> Why are Americans paying so much more for healthcare than they used to?
It's a pretty obvious answer, to be honest. Because it's a poorly regulated industry for the purposes of minimizing cost to individuals. Over time, industry participants will continue to expand rent seeking practices and because the demand for health is almost perfectly inelastic, they can continue to get away with it. Too many middlemen, too much needless complexity, not enough regulatory oversight.
I'm a rabid defender of the free market, but healthcare is not a regular market because nobody chooses to purchase healthcare services. You take them at whatever price they are offered whenever you need them. It's why we call users of these services "patients", not "consumers".
Consumers are best served by private companies competing against each other in a nearly perfectly free market to offer the best goods and services at the lowest prices. Patients are not.
Patients are best served by a well regulated industry in a nearly perfect not-free market in which their needs are prioritized over profit. Healthcare, just like education and security, are the foremost duties of the State.
When you say poorly regulated, you don't mean a lack of regulation right? Just that the heaping mass of regulations that do exist give us the trash system we have?
Cause I wonder if some people might take "poorly regulated" to mean "just not regulated enough", which I think is probably not the issue.
Isn't it the opposite of what you're saying? I always had an impression that the high cost is actually due to low supply of doctors and this low supply is due to overregulation driven by the doctor lobby. Where (if I remember correctly) there're limits on the number of new MDs education institutions produce, or a number of licenses, forgot what exactly.
The demand is inelastic, the supply totally is elastic in a normal situation, but it is made inelastic by regulations, restrictions, etc.
There is no such thing as a "free market". Any such "free market" only exists because of government regulation, oversight and enforcement.
People try and carve out an exception for healthcare because of inelastic demand. While I agree individual insurance and tying insurance to employment are terrible models and for-profit healthcare is a terrible idea, I just don't think healthcare is as exceptional free market defenders make it out to be.
The biggest barrier to the operation of the free market in medicine is the medical licence, especially as being a legal and economic barrier to prescribing drugs, ordering tests or referrals to the actual specialist who can help you
I'm not sure you're agreeing or disagreeing, so apologies in advance if I misread you and apologies in hindsight if I was unclear with my original comment.
I didn't claim free markets exist out of thin air. They need to be created and enforced, there's no dispute there.
I'm also not saying that healthcare should be a free market. I'm arguing for more regulation in Healthcare (and Education) than I would suggest is needed in regular markets. Security is even more regulated as the state must have a monopoly on the legal use of force, and with that comes the duty to protect its citizens.
I use a high deductible plan and pay out of pocket for a direct primary care provider. I realize this option isn't widely available or even sustainable for the economy as a whole, but it's a great option if you can get in. My doctor is easily available (because his client roster is small) and my common visits are all rolled into a flat rate subscription. I pay $85/mo for this.
The reason it costs less is because there are no administrative staff at all aside from the receptionist. interfacing with insurers requires an entire back office of non revenue employees that DCPs do not need to bother with.
You can also save a lot of money in HDHP by ordering your own tests from a reseller like ownyourlabs instead of having the hospital doing it, especially if you like doing annual preventative tests that may not be medically necessary. I bring the results to my dpc doctor for review and it's all very convenient.
I'm a big fan of HDHP's since you can save/accrue money in a health savings account and not lose it. While the deductible is super high, my employer has a good health plan and once you hit it everything is covered 100% (coinsurance). If something bad happens, ideally you will have enough money saved to cover any deductibles. The sky is the limit if you are stuck in the hospital with something severe and it's good to have some piece of mind that everything will be OK.
In the past I was in the hospital for about 10 days with pneumonia and at the time I had a standard PPO plan that only covered up to 90%. I was all of a sudden on the hook for thousands of dollars for medical bills , as my stay was over $100K in expenses and that was about 15 years ago. It's not like you can shop around for ER's when you are severely ill. I did make sure that the hospital was in-network before I went to it though. I can't imagine what the cost would be now. Luckily I had the means to pay these bills, but I would have saved a lot of money if I had a HDHP.
These are usually small independent offices not in a hospital so they will be doing their own marketing. look around for family clinics in your area the old fashioned way too.
I read an article, I think here on ycombinator, that eventually most people will interact with an AI as opposed to a real Doctor.
In a way, I would not be surprised that is the case in maybe 10 or so years. And I expect this AI will be run by Health Insurance Companies. We already seeing a bit of that.
It is time for the US Gov to stop collecting bribes (contributions) and "man up" to fix Health Care, even if it means they will lose their job. Congress is suppose to serve the community, not private health care and other fortune 500 companies.
But given the realpolitik of when Obamacare was passed, the current US system was probably the only way at the time to get to universal healthcare. The ACA barely managed to get passed after all (219–212 and 60–39):
Doctors and nurses are paid too much in this country. Pharmaceuticals charge too much. Diagnostics are gold-plated.
There's no downward pressure on these prices except what the insurance companies can negotiate, and people don't like the insurance companies doing that when their health is on the line.
ie, It's a total market failure, and single payer would fix things, at the expense of all the profits of the 3 largest factors.
Revoke the concept of a medical licence! Maybe charge $10k a year for one (so doctors are still registered, theres just no other barrier) and boom, now you can prescribe whatever you need. If that medical degree and residence program is really worth it then the market will price it in. Healthcare costs will fall drastically. Its the cartel of Doctors that keeps costs high, every medical decision gets made downstream of doctors. No doubt quality will fall in the cheap end, but the care per dollar will go way up.
I agree the supply needs unblocked. But there’s many steps to take before one so drastic. First off stop letting congress and the AMA dictate how many residences are offered, allow as many doctors study and become doctors as want to be.
You really want to live in a world where anyone with $10k can start prescribing medication? It'd be nice for the heroin dealer down the street, as the no longer have to worry about the cop. Just pay your yearly fee and start slinging Oxy. No downside to that, right
Licenced medical doctors under the current system will already prescribe you oxy (actually they moved into low socio-economic areas to sling dope, theres your upper class medical profession) so not sure what your attack is here
If you want physician salaries to be lower, you need to lower the cost of becoming one. It's really as simple as that.
People like to make comparisons to physician salaries in other countries but ignore the fact that the education is significantly cheaper or even free in those countries.
Additionally, the US forces newly minted medical school graduates into a forced regime of working for 3-10 years at minimum wage to get qualified as a doctor (ie medical residency). During that time, their debt balloons from $300K+ to $500K+ because many residents can't afford anything more than minimum payments.
And if that wasn't bad enough, there are increasingly gap years built into the system to make you more competitive. This could be a Masters (and more debt) or practical experience after undergrad to get into medical school. There is an increasing need for a "research year" after medical school to get into competitive specialties.
So you might be 38 years old and have spent 20 years studying post-high school by the time you are earning those big bucks and you have to recoupe maybe $700k+ in debt.
There are negative societal outcomes for a high cost of education. Just like there are for housing. Yet people want to gatekeep both for some reason.
One of the upward pressures of physician salary is malpractice insurance.
Cosmetic surgeons I have heard pay about half their salary into malpractice insurance. I do not know how you fix the litigiousness of consumers - that is a cultural problem.
I'm not necessarily opposed to a single payer system, but it wouldn't fix those things unless it also imposes severe price controls. Fixing prices below the market price inevitably leads to supply shortages (i.e. longer queues). This is why we see affluent Canadians come to the USA as medical tourists to get MRIs here and skip the queue back home. On balance it might be better overall but let's be clear about the trade-offs.
While physicians in the US are paid much more than any other country, there's not a huge difference for nurses.
>Doctors and nurses are paid too much in this country. Pharmaceuticals charge too much.
Be very careful what you wish for.
Japan has been suffering a chronic and severe shortage of doctors and other medical staff because pay is too low. More recently, certain medicines both prescription and off-the-shelf have been exhausted due to overdemand and undersupply from government-mandated low prices.
I’ve been looking for sources about the Japan doctor shortage, do you know of any that describe the cause as being low pay? I have heard about the medicine issues.
I have no links handy, but practically every report by NHK and other outlets all come to the same conclusion that medical workers are leaving the industry and newcomers (medical students) aren't coming in because the pay is too low for the intense workload required compared to almost every other industry (and the shortage leads to doctors putting in even more hours, causing a negative feedback loop).
The low pay in turn has been linked to hospitals running on essentially zero margin, so they can't pay more even if they wanted to. That in turn has been linked to Japan's national healthcare insurance system and other government mandates, with arguments everyone here has probably heard enough already.
Because there is enormous opportunity for price discrimination as people are willing to spend all their disposable income to save themselves or their family.
As an ambulance chaser who looks at medical bills all day, and has an Econ degree, the complete absence of words like supply, demand, and elasticity in these conversations is disheartening.
To an extent. But it's also important to realise that a lot of mechanisms that work in other markets don't work in the healthcare market.
If I'm unconscious after a car accident, I can't get quotes from competing ambulance firms or negotiate prices.
If I'm in hospital and they say I need surgery, they can't guarantee my insurance will cover the full costs - or tell me what it'll cost me should my insurance not pay.
In any other market, we'd call people agreeing to services they didn't know the prices of fools, and people billing for services customers hadn't asked for scammers. But due to the unique nature of the healthcare industry, such things are normal.
It's frustrating to watch people say things like "corporations are greedy" and simply stop there. They've correctly identified that markets exist, wherein sellers generally price things in a way that optimizes overall profit, but seemingly don't engage with the ideas of economics, which provide a whole suite of tools and theory to with which to understand why markets act the way they do, and what to do about it.
Well, for one thing, it's either that or die. Sure, you can travel overseas and get healthcare at much lower cost, but if you can afford that you probably don't care much about the cost anyway. It's a total seller's market.
Health insurance fundamentally makes no sense. You can’t exactly hedge your risk like with a car or a house.
The most ethical approach would be to separate care into health care and medical care. Health care should be strictly preventative and diagnostic and be free.
Healthcare as defined below is outrageously expensive to begin with. Going to hospital and seeing some resident for 5 minutes after having a nurse take your blood pressure and weight shouldn’t result in the insurance company being billed $1000.
Part of this resolution will be introducing far cheaper labor and automation. One point people never want to concede is that the actual cost of labor is increasing without commensurate productivity, aka cost disease. Free health and medical care will exacerbate this.
Medical care should be pay for yourself or purchase private insurance.
Medical care here is defined by actual treatment such as surgery, whereas health care includes diagnostics such as a yearly assessment, blood tests, etc.
Of course, it’s easy to want others to pay the bills.
Health insurance should be rooted in solidarity. It is supposed to be a collective mechanism designed to prevent individuals from financial ruin due to unpredictable medical crises. It is not about hedging individual risk, but about sharing it across society, because health problems can strike anyone regardless of preparation or behavior.
Maybe so - in any case a public option wouldn’t inherently indirectly be decided by the public via voting so we will see if people accept the higher taxes or lower spending make it happen.
So, it should be free to get a cancer diagnosis so at least you know what's killing you even though you can't afford to do anything about it. Sounds great.
It appears you've never lived with Medicaid. Medicaid makes it clear that the poor don't deserve as much or as good a quality of medical peer as someone well-off.
Why must it be private insurance specifically? A public insurance option should work as well, even if it is not to the exclusion of private insurance plans.
It doesn’t have to be private, but a public option wouldn’t be properly incentivized for the same reason there’s not public car insurance even though 49 states make it mandatory to have.
Except the demographics are such that it won’t work. The other problem is that if free there’s no downward pressure on excessive claims. I’ll leave it to the reader on determining what this is, but in general older people will pay unbounded amounts for poor prognosis.
Why should you pay, for example $100,000 so someone who is 85 can live to 86? Sometimes it’s time to accept reality.
Given that, up until 2010, the NHS was one of the most efficient healthcare providers and also completely free at the point of use, I think the answer is pretty straightforward.
"Health care should be strictly preventative and diagnostic" runs into the problem that not everyone agrees what that means. For a while most Europeans thought that leeching yourself was preventative medicine, or Japanese people thought removing the outer layer of your skin by rubbing it hard with towels was, etc. Nowadays some people have forgotten that vaccines work and don't want to pay for other people to get them.
Health care in the US is definitely stupid and bad and can easily be made better than it is, but all the easy sounding obvious right answers that would fix everything about some aspect of life usually don't pan out in practice.
It's tricky, because an insurer of your body (for medical care) has a vested interest in you taking good care of it (health care). By offering to pay for these services, they can potentially realize savings by not paying for the surgery that your undiagnosed diabetes or heart disease or whatever resulted in later on.
And since this is capitalism, if one guy offers that (an obvious benefit, or so it seems at least), their competition must do the same. Now the marketing department has us convinced that insuring only for major expenses (high deductible plans, basically) is stupid and that good coverage means only paying copays (which are also on the rise, duh). And it's easy to convince the public of that because paying a $35 copay for a 10 minute exam is still an easier pill for most of us to swallow than $100 or $200 self pay for same, since we're not thinking about the $15,000 premium which can be made nearly invisible to the consumer if their employer is paying for it, etc. Numbers made up of course, but I think the scale is reasonable.
I don't have all the answers, but I do think it's obvious that capitalism is not the correct approach if your goal is a healthy population.
What's the problem? Just do a Vickrey auction with your insurer, where you bid how much you're willing to spend to stay alive, and they make a counter-bid.
If you win, they spend their bid to keep you alive; if they win, they pay out your bid to your next of kin when you die. A perfectly Pareto-optimal solution of revealed preferences! /s
The American healthcare system is responding to the incentives that are in place, and those incentives are designed (if not intended) to drive up costs.
Doctors can be sued for malpractice if they miss something, so they're incentivized to provide as much care as possible, regardless of cost.
Hospitals and other healthcare organizations are likewise incentivized to charge as much as they can, since the bills are passed on to insurance companies.
Insurance companies have every incentive to lower the bills they pay. They negotiate volume discounts with healthcare corporations, and the billing system that gets worked out between these large organizations has little connection to the actual cost of healthcare provided to consumers.
For most consumers, insurance coverage is connected to employment, so it's very difficult to shop around. It could mean leaving one job for another, just to get different health coverage.
Inefficiencies abound. We can do better, but there is not a simple solution to this.
You could probably eliminate a lot of these inefficiencies by eschewing any sense of morality or fairness and simply letting more people die. Society isn't quite ready for this level of dystopia, but it's the direction we're headed if we don't change course. Nationalizing the US healthcare system may be the best answer, but it is guaranteed to be enormously complicated, and not guaranteed to improve outcomes.
> Inefficiencies abound. We can do better, but there is not a simple solution to this.
A single-payer system is the conceptually simple solution to this. We could get there either by expanding Medicare to cover everyone (M4A), or we could add a public option to the ACA that is priced and funded to outcompete the private options.
In practice there would be enormous complications in managing the transition, but the evidence is that it would improve both costs and outcomes unless it is being sabotaged by an austerity-focused government (like the NHS in the UK).
This is only going to get worse and not better irrespective of what is shown or talked about. A 5 trillion a year industry is a golden goose of the highest order, the ecosystem will protect itself.
The cynic in me thinks “they” will make it illegal or lucrative to not talk about the problems. May be they will spin up yarn like they do for school shootings and made half the country be fully ok with school shootings.
On a macro basis, other things staying the same, because greedy insurance companies had the upper hand before, during, and after a national health care law was passed.
Which granted the companies guaranteed payment from every American when not nearly every American was paying before.
There's plenty more on top of that, it's only one fundamental.
UK private health insurance premiums are going up 10-50% too. From a lower base admittedly. And aggregate private health spending is on a strong upward course
The responses here are pointing out structural problems in the industry, but I think this potentially misses a larger point: this article shows stats tracking healthcare spending without accounting for healthcare needed.
Yes, price discrimination, lack of pricing transparency, excessive administration costs, etc all add to spending. But at the same time we know that a lot of chronic diseases are increasingly common, that we have a large number of aging boomers, and that new, effective but expensive drugs (e.g. semaglutide) are being prescribed to both people that need them and perhaps some that "need" them, so there are simultaneously good reasons to expect healthcare spending to go up.
If we can't track both the price and the care delivered, we can't really see if the efficiency of care delivery is getting worse (though it probably is). If we don't have metrics that compare care delivered to care required, we can't tell if we're failing to care for our population ("Bob needs X but can't get it because he can't afford it") or over-prescribing and testing ("Alice may not need Y but her GP put her on it to cover bases").
The system is broken. The players are corrupt. But measuring spending only does not really illuminate the issues.
This is how capitalism works. When demand exceeds supply, the price will go up.
Healthcare is a different product than, say, apples. You only want a certain number of apples per day. But when it's about getting healthy, the limit to what you'd be willing to spend is what's on your bank account. Give such an incentive to some health companies and they'll find a way to get the maximum out of you.
Healthcare in the US is expensive simply because US citizens, on average, have a lot of money to spend.
Capitalism is great, as long as there is some amount of regulation. And healthcare is an area where this is definitely needed.
> But when it's about getting healthy, the limit to what you'd be willing to spend is what's on your bank account.
This sparked an interesting conversation between me and my half-sister. She said the following:
"Here's a lot of why people are angry - lets say I get a form of cancer that could be cured, but the cost is $200,000. But I'm 19 years old, come from a poor family who can't afford insurance, can't afford insurance myself, and haven't even had a chance to make $20,000 in my life, let alone $200,000.
Now I'm using a 19-year old as an example, but morally the dynamics don't change even if I'm 89 - it's not like I wanted to get cancer.
Talking about economic systems in this type of situation rings very hollow. And it makes people question why they should be a member of such a society or defend it. Capitalism is so great that it must constantly and relentlessly defended with online posts on all platforms."
I don't agree with my half-sister. People died of horrible, curable diseases in communist/socialist regimes as well, and they couldn't really even try to use wealth to improve their situation unless they were corrupt.
I really think the problem is that individuals are just not being capitalistic enough with healthcare. Healthcare companies are publicly traded and you can buy stock in them, and since people always need healthcare, it's a great way to build assets which you can then use to purchase healthcare later. It might even be a good idea to replace social security with government stock purchases in healthcare companies.
Most poor families can afford medical insurance, either through state Medicaid programs or using subsidies available on state exchanges. Overall the USA is at or near the top of countries in terms of 5-year cancer survival rates. We're actually doing better than countries with socialized healthcare systems, although there are problems with access and cost that should be fixed.
As an asset class, healthcare companies don't consistently have a higher ROI than any other sector. Regular people should generally diversify their investments with broad index funds rather than making concentrated bets in a single sector.
Spending more isn't necessarily a bad thing. If you just look at raw spending numbers, it looks healthcare has gotten much more expensive since ~2010.[0] But if you look at Healthcare spending as a percentage of GDP, it's been flat over the same period.[1]
With that in mind, in what sense is rising spending on healthcare a negative? Isn't this exactly what we'd expect in a functioning market economy -- that folks with more money[2] will spend more money on stuff, including healthcare?
For example, when we look at raw spending numbers in any other area (food[3], for example) we also see rising spending in absolute terms. Does this signal a failure of capitalism w/ regards to production and distribution of food? Obviously not.
Yes it is, at least, what is sold as 'healthcare' is.
I live in Switzerland and I see the same happening here. For European standards, healthcare is crazily expensive. For example, when I want to buy paracetamol, I pay around 8 times as much as in my birth country, the Netherlands.
The product, paracetamol, is exactly the same. What's more, many of the pharmaceutical companies that are producing it are based in Switzerland!
The reason it costs this much more here is simply that people are willing to spend more money. And the healthcare industry is more than happy to absorb that demand.
None of anything you said indicates demand elasticity.
Healthcare is notably inelastic. Do people eat more 8x more paracetamol in the the Netherlands than in Switzerland, because it's a better deal? No I suspect they both take it for pain when they have pain. That's demand inelasticity.
isn't it? I know several people who opt to not carry healthcare insurance (since the penalty was dropped) because of the cost, but would carry if it were reasonably priced outside of the employer market.
Because health is not a free market, if you are dying, you don't get to choose a competitor to your nearby hospital. Health is a lot of variation of that.
So the good part of capitalism don't work, but the bad parts do, like concentration of power and ignorance of externalities.
And today, we have reached a tipping point in those, with abuses overcoming people's tolerance for them.
Americans just elected a president that vowed to make the problem worse, by removing what little care the government still provided. The few democrats that advocate for a socialized healthcare system are barred from holding any meaningful power within the party. This entire system is rotten to the core, millions are suffering needlessly just so a few can get wealthier.
The article explains U.S. healthcare costs are rising due to labor shortages, higher wages, growing demand, expensive treatments, and hospital consolidation—not actions by insurance companies. Spending grew 7.5% in 2023 to nearly $5 trillion, driven by increased use of services and rising drug and hospital costs.
I did not read it, but it is exactly what I expected it to say. The owner of WSJ is the same person who own FOX News. I am sure there is no mention of the profit motive.
When I was very young, I remember my father and uncles talking about hospitals becoming "for-profit" in the late 60s. They all agreed that eventually health cares main purpose will be to get all the sick person's assets. That is where we are now.
This is a great question. In a class literally called “Economics 101” I took 20 years ago, we proved that the most efficient number of insurance providers is 1, implying that the government should provide this insurance.
In October 1942, FDR signed the Stabilization Act of 1942, which made it illegal for anyone to raise wages. Employers, who were now struggling to attract workers in a time of inflation, started looking for other ways to attract them, and many decided to start offering health insurance as a benefit.
Because risk? Why does car insurance exist, why does home insurance exist, why does errors and omissions insurance exist, why does umbrella insurance exist, why does business continuity exist?
Why do people think someone else should pay their medical bills?
Why do people think that other people should pay for their roads? Why do people feel like other people should pay for their police protection? Why do people feel like other people should pay for their public schools?
Why answer a question and then ask one that requires the same answer?
> Why do people think someone else should pay their medical bills?
Health is something you can influence but that you don't have total control. I prefer the world where if I am the unfortunate person at least the society will help me. Having health issues is already bad enough. I am willing to pay some of my money for that purpose. It doesn't impact my quality of life when I pay for someone else's medical bills but if I end up needing that I will benefit from it a lot. So the cost it totally worth IMO.
They didn't ask 'why does insurance exist'. I imagine they fully well understand the concept of insurance. The more relevant part of the question was 'private' I suppose. As opposed to what? I imagine 'public' (single payer?).
I don't know enough about the industry to have a really solid opinion on single payer vs not. However, I don't think that for-profit corporations is a good match for most (if not all) types of insurance. It puts too much incentive for them to screw over the policyholders and their dependents.
Essentially everyone is facing large healthcare costs.
Spreading risk is useful for things like house fires where the odds are low and the costs are high, it fundamentally doesn’t work for annual doctors visits.
> ... it fundamentally doesn’t work for annual doctors visits.
I don't think this is _overtly_ what's making premiums rise. However, if more people did this, the shared odds would be lower of people needing major, catastrophically expensive interventions later. I understand why they (myself included) don't and these things are all intertwined: they can't get time off of work, don't have anyone to watch their children, are afraid of something being found and needing to see a specialist, etc. and having costs balloon.
Without having read the paywalled article yet, I suspect that said interventions are only a small part of the equation, though, and the primary driver of costs are greed-flation, middlemen (e.g. billing), etc.
The point was illustrative, adding layers of bureaucracy isn’t free. Spreading costs for catastrophic issues is a valid use of insurance but the’ve inserted themselves into routine care thus raising costs. Getting a few stitches after a moderate injury is a fairly minor medical procedure, but get medical billing involved and the manpower for billing can dwarf the cost of medical care.
PS: Several studies have shown preventive screening in aggregate doesn’t significantly reduce total healthcare costs. It tends to uncover enough additional issues to offset the savings from treating things early.
the emphasis is prob why private health insurance. it’s not having other ppl posting your bills, it’s about being able to coverage low probably high cost events that is the whole point of insurance
That seems a bit disingenuous. I don’t hear anyone outside of rabid leftest circles asking for anyone else to pay their bills.
What people don’t want is their doctor saying they need something while a guy in a suit tells them they can’t have it. To make matters worse the patient pays for the guy in a suits e class.
There are basically two groups of people involved in this.
Those that have not had a loved one denied needed care by an insurance company who they pay and those that have.
If you cannot identify the twisted profit motives in the American health care system that is your problem.
One important feature is laws requiring a high standard of care. Medical providers can be sued if they don't provide care meeting some defined standard. This prevents economic tradeoffs that would occur with other forms of consumption.
One can view standards that maintain a certain level of quality as privileging the well off, requiring an industry to cater to their preferences over those of other classes of consumers.
Because plebs have been disenfranchised since the mid century and are too busy whining about dumb social issues they are fed by the media to notice who has actually been fucking them.
You don’t see the cost of the electricity on your bill either, but it’s going to be passed on.
Doctors can’t directly bill anyone for this time so they simply bump up other charges to compensate, the same way they cover rent or the office phone bill.
Insurance companies should be driving DOWN the cost for care. It's not possible for us to have the most expensive healthcare in the world and for them to still be profitable, unless there is corruption.
If the by-far dominant ethos of the upper and ruling classes is "greed is good, more is better" capitalism, then no actual collusion is needed for millions of self-serving individuals to send healthcare costs spiraling ever-upward through their own "from each as much as his ability to pay, to each according to his greed" actions.
But it is still hard for me to believe that these companies are all okay with robbing each other, just because the margins make sense somewhere else down the line.
Because capitalism. More concretely, because of for-profit healthcare. Even more specifically, individual health insurance is a terrible idea, as is tying insurance to employment.
Brief list of problems:
1. It's too expensive to become a doctor. Unless you come from a relatively affluent background, a freshly-minted doctor will graduate with $300k+ in student loan debt. After 3-10 years of working minimum wage (ie residency) that debt will be $500k+. Salaries need to be high to cover that. Everyone pays for that input cost, a lesson we're also failing to learn from increased housing costs too.
If anyone complains about physician salaries and points to other countries, particularly in the EU, ask them about the debt required to become a doctor in the US vs whatever country they bring up;
2. For-profit healthcare incentivizes taking money and then not paying for medical care to increase profits. The industry calls any payout they have to make a "medical loss";
3. The ban on importing medicines and Medicare negotiating drug prices needs to go. All it does is make drugs WAY more expensive in the US than any developed nation, often by orders of magnitude;
4. Even so-called not-for-profit foundations that own hosptials and medical providers are little better because, for example, the executives can be incentivized to icnrease assets under administration, just like a mutual fund. And any such money put into assets isn't being spent on healthcare. This needs to stop.
5. More artifical barriers. As just one example, physicians are legally forbidden from owning hospitals. This provision was snuck into the ACA;
6. Standardize electronic health records. EPYC is a scam and more rent-seeking;
7. Federal research dollars should come with equity in any drugs commercialized from that research. Drug companies don't do research, much as they claim to. They spend their money on marketing, lobbying and patent extension;
8. Patent reform. Drug companies make pointless changes to molecules and stop making the version that goes out-of-patent. No one else can produce it because parts of the manufacturing process are hidden (eg trade secrets) and, even if you can, you can't verify what you've produced is compliant with the approved version;
9. The state should produce generics. Insulin, epi pens, that sort of thing. Price gouging on these should be a crime. Some states are or will be producing insulin.
This can be solved easily by not requiring a bachelor's degree before getting into medical school. It is wasteful, especially when the bachelor's degree can be in any field such as music or computer science.
If you're going to go to medical school, you technically have to do a pre-med program with required courses like Organic Chemistry. Now some of these are relevant to medical school but some (like OChem) are viewed as a weed-out [1].
Could you just do a straight medicine degree out of high school? Yes. How much shorter would it be? You can look at other countries for this.
The US system is getting worse too because there's an increasing demand for gap years to make your applications competitive. That means a gap between undergrad and medical school where you're padding your resume. That might be doing a Masters or it might be practical experience. That's potentially more debt and more interest on your debt.
The residency application process is a nightmare. For competitive specialties you might need another gap year after medical school to do "research", That position can be low-paid too so, again, more debt. And you'll be even older by the time you're a doctor.
If you fail to match the first time you try, you're in a bad place. You're going to be less desirable as a candidate the next year if you try and match again.
In the UK it takes only 7 years to become a doctor. Students can enter medical school directly after high school. You do undergraduate medical degree (MBBS), followed by 2 years of Foundation program (paid clinical internship).
A few schools are now offering combined Baccalaureate-MD programs which cut up to two years from that education. That's a relatively simple change which can significantly reduce the cost of becoming a doctor so we should encourage more schools to do the same.
The reason is simple, for profit healthcare, simple as that.
In my area I am old enough to remember when all hospitals where I live where run by various charities. My small city of 100,000 people we had 3 hospitals. 2 run by Roman Catholics and a third was non-profit. Back then things were kind of cheap when compared to what people's salaries were.
Now there is only 1, owned by Tufts. The non-profits were pretty much eliminated in the late 80s or early 90s, and no one can pay their hospital bill without insurance. Even with insurance it is very hard to pay up.
All the hospitals where I live (except for 1) are owned by non-profits. Actually, they're all owned by one charity, the Catholic Church. Who are also buying up all the local doctors offices. And yet prices are going up, the number of services being provided is going down, with the added benefit of them forcing their religious beliefs on us.
I don't know the specifics of the hospital, but I imagine the admin staff working there is still solving for higher salaries and increasing the size of the staff, with patient outcomes being a secondary goal. Because that is human nature.
Are they run by the same charity, Catholic Charities ?
The 2 Catholic hospitals I referred to were run by 2 different Catholic Orders, one based in Quebec and I think the other was based in the US. Those 2 "merged" and then they were purchased by the third, then later on became that one became owned by Tufts sometime within the past couple of years.
Now I would not be surprised Catholic Charities is the only one left. Also these days seems all charities have started chasing "profits" too.
For profit is probably a good theory to explain why American health care is so expensive, but it is not so good as an explanation for why the cost is increasing.
If you look at per capita health care spending over the last 50 years in the US and other first world countries what you see is that spending has increased at roughly the same rate in most of them.
That suggests that the increases aren't due to peculiarities of individual systems (e.g., the heavy dependency on for profit providers in the US) but rather due to something common to most health care systems.
I had the same reaction to that comment...it's an exaggeration, but I also know someone who went to Cornell and UVA Law with full ride scholarship who said they had to eat breakfast out every day because they don't know how to make eggs of any kind. Not even fried or scrambled.
> Why are Americans paying so much more for healthcare than they used to?
It's a pretty obvious answer, to be honest. Because it's a poorly regulated industry for the purposes of minimizing cost to individuals. Over time, industry participants will continue to expand rent seeking practices and because the demand for health is almost perfectly inelastic, they can continue to get away with it. Too many middlemen, too much needless complexity, not enough regulatory oversight.
I'm a rabid defender of the free market, but healthcare is not a regular market because nobody chooses to purchase healthcare services. You take them at whatever price they are offered whenever you need them. It's why we call users of these services "patients", not "consumers".
Consumers are best served by private companies competing against each other in a nearly perfectly free market to offer the best goods and services at the lowest prices. Patients are not.
Patients are best served by a well regulated industry in a nearly perfect not-free market in which their needs are prioritized over profit. Healthcare, just like education and security, are the foremost duties of the State.
When you say poorly regulated, you don't mean a lack of regulation right? Just that the heaping mass of regulations that do exist give us the trash system we have?
Cause I wonder if some people might take "poorly regulated" to mean "just not regulated enough", which I think is probably not the issue.
Isn't it the opposite of what you're saying? I always had an impression that the high cost is actually due to low supply of doctors and this low supply is due to overregulation driven by the doctor lobby. Where (if I remember correctly) there're limits on the number of new MDs education institutions produce, or a number of licenses, forgot what exactly.
The demand is inelastic, the supply totally is elastic in a normal situation, but it is made inelastic by regulations, restrictions, etc.
I think you could classify the shortage of doctors as being due to "poor regulation."
Some brief reading suggests that the supply of physicians is constrained by a cap on public funding residency slots lobbied for by the AMA.
There is no such thing as a "free market". Any such "free market" only exists because of government regulation, oversight and enforcement.
People try and carve out an exception for healthcare because of inelastic demand. While I agree individual insurance and tying insurance to employment are terrible models and for-profit healthcare is a terrible idea, I just don't think healthcare is as exceptional free market defenders make it out to be.
The biggest barrier to the operation of the free market in medicine is the medical licence, especially as being a legal and economic barrier to prescribing drugs, ordering tests or referrals to the actual specialist who can help you
I'm not sure you're agreeing or disagreeing, so apologies in advance if I misread you and apologies in hindsight if I was unclear with my original comment.
I didn't claim free markets exist out of thin air. They need to be created and enforced, there's no dispute there.
I'm also not saying that healthcare should be a free market. I'm arguing for more regulation in Healthcare (and Education) than I would suggest is needed in regular markets. Security is even more regulated as the state must have a monopoly on the legal use of force, and with that comes the duty to protect its citizens.
A perfectly free market results in monopolies and oligopolies, which are hardly competitive.
I use a high deductible plan and pay out of pocket for a direct primary care provider. I realize this option isn't widely available or even sustainable for the economy as a whole, but it's a great option if you can get in. My doctor is easily available (because his client roster is small) and my common visits are all rolled into a flat rate subscription. I pay $85/mo for this.
The reason it costs less is because there are no administrative staff at all aside from the receptionist. interfacing with insurers requires an entire back office of non revenue employees that DCPs do not need to bother with.
You can also save a lot of money in HDHP by ordering your own tests from a reseller like ownyourlabs instead of having the hospital doing it, especially if you like doing annual preventative tests that may not be medically necessary. I bring the results to my dpc doctor for review and it's all very convenient.
I'm a big fan of HDHP's since you can save/accrue money in a health savings account and not lose it. While the deductible is super high, my employer has a good health plan and once you hit it everything is covered 100% (coinsurance). If something bad happens, ideally you will have enough money saved to cover any deductibles. The sky is the limit if you are stuck in the hospital with something severe and it's good to have some piece of mind that everything will be OK.
In the past I was in the hospital for about 10 days with pneumonia and at the time I had a standard PPO plan that only covered up to 90%. I was all of a sudden on the hook for thousands of dollars for medical bills , as my stay was over $100K in expenses and that was about 15 years ago. It's not like you can shop around for ER's when you are severely ill. I did make sure that the hospital was in-network before I went to it though. I can't imagine what the cost would be now. Luckily I had the means to pay these bills, but I would have saved a lot of money if I had a HDHP.
How do you find a doctor that operates like this?
There is a directory here: https://mapper.dpcfrontier.com/
These are usually small independent offices not in a hospital so they will be doing their own marketing. look around for family clinics in your area the old fashioned way too.
I read an article, I think here on ycombinator, that eventually most people will interact with an AI as opposed to a real Doctor.
In a way, I would not be surprised that is the case in maybe 10 or so years. And I expect this AI will be run by Health Insurance Companies. We already seeing a bit of that.
It is time for the US Gov to stop collecting bribes (contributions) and "man up" to fix Health Care, even if it means they will lose their job. Congress is suppose to serve the community, not private health care and other fortune 500 companies.
See perhaps "Insurance companies aren't the main villain of the U.S. health system":
* https://www.noahpinion.blog/p/insurance-companies-arent-the-...
The margins and ROE for health insurance companies aren't that big, health providers on the other hand…
Of course that doesn't necessarily mean the insurance companies are useful:
* https://paulkrugman.substack.com/p/health-insurance-is-a-rac...
But given the realpolitik of when Obamacare was passed, the current US system was probably the only way at the time to get to universal healthcare. The ACA barely managed to get passed after all (219–212 and 60–39):
* https://en.wikipedia.org/wiki/Affordable_Care_Act
“Politics is the art of the possible, the attainable — the art of the next best.” ― Otto von Bismarck
Doctors and nurses are paid too much in this country. Pharmaceuticals charge too much. Diagnostics are gold-plated.
There's no downward pressure on these prices except what the insurance companies can negotiate, and people don't like the insurance companies doing that when their health is on the line.
ie, It's a total market failure, and single payer would fix things, at the expense of all the profits of the 3 largest factors.
Revoke the concept of a medical licence! Maybe charge $10k a year for one (so doctors are still registered, theres just no other barrier) and boom, now you can prescribe whatever you need. If that medical degree and residence program is really worth it then the market will price it in. Healthcare costs will fall drastically. Its the cartel of Doctors that keeps costs high, every medical decision gets made downstream of doctors. No doubt quality will fall in the cheap end, but the care per dollar will go way up.
I agree the supply needs unblocked. But there’s many steps to take before one so drastic. First off stop letting congress and the AMA dictate how many residences are offered, allow as many doctors study and become doctors as want to be.
You really want to live in a world where anyone with $10k can start prescribing medication? It'd be nice for the heroin dealer down the street, as the no longer have to worry about the cop. Just pay your yearly fee and start slinging Oxy. No downside to that, right
Licenced medical doctors under the current system will already prescribe you oxy (actually they moved into low socio-economic areas to sling dope, theres your upper class medical profession) so not sure what your attack is here
This is so retarded it must be satire
I assure you Im serious. I would like to know your actual thoughts why you think this way
Doctors wages are not why costs are high
If you want physician salaries to be lower, you need to lower the cost of becoming one. It's really as simple as that.
People like to make comparisons to physician salaries in other countries but ignore the fact that the education is significantly cheaper or even free in those countries.
Additionally, the US forces newly minted medical school graduates into a forced regime of working for 3-10 years at minimum wage to get qualified as a doctor (ie medical residency). During that time, their debt balloons from $300K+ to $500K+ because many residents can't afford anything more than minimum payments.
And if that wasn't bad enough, there are increasingly gap years built into the system to make you more competitive. This could be a Masters (and more debt) or practical experience after undergrad to get into medical school. There is an increasing need for a "research year" after medical school to get into competitive specialties.
So you might be 38 years old and have spent 20 years studying post-high school by the time you are earning those big bucks and you have to recoupe maybe $700k+ in debt.
There are negative societal outcomes for a high cost of education. Just like there are for housing. Yet people want to gatekeep both for some reason.
One of the upward pressures of physician salary is malpractice insurance.
Cosmetic surgeons I have heard pay about half their salary into malpractice insurance. I do not know how you fix the litigiousness of consumers - that is a cultural problem.
I'm not necessarily opposed to a single payer system, but it wouldn't fix those things unless it also imposes severe price controls. Fixing prices below the market price inevitably leads to supply shortages (i.e. longer queues). This is why we see affluent Canadians come to the USA as medical tourists to get MRIs here and skip the queue back home. On balance it might be better overall but let's be clear about the trade-offs.
While physicians in the US are paid much more than any other country, there's not a huge difference for nurses.
Nurses in the US make more than 2x what they're paid in the UK
>Doctors and nurses are paid too much in this country. Pharmaceuticals charge too much.
Be very careful what you wish for.
Japan has been suffering a chronic and severe shortage of doctors and other medical staff because pay is too low. More recently, certain medicines both prescription and off-the-shelf have been exhausted due to overdemand and undersupply from government-mandated low prices.
I’ve been looking for sources about the Japan doctor shortage, do you know of any that describe the cause as being low pay? I have heard about the medicine issues.
I have no links handy, but practically every report by NHK and other outlets all come to the same conclusion that medical workers are leaving the industry and newcomers (medical students) aren't coming in because the pay is too low for the intense workload required compared to almost every other industry (and the shortage leads to doctors putting in even more hours, causing a negative feedback loop).
The low pay in turn has been linked to hospitals running on essentially zero margin, so they can't pay more even if they wanted to. That in turn has been linked to Japan's national healthcare insurance system and other government mandates, with arguments everyone here has probably heard enough already.
Because there is enormous opportunity for price discrimination as people are willing to spend all their disposable income to save themselves or their family.
Doesn't explain why this only happens in the US or why it happens more today as the article claims.
Yes. Technology is a key part.
- businesses are more optimized and driven to improve efficiency and metrics.
- technology for record keeping has improved so that the threat of debt is more scary (can’t just flee to another state, etc)
- people are more reliant on the industrialized healthcare system to full that need than in the past (less countryside medicine, etc)
- the legal system supporting doctors keeps strengthening (government recognized experts in many more areas)
- more inequality. One person who will pay covers 10 who won’t.
I.e. Relatively inelastic demand for acute medical care.
As an ambulance chaser who looks at medical bills all day, and has an Econ degree, the complete absence of words like supply, demand, and elasticity in these conversations is disheartening.
To an extent. But it's also important to realise that a lot of mechanisms that work in other markets don't work in the healthcare market.
If I'm unconscious after a car accident, I can't get quotes from competing ambulance firms or negotiate prices.
If I'm in hospital and they say I need surgery, they can't guarantee my insurance will cover the full costs - or tell me what it'll cost me should my insurance not pay.
In any other market, we'd call people agreeing to services they didn't know the prices of fools, and people billing for services customers hadn't asked for scammers. But due to the unique nature of the healthcare industry, such things are normal.
It's frustrating to watch people say things like "corporations are greedy" and simply stop there. They've correctly identified that markets exist, wherein sellers generally price things in a way that optimizes overall profit, but seemingly don't engage with the ideas of economics, which provide a whole suite of tools and theory to with which to understand why markets act the way they do, and what to do about it.
Well, for one thing, it's either that or die. Sure, you can travel overseas and get healthcare at much lower cost, but if you can afford that you probably don't care much about the cost anyway. It's a total seller's market.
Health insurance fundamentally makes no sense. You can’t exactly hedge your risk like with a car or a house.
The most ethical approach would be to separate care into health care and medical care. Health care should be strictly preventative and diagnostic and be free.
Healthcare as defined below is outrageously expensive to begin with. Going to hospital and seeing some resident for 5 minutes after having a nurse take your blood pressure and weight shouldn’t result in the insurance company being billed $1000.
Part of this resolution will be introducing far cheaper labor and automation. One point people never want to concede is that the actual cost of labor is increasing without commensurate productivity, aka cost disease. Free health and medical care will exacerbate this.
Medical care should be pay for yourself or purchase private insurance.
Medical care here is defined by actual treatment such as surgery, whereas health care includes diagnostics such as a yearly assessment, blood tests, etc.
Of course, it’s easy to want others to pay the bills.
Health insurance should be rooted in solidarity. It is supposed to be a collective mechanism designed to prevent individuals from financial ruin due to unpredictable medical crises. It is not about hedging individual risk, but about sharing it across society, because health problems can strike anyone regardless of preparation or behavior.
Maybe so - in any case a public option wouldn’t inherently indirectly be decided by the public via voting so we will see if people accept the higher taxes or lower spending make it happen.
So, it should be free to get a cancer diagnosis so at least you know what's killing you even though you can't afford to do anything about it. Sounds great.
That’s why you purchase insurance, no?
If you can afford it. If you can't, you are left with your cancer diagnosis and nothing you can do about it but wait around to die.
That would always be true, sadly. For example, the same could be said about water.
In any case the extremely poor already have free insurance in the form of Medicaid so not relevant.
It appears you've never lived with Medicaid. Medicaid makes it clear that the poor don't deserve as much or as good a quality of medical peer as someone well-off.
Yes, I'm one of those radicals that think water is a human right.
Also under the "Medical care should be pay for yourself or purchase private insurance" policy Medicaid would not exist because it is neither of those.
Yup. Medicaid isn’t great. Better to pay poor people to have private insurance. Just my own experience though.
Why must it be private insurance specifically? A public insurance option should work as well, even if it is not to the exclusion of private insurance plans.
It doesn’t have to be private, but a public option wouldn’t be properly incentivized for the same reason there’s not public car insurance even though 49 states make it mandatory to have.
Health insurance is cost pooling. The hedge is that the young people in the pool have better health.
Except the demographics are such that it won’t work. The other problem is that if free there’s no downward pressure on excessive claims. I’ll leave it to the reader on determining what this is, but in general older people will pay unbounded amounts for poor prognosis.
Why should you pay, for example $100,000 so someone who is 85 can live to 86? Sometimes it’s time to accept reality.
Health insurance absolutely makes sense in terms of diversifying any one individual's risk across the population.
Whether that's best done by the government or private institutions is left as an exercise for the reader.
Given that, up until 2010, the NHS was one of the most efficient healthcare providers and also completely free at the point of use, I think the answer is pretty straightforward.
"Health care should be strictly preventative and diagnostic" runs into the problem that not everyone agrees what that means. For a while most Europeans thought that leeching yourself was preventative medicine, or Japanese people thought removing the outer layer of your skin by rubbing it hard with towels was, etc. Nowadays some people have forgotten that vaccines work and don't want to pay for other people to get them.
Health care in the US is definitely stupid and bad and can easily be made better than it is, but all the easy sounding obvious right answers that would fix everything about some aspect of life usually don't pan out in practice.
It's tricky, because an insurer of your body (for medical care) has a vested interest in you taking good care of it (health care). By offering to pay for these services, they can potentially realize savings by not paying for the surgery that your undiagnosed diabetes or heart disease or whatever resulted in later on.
And since this is capitalism, if one guy offers that (an obvious benefit, or so it seems at least), their competition must do the same. Now the marketing department has us convinced that insuring only for major expenses (high deductible plans, basically) is stupid and that good coverage means only paying copays (which are also on the rise, duh). And it's easy to convince the public of that because paying a $35 copay for a 10 minute exam is still an easier pill for most of us to swallow than $100 or $200 self pay for same, since we're not thinking about the $15,000 premium which can be made nearly invisible to the consumer if their employer is paying for it, etc. Numbers made up of course, but I think the scale is reasonable.
I don't have all the answers, but I do think it's obvious that capitalism is not the correct approach if your goal is a healthy population.
Capitalism isn’t incompatible, but the externalities need to be priced in.
What's the problem? Just do a Vickrey auction with your insurer, where you bid how much you're willing to spend to stay alive, and they make a counter-bid.
If you win, they spend their bid to keep you alive; if they win, they pay out your bid to your next of kin when you die. A perfectly Pareto-optimal solution of revealed preferences! /s
The American healthcare system is responding to the incentives that are in place, and those incentives are designed (if not intended) to drive up costs.
Doctors can be sued for malpractice if they miss something, so they're incentivized to provide as much care as possible, regardless of cost.
Hospitals and other healthcare organizations are likewise incentivized to charge as much as they can, since the bills are passed on to insurance companies.
Insurance companies have every incentive to lower the bills they pay. They negotiate volume discounts with healthcare corporations, and the billing system that gets worked out between these large organizations has little connection to the actual cost of healthcare provided to consumers.
For most consumers, insurance coverage is connected to employment, so it's very difficult to shop around. It could mean leaving one job for another, just to get different health coverage.
Inefficiencies abound. We can do better, but there is not a simple solution to this.
You could probably eliminate a lot of these inefficiencies by eschewing any sense of morality or fairness and simply letting more people die. Society isn't quite ready for this level of dystopia, but it's the direction we're headed if we don't change course. Nationalizing the US healthcare system may be the best answer, but it is guaranteed to be enormously complicated, and not guaranteed to improve outcomes.
> Inefficiencies abound. We can do better, but there is not a simple solution to this.
A single-payer system is the conceptually simple solution to this. We could get there either by expanding Medicare to cover everyone (M4A), or we could add a public option to the ACA that is priced and funded to outcompete the private options.
In practice there would be enormous complications in managing the transition, but the evidence is that it would improve both costs and outcomes unless it is being sabotaged by an austerity-focused government (like the NHS in the UK).
This is only going to get worse and not better irrespective of what is shown or talked about. A 5 trillion a year industry is a golden goose of the highest order, the ecosystem will protect itself.
The cynic in me thinks “they” will make it illegal or lucrative to not talk about the problems. May be they will spin up yarn like they do for school shootings and made half the country be fully ok with school shootings.
Those yachts ain't paying for themselves.
On a macro basis, other things staying the same, because greedy insurance companies had the upper hand before, during, and after a national health care law was passed.
Which granted the companies guaranteed payment from every American when not nearly every American was paying before.
There's plenty more on top of that, it's only one fundamental.
UK private health insurance premiums are going up 10-50% too. From a lower base admittedly. And aggregate private health spending is on a strong upward course
Gift link: https://www.wsj.com/health/healthcare/american-healthcare-sp...
The responses here are pointing out structural problems in the industry, but I think this potentially misses a larger point: this article shows stats tracking healthcare spending without accounting for healthcare needed.
Yes, price discrimination, lack of pricing transparency, excessive administration costs, etc all add to spending. But at the same time we know that a lot of chronic diseases are increasingly common, that we have a large number of aging boomers, and that new, effective but expensive drugs (e.g. semaglutide) are being prescribed to both people that need them and perhaps some that "need" them, so there are simultaneously good reasons to expect healthcare spending to go up.
If we can't track both the price and the care delivered, we can't really see if the efficiency of care delivery is getting worse (though it probably is). If we don't have metrics that compare care delivered to care required, we can't tell if we're failing to care for our population ("Bob needs X but can't get it because he can't afford it") or over-prescribing and testing ("Alice may not need Y but her GP put her on it to cover bases").
The system is broken. The players are corrupt. But measuring spending only does not really illuminate the issues.
Because of private ownership of capital in an inelastic market.
This is how capitalism works. When demand exceeds supply, the price will go up. Healthcare is a different product than, say, apples. You only want a certain number of apples per day. But when it's about getting healthy, the limit to what you'd be willing to spend is what's on your bank account. Give such an incentive to some health companies and they'll find a way to get the maximum out of you. Healthcare in the US is expensive simply because US citizens, on average, have a lot of money to spend.
Capitalism is great, as long as there is some amount of regulation. And healthcare is an area where this is definitely needed.
> But when it's about getting healthy, the limit to what you'd be willing to spend is what's on your bank account.
This sparked an interesting conversation between me and my half-sister. She said the following:
"Here's a lot of why people are angry - lets say I get a form of cancer that could be cured, but the cost is $200,000. But I'm 19 years old, come from a poor family who can't afford insurance, can't afford insurance myself, and haven't even had a chance to make $20,000 in my life, let alone $200,000.
Now I'm using a 19-year old as an example, but morally the dynamics don't change even if I'm 89 - it's not like I wanted to get cancer.
Talking about economic systems in this type of situation rings very hollow. And it makes people question why they should be a member of such a society or defend it. Capitalism is so great that it must constantly and relentlessly defended with online posts on all platforms."
I don't agree with my half-sister. People died of horrible, curable diseases in communist/socialist regimes as well, and they couldn't really even try to use wealth to improve their situation unless they were corrupt.
I really think the problem is that individuals are just not being capitalistic enough with healthcare. Healthcare companies are publicly traded and you can buy stock in them, and since people always need healthcare, it's a great way to build assets which you can then use to purchase healthcare later. It might even be a good idea to replace social security with government stock purchases in healthcare companies.
Most poor families can afford medical insurance, either through state Medicaid programs or using subsidies available on state exchanges. Overall the USA is at or near the top of countries in terms of 5-year cancer survival rates. We're actually doing better than countries with socialized healthcare systems, although there are problems with access and cost that should be fixed.
As an asset class, healthcare companies don't consistently have a higher ROI than any other sector. Regular people should generally diversify their investments with broad index funds rather than making concentrated bets in a single sector.
Spending more isn't necessarily a bad thing. If you just look at raw spending numbers, it looks healthcare has gotten much more expensive since ~2010.[0] But if you look at Healthcare spending as a percentage of GDP, it's been flat over the same period.[1]
With that in mind, in what sense is rising spending on healthcare a negative? Isn't this exactly what we'd expect in a functioning market economy -- that folks with more money[2] will spend more money on stuff, including healthcare?
For example, when we look at raw spending numbers in any other area (food[3], for example) we also see rising spending in absolute terms. Does this signal a failure of capitalism w/ regards to production and distribution of food? Obviously not.
[0] https://www.statista.com/statistics/184955/us-national-healt... [1] https://www.statista.com/statistics/184968/us-health-expendi... [2] https://fred.stlouisfed.org/series/MEHOINUSA672N [3] https://www.statista.com/statistics/237211/average-food-expe...
> When demand exceeds supply, the price will go up.
Are you suggesting that healthcare is demand elastic?
Yes it is, at least, what is sold as 'healthcare' is. I live in Switzerland and I see the same happening here. For European standards, healthcare is crazily expensive. For example, when I want to buy paracetamol, I pay around 8 times as much as in my birth country, the Netherlands. The product, paracetamol, is exactly the same. What's more, many of the pharmaceutical companies that are producing it are based in Switzerland! The reason it costs this much more here is simply that people are willing to spend more money. And the healthcare industry is more than happy to absorb that demand.
None of anything you said indicates demand elasticity.
Healthcare is notably inelastic. Do people eat more 8x more paracetamol in the the Netherlands than in Switzerland, because it's a better deal? No I suspect they both take it for pain when they have pain. That's demand inelasticity.
Demand can also mean, willing to pay more for the same kind of product.
isn't it? I know several people who opt to not carry healthcare insurance (since the penalty was dropped) because of the cost, but would carry if it were reasonably priced outside of the employer market.
I'm referring to healthcare specifically, not the insurance market.
Because health is not a free market, if you are dying, you don't get to choose a competitor to your nearby hospital. Health is a lot of variation of that.
So the good part of capitalism don't work, but the bad parts do, like concentration of power and ignorance of externalities.
And today, we have reached a tipping point in those, with abuses overcoming people's tolerance for them.
Americans just elected a president that vowed to make the problem worse, by removing what little care the government still provided. The few democrats that advocate for a socialized healthcare system are barred from holding any meaningful power within the party. This entire system is rotten to the core, millions are suffering needlessly just so a few can get wealthier.
The article explains U.S. healthcare costs are rising due to labor shortages, higher wages, growing demand, expensive treatments, and hospital consolidation—not actions by insurance companies. Spending grew 7.5% in 2023 to nearly $5 trillion, driven by increased use of services and rising drug and hospital costs.
I did not read it, but it is exactly what I expected it to say. The owner of WSJ is the same person who own FOX News. I am sure there is no mention of the profit motive.
When I was very young, I remember my father and uncles talking about hospitals becoming "for-profit" in the late 60s. They all agreed that eventually health cares main purpose will be to get all the sick person's assets. That is where we are now.
The better question should be why do Private Health Insurance companies exist?
Because US laws allow them to extract money between the payment sources and the payment sinks.
Nearly pure parasitization.
This is a great question. In a class literally called “Economics 101” I took 20 years ago, we proved that the most efficient number of insurance providers is 1, implying that the government should provide this insurance.
That makes no sense. It depends on your risk profile. Believe it or not there are many who are healthy, even going into old age.
The fact this baffles many just shows how unhealthy America is.
The basic gist is that more insurance companies = more overhead so total cost of healthcare is higher. The ideal number of insurance pools is one.
Easy question!
In October 1942, FDR signed the Stabilization Act of 1942, which made it illegal for anyone to raise wages. Employers, who were now struggling to attract workers in a time of inflation, started looking for other ways to attract them, and many decided to start offering health insurance as a benefit.
This eventually became the new norm.
Because risk? Why does car insurance exist, why does home insurance exist, why does errors and omissions insurance exist, why does umbrella insurance exist, why does business continuity exist?
Why do people think someone else should pay their medical bills?
Why do people think that other people should pay for their roads? Why do people feel like other people should pay for their police protection? Why do people feel like other people should pay for their public schools?
Why answer a question and then ask one that requires the same answer?
Why is it that, in your argument, public insurance has not ever been considered?
People can pay for their medical bills with taxes. It happens all over Europe.
> Why do people think someone else should pay their medical bills?
Health is something you can influence but that you don't have total control. I prefer the world where if I am the unfortunate person at least the society will help me. Having health issues is already bad enough. I am willing to pay some of my money for that purpose. It doesn't impact my quality of life when I pay for someone else's medical bills but if I end up needing that I will benefit from it a lot. So the cost it totally worth IMO.
They didn't ask 'why does insurance exist'. I imagine they fully well understand the concept of insurance. The more relevant part of the question was 'private' I suppose. As opposed to what? I imagine 'public' (single payer?).
I don't know enough about the industry to have a really solid opinion on single payer vs not. However, I don't think that for-profit corporations is a good match for most (if not all) types of insurance. It puts too much incentive for them to screw over the policyholders and their dependents.
Essentially everyone is facing large healthcare costs.
Spreading risk is useful for things like house fires where the odds are low and the costs are high, it fundamentally doesn’t work for annual doctors visits.
> ... it fundamentally doesn’t work for annual doctors visits.
I don't think this is _overtly_ what's making premiums rise. However, if more people did this, the shared odds would be lower of people needing major, catastrophically expensive interventions later. I understand why they (myself included) don't and these things are all intertwined: they can't get time off of work, don't have anyone to watch their children, are afraid of something being found and needing to see a specialist, etc. and having costs balloon.
Without having read the paywalled article yet, I suspect that said interventions are only a small part of the equation, though, and the primary driver of costs are greed-flation, middlemen (e.g. billing), etc.
The point was illustrative, adding layers of bureaucracy isn’t free. Spreading costs for catastrophic issues is a valid use of insurance but the’ve inserted themselves into routine care thus raising costs. Getting a few stitches after a moderate injury is a fairly minor medical procedure, but get medical billing involved and the manpower for billing can dwarf the cost of medical care.
PS: Several studies have shown preventive screening in aggregate doesn’t significantly reduce total healthcare costs. It tends to uncover enough additional issues to offset the savings from treating things early.
the emphasis is prob why private health insurance. it’s not having other ppl posting your bills, it’s about being able to coverage low probably high cost events that is the whole point of insurance
Why should people participate in a system that doesn't guarantee them basic dignity and care?
We can afford to, and collectively it's cheaper.
If we take care of our people they're happier, healthier and more productive.
That seems a bit disingenuous. I don’t hear anyone outside of rabid leftest circles asking for anyone else to pay their bills.
What people don’t want is their doctor saying they need something while a guy in a suit tells them they can’t have it. To make matters worse the patient pays for the guy in a suits e class.
There are basically two groups of people involved in this.
Those that have not had a loved one denied needed care by an insurance company who they pay and those that have.
If you cannot identify the twisted profit motives in the American health care system that is your problem.
One important feature is laws requiring a high standard of care. Medical providers can be sued if they don't provide care meeting some defined standard. This prevents economic tradeoffs that would occur with other forms of consumption.
One can view standards that maintain a certain level of quality as privileging the well off, requiring an industry to cater to their preferences over those of other classes of consumers.
Because plebs have been disenfranchised since the mid century and are too busy whining about dumb social issues they are fed by the media to notice who has actually been fucking them.
Based and on point tbh
Because Insurance, Pharmaceutical, and Healthcare companies are colluding to rob the American people of their money.
You left out politicians. As far as companies like this are concerned, they are functioning within the limits of the law.
6% of healthcare dollars go to insurance. Maybe that’s too much, but it doesn’t seem like a major factor?
That’s the direct cost, a doctor talking to an insurance company is extremely expensive and not covered in that 6%.
What are you talking about? I look at medical bills all day. I’ve never seen a charge for talking to ins co.
> I’ve never seen a charge for talking to ins co.
You don’t see the cost of the electricity on your bill either, but it’s going to be passed on.
Doctors can’t directly bill anyone for this time so they simply bump up other charges to compensate, the same way they cover rent or the office phone bill.
Insurance companies should be driving DOWN the cost for care. It's not possible for us to have the most expensive healthcare in the world and for them to still be profitable, unless there is corruption.
There are more people in billing than there are hospital beds, in the US.
There's a large system set up to interface with insurance. It adds massive process overhead.
If the by-far dominant ethos of the upper and ruling classes is "greed is good, more is better" capitalism, then no actual collusion is needed for millions of self-serving individuals to send healthcare costs spiraling ever-upward through their own "from each as much as his ability to pay, to each according to his greed" actions.
If it is not collusion, it is corruption.
But it is still hard for me to believe that these companies are all okay with robbing each other, just because the margins make sense somewhere else down the line.
What’s the alternative?
Flagged submission because paywalled link cannot reasonably be bypassed.
CEO impunity
Is it common journalistic practice to put the graphic video of a murder _in front of_ the paywall?
Because capitalism. More concretely, because of for-profit healthcare. Even more specifically, individual health insurance is a terrible idea, as is tying insurance to employment.
Brief list of problems:
1. It's too expensive to become a doctor. Unless you come from a relatively affluent background, a freshly-minted doctor will graduate with $300k+ in student loan debt. After 3-10 years of working minimum wage (ie residency) that debt will be $500k+. Salaries need to be high to cover that. Everyone pays for that input cost, a lesson we're also failing to learn from increased housing costs too.
If anyone complains about physician salaries and points to other countries, particularly in the EU, ask them about the debt required to become a doctor in the US vs whatever country they bring up;
2. For-profit healthcare incentivizes taking money and then not paying for medical care to increase profits. The industry calls any payout they have to make a "medical loss";
3. The ban on importing medicines and Medicare negotiating drug prices needs to go. All it does is make drugs WAY more expensive in the US than any developed nation, often by orders of magnitude;
4. Even so-called not-for-profit foundations that own hosptials and medical providers are little better because, for example, the executives can be incentivized to icnrease assets under administration, just like a mutual fund. And any such money put into assets isn't being spent on healthcare. This needs to stop.
5. More artifical barriers. As just one example, physicians are legally forbidden from owning hospitals. This provision was snuck into the ACA;
6. Standardize electronic health records. EPYC is a scam and more rent-seeking;
7. Federal research dollars should come with equity in any drugs commercialized from that research. Drug companies don't do research, much as they claim to. They spend their money on marketing, lobbying and patent extension;
8. Patent reform. Drug companies make pointless changes to molecules and stop making the version that goes out-of-patent. No one else can produce it because parts of the manufacturing process are hidden (eg trade secrets) and, even if you can, you can't verify what you've produced is compliant with the approved version;
9. The state should produce generics. Insulin, epi pens, that sort of thing. Price gouging on these should be a crime. Some states are or will be producing insulin.
> It's too expensive to become a doctor.
This can be solved easily by not requiring a bachelor's degree before getting into medical school. It is wasteful, especially when the bachelor's degree can be in any field such as music or computer science.
So that's only partly true.
If you're going to go to medical school, you technically have to do a pre-med program with required courses like Organic Chemistry. Now some of these are relevant to medical school but some (like OChem) are viewed as a weed-out [1].
Could you just do a straight medicine degree out of high school? Yes. How much shorter would it be? You can look at other countries for this.
The US system is getting worse too because there's an increasing demand for gap years to make your applications competitive. That means a gap between undergrad and medical school where you're padding your resume. That might be doing a Masters or it might be practical experience. That's potentially more debt and more interest on your debt.
The residency application process is a nightmare. For competitive specialties you might need another gap year after medical school to do "research", That position can be low-paid too so, again, more debt. And you'll be even older by the time you're a doctor.
If you fail to match the first time you try, you're in a bad place. You're going to be less desirable as a candidate the next year if you try and match again.
[1]: https://forums.medicalschoolhq.net/t/why-organic-chemistry-i...
In the UK it takes only 7 years to become a doctor. Students can enter medical school directly after high school. You do undergraduate medical degree (MBBS), followed by 2 years of Foundation program (paid clinical internship).
A few schools are now offering combined Baccalaureate-MD programs which cut up to two years from that education. That's a relatively simple change which can significantly reduce the cost of becoming a doctor so we should encourage more schools to do the same.
https://students-residents.aamc.org/medical-school-admission...
WSJ ? Why bother even reading it.
The reason is simple, for profit healthcare, simple as that.
In my area I am old enough to remember when all hospitals where I live where run by various charities. My small city of 100,000 people we had 3 hospitals. 2 run by Roman Catholics and a third was non-profit. Back then things were kind of cheap when compared to what people's salaries were.
Now there is only 1, owned by Tufts. The non-profits were pretty much eliminated in the late 80s or early 90s, and no one can pay their hospital bill without insurance. Even with insurance it is very hard to pay up.
So there is your answer :)
All the hospitals where I live (except for 1) are owned by non-profits. Actually, they're all owned by one charity, the Catholic Church. Who are also buying up all the local doctors offices. And yet prices are going up, the number of services being provided is going down, with the added benefit of them forcing their religious beliefs on us.
I don't know the specifics of the hospital, but I imagine the admin staff working there is still solving for higher salaries and increasing the size of the staff, with patient outcomes being a secondary goal. Because that is human nature.
Which hospital system is this?
Providence
Are they run by the same charity, Catholic Charities ?
The 2 Catholic hospitals I referred to were run by 2 different Catholic Orders, one based in Quebec and I think the other was based in the US. Those 2 "merged" and then they were purchased by the third, then later on became that one became owned by Tufts sometime within the past couple of years.
Now I would not be surprised Catholic Charities is the only one left. Also these days seems all charities have started chasing "profits" too.
For profit is probably a good theory to explain why American health care is so expensive, but it is not so good as an explanation for why the cost is increasing.
If you look at per capita health care spending over the last 50 years in the US and other first world countries what you see is that spending has increased at roughly the same rate in most of them.
That suggests that the increases aren't due to peculiarities of individual systems (e.g., the heavy dependency on for profit providers in the US) but rather due to something common to most health care systems.
Hospitals are not the issue, the insurance industry is.
Hospitals are a large part of the issue.
https://www.sensible-med.com/p/the-entire-healthcare-system-...
[flagged]
Because americans don't know how to cook and eat UPFs all day everyday sitting on their couch watching tiktoks.
Is this really a mystery. I would guess < 5% american adults know how to use a knife or boil an egg.
On the one hand that is a gross exaggeration. On the other hand, I literally had a roommate in college ask me how to boil water to make spaghetti.
I had the same reaction to that comment...it's an exaggeration, but I also know someone who went to Cornell and UVA Law with full ride scholarship who said they had to eat breakfast out every day because they don't know how to make eggs of any kind. Not even fried or scrambled.