This.
Bored??
The bullets:
America just keeps adding layers of brokenness onto deeply broken systems.
I have also been insured by UHC for decades, and I think of them that way because that’s how they sometimes brand themselves, including their online portal “myUHC”. I wasn’t familiar with the other meaning of the acronym (or hadn’t made the association), but I certainly see the irony.
Anyway, why does healthcare cost so much in the US? It’s not because insurance companies are making huge profits. As best as i can tell, there are four major drivers of our excessive costs:
- Inefficiency
- Paying doctors more
- Paying massively more for drugs
- Using more medical services
- inefficiency. We need to track and code everything. Back when my mom was working on a PhD thesis on healthcare costs (she eventually despaired and left school abd) she looked into how the US, Canada, and the UK managed healthcare. In the UK, a lot of minor stuff never gets billed or recorded to anyone. I’m fact, my mom needed some minor emergency healthcare while visiting the UK many years ago, and when she asked how much she owed, they told her it wasn’t worth their while to figure that out, and gave it to her gratis. That would have generated a complex bill seen by several professionals in the US.
- we pay doctors more than many countries. But maybe not more than Canada!
From the Bureau of Labor statistics
Wages for physicians and surgeons are among the highest of all occupations, with a median wage equal to or greater than $239,200 per year.
Medical Doctor Salary in Canada - Average Salary.
The average medical doctor salary in Canada is $247,298 per year or $127 per hour. Entry-level positions start at $59,204 per year, while most experienced workers make up to $425,000 per year.
(The page makes it clear that’s a median, not a mean.)
How much do Doctors earn in the UK? - Medic Mind.
Doctors in the US generally earn more than those in the UK. According to the data from the Organization for Economic Cooperation and Development (OECD), the average salary of a doctor in the US is around $313,000 per year, which is significantly higher than the average salary of a doctor in the UK, which ranges from £80,000 to £150,000 per year.
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we pay substantially more for drugs than any other nation. It can be as much as a factor of 50. (That’s how much one of my mom’s meds increased in price when it was approved in the US. She had been buying it overseas on the gray market, which isn’t illegal if it’s not available in the US, not banned in the US, and for personal use.) The massively profitable pharmaceutical industry takes essentially all of it’s profit in the US, and sells drugs for the ~marginal cost of making them elsewhere.
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we use more healthcare than other nations. No, not cheap stuff like doctors appointments and hospital beds, but profitable stuff, like ozempic, and stents,
European countries typically have rates of implanting stents of 100-400 per 100k people, or 0.2% to 0.4%:
Angioplasty surgeries rise in majority of EU countries - Eurostat).
According to
The US implants 2M stents annually, which at 335M people is a rate of 0.59%
(Of course the appropriate rate depends on stuff like age, but I don’t think the US is a lot older than Europe, I’d have guessed we are younger.)
And I want to talk a little more about point 1, inefficiency. That’s a major source of jobs in the US. All those people recording care, reviewing care, approving or denying care, answering the phone to answer questions about care, or to discuss exceptions with doctors – they are all middle-class people working ordinary white-collar jobs with decent benefits. (Well, some of the people who answer the phone are paid less than that, but still.) If we suddenly made health care efficient, we would also suddenly put a lot of people out of work. Not that it wouldn’t be a net benefit in the long run, as most of those people are employable doing many other things. But if it happened suddenly, it would be an enormous disruption and hurt an awful lot of people. That’s a rather large barrier to fixing our problems.
I think a lot of the reason is simple….although we pretend that free market principles apply to the healthcare sector, those principles don’t work when the entity that’s paying the bills isn’t the entity that’s receiving the services.
There is a lot of political discourse about Capitalism vs Socialism, but the truth is our system is a hybrid system, and pretty much every sane person agree that there are some sectors where socialistic principles work and some sectors where capitalistic principles work.
I believe the health care sector should be socialized, and I think the best argument for this the fact that the best solution the free markets came up with is a patchwork of private socialized systems that doesn’t really work.
So it seems that GoFundMe won’t allow people to set up a fund for the shooter. I don’t agree with this. We had GoFundMe pages for some of Trump’s cronies, and that was fine. But they say not for people accused of violent crimes?
https://www.fastcompany.com/91243533/luigi-mangione-gofundme-campaigns-suspected-ceo-shooter-removed
I’m not supportive of the assassination, but I don’t see why GoFundMe should disallow this, especially in light of the principle of “Innocent until proven guilty”
I did a little searching, and it seems that this policy does predate the murder of Thompson, but I still don’t get it.
Add in, possibly high on the list, that a greater portion of caregivers are specialists, two to one in the US, opposite in other Western countries, who just do more, and especially expensive more.
That also drives (and is driven by) the salary difference.
There’s also the other inefficiency - whenever I need an X-ray, mammogram etc I am always offered multiple appointment slots for the next day. It costs money to have enough machines and technicians sitting idle for me to get a non-emergency , next day appointment.
Huh. Last time i had a mammogram scheduled i had to cancel because i had covid, and they couldn’t reschedule me for months. I finally begged to be put on the waiting list for cancellations, and had it done a week or two later.
For any that aren’t aware, the American Medical Association has a long and ignominious history of creating artificial scarcity of physicians to keep wages high:
And then, there’s the market-distorting influence of BigPharma:
The government can modify the system by providing market forces. The government could massively support the education of doctors and medical technicians, so that these professions are available to citizens across the full range of social strata. It’s supply and demand.
Seems odd that Cuba can do it and we can’t.
The fact that their physicians essentially live in poverty creates one advantage, but not one I’d like to replicate here:
As wanting as the Cuban economy may be, it is still able to produce a surplus of competent medical technicians.
They are fine for the sort of thing you’d go to Urgent care for. But drugs are expensive and in short supply, and stuff like heart surgury is a crap shoot-
https://fee.org/articles/the-myth-of-cubas-glorious-health-care-system/?gad_source=1&gclid=CjwKCAiA6t-6BhA3EiwAltRFGOmWb0vWSJlGFcnLgivu2dnYDnVfiHNtHl4irsMWgalCIW13oH03qhoColYQAvD_BwE
All of those are factors, but you didn’t explicitly call out the two biggest cost drivers of all. And the biggest single one of those two is the complete absence of cost controls. In Canada, fees for medical services are set by each province based on negotiated agreements with physicians’ medical associations and other providers. In the American system, it’s just a free-for-all cash grab with no regulation whatsoever. Even if a particular insurer negotiates particular fees with its in-network providers, they’re negotiated in the context of a lawless landscape of generally extortionate fees.
The secondary factor falls under your heading of “inefficiency”, but the major cost here is administrative. All those claims denials we keep hearing about don’t come cheap. It costs big money each time an insurer reviews your claim and tries to find ways to either minimize the payout or deny it altogether. These things just don’t happen under single-payer, where the conventional concepts of “insurance” and “claim” don’t really even exist. When I visit a doctor or get admitted to hospital, I get treated and then I go home. The doctor or hospital sends a bill to the Ministry of Health and they get paid. Simple.
Those two factors are actually related. Because providers are guaranteed full payment without having to chase down insurance companies, or chase down patients for co-pays, their billing process is hugely simplified and far less costly, so they’re happy to accept lower fees and net a similar income and a much less frustrating life.
I thought i was really explicit about “administration”. That doesn’t “fall under” that category, it is that category. And there’s a reason i listed it first.
Also, you’re factually wrong about the US having no cost controls. It’s just inefficient and inequitable cost controls. But we have lots of cost controls.
Yes, I see that I missed your subsequent post where you talked about administrative costs. In the one I was responding to, you talked about the costs to “track and code everything”, which is not a major cost factor. Adjudicating individual claims, however – something that doesn’t happen in single-payer – is a killer.
How about “no cost controls that actually work”? 
I agree with all this. I’ll just mention that another reason that free-market principles don’t work for health care is that a free market works only with pricing transparency (which doesn’t exist at all in the USA) and with competition–and for many health needs it’s not possible to choose from among competitors. Someone having a heart attack needs to go to the nearest hospital–not choose from among several.
Some human needs just can’t be solved by the free market.
Also, people are not omnicompetent experts in everything. It’s a basic issue with the “free market for everything” approach; when something is sufficiently complex or abstruse, most people can’t understand what they are choosing well enough to not screw up. Not because they are stupid or ignorant, but just because some things need an expert to understand, and nobody is an expert in everything; or even most things. Health care is just an especially extreme version of the issue between being both very complicated and very high stakes.
Even under the best conditions the great majority of people simply don’t have the knowledge or the time to accurately judge what hospital or procedure is best. So they are both easy to fool and prone to make mistakes on such issues even when nobody is helping them do so.
This is supposed to be a post by Luigi.