Indeed, the insurance companies deserve a ton of blame too. They rightly have death panels but use scare tactics to keep people away from gov health insurance that does the same. Still, theyre playing by the rules the gov came up with. Fee for service is a horrible healthcare strategy and insurance is forced into it.
The "Death panel" thing was the primary boogeyman when the ACA was being discussed. But like the comment says, that already exists, just in private form instead of government.
And insurance companies want us to need more or pay more for health care, not less. Insurance is regulated and the companies can only hold on to a certain percentage of the premiums.
They would rather hold on to 20% of a huge number than 20% of a big number.
Agreed, the incentives are horribly misaligned throughout the entire healthcare market. We desperately need legislative overhaul but again congress is completely broken.
My insurance denied me a MRI and physical therapy because having 2 working arms was a luxury. Had to pay out of pocket to be able to lift my arm above my head. Private insurance can go shove it.
"Americans consume too much healthcare"? I'm afraid to guess the logical conclusion to this, but I will counter with "Americans are offered two little preventative healthcare", because in more advanced countries where that is an option, the costs are lower.
The conclusion is that we need to get rid of fee for service so that doctors stop prescribing things that dont work. Getting rid of fee for service also increases the amount of preventative healthcare people receive as providers realize its cheaper to do preventative than massive surgery down the line.
The primary reason for the cost difference is the massive network of middlemen injected into the system, and rampant profiteering by for-profit healthcare companies.
Average cost of 1 vial of insulin in France: $9.08
Average cost of 1 vial of insulin in the US: $98.70
HDThoreaun: huffing some libertarian shit "The people are using too much insulin."
It’s not middlemen. The middlemen (managed care organizations, aka health insurance companies) earn low single digit profit margins.
In the US healthcare chain, the ranking of profit margins goes (and this is public info from public financials):
Pharmaceutical companies
Healthcare software companies (based on other software company margins)
Healthcare providers (doctor groups)
Hospitals (HCA, tenet, etc)
Managed care organizations and retail pharmacies at the very bottom.
The big one I don’t know is legal, which I assume slots between hospitals and healthcare providers, but could be higher. Those millions and tens of millions of dollar judgments don’t come from thin air.
Go ahead and get rid of MCOs, and at best you will reduce costs by 5%. That’s an objective fact. They are just allocating the very limited resources among more and more demand.
> Go ahead and get rid of MCOs, and at best you will reduce costs by 5%. That’s an objective fact.
That doesn't make any sense. Profit margin is meaningless if you are spending billions on a bunch of useless administrative staff pushing paperwork for no reason.
Obviously some of that is necessary, but certainly not nearly all of it. I don't care about a company making 5% on top of a $150k/yr admin salary. I care about the $150k/yr salary which is the true cost added to the system.
Having watched from afar my friends in healthcare who actually provide bedside care vs. the administrative bloat - it's going much like education. Tons of admin staff added that don't ever touch patients that seemingly just get in the way of the folks doing the actual work.
Margin is a meaningless number if you can just pump your expenses to increase the total dollar amount.
I think you left out several layers. At least one of which in the news lately is the PBM, which sit between hospitals/providers and pharmaceutical companies, and are able to exert monopoly power on that market. They have agreements with hospitals that hospitals are only allowed to purchase through them, and then their suppliers are permitted to purchase exclusive access. This results in things like the saline shortage last year, and pushing small local pharmacies out of business. The PBMs also have incredible profit margins, upwards of 80%.
> the massive network of middlemen injected into the system
Does anyone have a good reference for this? It's something that I inherently assume exists but would love to see a flowchart of how rampant it is and where different layers are siphoning their penny.
It doesn't have to be 17%, it can be an arbitrary number because the ones who decide on the nominal pricing are the ones who make money on them being extremely high. These same procedures can in some cases cost even 2-3 orders of magnitude less - and not in another country but in the same hospital but with a patient willing to pay in cash.
list prices are high to scare Americans into buying [more expensive] insurance plan.
they want Americans be scared of going bankrupt from medical bills.
on the backend, between insurance and hospital, these giant list prices are automatically lowered by factor of 10 to the actual cost of procedure
the business model is:
1. insurance scares people with huge prices
2. healthy americans buy a lot of expensive insurance
3. money is injected into healthcare system from healthy patients
4. money is split among insurance/pbm/providers/pharma
>The main reason for that is because Americans consume too much health care.
No, come on man, this is easily googleable. Americans go to the doctor less than other countries, they stay in the hospital less than other countries, they have lower life expectancy, infant and mother mortality than other countries. If you want to know why we spend so damned much, it's because we're billed 2-3x as much for the same care as other countries.
A more apt statement might be that we spend more, even if our quality of care is not better. And the reason we spend more is because of profit-maximizing companies in the middle.
It's wild that we let insurance companies label government triage as "death panels" while for-profit denial innovation got a free pass.
Indeed, the insurance companies deserve a ton of blame too. They rightly have death panels but use scare tactics to keep people away from gov health insurance that does the same. Still, theyre playing by the rules the gov came up with. Fee for service is a horrible healthcare strategy and insurance is forced into it.
Do HMOs charge themselves fees?
Source?
The "Death panel" thing was the primary boogeyman when the ACA was being discussed. But like the comment says, that already exists, just in private form instead of government.
https://www.npr.org/2017/01/10/509164679/from-the-start-obam...
8 replies →
[flagged]
By switching jobs? That's not always feasible for many reasons.
2 replies →
And insurance companies want us to need more or pay more for health care, not less. Insurance is regulated and the companies can only hold on to a certain percentage of the premiums.
They would rather hold on to 20% of a huge number than 20% of a big number.
Agreed, the incentives are horribly misaligned throughout the entire healthcare market. We desperately need legislative overhaul but again congress is completely broken.
My insurance denied me a MRI and physical therapy because having 2 working arms was a luxury. Had to pay out of pocket to be able to lift my arm above my head. Private insurance can go shove it.
"Americans consume too much healthcare"? I'm afraid to guess the logical conclusion to this, but I will counter with "Americans are offered two little preventative healthcare", because in more advanced countries where that is an option, the costs are lower.
The conclusion is that we need to get rid of fee for service so that doctors stop prescribing things that dont work. Getting rid of fee for service also increases the amount of preventative healthcare people receive as providers realize its cheaper to do preventative than massive surgery down the line.
Thank you for clarifying; I had a very different read on your previous comment that was probably the opposite of your intent.
Also americans are fed horrifying food products that are outlawed in civilized countries.
The primary reason for the cost difference is the massive network of middlemen injected into the system, and rampant profiteering by for-profit healthcare companies.
Average cost of 1 vial of insulin in France: $9.08
Average cost of 1 vial of insulin in the US: $98.70
HDThoreaun: huffing some libertarian shit "The people are using too much insulin."
https://www.rand.org/pubs/articles/2021/the-astronomical-pri...
https://www.visualcapitalist.com/cost-of-insulin-by-country/
https://aspe.hhs.gov/reports/comparing-insulin-prices-us-oth...
It’s not middlemen. The middlemen (managed care organizations, aka health insurance companies) earn low single digit profit margins.
In the US healthcare chain, the ranking of profit margins goes (and this is public info from public financials):
Pharmaceutical companies
Healthcare software companies (based on other software company margins)
Healthcare providers (doctor groups)
Hospitals (HCA, tenet, etc)
Managed care organizations and retail pharmacies at the very bottom.
The big one I don’t know is legal, which I assume slots between hospitals and healthcare providers, but could be higher. Those millions and tens of millions of dollar judgments don’t come from thin air.
Go ahead and get rid of MCOs, and at best you will reduce costs by 5%. That’s an objective fact. They are just allocating the very limited resources among more and more demand.
> Go ahead and get rid of MCOs, and at best you will reduce costs by 5%. That’s an objective fact.
That doesn't make any sense. Profit margin is meaningless if you are spending billions on a bunch of useless administrative staff pushing paperwork for no reason.
Obviously some of that is necessary, but certainly not nearly all of it. I don't care about a company making 5% on top of a $150k/yr admin salary. I care about the $150k/yr salary which is the true cost added to the system.
Having watched from afar my friends in healthcare who actually provide bedside care vs. the administrative bloat - it's going much like education. Tons of admin staff added that don't ever touch patients that seemingly just get in the way of the folks doing the actual work.
Margin is a meaningless number if you can just pump your expenses to increase the total dollar amount.
3 replies →
I think you left out several layers. At least one of which in the news lately is the PBM, which sit between hospitals/providers and pharmaceutical companies, and are able to exert monopoly power on that market. They have agreements with hospitals that hospitals are only allowed to purchase through them, and then their suppliers are permitted to purchase exclusive access. This results in things like the saline shortage last year, and pushing small local pharmacies out of business. The PBMs also have incredible profit margins, upwards of 80%.
https://www.youtube.com/watch?v=d_2yTvHoGs4
1 reply →
> the massive network of middlemen injected into the system
Does anyone have a good reference for this? It's something that I inherently assume exists but would love to see a flowchart of how rampant it is and where different layers are siphoning their penny.
Would that even be possible?
just look up increase in headcount of administrative staff at hospitals, providers, insurance companies, pharmacy benefit managers, etc.
all their salaries and profits are coming from patient's pocket
> The US spends over 17% of GDP on healthcare
It doesn't have to be 17%, it can be an arbitrary number because the ones who decide on the nominal pricing are the ones who make money on them being extremely high. These same procedures can in some cases cost even 2-3 orders of magnitude less - and not in another country but in the same hospital but with a patient willing to pay in cash.
list prices are high to scare Americans into buying [more expensive] insurance plan.
they want Americans be scared of going bankrupt from medical bills.
on the backend, between insurance and hospital, these giant list prices are automatically lowered by factor of 10 to the actual cost of procedure
the business model is: 1. insurance scares people with huge prices 2. healthy americans buy a lot of expensive insurance 3. money is injected into healthcare system from healthy patients 4. money is split among insurance/pbm/providers/pharma
>The main reason for that is because Americans consume too much health care.
No, come on man, this is easily googleable. Americans go to the doctor less than other countries, they stay in the hospital less than other countries, they have lower life expectancy, infant and mother mortality than other countries. If you want to know why we spend so damned much, it's because we're billed 2-3x as much for the same care as other countries.
A more apt statement might be that we spend more, even if our quality of care is not better. And the reason we spend more is because of profit-maximizing companies in the middle.