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Comment by willcipriano | Hacker News Reader

On a per capita basis we already spend enough money in the US to have the best socialized medicine system on the planet: https://data.oecd.org/healthres/health-spending.htm (if you remove voluntary spending we still spend more than anyone else)

They have the funds, our government just isn't competent enough to deliver it.

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Competency? The system is working as intended, it prioritizes the needs of capital flowing to the elites. You must come from somewhere else, one that places citizens on a slightly higher strata than the US does.

To believe this shows total ignorance of the history of the healthcare system in America. The whole thing is a crazy pile of hacks and accidents with 0 design or intent. It’s tape and string all the way down. We just stumble from unintended consequence to unintended consequence. Shit, the only reason it’s tied to employment is because of post war wage and price controls.

This is true. But fatal flaws such as the fact that Medicare cannot negotiate prices with drug companies are not accidents but rather artifacts of corporate lobbying. There are many examples of rent seeking like this across the system

Medicare didn't cover drugs at all until 2003 when Bush put together Medicare Part D to bolster flagging support. Medicaid doesn't negotiate prices either, but it's mandate that it will pay the lowest negotiated price in the market. When Part D was passed it almost had a similar structure. In 2016 there was a move to add negotiation but it fizzled. In both cases the CBO estimated that negotiating prices would save precisely no money. The way Medicare plans actually work is that plan provider bid to be part of the program and they are selected on a cost basis, and they then negotiate drug prices. Could Medicare administrators do a better job? Well the CBO has twice said no. Medicare Part D was a huge hack to cover a made up problem, which is to say seniors too wealthy for Medicaid not being able to afford their heart medicine. It was essentially GWB trying to buy voted before the 2004 election. So I think you're wrong on the history here.

Who do you think cane up with and wrote his domestic policies? That’s literally what lobbyist are for. They have these things drafted up ready to go years in advance (just like the Heritage foundation and SC picks). The only thing that might be last minute is the decision to go with it.

They know exactly what the downstream effects of these programs will be. Regulatory capture is a well attested phenomenon, so I’m skeptical of any claims that all the Byzantine policies that just so happen to favor big business came about haphazardly

Bill Frist wrote most of the legislation that became Medicare Part D, he was old buddies with Rove. Frist was a hospital guy and a bit of a scammer before going to congress, I won’t deny that he was in the tank for hospitals, but the pharma lobby didn’t write his law. The original version was pretty modest, people criticized it at the time for not spending enough money, though it may now bankrupt Medicare. I remember it pretty well because I was just then getting interested in politics, but a ton has been written about it.

I guessed and was basically directionally correct. That guy seems like he fits the Bush mold - Cheney and Rumsfield privatizing huge parts of the military comes to mind. Don’t get me wrong what you are saying makes sense. I’d be more surprised if it were a coherent system.

But I do believe many government regulations and laws that may seem like sphaghetti against the wall at first are actually very intentional and lucrative to someone.

We’ll this thing in particular was Frist’s pet project for years, Bush and Rumsfeld just needed seniors on board for the election so it finally got done.

A lot of things happen that way, just horse trading and trying to get re-elected.

> To believe this shows total ignorance of the history of the healthcare system in America. The whole thing is a crazy pile of hacks and accidents with 0 design or intent.

No. The health insurance companies spend a lot of effort and influence on lobbying to make sure they are there in the loop to cash in on every health care transaction. It's all very intentional.

What percentage of healthcare spending would you guess is health insurance company profits?

The number is around 3% of healthcare becomes health insurer profits.

https://content.naic.org/sites/default/files/inline-files/20...

The more frightening thing is how many middlemen's costs are baked in. Of course insurers aren't sitting around twirling their moustaches, figuring out how to be incrementally more evil; but they are spending astronomical amounts on compliance and other side-things that aren't actually healthcare.

As someone else pointed out the insurance industry’s profits account for a grand total of 3% of expenditures. The majority of healthcare spending is through Medicare, Medicaid, and the VA. You can also see in the thread below how I explain the non insurance industry history of Medicare Part D.

There are so many times in the history of American healthcare history that someone had an idea for a fix, sold it to their voters, wrote the law, got it passed, and then it flopped.

> As someone else pointed out the insurance industry’s profits account for a grand total of 3% of expenditures.

The insurance industry profit is not a meaningful number in this context.

Profits are only what is left over after all expenses are deducted. These expenses include all the operating costs of the medical insurance industry (salaries of all employees, massive CEO bonuses, real estate costs and on and on and on).

Every penny of those costs are unnecessary overhead. All those (hundreds of) thousands of administrators and CEOs getting bonuses are not providing any health care to anyone, only adding overhead to the system. They feed off the work of doctors, nurses and medical staff but don't provide any value.

So the number to look at is the total gross revenue of all medical insurance companies. All that money could be saved by simply eliminating the insurance industry middleman and paying medical staff (those who actually directly contribute to providing health care) directly.

The reason for the initial bad design is that it was all hacked together.

The reason it hasn't been fixed is that there are powerful people that don't want it to be fixed.

I wouldn’t attribute to malice what could be more easily explained by incompetence. There are a ton of broadly agreed upon tweaks that could in aggregate fix a lot but none of them are big enough to campaign on, and they don’t fit neatly into either party’s platform. For example funding more residency positions could drive down the cost of delivering a lot of services over the course of 10 years, but that’s at the edge of CBO accounting and doctors are maybe mildly against it. It’s too free market oriented for dems and a little to spendy for Republicans.

I could go on, but the point is a lot of fixes just aren’t sexy, we elect dummies, and well intentioned people make mistakes.

https://stanmed.stanford.edu/2017spring/how-health-insurance...

You should read this before claiming I show "total ignorance of the history of the healthcare system in America". Stop making excuses for shitty politicians.

I'll quote some for you to start:

>By the 1990s, the Blues, which offered insurance in all 50 states, were hemorrhaging money, having been left to cover the sickest patients. In 1994, after state directors rebelled, the Blues’ board relented and allowed member plans to become for-profit insurers. Their primary motivation was not to charge patients more, but to gain access to the stock market to raise some quick cash to erase deficits. This was the final nail in the coffin of old-fashioned noble-minded health insurance.

>WellPoint’s first priority appears no longer to be its patient/ members or even the companies and unions that choose it as an insurer, but instead its shareholders and investors. As in any for-profit enterprise, executives are compensated for how well they perform that financial function and are compensated well. In 2010 WellPoint had intended to hike premiums in California by 39 percent, before an attorney general effectively nixed the plan. CEO Angela Braly received total annual compensation of more than $20 million in 2012, despite the fact that she resigned under pressure that year because the company revenues were down. Joe Swedish, the new CEO appointed in 2013, is a longtime health care executive who served at the for-profit Hospital Corporation of America. His starting salary and bonus totaled about $5 million, not including stock options.

>To express their collective frustration, members gathered signatures for a MoveOn.org petition: “Anthem Blue Cross: Stop Playing Politics with Our Premiums.” They urged their insurer “to stop spending corporate funds on political campaigns, disclose everything it has spent directly or indirectly on political campaigns, and use the money to lower rates for Anthem policy-holders and California taxpayers.”

>To increase profits, all insurers, regardless of their tax status, have been spending less on care in recent years and more on activities like marketing, lobbying, administration and the paying out of dividends.

Yep

- artificial limit on number of doctors

- unlimited lobbying by pharma companies

- unlimited advertising for said companies

- single payer system gutted every time

- insurance company lobbying prevents insurance across state lines

- on and on

I disagree. It is an efficient system, which pays dividends to its investors every month:

https://www.statista.com/statistics/257364/top-lobbying-indu...

If the US government was really efficient, US citizens would be paying big pharma and the military industrial complex every day in order to go to work.

You don't need more efficiency, you need less corruption. And that starts by severely curtailing lobbying.

Don't you think it's rather corruption than incompetence?

ah yes, corruption and incompetence are exclusive to American systems in a way which no other country can deal with.

Whataboutism achieves nothing

It’s not competency. It’s the predatory insurance companies in the middle. Socialized medicine takes away that inefficiency but the GOP will block any attempt at improving life for the common person. It’s blunt but true. They desperately want to maintain the hierarchy of men over women and white races over others. It’s really that simple but with a prime directive like that most of us in the US are going to be unhappy.

Why give them something for free when you can just have then work to death instead?

That's misinterpreting data. We subsidize global pharmas (and medical device companies) based out the of US with the excessive cost we pay as patients. That is probably because of their lobbying. Since private health insurance mostly acts as a pass through, they are happy to let the cost curve rise as long as individuals and employers pay the bills.

The only place in the US government that controls its formulary is the VA/Tricare and they have remarkable success in managing costs there. Otherwise, you mistakenly believe the government controls these costs. We have incompetent or corrupt private industry, and a major party that is eager to deregulate things further.

> Since private health insurance mostly acts as a pass through

Citation Needed.

Prior Authorizations and other "misfeatures" ensure this private health insurance blocks necessary treatment and captures the "savings" at patient's health and sometimes, their lives, expense.

https://www.medpagetoday.com/opinion/second-opinions/99422

> We subsidize global pharmas (and medical device companies) based out the of US with the excessive cost we pay as patients.

Pretty sure this has been forever debunked. Not sure why you’re wanting to be a end-stage capitalism apologist

Insulin is not a subsidized item. It is very old tech and they make a profit in other countries. Its about <=$5/vial to make

We - the US consumer, not the US government - subsidize global pharma with the ridiculously high prices we are forced to pay for drugs. That is exactly my point.

With CHIP[0], Medicare[1] and Medicaid[2] that isn't really true. The US taxpayer foots the bill for the majority of medical costs in the US. If you are a child, elderly or disabled (ie. most of the people with high medical costs) it's very likely that you fall under one of those programs.

[0]https://en.wikipedia.org/wiki/Children%27s_Health_Insurance_...

[1]https://en.wikipedia.org/wiki/Medicare_(United_States)

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

Certain companies making crazy markups is not the same as subsidising the world. Get off your high horse

Let unpack both of your points separate. Last point, first: I don't mind subsidizing the world to a degree. A lot of these are US companies or international pharma with substantial US presence. The US is a phenomenally wealthy country, and a healthy and stable world is in everyone's interest along with being a moral imperative. The balance of whom that is falling on is inequitable for various reasons within the US, though.

Back to your first point: this is exactly about companies charging crazy markups. Look at https://costplusdrugs.com/ for some examples of how bad it is.

Now, we all understand that R&D and studies for safety are necessary and expensive, and not every drug succeeds. Every successful drug pays those as amortized costs, it's not simply a matter of manufacturing and raw materials.

However, https://en.wikipedia.org/wiki/Martin_Shkreli was a famous and egregious example vis a vis Daraprim of a common practice. Further, you have increases for non-elastic needs (insulin, epi-pens) that far exceeds increases to increases in manufacturing costs. Then you ones like Solvaldi that are just priced on the max the market will bear: https://www.fiercepharma.com/financials/gilead-prices-hep-c-... ... this is not all about recovering development and testing costs, obviously.

This is simply not true- you can purchase this cheap generic insulin from Walmart for not much more than that. However, most people group all sorts of new versions of insulin into a category of drug, and those new versions are definitely not "old tech".

I have no idea on what the costs to develop, produce, and distribute these insulins is, or even what is being charged for them. Maybe it is too high, but it is not so simple as a generic 5$ per vial drug.

Modern insulin is over 20 years old. There have been some small incremental improvements that help some but they are not what most want to use. Novolog/Novorapid were release in 1999

The old versions of insulin are still very cheap. its the much more modern versions that are much better at controlling diabetes, with much less side effects, etc.

Modern insulin being over 20 years old

You don't need to subsidize anything. I mean sure, you pay for those ridiculous salaries of all people involved in pharma, insurance, all lobbyists and snake salesmen who push/bribe doctors for over-prescriptions and obviously shareholders. Out of those, doctors are the only ones deserving high salaries, mostly. But they shouldn't come from such a bad incentive.

World would be just fine if US healthcare wouldn't be such a bad joke on democracy, freedom and all other things that seem to win US elections but actually matter little where they should.

Drug and device marketing and sales really ought to be illegal. Kickbacks to physicians and administrators should be limited in the same way they would be for bribes to government officials, both on the medical and industry sides.

Cruelty is the point.

I think this comment author's use of the word "competent" means "in delivering medical treatment to Americans."

But I also think "the government" shouldn't "deliver medical treatment" - I suppose they could mean "in deciding how to spend tax dollars to get medical treatment delivered."

In which case, I agree that is not their competency.

Most of it is likely going to lawyers and health and malpractice insurance companies.

No it's not. Do some research malpractice is a tiny percentage of costs overall. That's a red herring thrown out there by doctors and insurance companies.

Yes it is. A single large judgement anywhere in the country and the malpractice insurance for all doctors everywhere in the US is bumped up just for premiums. Some disciplines like OB are forced to pay a quarter of a million in malpractice insurance every year just to practice. For others, it went up from 30 to 50K per year just this year alone. When that happens every practitioner starts requiring expensive tests that have a tiny % of catching something, but may catch that stroke that triggers the $100 million lawsuit. 60% of doctors in the US are sued every single year, with each case worth 100k for the doctor to defend, and almost all are without merit. If you want to cut down healthcare costs, insurance and tort reform would be the #1 place to do it. Create a pool of money to cover bad cases and push out bad doctors, but the current system is untenable and benefits nobody in healthcare.

> Some disciplines like OB are forced to pay a quarter of a million in malpractice insurance every year just to practice

That's one and a half premature babies[0], or ten c-section babies. That number could be low or high depending on the average number of babies that OB is working with.

[0] "a premature baby spends an average of 25.4 days in a speciality care nursery at an average cost of $144,692" - https://www.oviahealth.com/blog/the-real-cost-of-preterm-bir...

[1] "A cesarean section (C-section) is much more expensive, costing an average of $22,646 including standard predelivery and postdelivery expenses." - https://www.valuepenguin.com/cost-childbirth-health-insuranc...

1/10 or less of that money is going to the OB. The facility collects a far bigger chunk. If you break down the hours worked by the amount doctors get actually paid, they are a tiny tiny share of health expenses and often make very low $ per hour worked. The biggest expenses go towards insurance, defensive tests, hospital management, and expensive specialized materials.

One of America's greatest paradoxes. By far largest per capita health expenditure in the World but not the best healthcare.

by 'not the best healthcare' do you just mean that it's not the most efficient and affordable, or are you claiming that another country has better expensive healthcare?

I think it was my choice of words. By healthcare I mean the populations's effective health care which is what matters and not just the quality of the services offered.

US ranks 46th on the life expectancy. Not saying that's a perfect metric but's a strong signal.

https://www.worldometers.info/demographics/life-expectancy/

- Cost-plus contracts disincentive cost-benefit value delivery. - Costly healthcare disincentive use of health services.

It's a system that combines the worse of public and private healthcare systems.

doesn't seem like much of a paradox for the best and most expensive healthcare in the world to also not be very efficient otherwise

it doesn't have consensus

and that comes from the people and their representatives

Yes, but worth remembering this is more than just cutting out capitalist's profit. This would need to involve running the medical sector better + pushing wages for doctors and other medical professionals down, but yeah the fact that US federal government spends more than the UK on healthcare per capita while not actually delivering healthcare to everyone is crazy

Yep, doctors in the US make anywhere from 2-5x that of doctors in the UK. Take a look at these salaries posted by the NHS [1]. Nurses make more too. It's very common for RNs in California to make upwards of $50/h even starting out, which works out to more than the specialized doctor pay in the NHS link.

Student loan debt isn't even a big factor in this because of the sheer size of the salary gap. $500k loan gets paid off fast when you make $300k+, and you get that salary for life whereas the loan only weighs you down for the first 5-10 years.

[1] https://www.healthcareers.nhs.uk/explore-roles/doctors/pay-d...

OTOH, doctors in the US often pay $50-$200k/year in malpractice insurance[1]. In the UK, indemnity comes from the NHS automatically.

https://www.nerdwallet.com/article/small-business/how-much-i...

Yes, for a surgeon. Scroll down to internal medicine, which is closer to who will be prescribing insulin, and note it's 8k to 50k. (No median or mean is given?)

I'm not at all shocked someone who cuts people open and removes or adds objects has a high liability insurance.

I have no source for this, but blaming medical system costs on liability insurance feels like a way of blaming the patients instead of the system. "If only greedy people were not trying to get rich quick off lawsuits."

Yes, doctors in the US can make good money, but imo, many deserve it - its is hard to become a doctor, and it should be - 4 years of undergrad, 4 years of medical school and then 2-3 years as a lowly paid resident making a pittance (compared to a doctor) - so that is 6-7 years of opportunity cost lost over someone that only had 4 years of school - i.e. years when you could have been working and making salary doing something else.

Compare that to a programmer, assume 4 years of undergrad, and then you get out making $100K easily - especially if you were a very smart student, probably much more (i.e. someone that was smart enough to be a doctor or a programmer), not even accounting for raises and inflation, 6-7 years at $100K and also assume 400K for med school loans and the programmer is already almost $1Million ahead of the doctor at year 7.

Over the long haul the doctor will likely do better, but it will take years to catch up once you factor in the huge costs a doctor has vs a programmer - I for one am glad only really smart people can become MDs.

Sure, the point isn't do they deserve the money, the point is to achieve European like prices for healthcare you need to do more than stick it to the venture capitalists or something

Can UK doctors own their practice or are they all employees of NHS?

Whenever talking about America, you need to do a massive cost-of-living adjustment for the entire system. For instance, a general practitioner in Germany can expect to earn around 3,000 Euros after taxes per month, and a surgeon barely grosses six figures. Ask a doctor in America if they'd be willing to work for that salary. And the same adjustment needs to be made for nurses, administrative staff, pharma employees, device manufacturers, medical suppliers, etc.

Edit: since I've being downvoted, I just wanted to clarify I'm neither agreeing with or disagreeing with the assertion that the U.S. spends enough to have the best medical system. I'm just highlighting the fact that, in general, highly skilled labor in the U.S. often earns 3-5x (or more) than highly skilled labor in other countries.

I wonder if the German surgeon would work in the US for some smaller amount of salary increase (though I suspect everything in the US is designed to prevent this).

Globalization is apparently good in all contexts except medicine and law, the two most common fields of employment for a congressperson or senator. The AMA would scream bloody murder if someone seriously proposed hiring foreign doctors to stem the shortage they caused by limiting residency slots for decades.

The AMA limitations of residencies and restrictions on foreign doctors should be challenged though anti-trust litigation.[1]

1. https://journalofethics.ama-assn.org/article/challenging-med...

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