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Comment by neotrope | Hacker News Reader

Thanks for this.

How much are regulations to blame for this mess? ie if we cut regulation, would that lead to lower cost and better outcomes?

What is the path to fix this?

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There is not one silver bullet or even hundred or thousands of bullets that are going to magically re-engineer 1/5 of the US economy. Measuring costs is really hard, measuring outcomes is even that much harder -- maybe more or less impossible in the aggregate.

The heart of the question comes back to what you actually want to fix. I don't know you. A lot of people would just like to pay less for the thing they currently receive which is a nice sentiment but often hard to resolve. A large set of those people are actually upset because they have been led to believe they are paying a lot more than other people for the same thing, which I do not believe to be actually true.

One solution that does seem palatable to a lot of people, not me, but a lot, is "I would like like to appear to pay less for what I receive while the real costs are hidden and subsidized in a way that is much less visible to me". While popular this view is not popular enough to adopt legislation to that effect.

In practical terms detailed policy legislation that makes losers out of a lot of low value transactional middle men would see some very meaningful across the board cost reductions, probably 7-10% (500 billion or more). Top of that list would be intelligent standardization and regulation of transactional medical billing process. This would/could look a little bit like how we regulate banking between financial institutions. Very sexy I know.

I think One "silver bullet" would be to give the patient more skin in the game when selecting treatments and balancing cost/benefit.

The current system is a tragedy of the commons. Costs are opaque and distributed. Patients have insurance and may as well buy the most expensive treatment (everybody else is doing it). There is nobody in the entire health system with incentives to trade 1% less benefit for 99% cost reduction.

In Europe, this is often handled by government purchasing discretion (not price caps as many simplistically believe). If X treatment is too expensive, it simply isnt covered. If generics medication get 99% of the job done, that is what you get.

This might mean replacing employee healthcarecare with employee payments, MORE copays, and more transparent pricing (there has already been some improvement in this area).

If a CT cost is 10x at one hospital, and 1x at the other, the patient needs an incentive to seek out the 1X cost. Similar, if one cancer drug is 10k and the other 100k, with a life extension of X days, the patient is the only one that can really make the call.

The way this should work is that providers have to publish their prices for each service and then insurers publish how much they pay regardless of where you go, which might be something like 90% of the median price, i.e. the equivalent of a 10% copay.

But then the patient can go to whichever provider they want. The one across the street from you charges $3000 more than the one which is a two hour drive away? It's your $3000 and it's your two hours each way.

You might even find a provider that charges less than your insurance pays, and then you could put the balance in your HSA for the next time it isn't.

We keep trying to pretend that some important price negotiation is happening between bureaucracies that has to be preserved, but a CT scan for example is a standard service. If the prices had to be published and put in a database where patients can see them, you don't need anyone to negotiate anything, people would just choose the one with the best price absent some specific reason to do otherwise, which would exert a downward pressure on prices that doesn't currently exist.

> In Europe, this is often handled by government purchasing discretion (not price caps as many simplistically believe). If X treatment is too expensive, it simply isnt covered. If generics medication get 99% of the job done, that is what you get.

The amount of times I’ve proposed this only to be responded with “government death panels” is astounding.

> If a CT cost is 10x at one hospital, and 1x at the other, the patient needs an incentive to seek out the 1X cost.

Healthcare is weird because the demand is inelastic and you aren’t always in a place to price shop. However, I agree with your broader point.

I think that that demand is more elastic than most give it credit for being. There are often many ways to treat an issue, with different costs and efficacy, and the demand for which and how many depends on who's footing the bill.

Similarly, I think most people vastly overestimate how much of Healthcare expenses involves an ambulance ride or emergency room

The trump administration did an executive order that forces hospitals to list all their prices. Imo easily his best move. Now, the current implementation does not work for a myriad of reasons that are mostly "hospitals have good lawyers and don't want to reveal prices" but the law can be fixed. A working implementation would make price shopping easy as someone would build a centralized site and you could have your health care provider put in the treatment needed along with your location and distance willing to travel.

> Top of that list would be intelligent standardization and regulation of transactional medical billing process.

Medical coding being different between every system, seems like the mechanism used to negotiate prices. Is that correct? Would standardizing on the VA medical coding[1] help, or just force the problem onto doctors to change their coding.

[1] One person told me the VA system was good.

Not sure if USA needs lower regulation. Many (most) successful healthcare systems are in high regulated countries.

Less regulation can solve competition problems. Is this the USA problem? I don't know.

Regulation that prevents anti-competitive practices is desperately lacking.

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