This.
I have some sources on your statement, Broomstick from a presentation I did, but damned if I can find them right now. I think they’re on my home laptop.
I would add, mandate a single standard for EMRs (electronic medical records) under federal law, just as we have done for billing. This will all health care providers to share information and data fairly easily.
The only effective way to cut healthcare costs is to make people use less healthcare. It’s really no more complicated than that.
The problem is, there’s aren’t many good ways to do that. Some countries set up some kind of comittee that says that Procedure X will be covered, but Procedure Y won’t be because it’s too expensive. Problem is, those are the “death panels” that people are afraid of, because what if you really needed Procedure Y?
So, nobody really talks about cutting healthcare costs.
This what most single-payer proponents don’t realize. Many nations did a better job than the US at keeping price increases in check. When an expensive new procdure comes out, it’s easy for the system to just say “No, we won’t cover it,” and that’s that. Actually reducing costs would require telling cancer patients that they can’t get their chemo treatments anymore, and yeah, I know you’ve been getting them all along but we’re cutting costs now. Or telling the parents of a premature baby that they’re just going to have to let the baby die, and yeah we know that we would have covered the care last year, but we’re cutting costs now.
Do you want to be the person who has to say that? Neither does anybody else. Which is why nobody anywhere does a very good job cutting healthcare costs.
There are entire think tanks devoted to these questions. But we certainly aren’t getting our money’s worth today; the US pays the most and has some of the least-favorable outcomes.
Are you kidding me? “They help widows and orphans!” as justification for the rampant wrongdoings of the health insurance industry, which has spent the past thirty years figuring out how to most efficiently screw their own customers?
Not directly. Medicare and Medicaid are run by the Department of Health and Human Services. Medicare and Medicaid have chugged along for fifty years just fine. Medicare laws change via Congress, but Congresscritters aren’t sitting around processing claims or writing medical policy.
If we revamped Medicare (and included medications), we might be able to just use that framework. No need for special processing systems or eligibility systems – you use what is in place and expand as needed. I’m even good with allowing private companies to offer Medicare Advantage plans, assuming they don’t get up to their usual tricks with not being clear on coverage, or making common medications prohibitively expensive.
Can you go give those words of wisdom to people with sickle cell disease or Tay-Sachs? Maybe a four-year-old with cancer? I bet a kid with cancer would love to know that all she has to do is eat veggies and go for a run! So much money she could save her family, and her hair would grow back!
The healthcare discussion isn’t about “what’s the best way to live”, it’s about “how to provide medical care to everyone in this country and get the best outcomes for the best price.”
Or make healthcare delivery cheaper. But stipulating your point for the moment…
Of course there are. Medical education, psychoeducation, and preventative care for starters.
We have those committees now. They are called health insurance companies.
Are you willing to live in a country where everyone with cancer has to set up a GoFundMe account and have car washes and bake sales just to cover medical expenses so they aren’t bankrupted? I’m not. That’s disgusting.
Oh you can avoid that scenario.
The flip side is you are going have to set limits on how much to spend on which person for what.
Nobody will get bankrupted because of the way the insurance gets set up. Society won’t get bankrupted because we controlled cost.
The price? Some people WILL NOT get medical treatment they could have if money was no object.
Now how you want to divide that between the baby that could be saved and live a good life at at cost of 2 million dollars and managing to get 30 old geezers to live another 5 years each is up to…well somebody.
That’s a great idea. What would be the cost of converting all those old paper records to one standardized format?
I used to work in the IT department supporting the medical records systems. It’s not going to be cheap. It might be a good idea, but it is not going to be cheap, and the conversion costs are going to be up front and the benefits down the line.
Regards,
Shodan
If health insurance companies were the only ones who paid for medical care, you would have a good point. But they aren’t, and you don’t. Providers spend substantial amounts of money on billing even when they know who is paying, and even more on attempting to find the payor when they don’t. Hospitals write off millions of dollars in care for the uninsured and indigent every year. In any event, the amount health insurers pay “for medical expenses” has the providers’ administrative costs built into it. If your family practitioner was just sending a bill to Uncle Sam for every visit instead of running insurance information and looking up contracted rates and so on the cost of the visit would drop substantially (even without any price controls).
Why? Money is always an object. What makes anything you’re describing here different from today?
Yes, the government might get to choose what procedures it will and won’t cover, but how does that prevent a person of means from obtaining the procedure on his own dime?
It doesn’t. And while I’m a proponent of universal health care, I don’t want to see limits on what health care private individuals can buy with their own money. The problem is that too many people can’t afford necessary health care. Not that a few people can afford too much.
A lot. But most hospitals are voluntarily digitizing the records, and we don’t necessarily need to have old records digitized, just require providers to keep records in digital format going forwards.
First, if Donald Trump or Bill Gates has a gazzilion dollars to spend on health care more power to em. Let em do it I say.
Yes, money IS always an object. The problem is too many people in society haven’t figured that out yet. ESPECIALLY when it comes to health care.
Note how many people think Federal Dollars are free somehow. Same goes for insurance companies. Yeah, they both probably manage their dollars poorly blah blah blah…but when push comes to shove, all that money is still coming from the people. No way around that.
I would like to add some general information here, because these discussions often seem to lack it.
The US spends ~17% of GDP on health care.
That is roughly** $ 8000 per citizen**. Of that, it is about a half and half private/public spending split. It depends a little on what you count as public spending, such as tax breaks for workplace health insurance etc. I’ve seen the public share calculated as high as 62 %, but for an average figure, a 50/50 split is good enough.
So that is 4000 per citizen government spending**, and then the citizens have to spend **another 4000 on private health care.
Now the public spending is mostly on Medicare, Medicaid, VA etc. That covers a total of 28 % of the American population.
In fairness though, the American system sluices the most expensive patients -old people, people too sick to hold down long-time employment, war injuries- over on the public purse, while commercial insurance handles the people healthy enough to work.
The average OECD nation spends 9 % of GDP. That is about **$ 3200 **per citizen.
(If you are good at maths you may notice a discrepancy here. It is because the average developed nation has a lower GDP than the US)
Now that 3200 is roughly 2400 public spending**, and ** 800 private. And those 2400 $ per citizen covers 100 % of the population.
Taking the UK, often mentioned in these debates, as an example: They spend 3500 ** per citizen. About **2900 public money, and 600$ private. They cover 100 % of the population, and their results are better than the US ones.
You’ll have noticed that the average developed nation gets 100 % universal coverage for less than the US spends for government coverage of 28 % of the population. But the US also spends more on just public healthcare than the average OECD nation spends on public and private healthcare together. Granted, you can drop everyone from Russia/Chile down from the numbers and get slightly better averages, but that still doesn’t make the average nations spends as much on government healthcare as the US does. Per citizen.
For a bit of scale, the US spends just under 5 % of GDP on its military. So the waste in US healthcare is twice the military budget. Incidentally it is also roughly 5 times the worlds medical research spending.
So what is the causes of the waste? This is what I’ve heard:
The biggest cause, about 35 - 40 % is excess bureaucracy and administration. Not just the insurance companies, although they do employ 600 000 people at generally high salaries. But mostly, the US system with billings and payments with no set standard leads to enormous amounts of work with billing, credit-checking, liaising, negotiating, chasing down payments and just general administration of all these things. I understand the average hospital has about 4-500 position dedicated to these jobs (often more administrators than they have beds), and the US has a lot of hospitals.
The next cause is about 30-35 % of the waste and it is medical inefficiency. That is two different hospitals close to each other both maintaining MRI machines that is used less than half the time, plus technicians and specialists. It is huge expensive interventions that do not improve outcomes. It is spending less on tests on someone without insurance, to end up with an expensive emergency room admittance a year down the line. And doing extra tests on someone with good insurance. Etc.
Understand that other systems are not free of medical inefficiencies. But these numbers indicate how much worse the systemic issues are in the US.
Below that I don’t exactly remember the order of things. Defensive medicine, 9 %. Higher salaries for healthcare workers, 6 %. Litigation, 2 %. Some minor causes I don’t remember.
So there is an enormous potential for savings.
Edit: Link http://www.oecd.org/unitedstates/49084355.pdf
Eliminating waste will not reduce medical cost, because there is no real competition in medical services. People need care when they are sick, and they can’t shop around, so supply and demand remains the same. Cutting waste only makes medical services more profitable, not less costly.
You can’t shop around, but your insurance company can, and that is going to be more and more prevalent with new “narrow” networks.
This is the tough discussion we will never have.
But of course providers will continue to have to conduct billing, even under a single-payer system, particularly if that system provides for copays and deductibles, so the savings you’re talking about are marginal. Even the Medicare administrative structure is vast and often difficult to navigate, and it keeps costs down by outsourcing them to other agencies like IRS and DOJ. A huge chunk of cost is not going to disappear just because there’s one payor loaded into the computer rather than ten.
Charity care is going to be written off under any system. Shifting who pays for it doesn’t reduce the system’s overall costs.
As Grim Render notes, serious cost-cutting would require shutting down lots of clinics and hospitals; i.e., throwing a lot of highly-trained medical people out of work. The politically unlikely possibility of that happening brings us back to why no system has ever really succeeded in cutting costs.
The savings from negotiated prices varies by the pool of subscribers the insurance company represents; more subscribers means more leverage to demand lower fees. If that is the goal, single payer is still the best answer, as one payer has more leverage that many smaller ones. Unless there is substantial consolidation of insurance companies, we are already at the lowest cost that can be negotiated, so further cutting of waste still results in greater profitability, not lower prices.
… that’s really not how negotiation works.
[QUOTE=Tom Tildrum]
But of course providers will continue to have to conduct billing, even under a single-payer system, particularly if that system provides for copays and deductibles, so the savings you’re talking about are marginal. Even the Medicare administrative structure is vast and often difficult to navigate, and it keeps costs down by outsourcing them to other agencies like IRS and DOJ. A huge chunk of cost is not going to disappear just because there’s one payor loaded into the computer rather than ten.
[/QUOTE]
Sure, they still have to conduct billing. But billing one payor is vastly simpler than billing lots. A typical (UK) NHS general practitioner won’t even have any dedicated billing staff. A US family practice will have two or three.
This is the kind of thing that seems so darned obvious, you wonder why EVERYONE does not accept it as a fundamental truth. But so long as health care is provided for profit, will never he addressed. A LOT of people make very good coin specifically from that bureaucracy and waste. Nothing other than good old capitalism. I hate to go all socialist, but is it possible that health care is not something that is best handled through a free market?
For folk who say computerized records will create savings, what do you think Epic charges for a standard install? They ain’t doing it for free.
I’ve heard of some efforts where organizations are trying to evaluate the quality of care provided based on outcomes, rather than filling the most beds and running the most expensive tests and procedures. Heck, with most of the folk I see in my job, I’d love to simply deny anyone health care until they stop smoking and get down to 100# over their healthy BMI.
And then there are the elderly, and profoundly impaired. How much do we spend on them with what purpose?
Of course, looking at the flip side, if we put all of those insurance employees and health care billers and bureaucrats out of work, what are those folk supposed to do for a living?