High cost of medical care

[mtangelsfan]

I know we have the Obamacare thread but I believe this question deserves its own thread.

Why are medical costs so high?  Please don't just say "greed" because prices were affordable back in the 70's.  People have not become greedier.

So what is the reason why?  Maybe nate could give some input (if he is lurking in this forum at all)

[Taylor]

I found this article, which is helpful: http://www.pbs.org/newshour/rundown/why-does-health-care-cost-so-much-in-america-ask-harvards-david-cutler/

Sounds like it's a combination of greed, charging practices that are inefficient, and people opting for (or being encouraged to receive?) unnecessary surgeries and things just to be safe.

[fan_since79]

Reasons?

1. Government subsidizing more and more of our health care insurance costs. Providers have nothing to lose by jacking up prices, and insurers can raise premiums on those who are subsidized. Government will pay for it. Medicare, anyone? Same premium for everyone (Part A and B), and it's cheap, about a $120 a month.

2. Medical malpractice premiums that can only be described as crushing.

3. As a corollary to that, doctors have to perform exhaustive number of tests to avoid lawsuits for malpractice.

4. Another corollary...drug companies have to charge more to cover the costs of the countless lawsuits and judgements against them regarding new drugs and therapies. Has anyone watched daytime TV lately? Many of the ads are from law firms trolling for clients who may have suffered something or other after taking these drugs. Judgements have often been in the millions of dollars.

5. Research on new drugs that drags on for years as companies try to prevent any single individual from suffering the least bit of injury or discomfort from the the new drug and might prompt them and their lawyers to file a multi-million dollar lawsuit.

That's off the top of my head.

 

 

Edited July 18, 2017 by fan_since79

[krAbs]

2 minutes ago, Taylor said:

I found this article, which is helpful: http://www.pbs.org/newshour/rundown/why-does-health-care-cost-so-much-in-america-ask-harvards-david-cutler/

Sounds like it's a combination of greed, charging practices that are inefficient, and people opting for (or being encouraged to receive?) unnecessary surgeries and things just to be safe.

I'm gonna piggyback on this, but only kinda. I think that this misses what is actually going on (based on your analysis - i haven't gotten around to reading the article yet). Greed is true in every industry. Every industry can charge for practices that are inefficient, and every professional can recommend unnecessary services. So, why is this happening in med, and not, say, with housing prices (I understand housing prices here are crazy, but we kinda understand the causes there, and crazy prices are not the norm in most of the USA - also, the prices aren't nearly as disproportional to what you are getting as they are in med).

My pet theory here is that in other industries you see the cost directly, where as with health, you are shoehorned into one of a few insurance plans, and then never really deal with the direct cost of things, just with backend costs. The gear is pulled out of the free market machine, and the train runs off the tracks.

[krAbs]

5 minutes ago, fan_since79 said:

Reasons?

1. Government subsidizing more and more of our health care insurance costs. Providers have nothing to lose by jacking up prices, and insurers can raise premiums on those who are subsidized. Government will pay for it. Medicare, anyone? Same premium for everyone (Part A and B), and it's cheap, about a $120 a month.

2. Medical malpractice premiums that can only be described as crushing.

3. As a corollary to that, doctors have to perform exhaustive number of tests to avoid lawsuits for malpractice.

4. Another corollary...drug companies have to charge more to cover the costs of the countless lawsuits and judgements against them regarding new drugs and therapies. Has anyone watched daytime TV lately? Many of the ads are from law firms trolling for clients who may have suffered something or other after taking these drugs. Judgements have often been in the millions of dollars.

5. Research on new drugs that drags on for years as companies try to prevent any single individual from suffering the least bit of injury or discomfort from the the new drug and might prompt them and their lawyers to file a multi-million dollar lawsuit.

That's off the top of my head.

 

 

So basically malpractice suites and the subsidy spiral. I think I agree with both, but I also think its tempting to paint with too broad a brush here. I think subsidies can be structured in a way that wouldn't cause this (see: literally every country doing this better than us), and I think the line to walk with malpractice/class action law suites is...difficult.

[mtangelsfan]

For one thing insurance has taken away competition.  Pretty much all doctors, labs, hospitals charge the same fees for the same things.  They don't need to worry about competition.

I'm not saying that is the end all, be all but I do believe it plays a part.  

[AngelsLakersFan]

36 minutes ago, krAbs said:

My pet theory here is that in other industries you see the cost directly, where as with health, you are shoehorned into one of a few insurance plans, and then never really deal with the direct cost of things, just with backend costs. The gear is pulled out of the free market machine, and the train runs off the tracks.

 

17 minutes ago, mtangelsfan said:

For one thing insurance has taken away competition.  Pretty much all doctors, labs, hospitals charge the same fees for the same things.  They don't need to worry about competition.

I'm not saying that is the end all, be all but I do believe it plays a part.  

This is what makes the most sense.

That said if you want to figure out a solution you have to follow the money and see who is making it. In this scenario you have to believe the answer is 'hospitals' because that is where the gouging is happening. Obviously another is in pharmaceuticals. Are hospitals posting record profits? If not... why not? If they aren't then is there someone else or does that invalidate this theory?

[krAbs]

Just now, AngelsLakersFan said:

 

This is what makes the most sense.

That said if you want to figure out a solution you have to follow the money and see who is making it. In this scenario you have to believe the answer is 'hospitals' because that is where the gouging is happening. Obviously another is in pharmaceuticals. Are hospitals posting record profits? If not... why not? If they aren't then is there someone else or does that invalidate this theory?

So that is a huge hole in my argument and honestly I don't know what to do with it. My understanding is that hospitals themselves have all kinds of budget problems. Weirdly, it seems to be pharmaceuticals and insurers who are making off like bandits in all of this, while doctors and hospitals end up getting a lot of the blame and holding the short end of the stick.

 

Granted, this is a very idealistic viewpoint. "The people I don't like! They are the problem!" So I kinda doubt that this is 100% true either.

[AngelsLakersFan]

1 minute ago, krAbs said:

So that is a huge hole in my argument and honestly I don't know what to do with it. My understanding is that hospitals themselves have all kinds of budget problems. Weirdly, it seems to be pharmaceuticals and insurers who are making off like bandits in all of this, while doctors and hospitals end up getting a lot of the blame and holding the short end of the stick.

 

Granted, this is a very idealistic viewpoint. "The people I don't like! They are the problem!" So I kinda doubt that this is 100% true either.

I just don't see how it is insurers when they are the ones footing the $30000 dialysis bill. 

If the hospital is charging $30k for the treatment, the only way they are struggling is if no one is actually paying $30k for their treatment, or the cost of the drugs themselves is near $30k.

[krAbs]

Just now, AngelsLakersFan said:

I just don't see how it is insurers when they are the ones footing the $30000 dialysis bill. 

If the hospital is charging $30k for the treatment, the only way they are struggling is if no one is actually paying $30k for their treatment, or the cost of the drugs themselves is near $30k.

Right, I catch your meaning. I guess you could also make an argument for lawyers making a ton off of all of it, but honestly...IDK. People love talking about malpractice suites as being the bane of the med industry, and i'm sure there is truth to that, but I don't think I've ever seen any literature in how much of an impact it ACTUALLY has on the industry.

[mtangelsfan]

A lot of hospitals have huge account receivable issues.  Even with insurance, individual costs for procedures are still near impossible for most people to pay out of pocket.

[krAbs]

31 minutes ago, mtangelsfan said:

For one thing insurance has taken away competition.  Pretty much all doctors, labs, hospitals charge the same fees for the same things.  They don't need to worry about competition.

I'm not saying that is the end all, be all but I do believe it plays a part.  

To get in the weeds a bit, any thoughts on all payer rate setting? Seems arguably like anti - competition, but also feels like something we should clearly do.

[Blarg]

1 hour ago, mtangelsfan said:

I know we have the Obamacare thread but I believe this question deserves its own thread.

Why are medical costs so high?  Please don't just say "greed" because prices were affordable back in the 70's.  People have not become greedier.

So what is the reason why?  Maybe nate could give some input (if he is lurking in this forum at all)

Martin Shkreli says hi.

[mtangelsfan]

I do not think the role of government should be broadened anymore.  They pretty much ruin whatever they touch.

[mtangelsfan]

Just now, Blarg said:

Martin Shkreli says hi.

meh, this started happening long before that POS came along.

[AngelsLakersFan]

Just now, mtangelsfan said:

A lot of hospitals have huge account receivable issues.  Even with insurance, individual costs for procedures are still near impossible for most people to pay out of pocket.

This is one of the potential culprits. But still, at the sky high rates people are paying it has to mean that MOST PEOPLE AREN'T PAYING! 

If that is the case that means that the health care industry is currently in a death spiral, where prices are increasing because people can't afford to pay them, thus leading to few people paying them, and prices increasing further.

[krAbs]

2 minutes ago, Blarg said:

Martin Shkreli says hi.

He kinda looks like an alien here.

[Blarg]

Most puchable face in America.

[AngelsLakersFan]

This is anecdotal but my dad negotiates medical bills with doctors all day long. He represents the insurances companies and the patients. He looks at average market rates for billed procedures within the market and tries to back providers off of higher rates. What I find interesting is that when he calls these doctors and offers them guaranteed cash at well below market rate, many of them are happy to accept it, where as many others call him a terrorists and talk about how much time money and effort went into their schooling.

[mtangelsfan]

2 minutes ago, Blarg said:

Most puchable face in America.

 

Ted Cruz says you are incorrect.

[krAbs]

Next march, we need to do a march madness bracket of punchable faces. Obviously Hillary will win, cuz like...look at this forum...but, #2 would be fun to see.

[mtangelsfan]

I don't think Hillary would win.  

 

[AngelsLakersFan]

Moar fair comparison

[ABC]

45 minutes ago, mtangelsfan said:

For one thing insurance has taken away competition.  Pretty much all doctors, labs, hospitals charge the same fees for the same things.  They don't need to worry about competition.

I'm not saying that is the end all, be all but I do believe it plays a part.  

2

From my understanding, fees vary wildly from doc to doc. 

[Blarg]

2 minutes ago, mtangelsfan said:

I don't think Hillary would win.  

 

She'd blame the Russians for fixing the election.