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Comment by mcherm | Hacker News Reader

Yes, the medical situation in the US is badly broken, and everyone knows it. However, it is unlikely to get fixed within the next several decades. It took decades and an extreme swing in political power (one party fully controlling both houses of Congress and the presidency at once) to get a change to the law that said essentially "Keep doing it the same way you're doing it except that a little over 3/4 of the people with absolutely no insurance will now get insurance." Such a tiny step forward, still unclear whether it will actually hold, and this was the crowning achievement after decades of work.

The way we pay for health care in the US may not improve in a substantial way for a LONG, LONG, time.

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"everyone knows it"

No, see - that's the problem. The vast majority of the electorate has no idea either that our system is broken or that other countries actually do things better - indeed, that it is even possible, in principle, to do anything better than current practice in the United States.

One sticking point in my mind is that people always seem to conflate our pharmaceutical and medical technology industry with our healthcare and health insurance system, which are different areas completely.

They think that if we don't have the expensive, privately-held bureaucratic system we do, then GE can't charge what it does for its MRI and CT scanner machines and exit the market, and then Grandma will die a horrible, painful death in a ditch outside Waukegan. Or, if pharmaceuticals don't charge insured patients $10000 a dose of some new drug, that our system will collapse because no one will make medicine in America ever again (never mind that 5 of the top 10 largest drug makers are outside of the US in countries that have abundantly socialist healthcare systems).

A little bit of devil's advocate versus your last point, how many of those makers refuse to do business in the U.S.?

That is, if there is some structural pricing advantage in the U.S., what is stopping those companies from benefiting from it?

I'm not sure I even understand your point. Bayer and Pfizer, for instance, do lots and lots of business in the US. His point is that Switzerland - like every industrialized nation in the world, with one exception - has a socialized health care system, and still somehow manages to have an economy that includes health care providers.

They said "never mind that 5 of the top 10 largest drug makers are outside of the US in countries that have abundantly socialist healthcare systems".

If the companies do (significant) business in the U.S., then the mere existence of those companies isn't useful evidence against the fear "that our system will collapse because no one will make medicine in America ever again". The specifics of where the pharma companies are getting their research dollars are more interesting than the specifics of their incorporation.

(but I don't personally fear that research funding would go away, and I accept that those companies have huge revenues outside the U.S., etc.)

It feels like one of those oddly contingent things that wasn't inevitable. Some decades ago, Richard Nixon and the Democratic-controlled Congress each had health-care-reform proposals, but weren't able to reach an agreement. So, nothing passed. But viewed from today's perspective they weren't really that far apart.

From my reading a great deal of the problems we have now is after decades of government intervention in an attempt to "fix" the system and only making it worse. The legislation you speak was not a tiny step at all, it was a huge leap into making things even worse. The legislation does little to fix the existing problems, in some cases makes them worse, and at the same time forcibly inserts millions of people into the system that most seem to agree does not work. I fail to see how such a thing can possibly help. If this was a crowning achievement of decades of work then politicians have extremely low standards.

Most of the problems I see with the system are inherent in the idea of attempting to socialize costs using the model of "insurance". For example, a friend of mine was born with a heart defect. No rational free-market insurance would sell him coverage at any price he could possibly pay, because the expected lifetime cost is quite high. The only real way to deal with such cases is to spread them across a large population, so people not born with heart defects subsidize those who were (and likewise for other major issues). But of course the population has to be selected in a way that is reasonably representative, rather than only the least healthy people opting in. The three traditional non-adverse-selected populations are: 1) the entire population of a country (the socialized-medicine solution); 2) the members of a large union; or 3) the employees of large corporations (the U.S. solution of employer-tied group plans).

But #3 is showing cracks as corporate-jobs-for-life get less common. In a world where you change jobs more frequently, now there are messes of coverage gaps, COBRA, etc. Not to mention that this arrangement discourages freelancing and entrepreneurship, since you must work for a large corporation with a group plan to be part of a health-care pool, a connection that otherwise seems rather arbitrary (why should where you get risk-pooled for health-care purposes depend on who you work for? only because corporation-tied pools are a way of minimizing adverse selection in the pool).

#1 was the attempt with the legislation in question but it gives too many people an easy way out which is part of the problems it creates. But the other problem is that not everyone can contribute evenly. Thus begins the problem of pushing for fairness so that some pay more than others. Then to be more fair there's a push to increase the limit as to what constitutes "too poor" to pay. Next thing you know politicians are using it to buy votes. Today it's "vote for me or they'll take away your Social Security!" and tomorrow it will be "vote for me or they'll take away your health insurance!"

#2 is the most common way in the US but not necessarily through just unions. It's all about group plans and whatnot in an effort to control pricing. The problem is that this method doesn't cover everyone and discourages certain types of employment as described elsewhere in this thread. In some cases, large unions use the benefits as leverage against their members for various reasons and/or against the employer as a PR tool such as "they are hurting our kids!" type of tactic.

#3 is part of my point as one of the reasons that companies went wild on offering health benefits to workers was to get around a government enforced wage freeze during war. There were companies that offered such benefits before but during the wage freeze it started to become normal to be offered the benefits.

I find it fascinating that after decades of escalation in the problems in US healthcare and insurance the best solutions anyone can come up with and/or get passed is to increase the very thing that almost everyone agrees is broken. "He's been shot three times and he's dying! What should we do?" "Shoot him three more times and see if that helps. Otherwise, we'll have to think of something else."

Has anyone in the world ever tried a variation of selection criteria #1 where the property tax of the residents in the coverage footprint of a hospital pay for the hospital? It seems logical and cheap to administer, which is why it would be opposed in the US, not much room to profit. However it does seem "fair".

I believe Sweden's system is organized roughly in that manner, though not all the way down to individual hospitals. The majority of the funding comes from local/regional taxes that pay for the healthcare system within the region. Then it's supplemented with some national funds that subsidize poorer and more rural regions, and which also provide grants to incentivize regions to do some things that the national government considers priorities. A quick look at Wikipedia says it's overall 71% funded at a local/regional level and 29% at a national level.

Switzerland also has a system based on compulsory insurance within each canton. The state doesn't operate the healthcare directly, but residents of each canton have to buy insurance from one of a small number of nonprofit insurance providers available in their canton, which end up doing the risk pooling.

The Swedish model brings up a good point that the regional childrens hospital in my area would have to gather revenue from multiple county govts not just the city its located in. There is also a Mayo Clinic facility in my state with at least theoretically national coverage which would have to gather money from the feds.

It might be simpler for "regional and bigger" hospitals and specialty clinics to back bill the patients local hospital.

The swiss model looks similar to how we used to bill old fashioned landline long distance telephone lines in the USA. Other than the profit/non-profit thing.

"the medical situation in the US is badly broken"

Those in power would disagree. If the purpose is to achieve a local maxima of profit they're doing pretty well. Privatize the gains, socialize the losses.

If the purpose is to provide medical care, well, yeah, its a pretty epic fail. But that's not the purpose of the system.

The system has to be bled completely dry before it can be redesigned and rebooted. Too many people are still paying in. That has to stop, before things can be improved.

Just how profitable do you think health insurers are, relative to, say, McDonald's?

Just to compare apples to insurance here, the largest pure auto insurer (progressive) maintains ~5-6% profit margins according to filings, whereas Wellpoint one of the largest insurers in healthcare maintains a 7% margin.

There's more to "the system" than just insurers. The large number of middlemen all extracting a profit is one of the many problems. Don't forget overhead and their middlemen, all the way back to med school tuition...

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