Researchers chart path to drastically lower administrative costs of health care

Entrenched institutions are the general problem with America. It's the police unions protecting bad policing, the restricting of doctor supply via the residency bottleneck, and local governments preventing new building for burgeoning populations.

They're all the same problem really. Beneficial to the incumbent group at the expense of those they service. It's kind of amazing.

If the preventables (e.g., Type 2 Diabetes) were prevented, otherwise mitigated (less sugar!) then the resources / system could focus on real disease.

The issue with the USA is it wants its cake, it wants to eat it, and expects to pay less for consistently making unhealthy choices.

Rest of the world, yes. Rest of the developed world, not at all. The major difference is that becoming a doc in the US is much more expensive than pretty much anywhere else. You could also argue it's proportionally harder because of the more numerous competitors. But on an absolute level of knowledge and capability no, it's not harder than say, in western european countries.

Really? Can you give some examples? There are a lot of immigrant physicians in the USA.

An anecdotal counter example: my mother is a physician with medical licenses from Australia, UK and the USA (obviously two have lapsed) and though she is quite critical of countries X and Y and positive about country Z she has never expressed any such opinion or said that one might be tougher than another, which is exactly the kind of thing she would point out.

Medicare for All will surely help this, but free college will help as well.

The U.S. is like a dysfunctional family where the parents will not pay for the kids college even though they have the money.

126,000 practicing PAs [0]

325,000 licensed NPs [1]

985,000 practicing physicians (MDs and DOs) [2]

I know that nurse practitioners are not under the same artificial residency constraints of MDs/DOs. I'm not sure about physician assistants.

For someone not in the U.S., NPs and PAs often do the same role as general practitioners/family doctors e.g. see patients, prescribe medicine, etc. They can also specialize.

[0] https://www.thepalife.com/physician-assistant-stats/

[1] https://www.aanp.org/about/all-about-nps/np-fact-sheet

[2] https://en.wikipedia.org/wiki/Physicians_in_the_United_State...

Everything you say is true, though.

Payers = Medicare for All, UNH, Aetna, etc.

Providers = Hospitals, doctors, medical supplies, etc.

It's entirely possible to have one payer and then having a governing body regulate a free market[0] comprised of providers in the market.

[0] - I'm using the word free market not in its purest form (which rarely exists) but rather in a more colloquially way.

I can tell you for a fact this simply isn't true. The reason manufacturers of medical supplies operate as a monopoly is because they have turned to acquiring everyone and anyone in the medical supply/device business and there's been 0 opposition to it.

https://www.beckersspine.com/orthopedic-a-spine-device-a-imp...

https://mergr.com/abbott-laboratories-acquisitions#cma-tab

https://www.greenlight.guru/blog/top-100-medical-device-comp...

You can go through the last link which is a list of device manufacturers and look at their acquisitions. They just eat up every small player that shows even a hint of providing competition. Some of them have been averaging an acquisition a month for years.

Possibly, but the cost of doctors (+nurses, technicians, etc) is in the noise, just a distraction. The vast majority of the cost of medical care in the US goes to the middlemen who contribute no value at all, just extract profit.

A 15 minute session with a general practicioner here (CA) costs around $300. That doctor isn't making $1200/hr ($2.5M/yr).

That doctor is likely only making a bit over 200K: https://www.salary.com/research/salary/benchmark/family-phys...

The other $2M+ are going hangers-on who're not contributing to health care, just inserting themselves into the chain to get rich. Take a look at the billions in revenue collectively by all insurance companies. That's all a tax on health care that provides no value.

A common accusation of anyone attempting to do a QALY based system would be that they are "sacrificing grandma for the dollar".

The recent COVID crisis is an example where QALY based evaluations (which may well have gone either way) were summarily considered "putting a number on the value of a life".

In that respect, it's not that the institutions are perverted but that the society they are in prefers them this way.

- providers (doctors, hospitals) - drug/device companies - lawyers - insurance companies

All of them point to someone else to blame and defend their part of the trough with knives. All have very developed lobbying arms and are fully entrenched in congressional election funding.

I mean, the Bush Administration started part D medicare. Republicans. An entirely new entitlement.

In fact Insurance Companies have an incentive to pay no more than competition, but for costs to rise. Due to regulated %overhead this is one of the few ways they increase profits every year.

To maintain current inflation adjusted stock valuations (based on earnings and growth) Insurance companies need prices to rise and they are incentivized to produce this outcome. Surprise!

Hope it fixes medical inflation (it won’t) or you’ll be back to the same place in 3-4 years.

Most people have no idea how captured healthcare is. There's no competition, indeed most healthcare is government granted monopolies already.

Having lived in countries with "free" healthcare, that isn't all it's cracked up to be either. A good example of cost cutting: just make the disease illegal, like ADHD in the UK. If it doesn't exist, nobody can claim medication for it. Problem solved.

As frustrating and arcane as the current system may be, the government fully in charge for the provisioning (rationing) and financing will only increase 'worthless paper, administrative costs'.

Medicare for all solves the access problem, but it doesn't do anything for the efficiency problem.

I'm puzzled why the article prefaces one of its rationales with this:

'...“With Medicare for All seemingly off the table, our paper suggests we can still tackle administrative costs through structural changes to the payment process,” said Kevin Schulman, MD, MBA, ...'

Why is that Medicare for All is off the table?

Its only partial coverage and the supplemental plans also are partial. Retirees regularly rake up thousands a year in medical expenses on medicare.

If anything we need medicaid for all. Its a total mess with the piecemeal systems that exist, but in PA at least (where I live) medicaid recipients pay like a dollar for basically any service. None of the copay nickle and diming (to the tune of $30 a pop) my grandmother is hounded with constantly.

And even that is a bitter pill. Its giving private insurance companies all the money and power still. The single payer has strong negotiating power but they still have to get someone to insure the citizenry and the cartel of insurers that exist can predate off that and do so eagerly.

This is an underappreciated requirement if we want to significantly lower costs. Drug patents, medical device patents and illogical government regulations imposed by corrupt and incompetent regulators lead to massive costs for patients. Allowing drug to charge hundreds or thousands of dollars for a dose of a drug that costs .50 cents to manufacture is an atrocity. This is doubly true since a large portion of medical research that these patents rely on is done by publicly funded research at universities and research clinics. Patent laws need to be completely rewritten to allow for a decent return on investment while disallowing price gouging.

Their entire business is fixing impedance mismatches.

Your implicated solution is to eliminate impedance mismatches.

Do you think the major med tech firms will be for or against that? What do you think their lobbyists will recommend?

The healthcare insurance industry absolutely needs to be destroyed.

One day, we'll look back at this debacle similar to cigarettes, big industry manipulating the population and millions of people dying unnecessarily because of it.

It's time to end the suffering.

I was able to walk into a fairly large hospital, get a full battery of tests along with a thankfully minor diagnosis and medication for a small amount of money paid up front. The bill was itemized, translated, and I received excellent customer service.

I required a non-elective procedure not covered by my grandfathered pre-ACA insurance back in 2014. I attempted to "shop" the procedure around. It was was not at all easy. I would have rather dealt with insurance.

Imagine if auto insurance were eligible to be provided by your company as a tax deductible expense. We would all be buying our gasoline through our car insurance company.

Which isn’t really too much different from private insurance at a large employer: Cigna or whoever just brings admin and a network of providers, while your employer pays the bills out of some actuarially sound pool of money.

Smaller employers can’t usually swing this, and that’s where the crappy rates come from.

What was not discussed in the paper was the effect the administrative complexities have on creating a moat are health care plans. The greater the complexity, the less healthcare providers will want to associate with multiple healthcare organizations/insurance companies.

Provider merges drive up costs.

Health insurance is the buyer of medical care, so when they are monopsony (buyer side monopoly) they drive down costs.

For historical reference, employer-paid insurance only became prevalent in the US during/after World War II as a way to compete for labor after the government implemented wage controls. When the wage controls were lifted, people had become used to the benefit of employer-paid health care and it stuck.

My sense is the US will never move to the model you describe with young men creating a buying group for very specific policies. Society is simply not going to accept extreme differences in premiums for young, healthy people vs much older, less healthy people.

Everyone should know it's completely illegal to open a hospital. It's illegal to charge less at 3am when you're not busy.

Any and all competition, even weak competition like Urgent Care, should be encouraged.