicine.
Cuban's actually playing pretty fast and loose with numbers here. He says $15 wholesale for $20 retail. But usually retail is going to have higher markups than that. Especially for stuff that has to be verified by a pharmacist. His $15 probably isn't much if any discount off the existing wholesale price.
Yes, you're reading that right: 11 cents.
https://www.biospace.com/article/states-accuse-drugmakers-of...
I wish cost plus worked but its just as easily gamed. Ive seen many industries that contracted cost-plus and the costs magically went up a lot. If there is money to be made the system can always be gamed/contorted/scammed, etc...
Of course, market pressure is much simpler if one manufacturer just decides to do it according to a consistent and justifiable method and stick with it.
Screwing with cost plus doesn't require manipulating books. If you're passing on your costs, you have no incentive to find cheaper suppliers. Need to hire a bunch of people? Meh. Guy didn't show up to work for two weeks? Not your payroll, really.
Enabling new entrants where possible, and regulating where not, is a simpler and more-scalable solution. Pharmaceuticals manufacturing seems to be light on the former.
Of course, if there were sufficient honest competition it wouldn't need to be cost plus either, it could just be an honest competitive market price.
As long as they are actually manufacturing it the main pressure would be when they inevitably internally question why they are selling it for less than market price. I have seen that discussion, there's a big difference between "we can sell it profitably for this much" and "we can sell it for this much and make this much money".
So how do you provide that internal pressure? One honest competitor that publishes transparent methods for estimating the cost of manufacturing the drug along with case studies making it easy to do in other cases, and commit to using that process.
Or medicare of course, I don't see any reason it needs to be a private company. If they could estimate the true manufacturing cost in a vacuum I would certainly hope they could negotiate better but maybe they just don't know how because they aren't the manufacturer.
an opensource covid-19 vaccine is now in progress (supported by Harvard University and the Government of India)
To which their response was probably, "pleasure doing business with you"
Even insulin prices get distorted because you are limited to which types you can buy in you are under medicare.
maybe with their majority the Democrats can finally tell their union buddies to bugger off and pass a single payer or tax high value insurance policies; one major reason ACA was so limited as many of those policies which were going to be taxed were all on the side of public employee union benefits.
Ironically, the Trump administration recently allowed states to import drugs from other countries to enable them to offer lower cost drugs through state run programs, but was still seizing the same products if they were ordered by individuals. While I can't really complain about an initiative to lower drug costs, the mental gymnastics needed to come up with this plan are pretty incredible. "We don't think price controls are compatible with a capitalist society, so we won't implement them. But we campaigned on lower drug prices (since that will increase our appeal among the elderly), so we have to do something. Let's import drugs from countries that do have price controls. But people can't order the drugs themselves, we have to protect them from themselves. We have to order the drugs and repackage them with new labels, because we need American instructions and American warning labels, not the instructions and warnings that the Canadian government is fine with."
Right now, it's better/easier for most people to get their drugs from a local pharmacist with our current system. If Mark Cuban is willing to throw a lot of capital and break up the price collusion between established drug companies, then I suppose it's a step in the right direction. We should be happy to accept lower prices and get to work on fixing other important problems with our healthcare system.
Federal contracts are usually, but not always issued under the rules of the FAR. Within the FAR there are several types of contracts supported including among others Firm Fixed Price (FFP), Cost Plus Incentive, Cost Plus Fixed Fee (CPFF), and Time and Materials (T&M). The other way that contracts can be issued is via an OTA or (Other Transactional Authority) and I won't really discuss those contracts as apart from semantics they usually obey the FAR rules as pertains to this discussion.
In a Firm Fixed Price contract, the contractor is considered to be holding all of the risk. The contractor is responsible for fulfilling the terms of the contract and must meet those requirements even if in doing so they lose money. When bidding a FFP contract, you develop an estimate of the work required, determine what the risks are and assign mitigation costs and likelihoods, determine what your desired profit margin is, and offer the government you best and lowest price. Usually these contracts are competitively awarded although that is not always the case (a). The "Firm" in FFP does not mean that the price can not increase. If the government changes what is desired or incurs costs on the contractor that were not specified in the original contract, the contractor can request equitable adjustment. FFP contracts are most commonly used when producing goods with known qualities that already exist or require slight modification of existing goods in the market.
Cost Plus contracts (Cost Plus Incentive or CPFF) entail cost sharing between the government and the contractor. In a Cost based contract, the government is considered to hold some of the risk. These contracts are generally used as development contracts when a new or significant evolution of an existing system is required. The government is responsible for reimbursing the contractor their costs incurred during development. These costs include both direct and indirect costs. Direct costs are what you would usually assume is meant by cost, e.g. the actual cost of the people and equipment used in pursuit of a single contract objective. Indirect costs are costs that are incurred in support of multiple contract objectives e.g. lighting and power for a building, HR and finance people. Significant portions of the FAR are involved in cost pooling and I won't get into it much more here. Because the government is responsible for reimbursing costs the contractor is not under as great of an obligation to minimize those costs. Effectively, there is a very low risk of losing money on a Cost contract because your actual costs are reimbursed. In cost contracts, the government can use the allocation of profit (fee) as an incentive to have the contractor meet time or total cost goals but is still responsible for reimbursing all reasonable costs. Most major new systems development happens under the guise of Cost contracts although some have been developed using FFP or OTA mechanisms. If the contractor fails to perform, the government will usually still reimburse the costs up to the point where work was stopped. It requires a lengthy legal battle to recover costs in a breach of contract suit.
Time and Material contracts are the most disfavored by the government. They have no performance objective apart from labor. The contractor is required to supply labor in a desired quantity and place but no actual performance (e.g. those 10 guys actually finish digging the ditch) is embedded. These contracts are fairly rare but are used occasionally.
To address the asked question regarding budgets post WW2. The Department of Defense publishes a daily list of every contract awarded above a certain value (I think 2 million) here https://www.defense.gov/Newsroom/Contracts/. Contract modifications (and new delivery orders under an existing IDIQ contract vehicle) Most of the largest of these contracts seem to be awarded via the sole-source justification. It is hard to put the blame squarely on cost contracts. There are cases, say developing a novel weapon system, where the government can not fully articulate it's needs at the starting point. Over-specification of requirements will cause the bidders on an FFP to give higher prices because they must be able to account for every requirement in their bids. When developing a brand new system, cost contracts can be effective although I do agree that the mechanism is over applied. I also believe that the sole source justification to avoid competition significantly undermines the cost control measures of both FFP and Cost contracts.
Now to briefly discuss what I believe is happening with this company. They appear to be functioning under rules most similar to CPFF, so I will analyze along those lines. Do they have a contractual goal? Yes, they have to produce the drugs needed based on transactions and contracts they accept. Do they have a reason to minimize their costs? Yes, their entire existence is predicated on the price differential between their products and those of other members of the market. If they allow their costs to balloon beyond a certain point, it will diminish their marketability. It doesn't mean that the stated margin will be over raw material and production costs as marketing is also included. I would like to see a public commitment to price transparency including all major line items in the cost similar to what is done with not for profit organizations (they have alluded to doing so with the statement "We will let everyone know what it costs to manufacture, distribute, and market our drugs to pharmacies.")
Source: In a previous life I was heavily involved in the bidding and management of DoD contracts.
Also see sections 13-15 of the FAR https://www.acquisition.gov/sites/default/files/current/far/...
He's exposing millions of Americans to the long term benefits of a value creation, non-linear thinking, honesty is the best policy, builder/craftmanship mindset.
When I was a kid growing up far away from Silicon Valley we had "The Apprentice" to learn from. Shark Tank (especially Cuban, but really the whole cast), is orders of magnitude better.
Smart move too, since you will probably get better companies on the show without that sort of policy.
The first season, before they brought on Marc Cuban, the show took a percentage just for appearing on the show (so even if you didn't get a deal, you still gave up equity). The second season, Marc Cuban came on and insisted they remove that rule.
https://www.forbes.com/sites/emilycanal/2016/10/21/about-72-...
https://www.cheatsheet.com/entertainment/do-the-deals-on-sha...
(I have never seen the show, so I don't know how the offers are described. As an investor, I cannot imagine any offer that can be made verbally in the timespan of a television episode being meaningful.)
Usually it's just one of the sharks offering something like "I'll pump in $500k for a 20% stake." (numbers made up) No details beyond that.
Article from Inc:
Mark Cuban Made Shark Tank Change Its Contracts After threatening not to return until an equity clause was removed from contestants' contracts, Mark Cuban finally got his way.
Just for appearing on the show, owners agree to give up 5% of their company or 2% of future royalties.
...
Cuban said the clause was removed retroactively, meaning every contestant who's appeared on the show since Season One will be relieved of the commitment. However, how that will work out logistically remains unclear.
https://www.inc.com/will-yakowicz/mark-cuban-forces-shark-ta...
This venture seems like a shot across the bow of anyone trying to squeeze an unfair percentage on top of generic drugs. Kudos to Cuban for launching this but it is something the US government should have been doing decades ago through drug price negotiation for medicare.
I also read "Art of the Deal" or whatever that crap was called.
Sometime I can tell you the story of how I sued a Fortune 50 company after a minor disagreement because I thought that's how business was done.
I can only laugh about all that now, and shout "thank you" to Cuban that we have at least one highly entertaining business show that also teaches mathematically correct ways of thinking about business.
He should get insulin and epipen factories running ASAP, those are very high profile scams in the US right now.
Looks like they could use some web dev help…
I tried this once last year before I had a membership, and the person at the entrance told me they would need to get an employee to escort me, and it might take an hour, because they're busy.
Presumably this is the kind of thing that a court would smack down, since I'm pretty sure they're required to actually provide reasonable access, but I was just trying it for fun and didn't make a fuss about it.
> Presumably this is the kind of thing that a court would smack down, since I'm pretty sure they're required to actually provide reasonable access, but I was just trying it for fun and didn't make a fuss about it.
Also it makes no sense for them to need to escort you. They scan your card on checkout so how would you buy stuff other than alcohol anyway?
Anyway I've never heard of anyone being told that before. I understand not making a fuss (we are social animals after all), but it probably should be done so they don't keep trying BS like that.
Allow me to clarify: CostCo sells everything at a fixed profit margin (I believe it's around 18% but I could be mistaken). I have no idea where their generics come from, I doubt they manufacture themselves, so before the CostCo markup they are subject to the same inflated prices you'll find anywhere else before the pill reaches the drugstore or your doctor or whatever.
What I've been imagining, specifically, is generics manufacturer that applied a fixed profit margin — "cost plus" — to their products. I guess that's not precisely the CostCo model, but you get my drift now.
You're mistaken no they don't.
Contrast to markups of 25 to 50% for typical retail, and for generic drugs in the thousands. https://www.thepharmaletter.com/article/1-000-pharmacy-mark-...
However, their financial statements do indicate an 11% average gross markup.
But there are definitely plenty of products marked up more than 18% at Costco. Either that or they are paying way too much for some things.
https://www.reddit.com/r/UpliftingNews/comments/l5vv6m/billi...
I don't know the man either way, and you may be spot on, but outside folks whose work is largely charitable and etc, how does anyone feel they know these things?
My impression of Mark Cuban has been built up over the years from a variety of sources, ranging from a brief in-person encounter[1] with him, to reading his book, his blog posts, etc., to seeing him on TV in various forms, interviews he's done, etc. There isn't exactly one specific thing that stands out by itself.
All of that said, it's a very subjective thing, and for all I know Mark works very hard to cultivate that specific image for his own ends. I have no problem saying that my impression could be wrong. But based on the limited evidence I have available, that's where I'm at with it at the moment.
[1]: I don't typically hang out with billionaires or anything. The only reason I've met Cuban is because he was once a keynote speaker at an event I attended. After his speech he hung out with the hoi polloi and mingled and interacted with people. I spent maybe 3 minutes chatting with him personally about my business, and maybe another 10-15 minutes listening to him talk to a small crowd that gathered around him. To be fair, that encounter probably went as far in shaping my impression of him as anything. I think the single biggest thing was that he displayed no condescension or smug superiority or anything towards people who weren't on his financial level. He was respectful, attentive, and reasonable even when talking with some rando like me.
Couldn't find one negative experience. There are several threads on Quora for instance detailing how he treats everyone with respect and is a genuinely good dude.
You can acknowledge that while it took hard work, and luck to get where you are, you likely would not have done it if you hadn't been born into a society that fosters the ability to move up the social ranks. If Mark Cuban were born in Libya there's almost no chance he becomes a billionaire for instance.
Or you can pretend like the reason you're rich is solely of your own doing, and that the world owes you something.
Cuban seems to be the former, and while he's not going to volunteer to just give all his money away, he is trying to help society collectively improve. It's a stark contrast between his approach and say, the Koch brothers.
I guess the best way I'd put it is Cuban is a capitalist who believes in the social contract.
However, I agree that he's probably a better person than most give him credit for, and I think he's really stuck between a rock and a hard place on a lot of these issues. Especially things relating to politics, mis/disinformation, and free speech. I consider the proliferation of non-paid online services (who therefore can only survive by making money in other ways) the true bane of humanity; not any particular executive. (That said, I'm also not going to let anyone off the hook once they deliberately choose to create such a service.)
I had a high opinion of Bezos until the disclosure of Amazon's poor working conditions. His making the minimum wage for workers $15/hour is a good step, but I think they're going to need to do a lot more before that reputation changes. Other than that, I admire him.
Dorsey seems to be the least hated of the bunch, and I like him, personally. He seems like he still has a kind of hacker mindset, and I believe he genuinely wants to make Twitter a force for good in the world. I'm not sure if he'll be able to accomplish it, though.
I understand net worth of $69B is on paper but none of these guys are philanthropic.
The main issue with Bezos is worker conditions at Amazon, I think.
https://www.bloomberg.com/news/articles/2020-02-18/jeff-bezo...
Bezos' parents loaned him a quarter-million dollars in 1995 [1].
Gates' mother, while on the board of directors of United Way, convinced IBM to invest in MS in 1980 [2].
Zuckerberg's parents sent him to the crazy selective and expensive boarding school Philips Exeter Academy and was privately tutored in comp sci before college [3].
[1] https://www.cnbc.com/2018/08/02/how-jeff-bezos-got-his-paren...
[2] https://www.nytimes.com/1994/06/11/obituaries/mary-gates-64-...
[3] https://www.newyorker.com/magazine/2010/09/20/the-face-of-fa...
How many people get quarter of a million in inheritance or have rich parents? It's silly to call out "self made" just because someone got a loan. Bezos did not inherit billions of dollars, he is a billionaire now. By any metric he is a self made billionaire.
You cannot. But Bezos did not inherit billions and living on them. He is self made, maybe he did not start at zero, but he did 1000x or 10000x (or even more) what he received. If someone had received a loan of 1000 dollars, I doubt anyone would say he isn't self made when he reached a million.
I disagree. The point of the term is not to describe a financial technicality. If someone inherited $900m and worked really hard to earn another $100m, I think most people would be confused to hear them described as a self-made billionaire. On the other hand, of course, people wouldn't tend to be confused if you described some billionaire as self-made if they grew up lower-middle-class and their parents gave them $100 when they turned 18.
So, yes, it's not an "all or nothing" thing, but it is absolutely about conveying relatability to a certain audience. We can reasonably disagree about whether describing Bezos as self-made is appropriate for the HN audience, but I tend to think the $250k "business loan" from his parents should at the bare minimum accompany the inspiring anecdotes about making a desk from a door (which, from what I have read, was literally done to symbolize the imaginary need for extreme frugality).
Gates and Zuckerberg were far from models of piety in how they came into their fortune.
- They are all the greatest people ever
- They all can afford to employ the most expensive personal marketing teams ever
What about Exxon, AT&T, Aetna, AIG, Goldman, DuPont Chemical, Lockheed, McKinsey?
There's a pretty obvious bias there: the ones you name do good because you named the ones who do good. (which, really, you could examine: how much of that perception is PR?)
We're not lucky to have billionaires. We'd be just as well if there were none at all.
Now imagine I tell the landlord I'm going to move out unless he fixes these issues and he then offers me a 50% discount on the rent. Now imagine he recoups that discount by putting your rent up by the same amount. And now imagine that I use those savings to buy a nice big TV for the two of us. The bathroom is still covered in mould. The carpet is still a mess. The power still cuts out all the time. And you pay more rent than me.
But I bought an awesome TV for us. So I'm the good guy right?
Remember, all of the talk of billionaires “paying less in taxes than their assistants” is not based on raw collected amounts, it’s based on percentages. A billionaire with an effective federal tax rate of 15% on 50 million income is paying 7.5 million in taxes, which is more than all of the federal tax collected from the bottom 10% of income combined.
I wasn't aware he was a founder at PayPal. I didn't even know he had worked for them.
(the "broken clock" being the obscenely wealthy as a class, not necessarily Cuban himself)
Hanging out with Tai Lopez and making vids with him??! Come on.
I bought this in Canada for maybe $30 last year. And not just one pill. An entire course of it.
https://www.sastimedicine.com/salt-alternatives/5785-736518/...
https://www.fiercehealthcare.com/hospitals-health-systems/dr...
I also don't see anyone else listed on the website. No physicians, no chemists, no engineers. It doesn't inspire confidence.
Wiping out their businesses financially might be the most effective way to fight them, in the short term.
Also, as an employee having a company that has to actually compete can really eliminate a lot of BS. If you're in the 800-lb gorilla, there can be a lot of dysfunction. If you're in a company with an 800-lb gorilla, there's a good chance what you do may not matter (unless its really good).
Do you have any evidence for this assertion?
If we'd ban lobbying we could have laws against companies that show nothing but utter disdain for life.
I'm not a fan of limiting salaries in general and I do not believe this is a good solution, but I believe it's likely to be better than the current situation. This is just me spitballing on a whim, having put approximately 60 seconds of thought into a solution. Hopefully people more informed will reply with better solutions or an informed explanation of what's wrong with my idea.
(And before anyone chimes in with "but corporations are just groups of private citizens" - they're explicitly not. Corporations are fundamentally defined by having a charter from the government to reduce the owners' liability, and thus we would expect them to incur additional regulations)
Influencing the leaders of a global super power is incredibly valuable, and lots of people want to do it for a lot of reasons.
In your proposal, would you ban NGOs, non-profits, and unions from lobbying? Why or why not?
The biggest issue is the complete lack of reporting, and anything that pushes the money flows more into the open (your hypothetical CEO is then personally responsible) is a step forward. Take a look at the stark difference between campaign finance reporting for individual candidates, and everything else.
Your last bit is a loaded question. If an entity's business is lobbying, then obviously they can engage in lobbying. But they could only be funded by individuals, not companies whose business is other-than-lobbying.
Do I think lobbyists should write legislation? No. Do I think congress should be able to break encryption without ever tech company sending someone to educate them on their stupidity? Also no.
I think there are some controls we could put on lobbying but it’s useful.
If Congress still allowed floor votes and amendments to bills, lobbying would be far less clandestine and effective. Right now lobbyists just have to target congressional leadership and key committees. Congress in an effort to clamp down on the legislative process and protect its members from controversial ores has made the process more vulnerable.
As for the encryption topic, then perhaps the scope of anti-lobbying should include government agencies as well. I certainly don't trust big tech to defend my personal digital rights, and the fact that we're looking to them to be our saviors is itself a major problem. They seem to be aligned with us at the moment, but ultimately mandated communications escrow would be another competitive moat for them. I expect that to shift if there is a serious move (back) to p2p apps.
I agree on the congressional process, but not to the exclusion of other approaches.
I took a look at a handful of western democracies and they all either banned or drastically curtailed this. People need to be in control of their government, and that includes campaign funding.
Finding one scapegoat and blaming all problems to it seems cartoonish level simplistic.
(And absolutely no one other than you has made this oversimplification in this comment chain.)
If USA wants to change the game (they don't) they can ban all corporate donations (aka legalized bribing), allow only donations by individuals, and then impose/enforce a limit of $10-25-50k per person (or something reasonable). Anyone playing tricks to game that rule get a penalty of x20 the excessive amount donated (e.g. via others). Also put all donations in public record. As simple as that.
It makes no sense to me that you (USA) spent $14bn [0] on this election.
[0]: https://www.cnbc.com/2020/10/28/2020-election-spending-to-hi...
If you mean that EFF will donate $5m which will inadvertently alter what logic dictates and demands.. then yes block EFF too from bribing politicians and political parties in the guise of "lobbying".
So yeah... it's great that billionaires occasionally step up to "fix" issues created by corruption and inadequate regulation/oversight, but I think if you're going to take a position that this is somehow better than waiting for the system to fix it, it might be more instructive to look at how this works in countries with a functioning bureaucracy. For example the drug given on the homepage is Albendazole, which they're selling for $20— well guess what, that pill is $2 in the UK and has been since the patent expired in the 90s:
> "In other countries, there are price control methods. The government steps in to ensure drug prices do not increase by a certain amount," Alpern says. "There are no price control mechanisms in the U.S."
https://www.npr.org/sections/goatsandsoda/2017/12/11/5677534...
Not if you're fighting deeply entrenched incumbents. Switching costs are huge, financially and politically. You need patients to hammer their providers to give them access to these drugs through this channel.
50% off is big, but it's something incumbents could match. 90% off leaves you with a profit margin, gets you PR points and holds the hounds at bay. Bonus: if you work out your competitors' debt loads and price at a level that they couldn't, financially, sustain.
And I think that really just underscores why this approach is the Google Fiber of the US pharma market— it may be able to force prices down for a handful of select customers, and may be helpful for proving a point about true costs and the need for regulation, but its existence is most certainly not some kind of proof of the invisible hand stepping in to solve this problem on its own and that regulation is therefore unnecessary.
Which gives you a textbook Sherman Act claim.
In any case, a loss-tolerant competitor doesn't argue for a 50% discount versus 90%.
As for antitrust laws, isn't the whole point that we're in this mess because the incumbents are all conspiring to fix prices and the existing consumer protection systems which should be preventing that have been failing Americans for decades and thank goodness for the free market which created the necessary incentives for Mark Cuban to swoop in and start this business?
The Sherman Act prohibits monopolies or cartels damaging competitors. As a competitor, you have standing. As a consumer, you do not.
I think this business could be phenomenally cash-flow positive in short order. It's not dissimilar from the way Teva started, just further down the pipeline.
The market should never be relied on to be the one to fix injustice.
This is a very bold claim, that we do not currently have the data to evaluate.
In ten or twenty years, we can revisit it, and conclude whether or not it is actually true.
https://news.ycombinator.com/reply?id=25925876&goto=threads%...
If I am not mistaken, the biggest challenge as I see it is that according to the FDA abandoned (generic drug) program, the Cost Plus Drug company will not be able to advertise many of its drugs to advertising monopolies that the FDA has handed out to companies (e.g. Shkreli, but also many bigger pharma companies), which according to a doctor friend of mine is a business killer. However, it's entirely likely that through sheer force of personality and name recognition, Cuban can force through a program of "check our company first", without advertising any particular drug, that gets popular among doctors. Hopefully that will drive eyes to the company without running afoul of the FDA's well intentioned but horribly gone wrong rule.
https://www.biospace.com/article/justice-department-charges-...
Also, from the web site:
- "We are hoping to introduce over 100 additional drugs by the end of 2021."
- "By 2022, building a pharmaceutical factory of our own in Dallas, TX"
I can't shake the feeling it's just a shallow rebranding play using a billionaire's personal brand. Perhaps many americans don't trust non-US brands, even when it comes to generics?
https://www.npr.org/sections/health-shots/2019/05/12/7222165...
It's extremely hard to enforce GMP and QA/QC from across the world and there's a strong incentive to cheat and lie when it comes to these costly procedures. Whether it'll be any better in a US manufacturing facility is of course up for debate.
> Because the FDA requires very specific GMP requirements that differ from those of the EU and other countries, drugs approved or synthesized without US FDA certification cannot be legally sold in the U.S.
Sounds a bit like trade protectionism - but I assume that goes both ways between e.g. EU and US.
I'm going to accept that at least one thing in the world seems to have gone right today.
In previous decades a rich industrialist may have built a library or a university building. This made sense when education was for the rich, and knowledge was inaccessible the wider public. But now knowledge is cheap, and large gifts like this are disconnected from today's average public person. Also putting a name on a hospital that still puts people into debt isn't a good image either.
Now the wider public needs cheaper pharmaceuticals. In order of the rich to stay in power for extended periods, they need to give some amount of handouts. Nuevo rich don't understand this, so they look to predecessors, and look on how they spent their money (hospitals, universities, etc), without realizing why they spent it. Expect to see more charity capitalism aligned with today's needs: generic drugs, taxi services, even phones and internet access.
Making generic drugs is non-trivial. The medicinal chemistry may be decades old, but you still need to do trials to demonstrate efficacy equivalency to the non-generic version. Are they really saying they'll do 100 of these trials by the end of the year?
While this is cool, I'm thinking that this type of initiative should be done by the federal government. A generic drug "mint" if you will.
To my knowledge, generic trials aren’t as involved as their non-generic counterparts for obvious reasons. But they are still non-trivial logistical undertakings.
https://www.fda.gov/drugs/types-applications/abbreviated-new...
https://www.fda.gov/consumers/consumer-updates/generic-drugs....
An American Sickness: How Healthcare Became Big Business and How You Can Take It Back
by Elisabeth Rosenthal
ASIN : 1594206759 Publisher : Penguin Press; 1st edition (April 11, 2017) Language : English Hardcover : 416 pages ISBN-10 : 9781594206757 ISBN-13 : 978-1594206757
I also don't get the "goodwill" argument. This is designed to be a profitable, sustainable business built on the classic mantra "your margin is my opportunity".
I think it's ridiculous that someone has to consider moving countries, which is no small task and out of reach for many, just to be able to afford their healthcare.
I'm not even particularly bullish about companies being able to improve transparency (it's a really complicated system, the incumbents stand to make/lose enormous sums of money, even when lower cost alternatives exist doctors might be contractually obligated not to discuss them)
But I think that this is a really good step
Similar to toasttab or chownow in the food ordering space
While this sounds good in practice, will it work in reality? I remember a pharma sales guy explaining that one of the ways his company got away with being more expensive than the competition was to practically give the medicine away to hospitals, so that the hospital would be more likely to prescribe it than the cheap generics, after which point the patients would just keep refilling the same meds (with the higher price then picked up by insurance)
In any case, I wish this company good luck! The US really could use more "maverick competitors" in the medical space
1. https://www.india.gov.in/spotlight/pradhan-mantri-bhartiya-j... 2. https://en.wikipedia.org/wiki/Pradhan_Mantri_Bharatiya_Janau...
Couple of thoughts: 1) Not a bad idea, been proposed before, drugs at a fair market value ... a little over cost ... good if true ... keeping in mind current restrictions. 2)Is this a springboard for a 2024 Cuban run at the presidency?
I've been advocating this for a while. Any given provider should have the same price for a given drug or procedure, regardless of insurance concerns. Putting this in law would probably help a lot.
Privatized healthcare, on the other hand, is a disaster.
milk - regulated
water - regulated
electricity - regulated
education - k12 regulated most of it
.
It’s almost like SpaceX took rockets from being a consulting business to a product business.
Space X owns something much close to an end-to-end objective: it's not a study, or a build, it's getting the thing to orbit, end of story. I think if you could set up the situation so that a company owns the end-to-end story of your health, things might be better off. That sounds more like Kaiser Permanente and my impression is that's exactly what happened. In reality our healthcare system is typically more like Gemini: contractors, tons of regulations, but none of them really own the end result so it's a public/private mix of bureaucratic mess, misaligned incentives, and buck-passing.
Also the ACA did have some successes in doing kind of what you're talking about. There were incentives in there to avoid readmittance before 30 days and to all appearances it's been a success.
https://www.statnews.com/2016/12/27/obamacare-success-penalt...
Most of these organisations were mutuals, eg, member owned, and would have pre-existing relationships with doctors etc that would control costs.
In this way, there were no perverse incentives - people had "insurance", and they wanted that money to cover as many eventualities as possible. The bigger the pot of money, the more resilient the community.
So actually, health insurance has a long legacy. The problem, I would suggest, is shareholders who are not the principal beneficiaries of the service.
FWIW, in the UK we found that a system of mutuals and municipally owned hospitals was sufficiently imperfect that we created the NHS anyway. Probably best to skip to single-payer in the US, imo.
The US is actually the only developed nation without a public healthcare system, it also has the highest healthcare costs of any nation on earth. Coincidence?
It seems like a pretty big mess at the moment.
You should look at historical healthcare expenditure by the US.
The problem isn't providing healthcare for all... it is the method and the cost. Universal payer is one way. It is not the best way and in fact Medicare is one reason costs are currently high. It is a bit like a car that used to get 30MPG and now gets 15MPG, and getting worse, and the solution being offered is for all of us to collectively chip in and buy gas for those who can't -- which is not tenable in the longterm because you're spending more and more of the GDP on transportation.
There are other ways of giving everyone coverage. One scheme, would be giving people money. Enough to cover average cost of healthcare plans and say education plans. The individual is then responsible for their own healthcare and has the funds to purchase health insurance. Then you have a healthy market and have mechanisms for the costs to come down.
That is entirely unlike the choice involved in buying something like a refrigerator and seriously skews the applicability of traditional free market thinking to the problem.
What you're referring to here is a high "price elasticity of demand", and markets are used to provision all sorts of goods for which this is true. Food, for example, is predominately provisioned by the market, and consumers are constantly faced with a choice of "buy food" or "starve to death".
You may be surprised to know that 80% of hospitals in the US are non-profit. The evil profit motive isn't the reason their bills are so outrages.
In the 60's US healthcare expenditure was 5% of the economy and it is close to 20% right now.
Other than that I have yet to see a problem that isn't solved by this scheme: increase the set of choices available to the person, and in some corner cases give them money so they are free to choose.
You have to bear in mind that the alternative to the free market approach is for someone else to come in an constrain either the buyer and seller in some way. Ths may work for a limited time and for a specific set of buyers and sellers but it won't work beyond that. Given that people have diverse and evolving needs the forced solution causes long term harm. Then you'll need some kind of propoganda machine to either exagerate the good or down play the harm.
To be clear I do not believe that we have a free market in the US in a lot of areas and what people conceive of as free market -- or rather what has been shoved down their throat as free market is anything but that.
> increase the set of choices available to the person
This view abstracts behavior into that which is governed by "choice" and "coercion." I think this binary distinction is a fine model for a lot of domains, but a poor one for healthcare.
Choice feels much more like a spectrum in the domain of healthcare than it does in other domains. For a rough sample of points along this spectrum, you have "do this or die immediately," "do this or die in the next several months," "do this or suffer permanent disability," "do this or suffer great pain," "do this or suffer some probability of some amount of disability," "do this or suffer mild discomfort," "do this or be slightly annoyed."
The far-"left" part of this spectrum cannot ever realistically expand its set of choices. The most extreme version of this is that you're literally incapacitated and so can never make a choice of e.g. what hospital to go to and what treatment to administer no matter how many hospitals or treatments exist.
However, I think the same problem persists in less extreme states as well. Health ailments can directly impact a person's ability to choose to begin with in a variety of ways apart from just physical or mental incapacitation or degradation. Various treatments and healthcare choices impose switching costs that reduce a person's choice even when they are nominally capable of making one. For example, if a patient chooses a single hospital for a bout of appendicitis (when they are in such pain that they cannot make a choice in that moment other than to dial 911), even once the acute problem of surgery passes, they are unlikely to be able to choose a separate hospital for their post-surgery hospital stay without jeopardizing their health due to movement and continuity of care concerns.
Even in non-emergency cases there is an extreme information asymmetry and unpredictable path dependence (certain choices lock into other choices down the line but the nature of how they lock in may not be apparent at the beginning) that make it hard to formulate what "choice" would even look like.
In some ways, I personally view the need for coercion in the healthcare space as precisely a way to return to a world where modelling things as a binary distinction of "choice" vs "coercion" makes sense again.
Any plan for regulation of healthcare always must deal with a distinction between "elective" and "necessary," "non-essential" and "essential," "covered" and "not covered." That line is drawn precisely where we have a best guess that the model of a binary "choice" vs "coercion" holds vs the model of a spectrum of choice; the ideal is that care is provided to boost a patient back into a universe where the binary "choice" model is a reasonably good approximation.
More generally there is the problem that healthcare has a weird squeeze of monopolistic and non-monopolistic needs.
At a base level, in almost all domains including healthcare you need some amount of a regulatory framework to counteract the problem that market participants generally have an incentive to decrease the number of choices to the other side. I think you probably agree with "coercion" at this level (stuff like preventing collusion among players, certain stances on breaking up certain kinds of monopolies, etc.).
But the problem is that in healthcare you do want powerful players because there are benefits we want to reap from large players. Large drug makers are the only ones capable of performing substantial R&D and regional hospital and transportation networks are really the only ways you can get the necessary infrastructure and expertise to treat a lot of things. On the buyer side you want large insurance pools to even out risk for people.
But those all have inherent monopolistic tendencies that are exacerbated by the problems of choice that I mentioned.
And funnily enough, food is heavily government-subsidized and regulated. It's not really a free market either.
Also starving to death isn't really the same level of urgency as dying of a heart attack. There's a couple orders of magnitudes difference in the amount of time available to make a purchase decision, and the level of physical and mental stress you're under while making that decision.
Sure, but by this metric, there exists no free market on the planet. If your argument is that the healthcare market should look exactly like the food market does today (with subsidies and FDA regulations), most adherents of private healthcare would agree with you.
Privatization != "no welfare".
> Also starving to death isn't really the same level of urgency as dying of a heart attack. There's a couple orders of magnitudes difference in the amount of time available to make a purchase decision, and the level of physical and mental stress you're under while making that decision.
Okay, but not all healthcare is "dying of a heart attack". Obviously it's impossible to shop around for healthcare when you're having a heart attack, and that's exactly what insurance is for. After EMTALA, emergency care is free if you can't pay for it. This isn't really controversial. What's controversial is whether the same framework needs to be applied for planned care, like MRIs, colonoscopies, annual physicals, tonsillectomies, vaccines, prescription drugs, etc.
Healthcare is not as fungible. Most medications have single-digit or even no effective alternatives.
For an illustrative example and the flip side of the coin, water is a good example of where unregulated markets do terribly (since you really do need water and can't substitute it with something else and it's also geographically heavily monopolistic). Potable water production and pricing in all developed countries is heavily regulated for good reason.
To the extent that healthcare isn't fungible, it's in very specific cases like end-of-life care, cancer, catastrophic surgery, and rare patented drugs. They also account for a tiny minority of overall health expenditure.
We can use different tools across both of those problems.
I don't think that's true for the U.S. Preventive care and planned care (if understood to be stuff like physicals, blood checks, screening, etc. including your examples of MRIs and primary care) as far as I remember is actually a small minority of healthcare expenditures (< 20% is a number I recall). I can try to root around for sources if you're curious, but I'm also curious where you're getting the impression of "vast majority."
> Antibiotics are fungible.
Not really. Definitely not in the same way that food is fungible. I assume you're talking about generics here? But generics again actually make up a startlingly small minority of healthcare expenditure costs despite making up the majority of prescriptions IIRC (again I'm going off memory but I think it was something like 75% of medication expenditures are due to medicines with no allowed generic alternatives).
Basically the places that you're suggesting the free market should best apply to are already the smallest slices of the healthcare expenditure pie (and also already quite effective in that limited domain).
But even stuff like hip replacement kind of is on a sliding scale. How much choice do you have if the alternative is death? What about cognitive impairment? What about blindness? What about impaired range of motion? What about mild discomfort? What about pure annoyance?
Water is also a necessity as is food and you can have a free market for those.
The questions are: 1. Does the buyer have enough choices or alternatives to choose from when it comes to healthcare? 2. Do those who offer services have a monopoly on the service?
When you look at the US market you'll find that it doesn't meet those criterias. Market forces are prevented from acting and being able to reduce costs.
The fact that there is a captive audience, as you suggest, means that we cannot just shovel money into it. You end up exactly where you are. Costs go up because it is a necessity. Same reason food prices go up when there is a shortage. It is not a luxury.
To answer your point:
Most/all of the issues you raised are met by "pooling" aka insurance. The need arises at random and when it does there is a massive cost and you urgently need the service. This is what insurance is for.
What I was suggesting isn't that people go and pay the doctor out of pocket -- although they can. Rather that they purchase insurance. Those who can't get $$ indexed to some national average or whatever scheme you prefer. The point is everyone gets to purchase insurance if they so prefer.
The problem is that choice of insurance providers is artifically limited right now and the choice of healthcare providers is as well. So you have a system where you are captive to the need and those who provide the service have a monpoly. Naturally costs will rise. Putting political preassure on government to increase spending is easy way out but that will only shovel more money from the pockets of the many into the pockets of the few. In fact this was predicted when Medicare was first introduced, and here we are. It is not like doctors and providers magically became greedy capitalists in the last 40 years.
Also to be very clear this isn't an issue of "profits". Insurance companies don't have huge profit margins. They make their "wealth" by being a monopoly. The execs make their money on the rise in stock prices which isn't sensitive to their 3-5% profit margin.
i think that has some merit, but its hard for me to imagine that having the payer, be disconnected from the consumer can really create a stable market without heavy handed regulation.
i dont think insurance can really get you to an efficient market. health care is simply not a good where price and substitution apply as in many other markets. and rather than jumping through hoops to invent such a market lets agree that this an ethical part of social contract and manage it with the best technocratic solutions that our society can offer. E.G. NHS and NICE
I think the argument for single-payer is that the buyers of healthcare now have a monopsony to drive down costs with.
If concentration of power was good we'd just find a few wise persons to run the country and leave it all up to them. Other than the little snag, the sinle buyer argument would work.
Giving the individual the money to make their choices is a better way to ensure that people get what they want. A universal healthcare plan (irrespective of how it is funded) because different people -- or even the same person at different stages of their life -- don't have the same needs and the same risk profiles.
What makes you say this (RE water)?
The point is, the free market should be plan A, and government programs should only exist to cover the gaps. Ultimately, people should be responsible for their own health, but in special cases, for no fault of their own issues, government should provide a backstop because it is the right thing to do.
Most taxpayers would agree with that. What they don't want is to be forced into something that is inferior and on top of that be penalized to subsidize someone else's premium.
Where I think we both agree is that the current disastrous mix of regulation and free markets in the present US system is a terrible solution.
https://maxwelljordan.medium.com/why-healthcare-in-us-is-so-...
That's false on multiple counts. First of all, the US does have a public healthcare system, Medicare and Medicaid. Second of all, there exists other developed nations with fantastic healthcare systems that are driven by purely private systems: namely Switzerland (widely regarded to be one of the best healthcare systems on the planet) and the Netherlands. Even more perfectly fine developed nations operate on public/private mixes, including Germany and Belgium.
> it also has the highest healthcare costs of any nation on earth. Coincidence?
In this case, it is indeed a coincidence. In order to attribute "privateness" to the high cost, you have to show a causal relationship. Unfortunately, there's a lot of evidence that makes it very difficult to draw that causal line: private Medicare Advantage plans are about 39% cheaper than the public "Original Medicare" (https://healthpayerintelligence.com/news/medicare-advantage-...), while also being of higher quality (https://healthpayerintelligence.com/news/medicare-advantage-...). In urban areas, the private Medicare Advantage plans cost less to administer per capita than the public "Original Medicare" (https://www.commonwealthfund.org/publications/issue-briefs/2...).
That NASA hasn't been able to capitalize on this situation is more about NASA's failures than anything else.
There are subsidies and everyone is required to pay into the system, but the administration is privately run.
If you want a true apples-to-apples cost of public vs private healthcare, you should look at Medicare Advantage vs Original Medicare. When you turn 65, you have the option to enroll either in "Original Medicare", which is what we usually think of when we talk about "single payer healthcare in America", or you can enroll in Medicare Advantage (aka Medicare "Part C"), where the premiums that would go to the CMS instead go to private insurers like Humana, United, Oscar Health, Aetna, Clover, etc. These plans replace Original Medicare, also cover Part D prescription drug benefits, and often include supplemental benefits that Original Medicare doesn't already cover. There are some interesting findings so far:
- 39% of Medicare beneficiaries are on private Medicare Advantage plans instead of the public "Original Medicare". Because everyone is entitled to "Original Medicare", this is purely voluntary. This number has been growing so rapidly, that we expect by 2025, more seniors to be on a private plan than the public one. There's also great variance by State. In Florida, Pennsylvania, Wisconsin, Michigan, Minnesota, Oregon, Alabama, Hawaii, and Connecticut — nearly 50% of beneficiaries are on Medicare Advantage. By 2022, we expect more seniors in those States to be on a private plan than a public one. https://www.kff.org/medicare/issue-brief/a-dozen-facts-about...
- For most beneficiaries, Medicare Advantage costs about 39% less than Original Medicare. https://healthpayerintelligence.com/news/medicare-advantage-...
- Medicare Advantage plans are, on average, of higher quality than the public Original Medicare. https://healthpayerintelligence.com/news/medicare-advantage-...
- In Urban areas, Medicare Advantage costs less per capita to administer than Medicare — and that's not including the extra Medicare Part D insurance that you would have to buy if you're on the Original Medicare plan. https://www.commonwealthfund.org/publications/issue-briefs/2...
They SpaceX is "private" in the sense that they are not listed on the stock exchanges. Previous manufactures were all "public" in the sense that they had gone through an IPO and you could buy stock.
People confuse this with public, as in the the government owned public pool.
I really hope this works out. We need more public corps companies like this.
That would have been a better name than this long name.
If you just do cost plus, then the research can't get (retroactively) funded.
This is similar to software, where the marginal cost is zero.
Current sticker price of Albenzazole in US: several hundred dollars. Cost in the developing world: a few pennies, according to Wikipedia.
Is this a joke? Would the government rouse itself to negotiate prices with manufacturers, like it does in the developed world? We'll have to wait four more years, with Mr Joe "Nothing will fundamentally change" Biden.
Well... the previous occupant of the White House tried to do exactly that and was struck down by the courts.
https://www.fiercepharma.com/pharma/fierce-pharma-politics-j...
The complete disregard for public health actually makes me angry. Here's more: https://www.ft.com/content/f0080fe4-c3ad-11e6-9bca-2b93a6856...
A common anthelmintic is somewhere north of 400 dollars in US but in Britain it's something like 5 pounds. Profits for the well-connected, pinworm for those that can't afford it. Pharma markets are funny, of course there is a monopolist, given the size and entry requirements, consequently you need a monopoly buyer. Can the government please wake up and govern?
Imagine if Epstein wasn't personally charged, instead just his business was fined. To me, that's actually the level of crime we're approaching here. If you think this is tenuous, at least consider the fact that it is proven that poverty is correlated with human trafficking (due to desperation and vulnerability) and illegally high medical bills force people into poverty.
Good time to remind everyone that Shkreli is in prison for financial crimes largely unrelated to the pharma side of his businesses, the rest of the pharma industry continued doing the same things as him as usual.
Don't hate the player, hate the game.
Fix the root causes, not the symptoms.
1. Layer of indirection created by the entire insurance system, which at this point is clearly not a good model for healthcare. Everyone needs/should have some amount of healthcare, so a system built entirely around the idea that only a minority of people should need to take advantage of the system is silly.
2. The half-assed government intervention of Medicare/Medicaid/ACA/etc – worst of both worlds in that when a government just injects shittons of money into the private sector (without very strong controls on price and behavior), what you end up with is ballooning costs... and that's about it. See also the govt. guaranteeing student loans for another example of the same. Or the Military Industrial Complex. And so on.
One example is with MRI scans. MRI machines, and the technicians and doctors who work with them, are insanely expensive. The US is, of course, not the only country with MRI machines. However, in countries with socialized medicine there may be a much longer wait for people to get an MRI scan for a non-critical issue. What about in the US? If you've got the money, you can get one right away. As a Canadian, I've seen tons of advertisements over the years targeting Canadians for MRIs as a cross-border service.
So the question is: is getting an MRI now instead of waiting 6 months a basic need? Private MRI clinics are definitely profiting from it. It definitely seems frustrating for people on the waiting list who can't afford to cross the border and pay out of pocket. However, it doesn't seem nearly as bad as a company price-gouging people on life-saving insulin, for example.
IMO the problem is more about (very) imperfect competition. Also medicine is very special in many ways (desperate buyers, doctors making decisions for them, moral and emotional weight, etc.), so it's hard to have incentives aligned.
If you want people to stop doing something, make it illegal.
If you can't muster the political will to do so, clearly not enough people agree with your view of morality (assuming a functional democracy).
As slow as it seems to be, my perception is that societal attitudes towards wealth have been shifting over the past few decades. I'm hopeful that one day, the tolerance for their misdeeds continue to dropbenough to inspire progressively more social and legal change, as you suggested.
Public witch hunts are called "witch hunts" for a reason, and it's not a pretty one. It's also known as "mob justice", which despite the name is generally considered to be not justice at all.
That... doesn't seem true to reality. Maybe I'm remembering it incorrectly.
In my view, society would become severely dysfunctional if we are expected to withhold our negative views of someone's choices, from fear that too many people will share those views.
This is a game theory problem with perverse incentives where regulation and law enforcement are needed. If CEO A (in this case Martin Shkreli) were to take the "moral high ground" and behave acceptably, the board of directors would look at similar companies performing 10x better, fire him and replace him with someone less moral.
If the board were to take the "moral high ground" the shareholders would value the company many times lower, and they'd be bought out for pennies by an acquirer willing to take the low road because that would be a super profitable move.
If moral shareholders refuse to buy the shares of low-road companies, the value of the shares fall, but the profits don't, and suddenly being "amoral" is super profitable for stock investors, and there are always some, and they will be richer than moral shareholders. As amoral investors amass riches, they will deploy greater amounts of capital using amoral valuations, which will then dominate.
So the whole system is broken, and personal ethics does nothing to fix the game. In a nutshell, this is also why libertarianism is broken.
Due to the incentives above, it might be said we are annoyed by their lack of willingness to be fired in a futile effort to obstruct a system which will carry on regardless--we are annoyed they won't do something pointless.
I have a feeling most people would have trouble taking food out of their family's mouth and literally becoming unemployed in order to tilt at a windmill where your effort cannot win. That's a pretty impossible standard to expect. If Shkreli found morals and got fired, Shkreli2 would take over.
So instead, I say, the problem is the system. Pretending it is about moral failing enables the system to go on by wasting time blaming moral failings instead of fixing it. The system produces bad behavior. We can tut tut each individual person it produces, or we can change the incentives and fix the system.
Something to clarify, I'm not really trying to say that people like that want to be evil. People like Shkreli make bad choices not because they like to be bad, but because they're indifferent to the indirect consequences of their choices. I'm extremely skeptical that someone in a position like Shkreli was would be in any serious risk of losing access to essentials like food and shelter if they were to behave more ethically, so I think it's important to set the standard that choosing a job like that when you have alternatives is wrong.
All that being said, I do agree with you that the primary problem by far is the exploitative structure that enables these people to exist in these positions, in the first place. If someone's analysis of the situation ended at Shkreli, I'd encourage them to think deeper. However, I do strongly believe that we don't have to choose between one or the other -- encouraging others to look down on those who choose to be a part of this system can have a significant influence by discouraging others from entering it, themselves. The more voices we have saying "this is not something to aspire to," the more pressure we can build to effect meaningful systemic change.
Instead, from afar, they become cartoon bad-guys. When this happens, most people take the easy route and decide they are all "evil" rather than looking at the incentive structure of the system, and the behavior it encourages.
Next time you see one of these, see if you can instead see it as a bunch of people in roles mostly acting in their own self interest, and think on whether policy, institutional organization, or law could alter the incentives and change what is in their self-interest in a better way.
This is pretty tenuous and would implicate a lot of other behaviors. You know what else causes poverty?
- the ability to hire based on skill and lay off people when you don’t need them
- alcohol
- charging for housing
- charging for food
- charging for utilities
- property taxes
- charging for transportation
If, “does something that could cause poverty” is the bar, then a huge chunk of market exchange of goods and services needs to stop.
In this thought I am reminded of the Econtalk podcast’s discussion of Martin Shkreli in the interview about the High Cost of Cancer Drugs with Vincent Rajkumar.
http://www.econtalk.org/vincent-rajkumar-on-the-high-price-o...
I read this somewhere but don't have a link.
Someone should make a list of the companies and executives implicated in generic drug price fixing. Shame is a very powerful tool...
First thing I thought of:
Valeant Pharmaceuticals
that that MBA speak for "making those many people unemployed" ?
1. https://i.imgur.com/w9zkfCM.png
If you are having troubles scaling up, maybe you could collapse all comments by default and load the child comments only when the user expand them?
Somebody has a big ego and wants to put his name on schools, hospitals? Let him.
Somebody wants to make a profit by exploiting the inefficiencies of an industry? Let him.
Wallstreetbets wants to take out a few hedgefunds by beating them at their own game? Let's go.
Me thinks theirs something else at work here. I could see Mark Cuban building this company up , selling it for billions at which point we're back were we started
They could make up the loss on volume, though. Especially if selling outside the US
Or as you say, they might join the incumbents and renege on the promise painted here
While this business model can work in some industries, in this particular heavily regulated industry, Cuban is either going to discover that it's harder than it looks and fold in a few years, or he's trying to sell a grand vision and offload it for a profit before the cracks in the foundation are discovered.
I would be more inclined to see the mission as genuine if this were launched as a public benefit corporation or B corp (but even then, the promises such companies make of serving the public good can be overblown).