Most expensive Healthcare leads to most prosperous Hospitals? Insurers?
March 10, 2017 7:58 AM Subscribe
So I'm following the US Healthcare debate a bit (from Germany) and what I am wondering is where all the money the US is pouring into it is going. It would seem that *somebody* has to get extremely rich under this system. This works under the assumption that the actual cost for treatments, doctors/ nurses salaries, drugs, equipment is roughly the same in industrialized societies. I think this can be a very complicated question, but are there any statistics about which Healthcare entities, in comparison to other countries are "fatter"?
What I mean for example, is Pfitzers US branch much more profitable than in Germany, or Japan, or Switzerland? Or are the insurance companies the big winners? Or Hospitals?
What I mean for example, is Pfitzers US branch much more profitable than in Germany, or Japan, or Switzerland? Or are the insurance companies the big winners? Or Hospitals?
From my experience in the field as a consultant the money is going supply side, Pharmaceuticals and Med-Surg products. The margins there are staggering.
posted by French Fry at 8:07 AM on March 10, 2017 [7 favorites]
posted by French Fry at 8:07 AM on March 10, 2017 [7 favorites]
Health insurers rake in massive profits. While this article is about those profits under the ACA, it cites some numbers:
UnitedHealth celebrated revenues that quarter totalling $46.5 billion, an increase of $10 billion since the same time last year. And company filings show that UnitedHealth’s CEO Stephen J. Hemsley made over $20 million in 2015. To be fair, that is a pay cut. The previous year, in 2014, Hemsley took home $66 million in compensation.posted by fraula at 8:07 AM on March 10, 2017 [8 favorites]
“At his request, Mr. Hemsley’s total compensation is below the median for CEOs in the Company’s peer group,” the proxy statement says, “even though the Board believes his performance has been outstanding."
In other words, Hemsley is far from being the only health insurance CEO making millions of dollars every year.
Aetna, whose CEO Mark Bertolini reported to the Securities and Exchange Commission a $27.9 million compensation in 2015, has similarly celebrated sky-high profits. “In 2015, we reported annual operating revenue of over $60.3 billion, a record for the Company,” Aetna recently told investors.
Why Do Other Rich Nations Spend So Much Less on Healthcare?
"The biggest reason is that U.S. healthcare delivers a more expensive mix of services. For example, a much larger proportion of physician visits in the U.S. are to specialists who get higher fees and usually order more high-tech diagnostic and therapeutic procedures than primary care physicians. ...
A second important reason for higher healthcare spending in the U.S. is higher prices for inputs such as drugs and the services of specialist physicians.
...
The third and last important reason for higher spending in the U.S. is high administrative costs of insurance."
(And health care executive salaries, though high, don't really come into the equation simply because there aren't that many of them. Remember, total health care spending is close to $3 trillion, which is 3 million million. Similarly, health insurer profits aren't a huge factor; profits are a relatively small fraction of total insurer costs. I'm not saying that profits and salaries are at the correct level, or that total costs wouldn't drop marginally if those factors were lower, just that they are not the primary drivers.)
posted by Mr.Know-it-some at 8:13 AM on March 10, 2017 [12 favorites]
"The biggest reason is that U.S. healthcare delivers a more expensive mix of services. For example, a much larger proportion of physician visits in the U.S. are to specialists who get higher fees and usually order more high-tech diagnostic and therapeutic procedures than primary care physicians. ...
A second important reason for higher healthcare spending in the U.S. is higher prices for inputs such as drugs and the services of specialist physicians.
...
The third and last important reason for higher spending in the U.S. is high administrative costs of insurance."
(And health care executive salaries, though high, don't really come into the equation simply because there aren't that many of them. Remember, total health care spending is close to $3 trillion, which is 3 million million. Similarly, health insurer profits aren't a huge factor; profits are a relatively small fraction of total insurer costs. I'm not saying that profits and salaries are at the correct level, or that total costs wouldn't drop marginally if those factors were lower, just that they are not the primary drivers.)
posted by Mr.Know-it-some at 8:13 AM on March 10, 2017 [12 favorites]
This works under the assumption that the actual cost for treatments, doctors/ nurses salaries, drugs, equipment is roughly the same in industrialized societies.
Very poor assumption. I'll see if I can dig it up: back way back when the ACA (aka Obamacare) was first being debated, the radio program Marketplace (I think) did a piece that compared the cost of a few things - getting an MRI, getting a hip replacement operation, like that - in the US versus Canada, Germany, the UK, etc. Getting them done in the US was stupid more.
They also did another piece about the cost to doctors for wrangling insurance paperwork; in one medical practice, there were three or four doctors and about 15 administrative people whose job it was to handle all the insurance paperwork. That ain't cheap.
posted by rtha at 8:21 AM on March 10, 2017 [9 favorites]
Very poor assumption. I'll see if I can dig it up: back way back when the ACA (aka Obamacare) was first being debated, the radio program Marketplace (I think) did a piece that compared the cost of a few things - getting an MRI, getting a hip replacement operation, like that - in the US versus Canada, Germany, the UK, etc. Getting them done in the US was stupid more.
They also did another piece about the cost to doctors for wrangling insurance paperwork; in one medical practice, there were three or four doctors and about 15 administrative people whose job it was to handle all the insurance paperwork. That ain't cheap.
posted by rtha at 8:21 AM on March 10, 2017 [9 favorites]
rtha raises a good point. One study called US Health Care from a Global Perspective goes into more detail than just cost per capita. From the overview:
[...] Thirteen high-income countries are included: Australia, Canada, Denmark, France, Germany, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States. On measures where data are widely available, the value for the median OECD country is also shown. Almost all data are for years prior to the major insurance provisions of the Affordable Care Act; most are for 2013.posted by fraula at 8:28 AM on March 10, 2017 [6 favorites]
Health care spending in the U.S. far exceeds that of other high-income countries, though spending growth has slowed in the U.S. and in most other countries in recent years. Even though the U.S. is the only country without a publicly financed universal health system, it still spends more public dollars on health care than all but two of the other countries. Americans have relatively few hospital admissions and physician visits, but are greater users of expensive technologies like magnetic resonance imaging (MRI) machines. Available cross-national pricing data suggest that prices for health care are notably higher in the U.S., potentially explaining a large part of the higher health spending. In contrast, the U.S. devotes a relatively small share of its economy to social services, such as housing assistance, employment programs, disability benefits, and food security. Finally, despite its heavy investment in health care, the U.S. sees poorer results on several key health outcome measures such as life expectancy and the prevalence of chronic conditions. Mortality rates from cancer are low and have fallen more quickly in the U.S. than in other countries, but the reverse is true for mortality from ischemic heart disease.
Another part of where money is going (this may not be what you intended so feel free to specify) – they spend several million... ugh, I'm mistaken. Billions. Lobbying the government. Top healthcare lobbyists by spending. Doing a search on "health insurers amount spent lobbying" will bring up quite a bit as well. The vast majority are pharmaceuticals and insurers, though the top one is the AMA (American Medical Association).
posted by fraula at 8:35 AM on March 10, 2017 [2 favorites]
posted by fraula at 8:35 AM on March 10, 2017 [2 favorites]
"The biggest reason is that U.S. healthcare delivers a more expensive mix of services. For example, a much larger proportion of physician visits in the U.S. are to specialists who get higher fees and usually order more high-tech diagnostic and therapeutic procedures than primary care physicians. ..."
This doesn't add up. An MRI in the US costs $1000+ while an MRI with the same equipment in another country costs about a fifth of that.
So why does the US spend more money on healthcare than any other country? "It's the prices, stupid."
posted by ImproviseOrDie at 8:50 AM on March 10, 2017 [2 favorites]
This doesn't add up. An MRI in the US costs $1000+ while an MRI with the same equipment in another country costs about a fifth of that.
So why does the US spend more money on healthcare than any other country? "It's the prices, stupid."
posted by ImproviseOrDie at 8:50 AM on March 10, 2017 [2 favorites]
Nope, lobbying costs again are a trivial cost: about $500 million a year. So on a base of $3.2 trillion (that's $3,200,000,000,000), those lobbying costs are 1/6400 (or less than 0.02%) of total costs.
Now, the indirect costs of lobbying may well be substantial, but they are impossible to determine, because you'd have to figure out 1) what government policy would be in a theoretical world without lobbying, and 2) how that theoretical change in policy would affect costs.
posted by Mr.Know-it-some at 8:51 AM on March 10, 2017 [2 favorites]
Now, the indirect costs of lobbying may well be substantial, but they are impossible to determine, because you'd have to figure out 1) what government policy would be in a theoretical world without lobbying, and 2) how that theoretical change in policy would affect costs.
posted by Mr.Know-it-some at 8:51 AM on March 10, 2017 [2 favorites]
"The biggest reason is that U.S. healthcare delivers a more expensive mix of services. For example, a much larger proportion of physician visits in the U.S. are to specialists who get higher fees and usually order more high-tech diagnostic and therapeutic procedures than primary care physicians. ..."
This doesn't add up. An MRI in the US costs $1000+ while an MRI with the same equipment in another country costs about a fifth of that.
So why does the US spend more money on healthcare than any other country? "It's the prices, stupid."
Definitely a big factor, as explained in the cited Atlantic article:
"A second important reason for higher healthcare spending in the U.S. is higher prices for inputs such as drugs and the services of specialist physicians. The prices of branded prescription drugs in the U.S. are, on average, about double those in other countries. The fees of specialist physicians are typically two to three times as high as in other countries. The lower prices and fees abroad are achieved by negotiation and controls by governments who typically pay for about 75 percent of all medical care. Government in the U.S. pays about 50 percent, which would still confer considerable bargaining power, but the government is kept from exerting it by legislation and a Congress sensitive to interest-group lobbying."
Whether that should actually be listed as factor #1 rather than #2, I don't know.
posted by Mr.Know-it-some at 8:58 AM on March 10, 2017 [3 favorites]
This doesn't add up. An MRI in the US costs $1000+ while an MRI with the same equipment in another country costs about a fifth of that.
So why does the US spend more money on healthcare than any other country? "It's the prices, stupid."
Definitely a big factor, as explained in the cited Atlantic article:
"A second important reason for higher healthcare spending in the U.S. is higher prices for inputs such as drugs and the services of specialist physicians. The prices of branded prescription drugs in the U.S. are, on average, about double those in other countries. The fees of specialist physicians are typically two to three times as high as in other countries. The lower prices and fees abroad are achieved by negotiation and controls by governments who typically pay for about 75 percent of all medical care. Government in the U.S. pays about 50 percent, which would still confer considerable bargaining power, but the government is kept from exerting it by legislation and a Congress sensitive to interest-group lobbying."
Whether that should actually be listed as factor #1 rather than #2, I don't know.
posted by Mr.Know-it-some at 8:58 AM on March 10, 2017 [3 favorites]
Administrative costs are a huge part of it -- the complexity of the insurance system in the US means 25 cents of every healthcare dollar is spent on administration, most of which is insurance paperwork. In Canada, it's 12 cents of every dollar. (The average US hospital has more billing clerks than hospital beds.)
Lack of direct government price negotiation is another (most notably on pharmaceuticals, but also on procedures).
posted by Eyebrows McGee at 9:02 AM on March 10, 2017
Lack of direct government price negotiation is another (most notably on pharmaceuticals, but also on procedures).
posted by Eyebrows McGee at 9:02 AM on March 10, 2017
This works under the assumption that the actual cost for treatments, doctors/ nurses salaries, drugs, equipment is roughly the same in industrialized societies.
Not sure if this is exactly the data rtha is referring to, but this Vox article compares US costs versus several other countries. While indeed the US is consistently the most expensive, I was more intrigued by the differences between the other countries.
For example, in the three drug examples in the Vox link, Spain's cost is an average of 116% of the cost in Switzerland. But for the surgical procedures, the average cost in Spain is only 33% of the cost in Switzerland.
The point, I suppose, is that each country's approach is different and the results vary pretty wildly. And there's also something to be said about conflating price with cost across different types of systems.
posted by mullacc at 9:04 AM on March 10, 2017 [1 favorite]
Not sure if this is exactly the data rtha is referring to, but this Vox article compares US costs versus several other countries. While indeed the US is consistently the most expensive, I was more intrigued by the differences between the other countries.
For example, in the three drug examples in the Vox link, Spain's cost is an average of 116% of the cost in Switzerland. But for the surgical procedures, the average cost in Spain is only 33% of the cost in Switzerland.
The point, I suppose, is that each country's approach is different and the results vary pretty wildly. And there's also something to be said about conflating price with cost across different types of systems.
posted by mullacc at 9:04 AM on March 10, 2017 [1 favorite]
Fraula's link is good.
It is not really one thing, but the accumulative effect of many, many things, and that is one reason it is so hard to change.
One detail I wondered about, but heard a European doctor explain in the radio some years ago. For many doctors, the pay is far better in the US than in Europe; something like 10 times better and for someone like the doctor who was interviewed, the work conditions are also much better. But many US doctors also have huge debts from med school, and there is a great risk for them, because if you don't qualify for the top jobs, the second and third tier jobs are much worse than in Europe. (I ended up feeling she was a really mean person, using her free education from Europe to cash in as a highly paid specialist in the US, but that is another story).
posted by mumimor at 9:12 AM on March 10, 2017
It is not really one thing, but the accumulative effect of many, many things, and that is one reason it is so hard to change.
One detail I wondered about, but heard a European doctor explain in the radio some years ago. For many doctors, the pay is far better in the US than in Europe; something like 10 times better and for someone like the doctor who was interviewed, the work conditions are also much better. But many US doctors also have huge debts from med school, and there is a great risk for them, because if you don't qualify for the top jobs, the second and third tier jobs are much worse than in Europe. (I ended up feeling she was a really mean person, using her free education from Europe to cash in as a highly paid specialist in the US, but that is another story).
posted by mumimor at 9:12 AM on March 10, 2017
Another thing to consider: malpractice costs. Medical malpractice lawsuits are a definite Thing in the United States, to the point that lawyers all but advertise the practice as a means to raise quick cash.
posted by EmpressCallipygos at 9:15 AM on March 10, 2017
posted by EmpressCallipygos at 9:15 AM on March 10, 2017
I've been in hospital in Australia & I've been in hospital in the USA. My Australian stay was for a scary at the time condition that turned out to be nothing. Hospital the care was top notch, all cutting edge tech etc, the building however was dated though clean & bright & everything worked and this was a major research & teaching hospital I shared a ward with 3 other people (which I rather liked as I had someone to talk to. Meals were hit & miss, nurses busy & overworked. I was in hospital for 9 days and left with no bill and got travel expenses as I had to come from the country to a city hospital AND my partner at the time got on site accommodation at a good price in the student dorms so he could be near me without driving back & forth.
Had a similar attack in the USA. Shiney brand new hospital had valet parking, on order meals with a menu to chose from, private room with my own direct phone line. Gorgeous bathroom I would happily have in my house. More nurses. I also got excellent cutting edge medical care, was in the hospital the same time frame and they came to exactly the same conclusions & treatments as my Australian visit. Cost me over $12K plus whatever they got from the insurance company.
So in some cases the money goes into the buildings and trimmings, but honestly for the most part my theory is they charge more because they can and because the insurance companies are going to nickel & dime them down when paying the claims. I also got individually charged afterward by 5 different doctors, even ones I didn't see, just for say looking at test results etc. Everyone has their finger in the pie wanting their little piece of it & it adds up.
posted by wwax at 9:18 AM on March 10, 2017 [2 favorites]
Had a similar attack in the USA. Shiney brand new hospital had valet parking, on order meals with a menu to chose from, private room with my own direct phone line. Gorgeous bathroom I would happily have in my house. More nurses. I also got excellent cutting edge medical care, was in the hospital the same time frame and they came to exactly the same conclusions & treatments as my Australian visit. Cost me over $12K plus whatever they got from the insurance company.
So in some cases the money goes into the buildings and trimmings, but honestly for the most part my theory is they charge more because they can and because the insurance companies are going to nickel & dime them down when paying the claims. I also got individually charged afterward by 5 different doctors, even ones I didn't see, just for say looking at test results etc. Everyone has their finger in the pie wanting their little piece of it & it adds up.
posted by wwax at 9:18 AM on March 10, 2017 [2 favorites]
Something I heard years ago, but I cannot provide a citation (though it seems logical): in the US, service providers are competing with one another. If Hospital A gets a new fancy-pants, Acme Medical Machine, every other facility in the service area will need to upgrade to remain competitive. As a result, there is an abundance of expensive, under-used equipment and services.
Ironically, there are also plenty of folks in need of such services, but cannot access them because they don't have the right insurance.
posted by she's not there at 9:20 AM on March 10, 2017
Ironically, there are also plenty of folks in need of such services, but cannot access them because they don't have the right insurance.
posted by she's not there at 9:20 AM on March 10, 2017
It's unpopular to say, but physicians in the US are also grossly overpaid. Most specialists make 2-10x what they do in other developed countries. I wouldn't say this is the main driver of health care costs, but it's a significant factor and it's one that's often overlooked because everyone wants to blame the big evil corporations.
posted by miyabo at 9:41 AM on March 10, 2017 [8 favorites]
posted by miyabo at 9:41 AM on March 10, 2017 [8 favorites]
Another thing to consider: malpractice costs. Medical malpractice lawsuits are a definite Thing in the United States, to the point that lawyers all but advertise the practice as a means to raise quick cash.
And that one's interesting because it gets circular. Why are lawsuit payouts so high? Because ongoing care is so expensive! Why is the ongoing care so expensive? Well partly because lawsuit payouts are so high!
posted by Blue Jello Elf at 9:51 AM on March 10, 2017
And that one's interesting because it gets circular. Why are lawsuit payouts so high? Because ongoing care is so expensive! Why is the ongoing care so expensive? Well partly because lawsuit payouts are so high!
posted by Blue Jello Elf at 9:51 AM on March 10, 2017
Medical malpractice payments’ share of the nation’s healthcare bill was the lowest on record, falling to about one-tenth of 1 percent (0.11 percent) of national healthcare costs.
So nope - it's not malpractice suits.
posted by COD at 9:56 AM on March 10, 2017 [3 favorites]
So nope - it's not malpractice suits.
posted by COD at 9:56 AM on March 10, 2017 [3 favorites]
I wanna know where someone got the $1k MRI because, hoo doggies, the MRI I had to check to see if I had any indications of aneurysm in mah brain (I have a strong family history of stroke and aneurysm) was about $3500.
Other pass along costs include: R&D done by pharma, and medical device companies; the INSANE world of medical coding and billing. I did some user research with folks who do medical coding for a UX project a few years ago, right when a new coding system was being introduced, and holy shit, what a cluster. Every insurance company and medical group uses the codes differently. Fun!
posted by gsh at 10:31 AM on March 10, 2017
Other pass along costs include: R&D done by pharma, and medical device companies; the INSANE world of medical coding and billing. I did some user research with folks who do medical coding for a UX project a few years ago, right when a new coding system was being introduced, and holy shit, what a cluster. Every insurance company and medical group uses the codes differently. Fun!
posted by gsh at 10:31 AM on March 10, 2017
It's unpopular to say, but physicians in the US are also grossly overpaid.
I saw a comment from a Finnish doctor who did an residency exchange in Boston: he was used to spending his lunchtimes in Finland discussing research; instead, his colleagues in the US were comparing the yachts they wanted to buy. I personally know a surgeon in the US who collects old planes.
Atul Gawande talks about this a fair bit: American medical students know that they're in a commercial, profit-driven environment from the moment they take their first class and see the tuition bill. Look at the doctors who are property investors, or someone like Tom Price and all of his dubious "friends and family" deals with healthcare startups.
posted by holgate at 10:41 AM on March 10, 2017 [5 favorites]
I saw a comment from a Finnish doctor who did an residency exchange in Boston: he was used to spending his lunchtimes in Finland discussing research; instead, his colleagues in the US were comparing the yachts they wanted to buy. I personally know a surgeon in the US who collects old planes.
Atul Gawande talks about this a fair bit: American medical students know that they're in a commercial, profit-driven environment from the moment they take their first class and see the tuition bill. Look at the doctors who are property investors, or someone like Tom Price and all of his dubious "friends and family" deals with healthcare startups.
posted by holgate at 10:41 AM on March 10, 2017 [5 favorites]
But the real answer is "everything": doctors, hospitals, hospital executives, insurance, insurance executives, drugs, pharma executives, the Medicare-scamming pill mills, the Hoveround scammers, Rick fucking Scott, the huge admin tiers everywhere.
The only healthcare things done on the cheap in the US are basic, essential services to poor people, and that's because they don't try to include everyone.
posted by holgate at 10:45 AM on March 10, 2017 [3 favorites]
The only healthcare things done on the cheap in the US are basic, essential services to poor people, and that's because they don't try to include everyone.
posted by holgate at 10:45 AM on March 10, 2017 [3 favorites]
I'm an epidemiologist/toxicologist by training, but part of my masters' work in the early 2000s focused on this question. As others have noted, it's exceedingly difficult to point to a single worst contributor here, but there's a strong public health consensus that these problems track back to a national unwillingness to control pricing for, well, everything in health care.
An instructive dataset to consider is the consumer price index. Look at slide 11 in this DOL BLS presentation: "Since January 1997, consumer prices for inpatient services increased 195 percent and prices for outpatient healthcare services increased 200 percent. This compares with an increase of 50 percent for all items over that same period. As a whole, consumer prices for medical care have increased 98 percent since January 1997. Over the same period, consumer prices for prescription drugs have doubled, while prices for nursing homes and adult day services have more than doubled."
The nutshell is that health care managed as a business service tends toward increasing the cost of services. Some of that cost increase (in some fields, a lot of that cost) is commensurate with technology acquisitions, like a small hospital having three kinds of expensive imaging equipment instead of referring patients out to larger, regional centers for that kind of procedure.
It's unpopular to say, but physicians in the US are also grossly overpaid.
It's unpopular to say because it's so misleading. Flip forward to slide 13 in the same presentation to see a broad distribution of health care provider wages, including a number of jobs that require an MD. Your family doc probably doesn't own a yacht, even if your surgeon does.
What I mean for example, is Pfitzers US branch much more profitable than in Germany, or Japan, or Switzerland?
Keep in mind that most pharmaceutical and medical device companies are, at this point, huge multinational conglomerates. They buy and sell intellectual property through mergers and acquisitions on a scale that is hard to understand, and at a speed that moves much more quickly than regulation can keep up with. So, no matter where you live in the world, your local Pfizer executive is making a lot of money--in part from the grift of the American health care market's freewheeling, profit-amenable practices.
posted by late afternoon dreaming hotel at 10:56 AM on March 10, 2017 [8 favorites]
An instructive dataset to consider is the consumer price index. Look at slide 11 in this DOL BLS presentation: "Since January 1997, consumer prices for inpatient services increased 195 percent and prices for outpatient healthcare services increased 200 percent. This compares with an increase of 50 percent for all items over that same period. As a whole, consumer prices for medical care have increased 98 percent since January 1997. Over the same period, consumer prices for prescription drugs have doubled, while prices for nursing homes and adult day services have more than doubled."
The nutshell is that health care managed as a business service tends toward increasing the cost of services. Some of that cost increase (in some fields, a lot of that cost) is commensurate with technology acquisitions, like a small hospital having three kinds of expensive imaging equipment instead of referring patients out to larger, regional centers for that kind of procedure.
It's unpopular to say, but physicians in the US are also grossly overpaid.
It's unpopular to say because it's so misleading. Flip forward to slide 13 in the same presentation to see a broad distribution of health care provider wages, including a number of jobs that require an MD. Your family doc probably doesn't own a yacht, even if your surgeon does.
What I mean for example, is Pfitzers US branch much more profitable than in Germany, or Japan, or Switzerland?
Keep in mind that most pharmaceutical and medical device companies are, at this point, huge multinational conglomerates. They buy and sell intellectual property through mergers and acquisitions on a scale that is hard to understand, and at a speed that moves much more quickly than regulation can keep up with. So, no matter where you live in the world, your local Pfizer executive is making a lot of money--in part from the grift of the American health care market's freewheeling, profit-amenable practices.
posted by late afternoon dreaming hotel at 10:56 AM on March 10, 2017 [8 favorites]
Your family doc probably doesn't own a yacht, even if your surgeon does.
This is part of the reason there's a massive shortage of family docs across the country.
posted by miyabo at 11:17 AM on March 10, 2017 [3 favorites]
This is part of the reason there's a massive shortage of family docs across the country.
posted by miyabo at 11:17 AM on March 10, 2017 [3 favorites]
Medical malpractice payments’ share of the nation’s healthcare bill was the lowest on record, falling to about one-tenth of 1 percent (0.11 percent) of national healthcare costs.
So nope - it's not malpractice suits.
But that's not the complete story: Costs could be higher because of fear of malpractice. Some people claim that doctors practice "defensive medicine," ordering lots of unnecessary tests and procedures to avoid losing lawsuits, and that malpractice reform would cause doctors to be much more efficient.
However, the evidence doesn't support that argument very well either: " if [malpractice reform] was enacted, it would reduce total national health care spending by about 0.5 percent".
posted by Mr.Know-it-some at 12:00 PM on March 10, 2017 [2 favorites]
So nope - it's not malpractice suits.
But that's not the complete story: Costs could be higher because of fear of malpractice. Some people claim that doctors practice "defensive medicine," ordering lots of unnecessary tests and procedures to avoid losing lawsuits, and that malpractice reform would cause doctors to be much more efficient.
However, the evidence doesn't support that argument very well either: " if [malpractice reform] was enacted, it would reduce total national health care spending by about 0.5 percent".
posted by Mr.Know-it-some at 12:00 PM on March 10, 2017 [2 favorites]
Because it's entirely a for-profit system. That's all you really need to know.
posted by Thorzdad at 3:06 PM on March 10, 2017
posted by Thorzdad at 3:06 PM on March 10, 2017
Why are lawsuit payouts so high? Because ongoing care is so expensive! Why is the ongoing care so expensive? Well partly because lawsuit payouts are so high!
It's circles within circles: why are lawsuits so expensive? Because the only recourse for preventable fuckups is through litigation.
An MRI in the US costs $1000+ while an MRI with the same equipment in another country costs about a fifth of that.
An MRI facility in the US is basically a speculative investment: you borrow the half-million dollars for the magic machine, hire the techs, and then encourage enough people through the door. There have been a few cases where doctors were caught receiving kickbacks for imaging referrals, and they're probably the tip of the iceberg. In most other countries, provision and capital expenditure is driven by need, and utilisation is driven by clinical guidelines and hard bargaining by insurers.
posted by holgate at 5:04 PM on March 10, 2017
It's circles within circles: why are lawsuits so expensive? Because the only recourse for preventable fuckups is through litigation.
An MRI in the US costs $1000+ while an MRI with the same equipment in another country costs about a fifth of that.
An MRI facility in the US is basically a speculative investment: you borrow the half-million dollars for the magic machine, hire the techs, and then encourage enough people through the door. There have been a few cases where doctors were caught receiving kickbacks for imaging referrals, and they're probably the tip of the iceberg. In most other countries, provision and capital expenditure is driven by need, and utilisation is driven by clinical guidelines and hard bargaining by insurers.
posted by holgate at 5:04 PM on March 10, 2017
gsh: "I wanna know where someone got the $1k MRI because, hoo doggies, the MRI I had to check to see if I had any indications of aneurysm in mah brain (I have a strong family history of stroke and aneurysm) was about $3500.
"
Vancouver BC. Brain MRI C$900. That's right, most Americans could fly to Canada, get an MRI, and fly home and it would still be cheaper than $3500 even if you include meals, taxis, and a day off work.
posted by Mitheral at 7:06 PM on March 10, 2017
"
Vancouver BC. Brain MRI C$900. That's right, most Americans could fly to Canada, get an MRI, and fly home and it would still be cheaper than $3500 even if you include meals, taxis, and a day off work.
posted by Mitheral at 7:06 PM on March 10, 2017
I know someone who wanted to marry rich and so ended up married to the scion of someone who buys/sells MRIs, and had enough disposable income as a result to buy them a house (as a surprise), buy the spouse a car (as a surprise), own an apartment in NYC (just for the odd weekend), and thinks nothing of flying the extended family to Asia for a holiday. From what I understand this is all MRI money.
Similarly, I recall reading that the reason Boston (one of America's biggest medical meccas) went from 10 major hospitals to 5 in recent years was to absorb costs for all the individually purchased equipment (MRIs were specifically cited) that not all could afford, but everyone wanted to have. (You hear similar stories on the college circuit as as explanation as to why college costs are so unGodly high here.)
In a related vein, though I believe hospital billing/coding practices could be streamlined and regulated, they are not. I remember reading during Bush 2 about a relative of his who had started up a lucrative company creating databases to hold -- and update -- all the information each health insurer requests and repeatedly changes in order to cover even very basic procedures. Medical billing staff used to be able to do their jobs with only a high school degree; now college degrees are required due to the complexity. Doctors I know spend a couple of hours every night dealing with the paperwork.
Meanwhile, insurers nickel and dime the little guy. The level of fine print is absolutely mind-boggling. This is related to the nation-wide problem of transparency. I know the Obama administration spent some time on this, but I've never seen much more than the odd one-off article detailing that surgery X in Texas costs 45x what it costs in Boston, for no discernable reason other than they can, and the consumer usually doesn't know the difference, or even what to do about it even if they do.
To me, the medical system and all of the decision-making from top to bottom that makes it inefficient, wildly expensive, scary, time-consuming, and poorly distributed throughout the citizenry is downright treasonous. College costs are similarly unpatriotic. Decision-makers don't care about all of us as a country, not if they get theirs. Be glad you live in Germany. If you're not very wealthy yourself, or if you didn't luck out with a good old-fashioned job that includes all of these benefits de facto, the system can easily -- and ruthlessly -- take years off of your life.
posted by Violet Blue at 8:47 PM on March 10, 2017 [1 favorite]
Similarly, I recall reading that the reason Boston (one of America's biggest medical meccas) went from 10 major hospitals to 5 in recent years was to absorb costs for all the individually purchased equipment (MRIs were specifically cited) that not all could afford, but everyone wanted to have. (You hear similar stories on the college circuit as as explanation as to why college costs are so unGodly high here.)
In a related vein, though I believe hospital billing/coding practices could be streamlined and regulated, they are not. I remember reading during Bush 2 about a relative of his who had started up a lucrative company creating databases to hold -- and update -- all the information each health insurer requests and repeatedly changes in order to cover even very basic procedures. Medical billing staff used to be able to do their jobs with only a high school degree; now college degrees are required due to the complexity. Doctors I know spend a couple of hours every night dealing with the paperwork.
Meanwhile, insurers nickel and dime the little guy. The level of fine print is absolutely mind-boggling. This is related to the nation-wide problem of transparency. I know the Obama administration spent some time on this, but I've never seen much more than the odd one-off article detailing that surgery X in Texas costs 45x what it costs in Boston, for no discernable reason other than they can, and the consumer usually doesn't know the difference, or even what to do about it even if they do.
To me, the medical system and all of the decision-making from top to bottom that makes it inefficient, wildly expensive, scary, time-consuming, and poorly distributed throughout the citizenry is downright treasonous. College costs are similarly unpatriotic. Decision-makers don't care about all of us as a country, not if they get theirs. Be glad you live in Germany. If you're not very wealthy yourself, or if you didn't luck out with a good old-fashioned job that includes all of these benefits de facto, the system can easily -- and ruthlessly -- take years off of your life.
posted by Violet Blue at 8:47 PM on March 10, 2017 [1 favorite]
America, where most medical providers don't do email (because HIPAA) and share records via fax, and if they do have online capabilities, it's through a "portal" (hosted by a third party) that doesn't interact with any of the other portals, and possibly not even an instance of the same portal software from another medical provider. The people building the portals aren't necessarily getting rich rich, but they're getting paid to do something that's unfit for purpose. Every point of friction in the system maps to someone taking a cut.
posted by holgate at 11:08 PM on March 10, 2017 [1 favorite]
posted by holgate at 11:08 PM on March 10, 2017 [1 favorite]
And a new article that summarizes much of the above:
Why the U.S. Spends So Much More Than Other Nations on Health Care
"...most of the explanation for American health spending growth — and why it has pulled away from health spending in other countries — is that more is done for patients during hospital stays and doctor visits, they’re charged more per service, or both."
posted by Mr.Know-it-some at 8:49 AM on January 3, 2018
Why the U.S. Spends So Much More Than Other Nations on Health Care
"...most of the explanation for American health spending growth — and why it has pulled away from health spending in other countries — is that more is done for patients during hospital stays and doctor visits, they’re charged more per service, or both."
posted by Mr.Know-it-some at 8:49 AM on January 3, 2018
« Older It's freezing outside and someone is living in a... | Names! Names! Names! in Shin Buddhism? Newer »
This thread is closed to new comments.
posted by soelo at 8:03 AM on March 10, 2017 [10 favorites]