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Comment by psd1 | Hacker News Reader

Well, that was interesting.

What I'm unclear on is whether "health spending", in this analysis, is defined as money paid to care providers such as hospitals and dentists, or money paid by citizens for healthcare. Because you've got insurers and PBMs taking profit.

The ratio of those two numbers is the efficiency of the American insurance model. How does it compare to the administration of a single-payer system such as the NHS?

Until I see some data indicating otherwise, I'm going to look at my £200pcm national insurance and my £9.90 prescriptions and my free ambulances, and Americans' $500pcm insurance and their unlimited prescription costs and their four-figure bills even when insured, and I'm going to continue to believe that Americans are punching themselves in the face.

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We spend even more money on healthcare administration than what’s directly spent on it. HR departments screwing around with insurance. Various government benefits & other agencies having to mess with private health insurance issues. Attorneys general offices and state rep offices spending time to get insurers’ and hospital billing departments’ heads out of their asses (they do a lot of this).

There are also untold hours lost in unpaid labor on the part of “clients” messing with insurance and hospital billing departments. It’s not uncommon for someone who is, or is connected to a person who is, seriously sick for even a few days to spend a work-week or more of time that year messing with the billing from the incident. This can include uneventful pregnancies and births.

The amount of wasteful overhead in the American "healthcare" system never fails to shock me. The last two companies I've worked for (one a self-insured non-profit, the current a "conventionally"-insured for-profit) have both, coincidentally, had ~500 employees, and each dedicated about one-and-a-half full-time positions to administering their healthcare plans. Now scale that up across every company in the country: it's... Insane.

Forget any of the squishy humanitarian impulses behind "socializing" medicine; eliminating all that un-productive labor would be of immense economic benefit.

(Health-plan administrative cost is a moat which advantages large businesses to the detriment of small. That goes some way to explaining why an economic-efficiency / dynamism argument has never gained traction in American political discourse.)

Right, it’s so bad that if we Did A Socialism and somehow had the worst cost outcome for such a move on the planet such that our direct healthcare spending remained identical(ly crazy-high)… it’d still be a win because of the huge drag on the rest of the economy and our QOL the current system imposes in indirect costs.

But that would be morally wrong and lead to communism and satan worshipping.

You shall not split. Lenin still lies in his mausolem awaiting a kiss.

One thing I’ve noticed from American colleagues talking about healthcare stuff (insurance and copays and vouchers and HSAs and so on and so forth) is that it’s just mind-numbingly complex. It just seems like an incredible mess. Like, the amount of mental energy that goes into it just from the users has to be a significant cost to society.

Anecdotally anyone can talk to a few doctors and find out just how much time they spend on updating charts/documenting information that's not directly relevant to the care, its just to protect against liability or work with insurance. Or how many hours they spend on phone calls fighting with insurance companies. The people who actually understand medicine wasting hours with some clueless rep with 0 understanding and a flowchart who's only job is to deny claims. Dr. Glaucomflecken on youtube has many videos about that too.

So on the ground level, it's already clear some of our highest paid most valuable people spend 20-30% of their time on a flavor of administrative junk which isn't necessary in a single-payer system. I'm skeptical of claims that this waste doesn't translate into the higher level metrics.

It'd still occur in a single-payer system. The problem is fees for services instead of fees for results.

So the wealthy can finally cheat death efficiently once and for all ;-)

On a more serious note: that might be hard in medicine per se to pay for “results”. And I found some of the insights from “Outlive” quite interesting: how we focus in cure but not prevention; and how in the bigger scheme of things Antibiotics was almost the only “real big invention” in western medicine for a very long time (e.g., in terms of actual medical impact)

Any evidence for that claim? The issue is not whether there is administrative overhead, but the amount of it. It’s not obvious to me that completely different funding models would incur the exact same amount of overhead on the practitioners.

It does happen in a fashion in the Canadian system where family doctors at least operate as private businesses that bill the gov't, and because of that have to spend quite a bit of time on paperwork which then requires a whole edifice which there has been a lot of complaint about recently.

A search will find you plenty of articles about this.

That and the nature of the relationship introduces conflict. Plus the bulk of provincial governments administrating the thing are ideologically biased against it because they are conservative or neo-liberal in bent, and have been chronically underfunding it for years....

If I only earn when I treat, then I have an incentive to over-diagnose. Insurance thus forces me to document my diagnoses, and I spend much of my time on documentation and appealing denials.

How would you measure results? Go to a doctor, get a prognosis, get a treatment then a new prognosis? The incentive to inflate results is obvious.

How else would you measure it? Survival rates? Doctors now have a strong incentive to avoid taking on sick patients.

> So on the ground level, it's already clear some of our highest paid most valuable people spend 20-30% of their time on a flavor of administrative junk

This is most definitely not just a US problem. I work adjacent to this industry in Poland, where we basically have a single-payer system[1], and I'd say 20-30% is definitely in the ballpark.

Especially in larger institutions (think hospital, not a single doctor's office), records must be kept and handovers between different doctors must occur. This means that you have to do all this work anyway, regardless of how much of it is actually transmitted to the insurance provider, and in our case, it's definitely far, far too little.

[1] we do have private healthcare, but that's typically small / less-complicated procedures and usually covered out-of-pocket by those who can afford it, so there are no insurance considerations there.

"This is most definitely not just a US problem. I work adjacent to this industry in Poland, where we basically have a single-payer system[1], and I'd say 20-30% is definitely in the ballpark."

I wonder if this could be the killer app for AI. Teach it how to do this sort of bureaucracy instead of humans, and let doctors treat actual people instead.

I'm skeptical of claims that this waste doesn't translate into the higher level metrics.

The claim is that the size of the pot of money to be split is determined by the willingness of consumers to pay. Which is determined by their wealth. Therefore the inclusion of a lot of administration changes the split of where that money goes. More administration = less money for nurses and doctors. Less administration = more money for nurses and doctors.

This fits observed behavior in other places. Your potential client has a problem and a potential budget for the solution. Clients are remarkably indifferent to how that budget is split up, as long as a solution to the problem is worth spending the budget. Here is the example that originally brought this point home to me. When Oracle moved from Solaris to Linux around the year 2000, it was able to charge more money for the database. Why? Because companies were willing to spend money on Oracle that previously went to the hardware and operating system. This incentive to open source the complement of whatever product you're providing is one of the reasons why so much money has been invested into creating open source.

Interesting point, though would you agree that an individuals budget for healthcare is unique? The budget for healthy vs not, tends to be 'all of it.' Hence, excessive healthcare costs.

Exactly. And the relationship seems to be that if your income goes up 1%, your available wealth at a point in crisis goes up 2.8%.

However your willingness to spend at the moment of crisis is dictated by your problem and available wealth. And now how that money is going to be split among different parties.

> Anecdotally anyone can talk to a few doctors and find out just how much time they spend on updating charts/documenting information that's not directly relevant to the care, its just to protect against liability or work with insurance.

It’s not just for that. Documentation and checklists exist in public health systems, too, and IIRC there’s some fairly hard evidence that they do reduce errors. Doctors hate them, tho.

I was in hospital a few years back for a fairly inoffensive surgical procedure (public hospital, though in Ireland’s rather weird hybrid system, because I had private insurance my insurance was paying), and I’d say I was asked at least ten times if I was allergic to anything, and had the barcode on my wristband read more times than I can count. This was extremely irritating… but apparently it does _work_; some patients don’t always give the same answer to that question every time.

"our highest paid most valuable people spend 20-30% of their time on a flavor of administrative junk..."

By choice. Medical coders are a dime a dozen. Front office/back office/in office. You hire and train other people or you whine and complain, and be unproductive. Hopefully you will get one of the smart ones who understand this.

If you used those two profit numbers you would be missing all of the expenses that medical insurance companies have, none of which do anything for providing healthcare. Furthermore, you would be missing all of the expenses which exist to accommodate the systems insurance companies invented to account for things that only they care about. Insurance is the least efficient method of providing healthcare and we've committed hard to it for the benefit of few.

The most efficient system would be direct payments only.

The downside is only the very roch can afford expensive medical emergencies.

But with insurance individuals get to pull the value of future premium payments forward to pay for large expenses in the present. There’s also a degree of socialization.

The downside is there will always be an overhead.

Government health care is insurance writ large and has the same tradeoffs, just on a larger scale.

> Government health care is insurance writ large

I would argue that it has even more tradeoffs; unlike private insurance, it's usually both mandatory and a monopoly, and that can go very wrong very quickly.

The US system is extremely overregulated and preventing true competition, even though US insurance is private, so there aren't really any good data points to compare, though.

Public systems can work very well and I can’t name one system which went downhill very quickly.

Exactly, the NHS is only going downhill because the dominant ideology among MPs has been that the NHS is the first place to get gutted for cheap savings. A lot of very efficient systems were removed and farmed out for "cheaper" private systems, that end up being rather costly in the long term with respect to increased error, price rising, and all the myriad ways incompetence and explicit money-grabbing messes with healthcare. They gutted the administration systems and now doctors have to work overtime on the weekends just to get their notes in the system, and now because doctors are overworked, they're putting more work into the hands of the incredibly underqualified PAs. And on top of all of this, repeated mismanagement of the money that is distributed to the NHS — including, of all things, incredibly inept bartering, putting hospitals on a "target system" where underfunded hospitals are given less money for not hitting targets, etc. It's a complete joke, but every step was damned near deliberate for the case of farming public money into the pockets of the friends of MPs.

The problem with the system in the USA is that paperwork can make all the different in costs. The burden is on the individual to comprehend all the implications of their choices. These choices are beyond do I want my ailments addressed.

Often, people in situations where they require healthcare are least able to assess the implications of their choices, as well. It is very literally praying on the sick.

You could provide every American with extremely robust healthcare for a trillion dollars a year. Probably less as you allocated resources based on need.

We choose to spend that on the military. Basically you can choose guns or butter, we choose guns and empire. Whether that is a “correct” decision is an exercise for the reader.

The US spends more on healthcare than arms.

You could argue for lower defense spending, but there’s a hard lower limit (which is unknown) and if you cross that threshold, the world changes for the worse very quickly.

The rules-based order is underpinned by tanks and planes and nukes. Diplomacy is a layer of abstraction over violence and potential violence.

Medicare costs $800 billion/year and only covers 20% of the population. They are on average the most expensive 20%, but I doubt you’re going to cover all the rest for another $200 billion.

Medicaid is another almost $1 trillion/year.

I've resorted to calling this kind of breathless fearmongering out for what it is. There are too many people suffering too greatly in the existing system to be civil at the expense of maintaining the fictions of libertarian idealogues.

Hyperfixation on an idealistic interpretation of real-world dynamics will always be thought-terminating. In the dichotomy of map vs territory, the map is definitionally a cliche. We can be better than that.

With many insurance companies there are lot of coordination costs.

Government "insurance" has several advantages:

- it has a much larger pool of insured, which reduces overall risk, and thus can have lower premiums/taxes

- there is no need for profits, which again lowers costs

- providers only have to deal with a single "insurer", which significantly reduces complexity of getting paid. Patients no longer have to waste time filling out paperwork about their insurance provider, and dealing with misunderstandings and miscommunication about whether they are insured, who they are insured by, etc.

- You no longer have to worry about if your preferred provider is "in network". Which also removes needless beurocracy.

- There is more of an incentive to care about longterm health, because the government will pay for all healthcare over the life of the patient. This used to be the case for private insurance, back when people stayed with the same employer, and same insurance company for most of their life. But now, insurance companies just want to minimize costs while you are with them, which probably won't be that long.

- Employers no longer have to waste time and resources providing health insurance for employees, and employees no longer need to spend time, energy, and anxiety on "open enrollment" every year.

Furthermore, you can have rich people and big companies pay for a good portion of it, through taxes

One interesting thing i would like to see would be for costs like Medicare not be borne by businesses on a per job basis but rather just part of their tax liability (note: requires first fixing the loopholes that mean large corporations pay no taxes).

Reason being that it disincentives job creation, by making it more costly to hire in America. Arguably all businesses and people benefit by keeping people alive longer, and therefore the companies which employ more people but make less profits shouldn’t pay more towards that goal. Let giant but very profitable companies with fewer employees pay too.

You forgot to mention the taxes they pay to support CHIP, Medicaid and Medicare. Which are not far off what many Europeans pay for universal health care, before most Americans even start to look at private health insurance so they actually get health care for themselves.

> Which are not far off what many Europeans pay for universal health care,

Effective tax rates of 40-70% do not exist in the Us. It’s still a ridiculous amount of the economy to tax and spend.

But what I think is more annoying is that the US has health systems for special interest groups:

- seniors - veterans - native Americans - women and children - government employees (especially teachers) - immigrants seeking asylum

This must be getting close to half the population. Either get rid of them, or pay for everyone.

> Effective tax rates of 40-70% do not exist in the Us. It’s still a ridiculous amount of the economy to tax and spend.

That isn’t true. In Germany, where we have fairly high taxes, I get to keep about 60% of my gross income, and I’m in the maximum taxation group. This 40% includes universal health care, pensions, tax, and mandatory insurance for job loss.

Don't forget the effects of VAT and various consumption taxes. If you buy stuff with your net income, ~ a sixth of the money spent will be indirect taxes again.

Those tax rates have nothing to do with healthcare, to take France as an example most of it is for other things, like pay-as-you-go pension plan or free education. Budget of french "assurance maladie" is 25% of the PIB or 450 billion euros for 68 million people, most of it paid by salary taxes. All things being equal, for the USA the same system would cost 2322 billion dollars.

https://www.securite-sociale.fr/la-secu-cest-quoi/chiffres-c...

The way that I've seen GP's point expressed that makes sense to me is that the per-person cost to provide health-care for those special interests you mention is roughly equivalent to the per-person tax burden in most other developed countries to care for everyone. That gives me a useful handle on how gob-smackingly wasteful the US system (writ large) actually is.

Very high tax rates in Europe are generally less about healthcare than about pensions, really, in most cases. Most European countries are a bit further down the demographic crisis road than the US is (and they mostly have higher life expectancies, too), so the cost of pensions has really become quite a big deal. Most European countries also have either very cheap or free university tuition; if you don’t qualify for a grant it’s 2k here, say. (This is an increase, due to the GFC; when I was in university it was 50 euro a year…)

That said, for _most_ countries, 40-70% effective tax is very high, and not encountered by the average person. To pay 40% effective in Ireland, say, you’d have to be earning at least 150k, and that’s assuming you’re single, have no kids, don’t pay rent or mortgage, and have no private pension (401k equivalent) contributions. Realistically, almost no-one hits those sorts of rates; for realistic setups you’re looking at closer to 200k for a single childless person.

It is impossible, here, outside of ultra-contrived circumstances, to pay over a 52% effective tax rate.

> It is impossible, here, outside of ultra-contrived circumstances, to pay over a 52% effective tax rate.

It depends on what you include though. You could look at someone earning 100k, having it taxed, paying all the things that are not taxes but obligatory just the same (social security, depending on the country), and then spending the rest on rent, travel, food & entertainment (and paying sales tax and various other specific taxes). How much of their total income has gone to the state?

If you want to extend that comparison, look at someone running a company. The value they create with their company will be taxed as well, then they receive dividends from their company which also will be taxed at different rates.

Of course, you'd need to either compare to individual US states, or make some choices about how to average their very different tax levels.

At least here, social security (PRSI) is a tax. Rent isn’t subject to VAT, nor is a lot of food. Someone running a company wouldn’t normally pay themselves with dividends, becuase it’s not tax efficient; they’d take a salary from it instead (that’s a cost, and thus is not subject to corporation tax).

Someone earning 100k (assuming single, no kids, no private pension) pays about 33% effective tax (including social security) and some VAT on spending. 50-70%, again, is just kinda nonsense.

You usually don't pay yourself all the money your company makes as salary. At least in Germany, your salary has to be "reasonable" (i.e. similar to what you'd pay someone who isn't a shareholder), otherwise it's considered a hidden distribution of profits ("verdeckte Gewinnausschüttung") and will not affect your company's taxable revenue. You'll always pay corporate (~30%) on your profits & capital gains tax (25%) on the remainder after corporate tax when you distribute it. You'll have to distribute it at some point.

"Some VAT on spending" is a bit hand-wavy, don't you think? If you take those 67k (probably a bit less in Germany, because you'll pay for health insurance one way or another, and it's not a 100% deduction) and spend it, most of that will be at the normal VAT rate, which in Europe is between 15 and 27%, the average is approximately 20%. That'll be another 10k or so (or another 10% of income), you're now at ~43%.

Buying gas for your car (~50% of sale price are taxes), or natural gas (~30% taxes), oil (20%), or electricity (27%) for your home, and you'll pay taxes, too. There's various small amount (~250€/yr for public television; nominally not a tax in Germany for legal reasons, but it would be dishonest not to include it -- it is by law, there's no way to opt out, you don't have a claim to anything in return, its height is controlled by the state), it adds up.

I doubt you could get to 70%, but 50% isn't far off if you actually spend your money (which you will have to at some point, so I don't see a reason why you wouldn't consider those taxes).

> At least in Germany, your salary has to be "reasonable" (i.e. similar to what you'd pay someone who isn't a shareholder), otherwise it's considered a hidden distribution of profits ("verdeckte Gewinnausschüttung") and will not affect your company's taxable revenue. You'll always pay corporate (~30%) on your profits & capital gains tax (25%) on the remainder after corporate tax when you distribute it. You'll have to distribute it at some point.

Okay, that's _really_ different to how it works in Ireland, and I think just shows the government trying to incentivise slightly different things. I think the key difference is that, per the above, dividends are taxed as capital gains in Germany (weird; they're clearly not capital gains); in Ireland they're deemed unearned income and taxed more or less as normal income (with some slightly weird treatment at the edges, I think; I'm not sure that you can offset income tax on them with pension contributions, say).

I'm a bit curious _why_ Germany wants to incentivise retention and payout via dividend vs payout via salary for small companies (it seems like, for high income people, corporate tax + dividend there would probably be lower than the highest band of tax?) but that's clearly what's going on here.

Sorry, I might have added confusion: this applies to limited-liability in Germany (all kinds, the cheap ones and the regular ones). If you're running your company with unlimited liability, there is no salary (I guess technically you could pay yourself a salary, but there's no reason you ever wood vs a limited liability which is its own entity) and your income from that work will be taxed as regular income (though labeled & treated slightly differently).

But since limited liability is a pretty good thing to have and is affordable now, these days many people opt for it, especially if you're somewhat successful because one of the disadvantages is increased accounting duties -- but if you make more than 50k (or something thereabout; in profits) without a limited liability, they'll apply the same duties to you.

Corporate tax + dividends is usually more expensive than personal income. On 100k profits, you'll pay 30k taxes, and then you'll distribute 70k of which 25% are tax (capital gains), so another 17.5k gone, and you've paid 47% until the money is yours. Top marginal income tax is 45% (250k+/yr). Accountants are technically optional, but practically mandatory for LLCs, and they cost 2-3% of revenue (by law, no negotiations possible).

Germany very much doesn't like self-employment when you look at it from that angle. But I doubt there's an intention behind it, it's mostly historical: limited liability is supposed to be the larger companies, not an electrician with two employees. But Germany doesn't adjust, so our 2nd highest marginal tax rate (42%) starts at 66k€, which around 10% of employees in Germany hit, and it rarely gets adjusted to account for inflation. But no worries: there's been a lot of noise to increase this to 57%, payable on income > 80k€. We'll get to the 70% eventually.

We have immigration (illegal or otherwise) to stave off demographic cliffs. As much as the right hates illegal immigration, it is mostly Christians and they integrate well.

The EU either has to integrate muslims, which is a rougher ride, or Russians/Ukrainians, of which there is a more limited number to import.

The country with the worst demographics, South Korea, still IMO has an out: it can topple North Korea and import a huge number of people from there.

China is in deep, deep trouble. They have restated demographics downward, and probably it is still worse than that. Combined with increasing levels of totalitarianism, allegedly a huge financial house of cards in real estate and regional governments, and a likely invasion of Taiwan that results in blockade and sanctions...

Russia was having huge problems before the war. Now they are throwing away a badly needed generation, and causing 2-5x that amount to flee the country.

Democracies have the potential to pivot from demographic disaster, but totalitarian regimes don't care about them, because demographic cliffs mean there is just an older more compliant population to suppress. Of course it means long term their country will fade to irrelevance and perhaps starvation/economic collapse, but totalitarian regimes exist primarily to ensure the survival of the regime, not the population.

> We have immigration (illegal or otherwise) to stave off demographic cliffs. As much as the right hates illegal immigration, it is mostly Christians and they integrate well.

Indeed, but, even Mexico and much of Latin America now has below replacement fertility too. So now what?

Demographics is a strategic weapon.

Democracies that entice immigration are also strategic weapons.

But to answer your question, that's their problem.

Countries and governments need to wake up and structure their societies towards liberal reforms to get encourage child rearing. That involves a host of things that the right won't like, but the side effects will be a society that people want to immigrate too.

It's a double demographic effect. Now, so far even Europe has not restructured its housing, work, subsidies, childcare, and the like to fully stimulate demographics.

The US would need huge reforms in healthcare, workers rights, and childcare, and the doom of an imbalanced demographics like we have with the boomers (ESPECIALLY the baby boomers) is that they vote only for their selfish needs and won't vote to invest in the younger generation

Well, there's also the rate of new drug and procedure discovery. I've heard it quipped that Americans are subsidizing the discovery of new medical techniques for the rest of the world. Whether that's worth a higher cost is arguable but I think the effect is there.

Exactly this, example: biologics.

I am currently prescribed a medication that is over $30,000 per injection every 12 weeks.

Because we have absolutely atrocious health organization. Pharmaceutical companies can set their prices regardless of anything but their profit.

How should pharmaceutical prices be set?

In general, anything that's mandatory for life/basic quality of life but still needs to be produced by industry should should be regulated to artificially reduce prices in order to compensate for inelastic demand and prevent price gouging. This regulation should include supply-side subsidies and dynamic, carefully considered price controls.

This should apply to food, water, housing, health care, transportation, internet; all those good things that you can't do without and are extremely vulnerable to market manipulation.

It's worth researching the inevitable consequences of price controls, it's a predictable outcome that's been tested many times.

Price controls are Hobson's choice: Would you prefer expensive bread, or no bread?

That's right, which is why basic healthcare (including production of normal, well-characterized, non-experimental drugs) should be taken out of the price system altogether and run directly by the government.

Normal off-patent drugs are already pretty cheap. You can get a bottle of ibuprofen for like $5. Drugs still under patent are, of course, expensive on purpose.

By price controls I literally just mean "anti-gouging regulation", not "you can't charge more than exactly $5 for x"

Describe the operation of "anti-gouging regulation" that isn't just a price ceiling or a cap on how much the price can increase in response to a sudden supply constraint that would otherwise result in a shortage.

Using the free market to respond to a shortage requires competition. Patents can make this impossible. When you have a fixed supply of something and no other entity can produce it having an uncapped price doesn't really help the market respond. Consider the example of a Taylor Swift concert. Are scalpers creating more supply by raising the prices of tickets or is it pure rent seeking?

And, to many, the difference between "expensive bread" and "no bread" in the case of drugs is entirely academic.

Products under patent would already be charging the monopoly price regardless of a shortage. That's what a patent is supposed to do -- cause prices for new drugs to be temporarily high to provide the incentive to develop new drugs. The limit for this is how much better the new thing is than the old thing, such that if you charge more than that people switch back to the old thing.

This obviously kind of sucks when the drug is the difference between life and death, but those are also the drugs we most want a large incentive to develop, and that's why the patents eventually expire.

> Consider the example of a Taylor Swift concert. Are scalpers creating more supply by raising the prices of tickets or is it pure rent seeking?

Scalpers are trading time for money. You want tickets that would otherwise sell out but you don't want to wait in line, so you pay someone to wait in line for you. It causes tickets to be available at the higher price instead of being sold out and unavailable at any price. The way to prevent the rent seeking is to auction off the tickets to begin with so the money goes to the artist instead of the scalpers.

Define gouging.

Every other country appears to have the “bread” at a reasonable price. Ironically, it’s the US which has the same bread for 100x the cost.

Did you know Russian citizens spend half their take home pay on food? Wanna keep running with that point of yours?

I thought we were talking about developed nations participating in the global economy.

There are other markets than Russia and the US what about all of Europe.

https://www.bbc.com/news/articles/c99vz4kz5vzo

First, define the "basic quality of life" and what are you going to do when demand will exceed supply. Because we might as well just start the money printing machine and expect everyone to become a billionere.

Off the top of my head I'd include the following in basic quality of life (but not fundamental ability to live) these days:

* A little extra space in your dwelling * Internet * Access to nature * Hot water * Some means of transportation that grants you access to work, home, and recreation * Leisure time beyond that needed to cook, clean, sleep, and exercise * Some dietary variety * Any functioning smartphone * Access to community * A modest amount of extra money for recreation * Any vacation time * Access to heat/cooling beyond the bare minimum * Access to education * More than one choice in a job * A bed that doesn't hurt you

The list could likely be trimmed or made narrower, and there are likely things I'm not thinking of, but you get the idea. Nothing extravegent or necessarily expensive, just a few things beyond the absolute bare minimum a human needs to survive. Basically, I think everyone should have access to three major things: 1. The necessities of survival 2. A few extras to allow the unmotivated and unambitious to be sustainably content and not truly miserable from true deprivation (so, like, evaluate human needs the way a modern ethical zoo evaluates animal needs rather than a historical abusive menagerie would). 3. Access to tools and resources for the sufficiently ambitious to reasonably improve their situation without making excessive sacrifices from point 1 or 2.

Does any of that strike you as unreasonable or unachievable?

One model is that a government pays a license fee that allows them to produce the drug in unlimited quantities for their country. (In practice, they could buy the drug from the manufacturer at the marginal cost, or they could use another pharmaceutical company as a subcontractor.) Sometimes there is a deal, and the country may get orders of magnitude higher health benefits for a marginally higher price. And sometimes the company refuses, because the deal would interfere with their business model in other countries.

> One model is that a government pays a license fee that allows them to produce the drug in unlimited quantities for their country.

How does this determine how much the license fee should be?

The same way as in any other business contract. How much the government is willing to pay, how much they expect to benefit, what other uses they have for the money, and so on. In practice, the company will likely get a bit more profit from the license fee than it would get from selling the drug normally.

The government is effectively a monopsony in that context, so that isn't a real way to calculate anything, it's just the government making up a number which is likely to be too low (suppressing R&D) or too high (inflating costs). You could potentially fix the first one by giving the company the option to decline and instead sell the drug under the existing system, but how do you fix the second one?

When this gets brought up as a positive to our high healthcare spending (which you're not exactly doing, more just making note of the existence of the argument) it's such a head-scratcher for me.

1) OK... maybe we should stop, then? Like, that seems like a terrible deal? How is that a justification at all? It seems like just a description of something very stupid we're doing.

2) This would be a good deal if we were getting other countries to also pay high prices and bringing that money "home", but basically the exact opposite is happening. WTF.

3) More often than not, the side of the issue that raises this as a good thing is also the side full of folks who think we should e.g. reduce spending on foreign aid, so it's especially weird that they're bringing it up.

Plus, I'm very skeptical that the idea that drug development would dramatically slow down if the US stopped over-spending to the tune of 2x-100x on lots of drugs is even true. But setting that aside, it's still just a bizarre line of argument, to me.

You see, development of new drugs, devices, and treatments is definitely something that we must continue at breakneck pace, by any means necessary, because people keep discovering how awful and harmful the existing ones are, so we need to make consistent progress beyond the status quo.

If you move faster than the science and the lawsuits, then you can keep selling deadly crap to a naïve and trusting populace.

https://en.wikipedia.org/wiki/Reye_syndrome

https://en.wikipedia.org/wiki/Thalidomide

https://en.wikipedia.org/wiki/Tardive_dyskinesia

https://en.m.wikipedia.org/wiki/Fenfluramine/phentermine

> OK... maybe we should stop, then? Like, that seems like a terrible deal? How is that a justification at all? It seems like just a description of something very stupid we're doing.

The US pays for drug development and then the rest of the world caps prices and gets the drugs cheaper. If the US stops then the money for drug development goes down, which is not great. What you really want is to get the other countries to pay their share, but how do you propose to do that?

The reality is we have no evidence that other countries other countries wouldn't start developing drugs. Our fear that no one else would do is not grounded in the rational and we shouldn't let irrational fears decide what we do. This isn't something we can logic out ahead of time, we simply need to commit to not doing it.

Other countries already develop drugs. They just charge more in the US market.

People always forget it's "what the market will bear".

Price caps set a very explicit bar and then ask a company to think very carefully if they truly think the drug can't be sold at that price (and surprise: turns out when motivated a ton of them discover that yes, it can be).

What the market will bear affects an already existing product. R&D is driven by one of two things:

1. An expectation of profit at the end. 2. A highly desired outcome from a motivated pool of Investors.

Price caps can dampen #1. Which can put more of the burden on #2 as a source of funding. Whether you think that is an improvement or not probably depends on your particular ideological position around markets and healthcare.

But there is definitely an objective argument to be made that this might decrease the speed of improvements in healthcare technology.

> But there is definitely an objective argument to be made that this might decrease the speed of improvements in healthcare technology.

Every American posts about "healthcare improvements" like they're a millionaire and that cancer wouldn't bankrupt them (and then also get them fired from their job when their insurer casually mentions the "bad risk" they've got which is driving up the cost right now).

This has nothing to do with the comment you quoted from my post.

What the US could do is cap prices in the US at some modest multiple of the cheapest price charged in other countries. The drug maker would then have a choice: cater to either the US market at an elevated price while losing the cheaper markets, or abandon the US market to have a possibly larger market elsewhere at lower prices.

That is one option. It would mean that some drugs, especially those for rare conditions, are never brought to market in the first place because the expected worldwide revenue would be too low to justify spending $1B+ on a stage-3 clinical trial that might fail. Is that a good trade-off? Depends on your perspective I guess.

It might actually increase world revenue, if it causes some countries to bite the bullet and accept a higher price.

Well then we have a game theory problem. Every country wants to freeload on drug development spending to minimize their own expenses. It's unrealistic to expect that countries like India or France will voluntarily accept higher drug prices just to incentivize new drug development. If the USA decides to stop subsidizing the rest of the world then the most likely outcome will be a permanent reduction in the rate of new drug development. Would that be an improvement?

We have people dying of treatable ailments that have been understood for decades which cost less than the labour used to deny them treatment and lobby against their interests.

A slower pace for rare ailments seems like an obviously acceptable trade off.

you make a committee of old doctors and have them set the prices.

Let the market figure it out—it’ll adjust, companies will raise prices in other markets and simply not serve the ones that won’t let them charge enough to make it worth it—and then explicitly, collectively subsidize it if that produces a shortfall? Pinning the bill for a subsidy on the sick people—but only in our country—we’re claiming to be trying to help, while also claiming our entire country is and must remain, uniquely, a martyr to the cause is a deeply weird way to go about providing a subsidy.

The market has figured it out. The market has figured out, that tech bros will charge you as much as possible for that last dyeing grasp, seeking as much profit, while just glossing over mistakes and oversites that unalive you and your loved ones. The very best of luck with that. Hope you have an immediate and effective alternative.

I meant use monopsony government buying power and/or price controls like 100% of the rest of the developed world, and let the market figure it out. Though I definitely didn’t make that clear, my bad.

Then subsidize, on purpose and directly, not by some lopsided roundabout more-expensive-than-it-needs-to-be scheme, if problems arise.

Please define "their fair share". How much of the money for US advertising shall they bear whilst we are at it.

If advertising wasn't net positive for drug companies, they wouldn't do it, ie. paying for advertising means paying less. But if you disagree with that reasoning, advertising accounts for ~3% of US drug spending, so taking it or leaving it isn't going to make a big difference in prices.

It is notable that the industry spends more on marketing than R&D. Virtually all of this spend is in the US; very few countries allow the marketing of prescription drugs to consumers.

Quite a bit of the high pricing for Americans is also by companies who _don’t even do_ R&D to any significant extent; companies who only make generic price them dramatically higher in the US than elsewhere.

> > other countries to pay their share, but how do you propose to do that?

They cannot pay with money, but honestly speaking they could "pay" with risk taking, I mean trying drugs that the FDA is too risk averse to approve . For example the risk profile of basically every day activity is much much higher in India or Nigeria compared to the U.S. and so the same should be for drugs, medicine is an extremely risk averse field as it is, but with the FDA being the world authority over medicine safety basically the risk profile of the US is being transferred over to the rest of the world which is nuts. Consider for example the risk profile of daily driving in the U.S. vs India or Thailand where everybody goes around in scooters without helmets, it works for them, their economy would collapse if they tried to have the safety of the U.S. drivers going around with 20ft long 7500lbs cars.

The unfortunate thing is that the whole world relies not only on the U.S. for drug research but also drug approval. If the FDA says no to something then not even Lesotho would try it , even though maybe from a risk reward standpoint it would make so much sense for Lesotho to try it .

Not all subsidy is a bad thing. The money is used to fund real expertise and industrial capacity.

Yeah, it's unfortunate for the US, but since no one else is stepping up to pay for the medical research that benefits all of humanity, we have to do it.

The recent "negotiated prices" for Medicare drugs could be the beginning of the end for this system though.

Wouldn't it be even better to explicitly funnel our money to R&D, rather than hoping that it gets there eventually after insurers and paperwork maximizers and intentionally-inefficient providers all take their cuts?

Which researchers do you funnel money to?

The majority of basic research is done in academic research laboratories which are predominantly funded by government research grants. If one of these studies pans out and something can be patented, a business or investor group may license the patent and fund an applied R&D program with the goal of getting through FDA trials. This effort is either funded by investor capital or internal company funds (likely from revenues from the sales of FDA approved medications or other products). Presumably if a business or investor group has a track record of bringing treatments to market (e.g. having a revenue stream from a previously economically successful product) they are entitled with the option to invest more funds, etc.

High interest rates have stopped way more drug development than lower or higher drug prices ever have.

Between 2019 and 2022 there were like 88 biotech IPO lockup expirations and only 3 were trading higher than post lockup for any period of time.

Macro determines the rate of risk taking. Not “details.” You simply 100% cannot have drug discovery without risk, and risk wants returns.

Should we have low rates and high inflation for the sake of more “discovery of medical techniques?” Inflation and high costs: dude, they are exactly the same thing!

"I've heard it quipped that Americans are subsidizing the discovery of new medical techniques for the rest of the world."

The way Trump touted an invention from the German company BioNTech as "Invented in America".

To be fair, very critical elements of mRNA technology were developed in the U.S. Nothing is purely German or American nowadays.

To be fair, writing a paper is not developing a technology. And someone from the town I live discovered oxygen. No oxygen, no mRNA.

"Nothing is purely German or American nowadays."

I know that, not everyone seems to though:

"I've heard it quipped that Americans are subsidizing the discovery of new medical techniques for the rest of the world."

And not even nowadays. Like with the Wright Brothers, who used data from Otto Lilienthal.

But the Wikipedia article could not stop trying to minimize his impact,

"Lilienthal's research was well known to the Wright brothers, and they credited him as a major inspiration for their decision to pursue manned flight."

where someone felt the need to add

"They abandoned his aeronautical data after two seasons of gliding and began using their own wind tunnel data."

and make it all about the Wright Brothers. In an article about "Otto Lilienthal" not the Wright Brothers.

Going far enough, we should credit some anonymous Homo erectus for discovering fire... Not that I am completely joking, the tree of human knowledge is fascinating by its depth and goes deep into the pre-literate age.

That said, I wouldn't dismiss Karikó's and Weissman's discovery of replacement of uridine with pseudouridine as merely "writing a paper". It was a pretty crucial technological stepping stone that made mRNA treatment orders of magnitude less dangerous to humans. Same with their discovery of the way how to deliver mRNA into cells (using lipid nanoparticles).

> What I'm unclear on is whether "health spending", in this analysis, is defined as money paid to care providers such as hospitals and dentists, or money paid by citizens for healthcare. Because you've got insurers and PBMs taking profit.

> The ratio of those two numbers is the efficiency of the American insurance model.

The ratio of those two numbers is quite divorced from the efficiency of an insurance model.

On the one side, this would count wasteful spending on unnecessary tests or overpriced services as an efficiency improvement because proportionally more money is going to providers. On the other side, if insurers better at preventing fraud have lower premiums and therefore get more customers and make more money, that would count as "inefficiency" and the fraud prevented would also count as inefficiency (because that money went to "providers"), even if the net result is less fraud and lower premiums.

That isn't to say that the US system is efficient. It's clearly quite broken. But its brokenness is because the government has been thoroughly captured by the industry -- which is the providers as much as the insurers -- and they oppose any measures that would improve actual efficiency because the inefficiency is their profit. Which is why the US system costs more than the systems in other countries regardless of whether the other countries use public or private systems.

An efficient regulatory system for a private insurance market would be something like, a schedule of service codes where each provider is required to publish a fee schedule representing the uniform fee paid by all institutional insurers, eliminating the overhead of "negotiating prices" (a major source of inefficiency) in favor of price transparency and allowing patients and insurers to choose a provider on the basis of price and distance, while still subjecting providers to competitive pressure because people would naturally favor providers with lower fees. But the existing US system doesn't do that at all.

I generally agree with your points, but the US healthcare system does now have pretty much the level of price transparency that you want. Commercial health plans have been required to publish their negotiated network provider fee schedules since 2022. You can just download the files and take a look. Of course as an individual health plan member that won't tell you your out-of-pocket cost for a particular service, but it is useful to self-insured employers comparison shopping between health plans.

https://www.cms.gov/healthplan-price-transparency/plans-and-...

Longer term though we should move away from the fee-for-service model based on providers submitting claims for service codes. A value-based care model where provider organizations bear at least some financial risk and are accountable for patient outcomes will probably work better for everyone.

> the US healthcare system does now have pretty much the level of price transparency that you want.

They made a little progress toward it but the providers are fighting it every way they can. Apparently one of the methods is to use many different codes for the same thing so they can't easily be compared. You need to get to the point where it's like a price comparison service; your doctor tells you to get a scan and you get a list of every service in the country that offers it, sortable by both price to you and distance from your house. They should also eliminate the premise of "in-network" and just have all providers publish their prices and insurers publish the amount they cover in your region.

> A value-based care model where provider organizations bear at least some financial risk and are accountable for patient outcomes will probably work better for everyone.

It would probably be better to combine them, i.e. you get primary care your way but when primary care wants you to get a scan or take a medication you have competing providers. Lumping the entire network into one entity is likely to lead to market consolidation and then inefficiency.

The price transparency requirement I linked above applies to health plans, not providers. (There's a separate price transparency requirement for hospitals but it's less useful to consumers with health plan coverage.)

I'm not sure what you mean about different codes for the same thing. The health plan MRFs all use the same CPT/HCPCS codes. Each code has a unique meaning.

Health plan member portals also have online shopping tools where you can do price comparisons for every network provider within a certain distance. So what you're asking for pretty much already exists, although many consumers aren't aware of this.

https://www.cms.gov/healthplan-price-transparency/consumers

> Of course as an individual health plan member that won't tell you your out-of-pocket cost for a particular service

If I can't get this, there's no price transparency. Of course it's even worse than this in practice, since not only can no one tell me my out-of-pocket cost for a service I'm about to purchase, they can't tell me what the negotiated rate is going to be, and it could be over a year before anyone can tell me either the negotiated rate or my share of the negotiated rate. (Odds are it will take at least a month and these figures will be renegotiated multiple times before I get a bill.)

If you're a health plan member then you can access consumer price transparency data through their mandatory comparison shopping tool.

https://www.cms.gov/healthplan-price-transparency/consumers

Reimbursement rates are negotiated between payers and network providers at most once per year. Rates don't change monthly.

> and are accountable for patient outcomes will probably work better for everyone.

What's to stop providers cherry-picking who they treat? Who's going to treat the patients who are high risk? That will ruin the outcomes metric?

Accountable care organization (ACO) contracts between payers and providers usually don't allow cherry picking. They have to take all comers. There are typically higher capitation rates for older, sicker patients. It does take some actuarial sophistication to price those risks correctly but with large numbers of patients things tend to average out.

Who and how is that going to be monitored and enforced? What's the punishment? Cost-of-doing-business fines that the market only ends up paying anyway?

I'm not disagreeing w/ the theory of your proposal. I haven't - yet? - seen how it can actually work.

For Medicare ACOs you can read about monitoring and enforcement here.

https://www.cms.gov/priorities/innovation/innovation-models/...

For ACO agreements between provider organizations and commercial payers, the parties can negotiate any contract terms they like. The agreements are usually confidential but payers aren't naive about this stuff and are fully aware of how to protect their financial interests against cherry picking by providers.

Profit margins for insurers are pretty low on a percentage basis. The Affordable Care Act (Obamacare) imposed a minimum medical loss ratio on commercial payers. You can read the financial statements for those that are publicly traded. Some of the largest insurers such as Blue Cross Blue Shield Association members are non-profit.

The NHS isn't really a "single-payer system" in any meaningful sense. In the UK, most healthcare providers are employed directly by the government and their wages are fixed below the market rate to control costs. There are internal financial transfers but there aren't really arms-length negotiations and payments between separate payer and provider organizations.

If the USA was to adopt a single-payer system like the various "Medicare for All" proposals that politicians have floated that wouldn't do much to reduce costs. Any meaningful cost reduction for the system as a whole would require driving down provider wages, rationing care, and ending the way that we subsidize drug development costs for the rest of the world. Those measures might be good things to do on balance, but they aren't politically popular.

For profit non profits exist. There is no “metric” for how much a 501(c)(3) must ratio in order to be considered tax exempt.

They must follow their own discipline set in their founding documents.

Calling blue cross blue shield nonprofit is disingenuous as they made $749,000,000 in 2022.

Per their 990’s: https://www.causeiq.com/organizations/view_990/135656874/101...

$749 million is revenue. Revenue less expenses (i.e. profit) was $57 million, which admittedly is a decent 7.5%. But as a nonprofit there are no shareholders or partners to siphon off that profit. The common argument is that management siphons off that money through salaries, and I can't say they don't, but if you look at their assets & liabilities it seems like some significant amount of their profit is going into savings.

Anyhow, the Blue Cross/Blue Shield system has a very complex structure so if you're looking to find where the real money is being siphoned off it's unlikely to be at the top. BC/BS affiliates are independent, that's why the org at the top for a system insuring over a hundred million people pulls in less than a billion dollars in revenue.

"Nonprofit", at least in the US, is usually shorthand for having received a 501c3 (or similar) designation from the IRS. It has little bearing on your ability to make money as an organization (with caveats like the public support calculations)

Source: Ran a nonprofit for a few years that made money doing software consulting

This is so misleading. What you are saying it technically true, but also why our system is broken.

If I can only make 10% profit (or whatever the law is), what is my incentive to keep healthcare costs down? The ONLY way I can grow my income if it healthcare costs go up. 10% profit on a $100 medication is way less than 10% profit on a $1,000,000 medication. The road to hell is paved with good intentions.

Another disingenuous argument on non-profits. Is all of Blue Cross Blue Shield non-profit or only the certain parts you want us to look at? A 'Pay no attention to the man behind the curtain' argument.

Final disingenuous argument is you just asserting 'meaningful cost reduction'. There is no way ambulance rides went from $200 to $10,000 because of EMT pay.

> There is no way ambulance rides went from $200 to $10,000 because of EMT pay.

Absolutely not. EMT pay can be as low as $12 an hour.

> If I can only make 10% profit (or whatever the law is), what is my incentive to keep healthcare costs down? The ONLY way I can grow my income if it healthcare costs go up.

You're missing the step where you also have to increase premiums, i.e. price. And what normally keeps any seller from increasing their prices whenever they want is competition--some other insurer will get your business.

That begs the question of how competitive the insurance market is. Let's assume it's woefully uncompetitive. But in that case I don't see how the ACA 80/20 rule on administrative overhead changes incentives and the evolution of price inflation one way or another. At best it temporarily disrupted existing inflationary schemes, at worst it does nothing.

I'm not asking you to look at anything. Many US healthcare payers are private non-profit corporations. That includes some (but not all) Blue Cross Blue Shield Association licensees. The BCBSA isn't a payer itself and merely provides some shared services to their independent licensees. Outside of the Blues system there are other large non-profit payers such as Kaiser Permanente, HCSC, Geisinger, EmblemHealth, etc. This isn't secret information, you can just go look it up instead of arguing.

Commercial health plans have conflicting financial incentives. Most of them no longer provide much insurance (in terms of bearing financial risk) but rather primarily act as administrators for self-insured employers. So while payers can potentially boost short-term profits by paying out higher claims, employers comparison shop between competing health plans every year. Your HR department would happily switch from Aetna to Cigna (or whatever) next year if their analytics forecast shows that would save a few dollars on expected claims.

Ambulance fees are a mess but those represent a tiny fraction of overall US healthcare spending. Some reform there would be a good idea but that wouldn't do much to reduce costs.

Significant systemic cost reductions will require some mix of lower provider wages, care rationing, and reduced spending on new drug and device development. Countries with more socialized healthcare systems are more financially efficient in some ways but they also just do less stuff: less drug development, longer queues for advanced treatments, underpaid doctors (relative to market wages), care restrictions based on QALYs (or similar metrics). Complaints about payer profits, while perhaps somewhat legitimate in certain cases, are largely a distraction from more fundamental problems. That's just basic math dictated by the cashflows. There are no simple solutions and we're eventually going to have to make hard choices. No one wants to face this reality.

Edited out frustration.

I wrote hospital medical software for 20 years passing on way better pay because I wanted to make a difference. And I gave up because the system WANTS to be how it is today. Everyone in medical is CHOOSING to make it this way, then claiming 'ah it's too big, it's too complicated, we can't change it'. Americans being to scared to call an ambulance means emergency care has completely failed them, not a small little thing to be brushed off. Americans are making hard choices about medical care every day already.

We're all frustrated. No one is happy with their available choices. Join the club.

The system can't want anything. It isn't even really a "system" in any meaningful way, in the sense of being a unified entity working towards a common goal. US healthcare is just a bunch of disconnected people and organizations pursuing their own interests, often in conflict with each other. Any major improvements will require changes at the federal policy level to better align incentives with desired outcomes. This is hard because we collectively can't even agree on the desired outcomes or how to measure them. I mean at a high level most people think that everyone should have convenient, affordable access to high-quality care but once you get into specifics everything gets complicated and making trade-offs which disadvantage some voters is unpopular. Like should we spend $100K to give a terminal cancer patient another month of life? Should surgeons make $700K per year?

It's easy to complain and cast blame. And we should certainly cut out waste and abuse where we find it. But that won't significantly move the needle on overall system costs. The problems are much more fundamental.

> It isn't even really a "system" in any meaningful way, in the sense of being a unified entity working towards a common goal.

Well said. That this could be equally applied to the US as a whole likely explains subsidiary disfunctions.

Thank you for taking the time to lay out some of these issue in a clear way. It's an issue I'm somewhat new to but have taken in interest in. Where does your branch of the club meet? What are we doing?

Good Lord I wonder what the unexpurgated version was like

This is nonsense. Health care costs about twice as much in US as everywhere else and only the rich can afford it. Health insurance companies fight against doctors and patients to subvert health and profit as much as possible.

92% of Americans have health plan coverage, so we're not talking only about the rich here. There are certainly problems that we should fix but spreading misinformation about basic facts doesn't help anything.

https://www.cdc.gov/nchs/data/nhis/earlyrelease/Quarterly_Es...

It's easy for populists to demonize health insurance companies. But even if we somehow magically cut all payer profits to zero that would only marginally reduce total system costs. Much of what they do in fighting against doctors by negotiating lower reimbursement rates and denying claims that don't meet coverage rules actually helps to control costs for their main customers, the large self-insured employers that purchase health plans for their employees. At the national policy level, one change that would probably help would be breaking the linkage between employment and health plan coverage in order to better align incentives.

Other countries that spend less on healthcare also have lower provider wages, longer queues for advanced treatments, rationed care based on QALYs (or similar metrics), and less innovation in drugs and medical devices. Maybe that would be better overall but let's not pretend that there aren't severe trade-offs. You can't have your cake and eat it too.

So what if they have health plan coverage if they can't afford to use it? Insurance is wildly out of control and needs to be reformed out of it's current form of existence. Health insurance companies act in bad faith against patients and doctors and many people with insurance go bankrupt anyway. What percentage of bankruptcies are from medical bills? It's impossible to objectively defend unless the goal is to make money at the cost of human health.

The vast majority of consumers with health plan coverage do use it. At a minimum they can access preventive care benefits at zero out-of-pocket cost.

https://www.healthcare.gov/coverage/preventive-care-benefits...

About 4% of bankruptcies are from medical bills.

https://doi.org/10.1056/NEJMp1716604

That study (full text[1]) is extremely selective: namely, the only factor they looked at was hospitalizations causing bankruptcies, and ignored emergency care expenses, chronic conditions and other long term treatment. In fact from their introduction you can very much see the problem:

  the fraction of people filing for bankruptcy who happen to have substantial medical expenses.

Like...that is a weird factor to just try and wash away with sample selection.

The only factor they considered was the proportion of people who filed for bankruptcy by years before/after hospitalization, which they found was about 4% of total bankruptcies - for non-elderly adults.

  we estimate that hospitalizations cause only 4% of personal bankruptcies among nonelderly U.S. adults, which is an order of magnitude smaller than the previous estimates described above.

Now let's put that in perspective: one of the most common routine surgeries for a healthy person would be having your appendix out. That's a hospitalization, you stay overnight. It's also fairly cheap and immensely routine.

It is also notable that the study was focused on patients at a single Californian hospital -

  we therefore selected a sample of people who were admitted to the hospital in California

  Our study was based on a random stratified sample of adults 25 to 64 years of age who, between 2003 and 2007, were admitted to the hospital (for a non–pregnancy-related stay) for the first time in at least 3 years

In short, the way this study is being thrown around to assert how medical bankruptcy works is invalid. And I'm calling completely bullshit on this methodology. Even their conclusions more or less paint the picture:

  We have found that hospitalizations cause: *increased out-of-pocket spending on medical care*, *increased medical debt*, and decreased employment and income

* asterisk emphasis mine.

[1] https://pmc.ncbi.nlm.nih.gov/articles/PMC5865642/

You work for an insurer? I'm sorry for you. Save your soul and quit!

Work for an internet ad company instead!

I suggest you try purchasing insurance through a state market place for you and your family for next year and then report back on your experience if you're still alive in 2026.

> longer queues for advanced treatments

Americans always toss this out like it means something. If you're not in queue because you can't afford it, then you are in the queue it's just infinitely long but you're not counted.

Your entire culture here is so broken you are fundamentally incapable of even beginning to understand how other countries discuss these metrics: when they discuss wait times it's for everyone who needs it - no one is unable to afford it or being denied it by their health insurance. "The queue" is triaged against available resources - i.e. patients needing urgent care will get it earlier then those who are stable.

Could it be shorter? Of course it could, but it also includes everyone who needs it. And if you don't like the queue the gasp you can still pay to be treated privately and receive prompter service under most systems.

Your system is so broken you literally can't comprehend the wording of complaints about other systems because you contextualize it through your own. Built into the entire model is that "the queue is long and also we already kicked a bunch of people out of it, which is not what anyone is talking about in regards to the NHS, or Australian Medicare or any other system.

I am quite familiar with the systems in other countries. Every country rations care. Some do it by condition severity, others by ability to pay. The vast majority of US consumers have health plan coverage and the co-insurance or co-payment amounts are fairly low. I won't attempt to defend the vagaries of the US healthcare system but let's not pretend that everyone who needs treatment in other developed countries actually gets it in a timely matter. Why are 5-year cancer survival rates higher in the USA than the UK?

It's pretty common to see affluent Canadians come to the US as medical tourists and pay out of pocket for procedures like MRI scans or joint replacement surgery. This is a real thing that happens all the time. Depending on your perspective that might be acceptable in the name of fairness and cost control but there are always trade-offs.

Ah yes the kind of health plan coverage that still requires you to pay thousands of dollars out of pocket...

Studies have found that Kaiser Permanente (an integrated health insurance/care provider—basically a non-governmental equivalent of the NHS in comprehensiveness—that is available in many US states) is more efficient and effective than the NHS for about the same cost.

Examples:

* <https://www.bmj.com/content/324/7330/135>

* <https://www.bmj.com/content/327/7426/1257>

Kaiser’s effectively an HMO, right? Consumers (i.e. employees evaluating their corporate benefits) hated HMO’s at their peak in the ’90’s so much that the initials became politically toxic.

Cheaper plans with more restrictions could exist more broadly. Consumers don’t want them, politicians make hay on the consumer unhappiness and ban the things that allow the plans to be cheap in the first place.

Kaiser is like the NHS in that it does everything in-house. Kaiser members go to Kaiser doctors, stay at Kaiser hospitals, and get prescriptions fulfilled from Kaiser pharmacies.

I agree on "HMO" being tainted. Kaiser has a good reputation in its territories, as does Intermountain, the other big western US integrated system.

Health care prices in the US were reasonable until the government got involved in it in the 1960s.

Prices rose with inflation until 1968, when they started angling up steeply. 1968 was soon after the advent of Medicaid and Medicare.

The 1962 FDA amendments also resulted in a steep rise in drug costs, and a sharp reduction in new drugs being developed.

If that's true, how are they so much more reasonable in most developed countries with far greater government involvement still? Is the US government just uniquely bad at healthcare somehow? Why?

It is true. Look at graphs of it.

> Why?

I don't know how other countries manage their health care systems, though I know that the British one is facing bankruptcy, and while health care was free in the Soviet Union patients had to pay for anesthetic for root canals, and bribery was the norm.

Here's a link to what's wrong with the American system:

https://www.theatlantic.com/magazine/archive/2009/09/how-ame...

>British one is facing bankruptcy

No it isn't.

By reasonable do you mean 30-50% of your income for your entire life? Regardless of whether you use the services?

No country in the world has you paying 30-50% og your income to health care, it's more like 15-18%

Where on earth are you getting that figure from?

The uk tax receipts in 2024 was 342.2 billion.

The nhs budget was 181 billion. Half of all government money appears to be going to healthcare.

What percentage of people's money is government money?

You appear to be working on the assumption that 100% of the population's income goes to the UK exchequer

… Where on earth are you getting that? As a high earner in a European country, about 8-9% of my income goes on the health service (though that includes some non-healthcare stuff). And I’m an extreme outlier; multinational salary and equity, single, no kids. For a single childless person on the average wage it’s about 2.5%.

What’s your effective tax rate?

Didn't the de jure government get involved in WWII with prices caps on wages yet exempting benefits, and this set the stage for the anticompetitive bundling of healthcare with employment? And wasn't the standard of care back then predominantly flavoring plus opium, which has a quite low cost basis?

Yes, employers during WW2 started offering health care as a fringe benefit because the US had wage caps. Even earlier, the government required licensing of doctors, the original purpose of which was to drive out Jewish and Black doctors.

https://www.amazon.com/Competition-Monopoly-Medical-Care-Fre...

But the big government push into health care happened in the 60's.

Another big driver of American health care costs is the FDA:

https://www.amazon.com/Regulation-Pharmaceutical-Innovation-...

It is surprisingly hard to track down what is meant exactly. It is not either of the options you listed here, but closer to the first. Chasing a very long chain of citations to other citations, it appears this paper contains the original explanation of where the data come from: https://sci-hub.st/10.1007/s11205-015-1196-y.

They survey all of the possible healthcare goods and services available across OECD nations, make their best attempt to select a representative basket that is both available across all nations and reasonably similar, then estimate what they call a "quasi-price" per unit of good and/or service, to account for the fact that the actual charged price is often artificially suppressed or set to zero by government fiat. This seems to be done by scouring management accounting databases to figure out what the payers and providers consider to be reasonable reimbursement rates for accounting purposes, whether or not that is what they actually receive.

I get what they're trying to do, but this probably explains some of the counterintuive results, because mostly people are probably thinking more along the lines of "add up all premiums paid to insurers, out of pocket expenses paid directly by consumers to providers, and all government outlays classified as healthcare" and that's how much your country spends on healthcare.

That's a reasonable comparison to make, but as the blog and the OECD report both point out, it does nothing to account for differences in quantity and quality of healthcare goods being paid for. The problem is this discourse then inevitably leads to "well the US gets worse outcomes," but to what extent is that fair? The only reason I can walk today is because of US healthcare. If you incur a musculoskeletal injury that requires intervention in various different countries, how likely are you to fully recover? If you get cancer, how likely are you to go into remission? I don't necessarily know exactly what should be measured, but I know that when the discussion goes straight to lifespan, that is heavily confounded. Americans drive more, own more guns, are fatter. There has been tremendous industrial pollution in various places, though I don't know how that compares to the rest of the OECD. I wouldn't be surprised if we have more backyard pools. There are many, many reasons we might live shorter lives that have nothing at all to do with the quality of the healthcare we receive.

Americans look at their 9k a month salary and don't care about loosing an extra 300 USD on health insurance. I've experienced the British and Swiss systems - Swiss is like the American - pay roughly 600 CHF a month - and it's way better than the NHS. You can see a specialist the next day, get a scan the next day etc.

Is medical bankruptcy common in Switzerland?

600chf sounds like passable value for money, as long as you get excellent care and as long as that's all you pay.

But my concern is always what happens to the poor. Yeah, yeah, the Swiss are rich - but not literally every Swiss, I presume.

>Is medical bankruptcy common in Switzerland?

Only 4% of US bankruptcies are because of medical bills <https://www.washingtonpost.com/blogs/post-partisan/wp/2018/0...>. A tipoff that [insert large percentage here] of bankruptcies aren't actually because of medical costs is that only 6% of bankruptcies by those without health insurance are because of that cause. The biggest cause of bankruptcies is lack of income, which health insurance doesn't affect in any country.

I was asking about Switzerland, since you brought it up. It's a fascinating place, I'm keen to hear your observations.

Don't conflate bankruptcies. _Purely financial_ bankruptcy is recoverable, given good health and time. (Not to trivialise it.) But, for a peasant with terminal cancer: _medical_ bankruptcy generally means a miserable and undignified death. There's worse pain than pain, you know?

So, while I have to respect the dispassionate argument that "not _that_ many people die in a ditch", I reply that my £200 buys me not just passable healthcare but also some pride in my nation finding some fucking compassion.

That moral point is also an economic point, but I'm not ready to articulate it concisely. Let me say simply that a nation needs to find character on the way up and then again on the way back down, and America is currently fumbling for the second step. A nation is founded on its citizens. The cost of a zeitgeist of rage and distrust is, eventually, everything. What price empire?

> I was asking about Switzerland, since you brought it up

sarah_eu brought up Switzerland, in comparison to the UK NHS. I don't know what percentage of Swiss bankruptcies are because of medical bills, but can cite the statistic for the US (which of course is the main topic here). Also, as I alluded to, "[insert large percentage here] of bankruptcies in the US are because of medical bills" is a common incorrect trope in/about the US, which I wanted to fend off before it came up yet again.

>But, for a peasant with terminal cancer: _medical_ bankruptcy generally means a miserable and undignified death.

Obamacare mandated that the 15%[1] of Americans pre-Obamacare that did not have health insurance get it or pay a penalty. The figure is 8% now.

And before you say "Well, that's not 100%", while the penalty for Obamacare noncompliance is not high enough, 92% of Americans having health insurance is not very far from the 95-97% elsewhere, and some large share of the 8% is from illegal aliens who are ineligible or avoid signing up for government health insurance. In every country there are people who fall between the cracks, whether a German who neglects to sign up for a new sickness fund after changing jobs, or a Canadian who neglects to sign up for a new provincial health care card after moving. The only way to get actual 100% coverage is to use the UK NHS model of having no membership card at all.

[1] Yes, 85% of Americans before Obamacare had health insurance. How many of you non-Americans (heck, many Americans) thought that "0% of Americans have healthcare" before or after Obamacare? It's OK; you're not alone in believing everything you read on Reddit.

> Only 4% of US bankruptcies are because of medical bills

I'm going to hazard a semi-informed guess (I grew up in Switzerland, live in the US), that 0% of Swiss bankruptcies are because of medicals bills.

And https://www.amjmed.com/article/S0002-93430900525-7/fulltext disagrees with you, claiming 62% of US bankruptcies are due to medical bills... (other links report somewhat lower figures, e.g., https://www.self.inc/info/medical-debt-bankruptcies-statisti..., but definitely nothing as low as 4%).

Neither of your links are primary source data and give an incorrect interpretation. If you follow the links to the primary data you will find the phrasing changes from "medical problems contributed to..." in the source to "health care expenses were the most common cause of bankruptcy" in your citation.

The numbers you cite are the percent of bankruptcies that include medical debt. The data doesn't say the medical debt caused the bankruptcy, or that this debt type was the largest percentage of debt. People declaring bankruptcy typically have many types of debt as they generally fall behind on all their bills.

The Washington Post piece I linked to (Permanent URL: <http://web.archive.org/web/20180326154159/https://www.washin...> discusses the Himmelstein article the letter you cited cites. As arpinum said, Himmelstein et al. conflate any debt that includes medical bills at time of bankruptcy with "medical bills caused bankruptcy".

> But my concern is always what happens to the poor.

There are subsidies available to low-income households. I'm unsure about the specifics as subsidies differ from one canton to another and usually depend on your income and family status.

Yes, exactly, while the average USian might still keep up with the rising costs of healthcare,

(and in fact being the cause of rising costs because that is where they are going to spend their disposable income),

the median USian will not.

Partially this also comes from statistical effects that aren't scale-invariant :

Countries with more people are more rich (including per capita).

Countries that are richer are more inequal.

Countries with more people are more inequal.

9k a month is not typical for sure.

$300x12 = $3,600/year for US health insurance?

I think it costs more than that!

Exactly. I think they are confusing the employee portion with the overall cost? As an example, I currently pay about $200/ month but my employer is paying $1800, so total cost is $24000/year.

TBF, the $300 is a "more" number in their post, the difference I think from the further upthreads comparison of $200/mo cost of non-US, vs. $500/mo cost for US. So,

> don't care about loosing (sic) an extra 300 USD on health insurance

It's the difference we allegedly don't care about. But they're claiming the cost is $500/mo, not $300/mo.

Still, I think they're wrong: $300/mo or $3,600/y would be a decent sum to a lot of people that they would like to have, to spend on things like housing or basic items.

Also, my searching says $500/mo is a bit below the average single-person coverage premium. And if you have a family, my Google searches suggest you'd love to see $500/mo for healthcare, as you're paying >>$500/mo.

Even if we (I think generously) use $500/mo, I think we can only generously call that a premium-only number. But if you're comparing my private insurance premiums to a nation with universal/government insurance, I think you have to add in both the higher costs I pay out of pocket for things insurance won't cover, and the taxes I pay for government healthcare programs.

I very much doubt that every American makes 9k per month.

Ofcourse what it really comes down to if poor people deserve healthcare or if we should just pretend that they don't exist (the state of healthcare in Europe before WW2).

> I very much doubt that every American makes 9k per month.

We know they don't[1]:

> For the year 2022, the U.S. Census Bureau estimates that the median annual earnings for all workers (people aged 15 and over with earnings) was $47,960; and more specifically estimates that median annual earnings for those who worked full-time, year round, was $60,070.

The upthread's figure is $/mo; the higher (full-time) figure there is $5005/mo.

$9k/mo is within top 20%'tile. Every trying to read the statement as "most Americans" doesn't work.

[1]: https://en.wikipedia.org/wiki/Personal_income_in_the_United_...

The US government(s) spend about as much money per capita on health care as the average European country. Obviously US health care costs are out of control for other reasons than the existence of private insurance.

To be clear because that's easy to misunderstand: despite the fact Americans do not have universal public health care, the government already spends as much as many European countries that do, per capita. Part of this, of course, is because US public health care spending is concentrated on the old (Medicare) and disabled/poor (Medicaid). But it's still a shocking testament to US health care costs.

NI does not pay for the NHS, it comes from general taxation, you’re comparing the wrong figures.

NI is part of general taxation in all but name. Nominally there is an NI fund but any money deposited there is immediately lent back to the government to be spent on whatever they want.

Oops. I've spoken enough already in the thread, but I do want to thank you for the correction.

In my defense, I'm attempting to perform data operations on a kilo of fatty grey meat from a savanna hominid. I've been meaning to upgrade but have you seen gpu prices lately.

Certainly a significant number of its points were defined to explicitly exclude insurance overhead, which I have often seen cited as "very high in the US".

It's also completely ignoring the possibility of Hollywood-style accounting.

One thing I'm curious about is any correlations to number of grandchildren.

Have you tried phoning a GP or for an ambulance recently?

No, let me instead tell you about my healthcare experience in America.

I wanted to get travel vaccinations in New Orleans. In my ignorance, I just looked up a clinic and went. Apparently I don't understand the coding for black clinic.

It was a shack with 30 poor rural black women sitting motionless on mismatched folding chairs. We sat and sweated for an hour; no practitioner or even receptionist appeared.

I don't think there was a phone at that shack. There weren't many cars about, so those women probably walked a decent distance to sit and wait.

One of them had an enormous tumour on her face.

It could be that we just killed the vibe. But these women were motionless. Like waiting was all they did. I believe they waited in that shack for days in a row.

We went to that clinic from a bar where we'd been drinking seven-dollar beers while a waspy college band played poor-hillbilly music to oyster-guzzling yuppies in raybans.

I've generally found Americans to be smart, humble, funny, kind and warm. But when I encounter an American being arrogant or self-centred, I think about that New Orleans shack.

I could trade stories about experiences with UK and US healthcare (I've lived in both countries), but the facts speak for themselves. The UK and US are near opposite ends of the scale of healthcare expenditure per capita in the developed world, yet the average life expectancy is about the same.

I am not defending either system - I would strongly prefer something like the rest of continental Europe, which is a pragmatic mix of private and public healthcare. However, the idea that fully-public healthcare (a unique experiment in the world) is a sustainable model is a joke. It's hard to defend, when our current standard healthcare at the point of service could charitably be called "usually better than the 3rd world".

Yep. Or Australia, where all providers are private but most are free at point of service, should you choose, or if you pay out of pocket you can claim a rebate.

I went as a young man. I may have misunderstood how it works. I don't know how cost-effective it is.

We should also not forget the $1B in drug advertising spend that must be recouped. People from other countries are frequently dumb-founded when they see US tv with prescription ads. Also look at all the companies buying up old drugs and immediately raising the price 10X or more.

Doesn’t advertising drive prices down? For example there is currently a booming industry for GLP-1s and the prices are dropping as the drug is becoming more available. Consumers know they have lots of choices and therefore price discovery is occurring.

> I'm unclear on is whether "health spending",

They list their source as 2017 OECD data. OECD seems to define this as:

"Health spending is the final consumption of health care goods and services including personal health care and collective services."

Their charts are also drawn in a standard and more understandable way.[0]

> Americans are punching themselves in the face.

Hurtful, but okay, I do hope you realize it's the rampant monopolization of health care that is the problem in this country. Yours solved it by simply creating a single publicly held monopoly.

It's not as if either system is perfect and doesn't create it's own share and particular style of inhumane healthcare outcomes. Prescription label prices are noticeably different but are they meaningfully different where outcomes are concerned?

[0]: https://www.oecd.org/en/data/indicators/health-spending.html

> Until I see some data indicating otherwise, I'm going to look at my £200pcm national insurance and my £9.90 prescriptions and my free ambulances, and Americans' $500pcm insurance and their unlimited prescription costs and their four-figure bills even when insured, and I'm going to continue to believe that Americans are punching themselves in the face.

This is a odd position to take. You're going to firmly hold onto a view despite admitting it's not that informed?

Not to mention you're not even comparing the right costs. What the patient pays is not the total cost.

I don't know, or care, how the fuck you got that. Please block me.

That’s a remarkably angry response to someone suggesting you look deeper into a topic.

You're pushing my buttons like a pro. It looks deliberate.

Let the record state that this account got into my inbox in the seconds between my reply and me blocking it. Zero time spent in reflection.

If there's a human behind that account, be told that when you grossly misrepresent a person, the injustice tends to make them angry.

I put thought, into my top level, on the best way to spark a discussion. There was none before, yet my comment has received a bunch of detailed and thought-provoking replies. I have encouraged a tolerably productive conversation. People are continuing without me. This is my first good HN comment.

I put my beliefs, _which I hold lightly_, up in the air expressly to be shot down. I've read every reply, and learned things I didn't know. I'm proud of that top level comment.

Hopefully, the block works this time. I really _really_ do not want you in my inbox, amongst the valuable people.

So please, have the courtesy to

## FUCK OFF

It does feel that way. The worst part is that enough of our elected officials insist we enjoy the abuse.

This may be tangential but the NHS is not without some sickening expenses. The costs are just opaque and hidden but ultimately taxpayers are paying for £300 for a stainless steel bucket for patients to pee in thanks to bureaucracy and government contracrs. (that figure is pre 20s inflation)

So every month the government siphons off 40-45% of your income and donates a lot of it to Big Healthcare. So a case of being damned if you do and damned if you don't...

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