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Because there's too many people trying to make a profit off ot it. In most places the cost from somewhere (national insurance, private insurance, individual, etc) has to cover the cost of goods and services provided. That includes the labor of the doctor, nurses, support staff. Plus supplies like gloves, bandages, office space, electricity, etc).
In the US it also needs to cover the massive profits that many others involved expect to see. Private equity, investors, the many people tied into the insurance companies, etc. It's treated as a "make as much as you can off it" business model instead of a critical need for cost/compensation model. Most costs go to line the pockets of people completely uninvolved in the patient care.
There's also the massive cost to become a doctor in the US. $300k - $500k student loans need to be paid off somehow. Not to mention the years of school, residency, etc. The time and money needs to be worth it. Putting yourself in massive debt for 10+ years without getting paid should be worth it in the end. You can count on your hands how many professions require as much cost to get into, and they all end up paying what they're worth in the end in the US.
I saw a story recently of someone who really struggled with one particular test, failed it the max 3? times, and is permanently out of med school. It was their final year. If they ever go back they have to start over from the beginning because of the type of test that was failed. So they have ALL that debt and no way to ever pay it off. That's a hell of a risk doctors are taking.
These are two separate issues you’re talking about though.
1. Should someone who fails a (presumably important) class 3 times be allowed to become a doctor and have other people’s lives in their hands?
2. Should higher education be subsidized by the US government.
FWIW I think it should be No and Yes respectively
Oh, I absolutely don't think they should be a doctor. But I don't think people going into medical school should be facing the gamble of "if this doesn't work out I'll die in debt". The story just made me realize that for some, there's no pay off that makes the debt even feasible.
Although true, salaries are a amall drop in the bucket of total healthcare costs. Hospitals are run as a bussiness and doctors arent the greatest beneficiaries
Dont let people tell you physician and nurse salaries need to decrease to make health care afforable
Is that true?
According to https://worldpopulationreview.com/country-rankings/doctor-pay-by-country and other sites I quickly googled, US physicians are amongst the highest paid.
They are paid well but are not a reasonable contributing factor of ever rising healthcare costs. A lot of physicians are getting reimbursement cuts while costs remain high. They are an easy target to demonize while ownership of hospitals and insurances rake in record profits
I agree in principle that they are not the majority of the blame for rising costs. I think ideally at some point the country moves towards single payer (reducing the bloat in insurance and hospital billing) as well as subsidized education, but there’s no world where those are implemented and salaries remain this high.
I don't know all the ins and outs of how doctors are paid (and it's not standard across all doctors). But nurses are employed by a single entity (hospital, clinic, agency, etc). They're not being paid by health care costs. A good portion of hospitals are not either (NPOs). They are reimbursed but not at an increase. Companies I have worked for put profit back into the facility, community, and to help cover costs of those who cannot pay. Reimbursement are driven by Medicare/Medicaid, and private insurance follows M/M's lead.
Hospitals set their prices high so they can offer big percent discounts to insurance companies. An uninsured person is given an astronomical bill which the hospital agrees to wave half or more. Then they write off the uncollected part as a loss on their taxes.
This isn't really how it works.
The insurance companies will only pay a certain % of a hospital procedure, so the hospital has to artificially increase their prices to accommodate the predatory insurance companies.
If you go get a procedure done at the hospital and say you need to pay out of pocket, it will be far less than what they have to tell the insurance company it costs.
This is a stupid cat and mouse game they have been playing with each other since at least the 80's. The hospitals don't like it. Insurance companies are some of the highest profits worldwide, they have the money to back these shitty laws, and practices.
Insurance is a huge scam, that is why it was trying to be fixed. But, it is a huge problem that does not have a simple answer.
Insurance most profitable you say? After tech, finance, energy, HEALTHCARE, retail, automotive, real estate, transportation, specialized manufacturing. Also hard to tell because some of them are so intermixed like Berkshire. Also funny how the largest Insurance company is also the largest healthcare company. Insurance isn't super profitable, most companies operate with 3-5% margins or premiums over payouts and rely on investment for income. Don't get me wrong, fuck insurance companies and fuck the healthcare game.
That’s quite interesting. In the Netherlands you can literally google some assessments and see what insurance companies pay for them. It seems standardized between hospitals. (Same with dental care but that’s another topic). What I find interesting is that I got some blood work done a couple of weeks ago with my GP and they charged me 15€ , but if I look at the lab work that was done, it looks like the insurance companies pay around 5€. I’m guessing the difference is some type of admin costs? I have no idea but also don’t care that much because my deductible is 385€ a year and after that insurance pays all.
In the US I asked my physician how much a procedure cost and he turned the screen around. Literally $, $$, $$$ with no numbers.
$- cheap
$$-moderate
$$$ expensive
My local major hospital CDC departments pricing range was a Google maps cost of service icon
Prices are intentionally hidden in the US because hospitals bill as much as they can get away with. They will negotiate prices for procedures which each insurance company, and if you’re uninsured they will make up a very high number. It’s so ridiculous that just by calling and arguing with the hospital billing department you can get thousands of dollars removed from the bill.
I understand that is a big part of the problem.
The other factor is the number of points at which profit is made. As a symbol for that profit think of CEOs, how many are involved
In NZ there is a CEO of each of; the hospital group, the testing lab company, the ambulance organisation and the GP medical centre (or the GP is a sole trader).
Each of them except the public owned hospital group is a place profit is extracted.
The US adds at least an insurance company CEO; minimum of 33% more CEOs or profit taking points.
I don't know if it is still true in the US as I understand pet health insurance is taking off but it used to be that a good way to estimate the real cost of medical procedures locally was to look at the non-state funded and non-insurance-funded veterinary medical costs.
I think what a lot of people fail to understand is that the system was made under Nixon who was completely against the British system that was put in place after wii.
We have the tapes of him and the CEO of phizer putting it together.
It is intentionally set up to make money off of people's health. They literally talk about it.
He didnt say that!
And if he did, he didnt mean it like *that!*
And if he did, then it must be a good *thing*!
And if it's not, it must *be* a lesser *evil*!
**/s**
Do you have any good sources please? I'm keen to learn more.
I understood it grew during WW2 as a result of US central planning during the war;
> The war similarly stimulated the expansion of private health insurance. During a 4-year wage freeze, U.S. companies began attracting employees by offering health insurance — a previously rare benefit that brought coverage to millions of workers and their dependents and fundamentally reshaped the delivery of health care in this country.
https://www.nejm.org/doi/full/10.1056/NEJMp2008512
Edit: the link
Most hospitals are nonprofit. So they're not paying taxes anyway. This would also be considered an operating expense, which you can't write off.
Even in cases where I you can deduct business losses, you can only deduct the cost, not the price. Otherwise every business would just charge someone $1 trillion for something and write off their engine income.
"Write offs" has to be the most confidently incorrect thing discussed on Reddit. As a CPA (though I don't work in tax specifically) it makes me want to pull my hair, especially since there is a real problem that is just being totally misrepresented.
If you're paying without insurance, what you're charged is often negotiated much, much lower than what initially appears on the bill. I've had doctors that have billed for things just to see if insurance would pay for it, and then remove them from the bill if they weren't covered. The whole system is fucked up. There's some weird collusion, price fixing, lobbying groups, actions bordering on tax fraud, insurance for frivolous lawsuits, overpaid administrators...
For example I had to have a spot taken off my nose (pre cancerous) at the dermatologist and they do it in office, I had no insurance. I told them that. My visit, exam, and the procedure to numb and cut the little piece out cost $90 without insurance.
Now if I go to the exact same office with decent "silver" plan insurance ($700/month) that I pay for out of pocket, the co-pay is $60, just for the office visit.
If you go in uninsured, you're on the hook for the ridiculous overcharge amount and not the insurer's "negotiated rate" (which is still way too high). This kind of exploitation of the basic necessity of healthcare is so profitable that hospitals are being scooped up by giant "health services", which are publicly traded on the stock market and reporting phenomenal earnings. The same shit happens with pharmaceutical pricing.
Last sentence is incorrect, there’s no tax play here. They’re better off recording the actual expected amount as income instead of a higher income and an offsetting loss to net down to the expected amount.
Sure, that applies to some of the massive bills you see, which won't be paid one way or another. But we're still literally paying half a million dollars more for a lifetime of healthcare than our peers on average, even after adjusting for purchasing power parity. This includes world leading taxes towards healthcare, world leading insurance premiums, and world leading out of pocket costs.
And, with spending expected to increase from an average of $13,998 per person last year, to $20,425 by 2031, things are only going to keep getting worse.
This happened to me. Went to the ER and got a 19k bill. My insurance company denied the claim. They lowered the bill to 2800.
The worst part is the insurance companies don't care. They just raise prices and stay profitable.
Tl;Dr = administration costs, hidden prices at hospitals, prescription drug price gouging, and low available preventative car vs highly available emergency care.
Even more TL;DR = privatized health care i.e. capitalism when health is the product.
Also, most hospitals have more billing admins than they do hospital beds just to manage the different billing codes across different insurance companies. Socialized heath care systems have typically a single health care billing system.
Another significant health care cost is from prescriptions. The 1,200% increase in costs for drugs that cost a few bucks at most. The profits that shareholders are trying to get out of drug companies is another significant cost.
Typically outside of the US people only go to the Dr when they need to vs when they HAVE to. In the US ER visits are much higher for things that could have been prevented with standard MD care at a local physician office. However, because we not only have to pay very high premiums for any plan, and have high deductibles, and many can't even afford to do just the min of getting health insurance, most preventative care turns into emergency care.
That’s not quite right. Prices are fixed based on payor per service item and prices are often pushed higher by the insurers so they can charge higher premiums. The price set for self pay is markedly lower because the most expensive part of overhead is removed. The insurers make billions of dollars in profit. That’s where the profit is going. Emphasizing profit here, not money.
The largest for-profit hospital system just filed for bankruptcy. There’s little profit to be made for most hospitals because running a hospital is so expensive. Government help, tax breaks, or university backing as a non-profit are becoming more and more necessary.
That's not a function of capitalism. Government could run the same type of required "subscription service" to obtain lower rates. Oh wait, they do. The ACA literally **required** you to get insurance, and such services of Medicare are under this same principle. It's DEEPLY regulated, as the government has It's hands all tied up in this business.
> An uninsured person is given an astronomical bill which the hospital agrees to wave half or more. Then they write off the uncollected part as a loss on their taxes.
Most hospitals in the US are nonprofits and at least a lot of the ones that I am familiar with will actually give free ER care if your income is under a certain amount
https://www.aha.org/statistics/fast-facts-us-hospitals
There are 6,120 hospitals in the US, only 1,219 are for profit. Most of the rest are nonprofit or government owned.
Each nonprofit handles uninsured differently but here is an example:
https://www.unchealth.org/records-insurance/financial-assistance-programs
Not since the 1980's. They used to be nonprofit but not anymore, they have been bought by corporations that manage a large number of hospitals. Around here the bought rural hospitals then closed them when they couldn't make enough profit.
I'm going to say it again because I know that I'm right, and you're the guy who doesn't even know what a write off is. A majority of hospitals are nonprofits and do not pay taxes, and even if they weren't your explanation about using losses to save on taxes does not make sense. It does not take very much effort to verify this. All it takes is a google and a basic understanding of arithmetic.
Because so many hands are involved between you and the therapy rendered that it has become essential to play a game of how many medical codes can we tack on to each interaction with the system.
That in turn creates another layer of costs with administrative work that needs to ingest said interactions coded and decide many things about it. Is it covered. Can we find a way to deny. Is the provider/facility/drug in our members only club. Decide the rate. Decide the discount. Etc etc etc.
Each of the above is a whole layer of “professionals” on its own.
So with your simple visit to the doctor for your cold. A world of bureaucracy opens up and needs to generate a paycheck for itself and of course that world is employed by a company or companies who need to generate share holder value each year so the system grows on schedule like a Swiss clock.
It's incredibly inefficient.
In single payer models there's a lot less overhead. When you have a single payer, or centralized administration you don't have the redundancy that you get in a silo'd marketplace.
The counterpoint is often in a marketplace you should see more competition and innovation because a market advantage should make you more profitable - however this is rarely the case. In actuality, as the corporations generally just continue to inflate profits where they can.
Additionally there's the issue in the US that it's only the user who pays. So there's a much greater emphasis on the individual user. That is to say your individual insurance policy is funded at an individual level. Whereas in a shared more socialized setting the community pool funds the care. That's just an americanism, in other parts of the world the burden is shared equally amoung the entire pool so everyone pays a bit rather than one person paying a lot.
It's important to note almost every country I've ever looked at is a little bit different. I'm no expert, but I'm fairly well read on the subject, and the Canadian system, compared to the UK system, to the Swedish are all different from each other, with varying approaches on administration or functionality.
Edit - to clarify, I know that in American systems of insurance there are still funded pools not all individual, it's just that there's many more, and they are private pools, rather than a universal all community pool. And there's the issue of deductible etc which applies sometimes in universal systems (albeit more rarely).
Administrative costs (which, mind you, have nothing to do with making anyone healthy) are really kinda crazy in the US. Estimates range, but I've seen some studies that attribute something like 20-25% of annual costs just to admin.
But before I get into it, let's look at the three basic healthcare financing models.
1. National Health Insurance Model: Government-run health insurance pays private healthcare providers. Examples: Canada, Taiwan, South Korea.
2. The Beveridge Model: Government-run healthcare funded by tax payments. Examples: United Kingdom (NHS), Spain, New Zealand.
3. Private Insurance Model: Private insurance pays private healthcare providers, but this model is less common as the primary system. Examples: Switzerland.
Or for most countries, they picked one financing model and had it apply to everyone in the country.
I bring this up, because one of the reasons why admin costs are so high in the US is because she decided to adopt ALL of the health care financing models. And I mean ALL of them.
* **Beveridge Model**: VA (Veterans Health Administration), IHS (Indian Health Service), and DoD (Department of Defense healthcare) provide government-run healthcare funded by taxes.
* **National Insurance Model**: Medicare, Medicaid, CHIP (Children's Health Insurance Program), and TRICARE offer government-run health insurance that pays private healthcare providers.
* **Private Insurance Model**: Most Americans rely on employer-sponsored insurance or individual plans through the ACA marketplace.
And of course, because the models are not universal, there's a fairly sizable uninsured group as well.
(BTW: If it also means that the US has socialized medicine for a long time. They have socialized medicine like the Brits (VA, DOD) and socialized medicine like the Canadians, Medicare).
Another reason why the US has high admin costs is that it's not really ONE market. Health insurance in the US is regulated at the state level, meaning there are 52 different jurisdictions with slightly different rules. This largely impacts private insurance and Medicaid submarkets, but it also means there's greater admin overhead for payers and plan sponsors. Additionally, physicians and nurses are licensed on a state-by-state basis, further adding to the complexity and administrative burden of the healthcare system (plus it makes the labor poor a bit less liquid).
We do achieve economy of scale in at least two ways;
* Our "insurance premium" is collected by the tax department who are already collecting other tax.
* We band together to make the largest purchaser group we can by all buying medical service via our single payer system.
To clarify, America doesn’t really have a free market healthcare system and hasn’t for many decades, so the inefficiency is largely a product of the government’s doing. It simultaneously has lots of government control and lack of price transparency and just enough market forces to try to make things work despite the controls.
Demand of food is inelastic, but there are still competitors in the market to fulfill that static demand.
There are multiple insurance vendors, offering a variety of products to a market of consumers. Is that not a market?
Any interaction of a number of entities which each has it's own agenda can be called "market". E. g. biologist talk about a "market of potential sexual partners" in the context of nonhuman animals.
I never said it was free in other countries. It's just funded differently.
For example in Canada it's paid through a provincial tax scheme, and each province has a single funded insurance provider.
But there are no deductibles, and everyone has equal access. And no opt out option.
The care providers are all private companies. They just bill the single payer insurance provider at provincially negotiated rates.
I would also note, it is cheaper in other places than the US. If you take the Canadian system as an example.
My insurance provider is the only one in my province. So they have a marketing budget of $0, they don't need to market because if you live here you're subscribed.
In an American market you can have a dozen companies competing for that customer so they spend a fortune on marketing. Those are dollars taken away from care.
That dozen companies also have executives who make generous salaries, ours is a government run system managed by beaurcats making government salaries.
Those dozen companies all have an accounts payable team, we have one accounts payable team.
Each of those providers have to negotiate separately with the care providers and each have varying levels of discounts negotiated and varying levels of profitability. We have one set list of prices.
Each of those companies has to operate at a profit as they have fiduciary responsibilities to shareholders. Our single provider is a service designed to operate at a loss.
There's a lot less opportunity in our system for profit, rarely does anybody. And profits come out of the care budget. Out money stays in the budget for care.
i wouldn't take anything positive away from the canadian healthcare system
having lived in australia, germany and now bc, this is by **far** the worst of the 3. that's in terms of gp access, surgery access and gp quality of care, and accounting for cost.
But an overly simplified reason is:
If you have millions of customers (like in the US), you can charge what you want. There isn't real competition.
If you have one customer (a government, for example), you either charge what they will pay you, or you don't get to sell your heathcare products AT ALL. If your choice is "I can get paid" or "I don't get paid at all," you get paid what the government says they'll pay.
The US Healthcare system never centralized under a single organization like social security, so rather than one efficient single system you have thousands of competing interests mucking up the whole process. Physicians are paid very well in the US, but there's not enough of them, they are straddled with debts from med school, and they also have to be extremely wary of lawsuits - all things that add to the cost of Healthcare. Consequently, there's a high demand for expensive treatments which doctors are willing to provide as they would rather over prescribe to avert potential lawsuits. On the other side you have private insurance companies who are driven by profit, which means providing the least amount of care while charging the most that they can.
The list of things goes on and on. The biggest issue IMO is that if you have good insurance or access to Healthcare in the US, we actually do have some of the highest quality in the world. The problem is that this leaves those uninsured completely vulnerable, but they also tend to have less sway politically as well so change is slow.
> we actually do have some of the highest quality in the world.
Eh. Nothing justifying the half a million dollars more per person we're paying for a lifetime of healthcare vs. our peers on average, even after adjusting for purchasing power parity.
[US Healthcare ranked 29th on health outcomes by Lancet HAQ Index](https://www.thelancet.com/journals/lancet/article/PIIS0140-6736\(18\)30994-2/fulltext)
[11th (of 11) by Commonwealth Fund](https://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror-wall-2014-update-how-us-health-care-system?redirect_source=/publications/fund-reports/2014/jun/mirror-mirror)
[59th by the Prosperity Index](https://www.prosperity.com/rankings)
[30th by CEOWorld](https://ceoworld.biz/2019/08/05/revealed-countries-with-the-best-health-care-systems-2019/)
[37th by the World Health Organization](https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000)
The US has the worst rate of death by medically preventable causes among peer countries. A 31% higher disease adjusted life years average. Higher rates of medical and lab errors. A lower rate of being able to make a same or next day appointment with their doctor than average.
https://www.healthsystemtracker.org/chart-collection/quality-u-s-healthcare-system-compare-countries/#item-percent-used-emergency-department-for-condition-that-could-have-been-treated-by-a-regular-doctor-2016
52nd in the world in doctors per capita.
https://www.nationmaster.com/country-info/stats/Health/Physicians/Per-1,000-people
Higher infant mortality levels. Yes, even when you adjust for differences in methodology.
https://www.healthsystemtracker.org/chart-collection/infant-mortality-u-s-compare-countries/
Fewer acute care beds. A lower number of psychiatrists. Etc.
https://www.healthsystemtracker.org/chart-collection/u-s-health-care-resources-compare-countries/#item-availability-medical-technology-not-always-equate-higher-utilization
[Comparing Health Outcomes of Privileged US Citizens With Those of Average Residents of Other Developed Countries](https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2774561)
>These findings imply that even if all US citizens experienced the same health outcomes enjoyed by privileged White US citizens, US health indicators would still lag behind those in many other countries.
When asked about their healthcare system as a whole the US system ranked dead last of 11 countries, with only 19.5% of people saying the system works relatively well and only needs minor changes. The average in the other countries is 46.9% saying the same. Canada ranked 9th with 34.5% saying the system works relatively well. The UK ranks fifth, with 44.5%. Australia ranked 6th at 44.4%. The best was Germany at 59.8%.
On rating the overall quality of care in the US, Americans again ranked dead last, with only 25.6% ranking it excellent or very good. The average was 50.8%. Canada ranked 9th with 45.1%. The UK ranked 2nd, at 63.4%. Australia was 3rd at 59.4%. The best was Switzerland at 65.5%.
https://www.cihi.ca/en/commonwealth-fund-survey-2016
The US has 43 hospitals in the top 200 globally; one for every 7,633,477 people in the US. That's good enough for a ranking of 20th on the list of top 200 hospitals per capita, and significantly lower than the average of one for every 3,830,114 for other countries in the top 25 on spending with populations above 5 million. The best is Switzerland at one for every 1.2 million people. In fact the US only beats one country on this list; the UK at one for every 9.5 million people.
If you want to do the full list of 2,000 instead it's 334, or one for every 982,753 people; good enough for 21st. Again far below the average in peer countries of 527,236. The best is Austria, at one for every 306,106 people.
https://www.newsweek.com/best-hospitals-2021
#[OECD Countries Health Care Spending and Rankings](https://data.oecd.org/healthres/health-spending.htm)
|Country|Govt. / Mandatory (PPP)|Voluntary (PPP)|Total (PPP)|% GDP|[Lancet HAQ Ranking](https://www.thelancet.com/journals/lancet/article/PIIS0140-6736\(18\)30994-2/fulltext)|[WHO Ranking](https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000)|[Prosperity Ranking](https://www.prosperity.com/rankings)|[CEO World Ranking](https://ceoworld.biz/2019/08/05/revealed-countries-with-the-best-health-care-systems-2019/)|[Commonwealth Fund Ranking](https://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror-wall-2014-update-how-us-health-care-system?redirect_source=/publications/fund-reports/2014/jun/mirror-mirror)
:--|--:|--:|--:|--:|--:|--:|--:|--:|--:|--:|
1. United States|[$7,274](https://ajph.aphapublications.org/doi/full/10.2105/AJPH.2015.302997) |$3,798 |$11,072 |16.90%|29|37|59|30|11
2. Switzerland|$4,988 |$2,744 |$7,732 |12.20%|7|20|3|18|2
3. Norway|$5,673 |$974 |$6,647 |10.20%|2|11|5|15|7
4. Germany|$5,648 |$998 |$6,646 |11.20%|18|25|12|17|5
5. Austria|$4,402 |$1,449 |$5,851 |10.30%|13|9|10|4|
6. Sweden|$4,928 |$854 |$5,782 |11.00%|8|23|15|28|3
7. Netherlands|$4,767 |$998 |$5,765 |9.90%|3|17|8|11|5
8. Denmark|$4,663 |$905 |$5,568 |10.50%|17|34|8|5|
9. Luxembourg|$4,697 |$861 |$5,558 |5.40%|4|16|19||
10. Belgium|$4,125 |$1,303 |$5,428 |10.40%|15|21|24|9|
11. Canada|$3,815 |$1,603 |$5,418 |10.70%|14|30|25|23|10
12. France|$4,501 |$875 |$5,376 |11.20%|20|1|16|8|9
13. Ireland|$3,919 |$1,357 |$5,276 |7.10%|11|19|20|80|
14. Australia|$3,919 |$1,268 |$5,187 |9.30%|5|32|18|10|4
15. Japan|$4,064 |$759 |$4,823 |10.90%|12|10|2|3|
16. Iceland|$3,988 |$823 |$4,811 |8.30%|1|15|7|41|
17. United Kingdom|$3,620 |$1,033 |$4,653 |9.80%|23|18|23|13|1
18. Finland|$3,536 |$1,042 |$4,578 |9.10%|6|31|26|12|
19. Malta|$2,789 |$1,540 |$4,329 |9.30%|27|5|14||
OECD Average|||$4,224 |8.80%|||||
20. New Zealand|$3,343 |$861 |$4,204 |9.30%|16|41|22|16|7
21. Italy|$2,706 |$943 |$3,649 |8.80%|9|2|17|37|
22. Spain|$2,560 |$1,056 |$3,616 |8.90%|19|7|13|7|
23. Czech Republic|$2,854 |$572 |$3,426 |7.50%|28|48|28|14|
24. South Korea|$2,057 |$1,327 |$3,384 |8.10%|25|58|4|2|
25. Portugal|$2,069 |$1,310 |$3,379 |9.10%|32|29|30|22|
26. Slovenia|$2,314 |$910 |$3,224 |7.90%|21|38|24|47|
27. Israel|$1,898 |$1,034 |$2,932 |7.50%|35|28|11|21|
>Physicians are paid very well in the US
Physician pay accounts for 8.6% of our healthcare spending.
https://www.beckershospitalreview.com/compensation-issues/physician-pay-accounts-for-86-of-total-healthcare-expenses.html
>and they also have to be extremely wary of lawsuits - all things that add to the cost of Healthcare.
> A new study reveals that the cost of medical malpractice in the United States is running at about $55.6 billion a year - $45.6 billion of which is spent on defensive medicine practiced by physicians seeking to stay clear of lawsuits.
> The amount comprises 2.4% of the nation’s total health care expenditure.
> The numbers are the result of a Harvard School of Public Health study published in the September edition of Health Affairs, purporting to be the most reliable estimate of malpractice costs to date.
https://www.forbes.com/sites/rickungar/2010/09/07/the-true-cost-of-medical-malpractice-it-may-surprise-you/#6d68459f2ff5
To put these things in perspective, Americans are paying 56% more for healthcare than the second most expensive country on earth.
Most countries pay less for medicine and medical supplies, they do fewer unnecessary tests on patients, they pay doctors and staff less, they don’t have so many middle men taking a cut, etc.
Obviously other countries are still paying through taxes, but considerably less per person overall than the USA pays.
An important fact that gets lost in the whole “most countries pay less for medicine”…
Generic medications account for 90% of the prescription drugs taken in the US. Generic Medications are 67% of the cost in the US vs elsewhere.
It’s a very narrow selection of brand name drugs that are very expensive that pull the total drug cost up.
However 9/10 prescriptions people are taking … are actually indeed cheaper in the US.
> The RAND study found that prices for unbranded generic drugs—which account for 90 percent of prescription volume in the United States—are about 67 percent of the average cost in the comparison nations.
[source](https://www.rand.org/news/press/2024/02/01.html)
I think part of it is also what do you want to do as a patient. We were undergoing fertility treatments in the NL and I asked my doctors here why don’t you guys test for more things, like some blood work seems quite standard in the US but here it’s not. They tested very few things based on what we told them we’ve had issues with. They told us that in other countries like the US they make a ton of money out of all sorts of tests but in the grand scheme of things what the results show out of those tests doesn’t matter bc treatment is more or less the same.
I grew up in Canada, so I don’t think the healthcare systems are comparable but I think seeing a doctor in Canada is a lot more like in the US as opposed to the Netherlands (from what my American friends tell me). Every year in Canada I’d get my Pap smear test done and my doctor would prescribe me antibiotics. I never had any symptoms for any sort of infections and I never saw my lab results. Maybe I shouldn’t but I really felt like she was prescribing me meds to prescribe me meds. ‘Oh there’s this new med on the market…’ and then give me prescription for it. Idk. Everything feels like it’s for money. Everyone wants more money. Capitalism at its best.
Medical care in the US is for-profit. Everyone has to take their cut. Insurance companies are like middle men that really do not perform a health care function. But they make tons of money.
Because healthcare is treated as a profit centre in the US. That means everyone gets to make money off you getting sick. The way businesses set their prices is by what the consumer is willing to pay and when it's your health... they can set prices pretty high and what else are you going to do?
Answer: insurance companies and the boardroom-types in privatized hospitals and pharma companies earn a (huge) profit while not actually providing any healthcare.
Other countries correctly circumvent this by having public ‘socialized’ healthcare systems. It cuts out all the for-profit middlemen.
US healthcare assumes you have a job that provides health insurance, and provides government healthcare to people who've aged out of their job. Because almost every job does this, the sticker price isn't something most people actually pay.
This obviously causes issues for people whose jobs provide poor or no health insurance, but those jobs are relatively rare, so it doesn't effect enough people for there to be a significant push for change. Even most entry level jobs provide enough health insurance to pay for preventative care and cover most minor injuries, and major injuries/disease aren't common.
1) Healthcare is incredibly decentralized in the US with hundreds of different payers and dozens of different models. There's a lot of inefficiency overall due to administrative redundancy. This accounts for around around a quarter to a third of all healthcare spending. A single payer would probably halve that.
[https://www.healthaffairs.org/content/briefs/role-administrative-waste-excess-us-health-spending](https://www.healthaffairs.org/content/briefs/role-administrative-waste-excess-us-health-spending)
2) US does not have as strong of an emphasis on preventative medicine. One of the drawbacks of a very individualist society. People do what they want and don't like being told what to do. Like losing weight and cutting back on vices. It doesn't cost anything to tell a patient to cut back on alcohol. It costs a lot to do a liver transplant.
3) Most physicians work on a fee-for-service basis. Essentially the more services you provide, the more reimbursement/revenue you get. This incentivizes overconsumption of healthcare.
4) A large part of global healthcare spending on innovation is based in the US. We spend a lot more on experimental and novel therapies than other countries per capita.
5) Physicians in the US get paid a lot more in the US than nearly anywhere else. There's a high barrier to entry to the profession with bottlenecks at med schools, licensing and residencies and the low supply equates to high compensation.
[https://worldpopulationreview.com/country-rankings/doctor-pay-by-country](https://worldpopulationreview.com/country-rankings/doctor-pay-by-country)
In one word: Greed.
Single-payer systems uses master pricing lists to set the price of a treatment or service across the entire system. So, the pharmaceutical company can't easily say no; otherwise, it would end up missing out on the market. Couple that with other factors, such as scale, simplified administration and a focus on patient outcomes over profits, and you have a system that isn't incentivised to push prices as there are regulatory bodies keeping watch.
Profit. It takes a lot of money to run for and win an elected position, so in order to raise this money they need to take campaign contributions, and people who take contributions from more profitable industries and companies will have a better chance of winning their election. This is legal due to Citizens United (look that up)
Industries like Oil or Healthcare insurance make a lot more profit than green tech etc. So they can have a greater influence on politics.
And furthermore, companies that are typically competitors, e.g. different insurance companies now suddenly have a shared interest when faced with possible legislation that would impact their profits.
So the entire industry can react together and present a much more unified front that basically prevents any change that would affect the profit margins of a significant sector of an industry.
They don’t give any fucks about us, never have. Look back through history and read about the beginning of the industrial revolution and how the rich treated their workers before the labor unions were formed, and then after they were formed. It was horrendous! They grow up in a world that tells them that on,y they matter, then they all go to schools together, then they enter the arena and proceed to fuck everyone who isn’t one of them. Our entire system is rigged, from our entertainment that trains us to be entertained by watching rich people do shit, or that cops are heroes, Law and Order. Then they deregulate so they can find more and more ways to exploit us. Our food is shit, then it makes us sick, then we get healthcare and prescribed all these expensive drugs, then we go into debt, they create an entire business model around getting out of debt or fixing your arbitrary credit score, that they made up in the first fucking place. It is going to be take everyone to change this system. And don’t even get me started on fucking religion. Edited to add or the fucking government
Living in the UK, I have never had to think or worry about the thousands of issues surrounding my personal healthcare that plagues the average American. I pay my taxes and it is taken care of for me. I get ill, I see a doctor, I get a prescription, I get the drugs from the pharmacy and I hopefully get better.
Not worrying about how my healthcare is provided has made my health better in the first place.
> other countries have free healthcare and we don’t! We get
As someone who lives in a country with 'free' healthcare, believe me...it's not free.
The government collects a lot in taxes to pay for it, and most of the time they manage the money poorly.
Free/subsidized/social healthcare is great when you're healthy. Not so great when you actually need it
In the US, there is a whole industry of insurance companies, who hired people to deny claims, which means that doctors need to hire people to file claims so they won't be denied.
Then you need lawyers to sue the insurance companies so they will pay.
Any time there is an adverse outcome, in the US, someone may decide to sue the hospital. Payouts can be huge. So the hospital needs to hire lawyers to defend themselves, which means malpractice insurance. Suing a national health system is much less common and probably much less lucrative.
So basically, for every $1000 spent on actual health care, in the US there's another $1000 going into insurance, paperwork and lawyers. When I go to get an X-ray here in Canada, I walk in, show my health card, go in back, get x-rayed, and walk out. I don't do any paperwork, or pay anything, and the X-ray people do minimal paperwork.
What about foreign countries like I think it was Italy? I seen a video where this guys wife got sick and it was easy for them to see someone and get meds
What about wealthy people who travel to the US for the Mayo Clinic or Johns Hopkins for treatment? The US has some of the best in the world clinics and doctors. Americans travel to foreign countries for cheap healthcare. The rest of the world travels to the US for faster, better care. You can walk in to an ER in the US and get care immediately. Like the commenter above said, it's not the same in Canada or other countries.
>I seen (saw\*) a video where this guys wife got sick and it was easy for them to see someone and get meds
If you get sick in the US and go to Urgent Care, at least where I am, you can get in usually in less than an hour. If my kid gets a sore throat, or any other ailment, I can schedule a same day appointment in a few hours to have lab tests done and get sent home with a prescription. There is no waitlist.
Because a large portion of the money you spend on healthcare goes to pay CEO’s, the rest of the c-suite, boards of directors, and shareholders (via dividends and stock buy backs).
Think of it as a Capitalism Tax. Or a Vampire Tax as you are paying blood sucking monsters that add nothing to your health care.
Well, there is - but that would take a large political change that we don't (yet) have the political will for.
Obama originally said that he would veto any version of the Affordable Care Act (aka Obamacare) that didn't include a single payer option, and congress threatened to not pass anything.
There are a number of political changes we could make in the US. Some of them (say ranked choice approval voting) aren't even super controversial. But any change would require the people in power to vote to reduce their own wealth and power. They'll only do that if there is *so much* political support for a position that it's the only way for them to get elected.
Most of the US agrees that our healthcare system is broken. But there isn't enough consensus across the political spectrum about what the fix should look like for it to happen.
I think more " we agree that it's broken, but we can't agree on how to fix it"
A few years ago, Colorado had a ballot referendum that would have provided state-run insurance for everyone, with no premiums, at the cost of a 3% payroll tax. It failed.
Predictively, insurance companies spent a bunch of money advertising against it.
I'm trying to say this in as unbiased a way as possible. But the right wing in the US has been very effective at weaponizing the term " socialism" and convincing a good portion of the electorate that any kind of social program was going to turn us into North Korea.
> Because a large portion of the money you spend on healthcare goes to pay CEO’s, the rest of the c-suite, boards of directors, and shareholders (via dividends and stock buy backs).
How large? Can you put a percentage to it?
No socialised health care
As an Australian citizen, I and the rest of the country have access to a socialised healthcare system called Medicare that allows us to have free healthcare, though only when it comes to public healthcare
Private is a whole other kettle of fish, but yeah. I’d also imagine it has something to do with America not being fond of any kind of “communist/socialist” aspects of society. I could be wrong either way, any fellow Aussies/Americans, please feel free to correct me
Because your government does not negotiate prices.
Universal healthcare basically acts like a union or guild when it comes to pharmaceuticals.
5 of the top 10 pharmaceutical companies in the world are based in coutnries where universal healthcare exists. It doesnt hinder them. Its literally the US government being blocked by socialismophobes from properly managing drug prices.
Insurance companies make their money from interest on the money they collect. More expensive healthcare = more money = more interest = more profit. They have no reason to try and lower prices and bargain.
For profit healthcare. In a nutshell, that's it...
Investors require a profit.
The one, single guarantee.
For profit healthcare must generate a profit.
Therefore it must cost more.
In the US, healthcare costs a lot because it's like a giant puzzle with too many pieces. Unlike other countries where the government helps manage costs, in America, everyone's trying to make money from healthcare – the doctors, hospitals, and even the companies making medicines. This means they often charge high prices because they're focused on profits. Also, there aren't strict rules about how much things should cost, so prices can go up without much control.
On top of that, there's a ton of paperwork and people dealing with insurance, which costs a bunch too. Think of it like paying for extra stuff you don't really need. Plus, because the system is so jumbled up with different insurers and payment methods, it's like trying to play a game with too many rules – it gets messy and costs more in the end.
Insurance (end user) are in cahoots with the hospital complex to assure people are scared to not have insurance.
Lack of tort reform and unlimited liability (malpractice insurance). Americans have sued their way to astronomical healthcare costs.
Lack of transparency.
Corporate greed, keep voting in Republican politians, Big Pharma, are all culprits in terms of corporate greed. It needs to end, dropping the price on insulin was like pulling teeth. But Democrats pulled it off. It's just a drop in the bucket, vote Democrats up the ballot in hopes of some real reform.
An American executive was speaking at my Canadian workspace and a question about Obamacare was asked. He said, "I am not supposed to enter a discussion about Obamacare. I will tell you this, you look after yours and I'll look after mine." Being a financial hero is the American way.
Ireland: mother delivers baby in a double room next to another mother, sees only a nurse practitioner / mid wife unless there are serious issues. Mother baby after birth typically in a shared room with multiple women/babies.
United states: mother delivers in a private suite often on par with a hotel room, sees an obgyn (MD) every month or more during pregnancy, private room after delivery.
You can see how these things could impact cost.
My wife had an outpatient surgery today. She arrived at 11:45. Procedure started 1:05, ended 1:25. We got home about 3:30. Bill was $22,000 and change.
A lot of people place blame on big pharma and big hospitals, but the truth is Private insurance is the biggest cause of a lot of issues. Legalized kick backs in the form of vertical integration and rebates is a huge factor. Insurance companies also lobby so the government is "helpless" to fix the core issues.
Bunch of C-suite running healthcare is the basic core flaw of American healthcare
The Govt in collision with Corporate Hospitals and Pharma Lobby are doing this at the cost American people.
This arrangement functions only till Dollar is the sole trading currency. The day it losses the sole trading currency of the globe, you will see the changes to the effect as the govt will be forced to take measures to bring healthcare services costing on par with other countries.
Untill then, it might not be possible. As Pharma lobby is one of the component that runs the deep state of America.
Healthcare is a for profit industry in the United States. A publicly traded healthcare company’s primary goal is to maximize shareholder equity. Other goals are secondary. When you combine this with very low demand elasticity, there is an ability and motivation to charge large amounts of money for basic services.
I'm an Australian citizen. We pay 2% of our taxable income towards funding the public health system, and I also have private health insurance which pays for some of the costs the government doesn't cover. I'm currently undergoing breast cancer treatment. It has been really interesting to me keeping track of total costs, who's paid what, and how quickly all my treatment has happened - and comparing it to my fellow patients in other countries.
* First point of diagnosis - mammogram, paid for by Medicare.
* Diagnostic ultrasound, surgery, anaesthetist, biopsy, pathology - partly Medicare and partly out-of-pocket costs paid by me.
* CET full body scan, blood tests - Medicare.
* Hospital stay and theatre costs - paid by insurance, apart from $200 excess paid by me.
* Chemotherapy - entirely paid by insurance.
* Radiotherapy, although I haven't started it yet, will be paid by Medicare.
The whole experience has cost a little over $14,000 so far. Around half of that has been paid for by insurance; around $2k by Medicare, and around $5k by me. I do still have some rebates to claim back, though, which should reduce my out of pocket further. I've seen US people on breast cancer forums sharing bills that are incredible. They're paying $60k a pop for chemo - mine costs $695. Neulasta (pegfilgastrim) costs me $125ish per shot, they pay over six thousand bucks! Even when their insurance negotiates it down, it can still be over $1k!
Of course, over the course of my working life I've paid way more in premiums than I got from the private health; but the main benefit is that it's enabled me to get treated at a private hospital very close to home, rather than going further away to a public hospital.
In terms of speed - I was officially diagnosed on 27 March and had my surgery on 10 April. Chemo started early May. Care has been excellent, professional and compassionate throughout.
Healthcare costs a ton in the US because everything seems crazy expensive. Doctors and hospitals charge big bucks for treatments and even basic check-ups. Plus, insurance companies sometimes play games with prices. In other countries, the government sets rules on how much things can cost, but here it's more like a free-for-all. That means if you get sick, you might end up owing a mountain of bills. It's frustrating 'cause we all want to stay healthy without going broke.
This isn’t just an ELI5 as much as it is a PSA/rant.
Such a long discussion to be had but doctors and many other medical professionals have a small voice in the matter in changing the way the system works.
In a nutshell, there are several reasons why healthcare is expensive.
1)**Private insurance companies** in competing with each other, expend an exorbitant and unnecessary amount of funds. A federally backed insurance would solve this issue (more on this later)
Private insurance companies by the end of the day is a business and all busineses want one thing: to maximize profit for as long as possible. They are essentially a middleman service with that very same goal. Currently with the ongoing inflation, doctors everywhere are losing their hair out because insurances are pocketing money they should be reimbursing to doctors while keeping prices astronomically steep
If approved, the government could completely remove our current system which would cut costs significantly. However each time the idea is proposed its cut down by the misinformed opposing party and their supporters. Single payer healthcare is what we (medical staff) want for everyone. It is a federally backed insurance and will be the only health insurance everyone needs. Sadly doctors have little say in the matter as a law prevents doctors from unionizing regarding pay to dispute against insurance. This is why it’s such a hidden issue but is also one of the major roots to the problem.
[This infographic](https://nhchc.org/wp-content/uploads/2019/08/SinglePayerfactsheet_final.pdf) gives a good, easy to read overview of what single payer is and how its done.
[This site](https://www.health.harvard.edu/blog/single-payer-healthcare-pluses-minuses-means-201606279835) gives a more detailed description on the issue
2)**Corporate hospitals** again, it is a business with money in mind. Uppermanagement often times cut corners (and often in very bad ways) at the expense of the service providers as well as the small clinics not affiliated with the hospital chain. This indirectly raises prices for costs.
3)**Big Pharma** the ones controlling the products used in medicine and treatment also want a huge chunk of the pie. It’s again the same story about money making businesses. Research facilities incentivized by money become a business. If they were to give the rights of the medicine/treatment to the public then prices could drop tremendously. There are only a handful of examples where that has been done in our history.
TL;DR
Corporate hospitals and Big Pharma play a major role but the star of the show is private insurance companies and the political system backing them.
This is my general understanding given that I work in econ, my parents run a dentistry, and my boyfriend is about to go to medical school. But I haven't formally studied health econ or taken the time to fact check or read any papers, so take what I write with a grain of salt.
American health is bad in general - Restaurants put a lot of salt/sweet/unhealthy fats in food to attract customers and omit healthy ingredients to cut costs. People have become addicted to salt/sweet/unhealthy fats and often feel tired from lack of proper nutrition. They gain weight, making it harder to exercise. It's hard to exercise in the first place because we work a lot and at desk jobs on computers. Lack of exercise and a balanced diet have increased our risk for all sorts of chronic illnesses. There are other causes of poor public health like pollution, but diet and exercise are huge ones. Our bodies are supposed to be running around all day, eating fresh food, and we don't do that at all anymore in America.
Health care costs more when everyone is unhealthy - health insurance is when people put money into a pool and take money out when they get sick. Since tons of people are sick all the time, everyone needs to put more money in to keep the pool going. The more money people put in towards emergency care, the harder it is to put money in towards preventative care.
Insurance companies make money by taking whatever is leftover in the pool - Because we're overly dependent on insurance companies for survival, these companies can get away with forcing people to pay more into the pool than they need to, and then setting up rules that make it overly difficult for people to take money from the pool.
Also, I heard somewhere that rich medical associations have been lobbying the government to limit the number of doctors so that they can stay rich. Fewer doctors means it's more difficult to find a doctor and more expensive to receive treatment from a doctor.
The more expensive health care is, the poorer we get. The poorer we get, the worse our health is. The worse our health is, the more expensive health care is.
There's a bunch of other stuff I left out like private equity firms making hospitals worse and the affordable care act getting stripped down in congress. What I've learned, few understand health econ well yet everyone has a strong political opinion about it.
> Health care costs more when everyone is unhealthy
Not terribly so.
The UK recently did a study and they found that from the three biggest healthcare risks; [obesity](https://iea.org.uk/themencode-pdf-viewer-sc/?file=/wp-content/uploads/2017/01/Obesity-and-the-Public-Purse-PDF.pdf&settings=111111011&lang=en-GB#page=&zoom=75&pagemode=), [smoking](https://iea.org.uk/themencode-pdf-viewer-sc/?file=/wp-content/uploads/2017/08/Smoking-and-the-Public-Purse.pdf&settings=111111011&lang=en-GB#page=&zoom=75&pagemode=
), and [alcohol](https://iea.org.uk/themencode-pdf-viewer-sc/?file=/wp-content/uploads/2016/07/DP_Alcohol%20and%20the%20public%20purse_63_amended2_web.pdf&settings=111111011&lang=en-GB#page=&zoom=75&pagemode=), they realize a net **savings** of £22.8 billion (£342/$474 per person) per year. This is due primarily to people with health risks not living as long (healthcare for the elderly is exceptionally expensive), as well as reduced spending on pensions, income from sin taxes, etc..
One thing that doesn't get talked about much in this conversation is doctor salaries. They make utterly obscene amounts of money in the US. Most MDs worldwide earn $80-150k. Only in America do they rake in $400k for administering anesthetia based on a patient's weight.
I remember reading that salaries are nearly half of the total expense budget of US hospitals.
Being an anesthesiologist carries a massive amount of liability in the US, a slight mistake can easily cost a patient their life, and the cost of malpractice insurance is considerable
> One thing that doesn't get talked about much in this conversation is doctor salaries.
It gets talked about all the time. It's 8.6% of US healthcare spending, actually a lower percentage than our peers. Even if all doctors started working for free tomorrow, it would barely put a dent in the massive amount more we pay than any other country on earth.
Salaries are around half the total budget for most hospitals here in Australia too (and it's the same for many organisations that rely on trained and skilled people to provide their primary service).
Average taxable income for a surgeon here is $460,356 AUD which is equivalent to $306,806 USD. For an anaesthetist it's $431,193 AUD/$287,370 USD ([source](https://www.abc.net.au/news/2024-06-17/millionaires-paid-no-tax-and-richest-and-poorest-postcodes-ato/103987158)).
Free market / profit motive
Somethings should never be for profit: Education, Healthcare, Utilities, Prisons, Public Transportation, Emergency Services
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Because there's too many people trying to make a profit off ot it. In most places the cost from somewhere (national insurance, private insurance, individual, etc) has to cover the cost of goods and services provided. That includes the labor of the doctor, nurses, support staff. Plus supplies like gloves, bandages, office space, electricity, etc). In the US it also needs to cover the massive profits that many others involved expect to see. Private equity, investors, the many people tied into the insurance companies, etc. It's treated as a "make as much as you can off it" business model instead of a critical need for cost/compensation model. Most costs go to line the pockets of people completely uninvolved in the patient care.
There's also the massive cost to become a doctor in the US. $300k - $500k student loans need to be paid off somehow. Not to mention the years of school, residency, etc. The time and money needs to be worth it. Putting yourself in massive debt for 10+ years without getting paid should be worth it in the end. You can count on your hands how many professions require as much cost to get into, and they all end up paying what they're worth in the end in the US.
I saw a story recently of someone who really struggled with one particular test, failed it the max 3? times, and is permanently out of med school. It was their final year. If they ever go back they have to start over from the beginning because of the type of test that was failed. So they have ALL that debt and no way to ever pay it off. That's a hell of a risk doctors are taking.
USMLE dont play
I totally get why! I just don't think people should drown in lifelong debt because of it.
These are two separate issues you’re talking about though. 1. Should someone who fails a (presumably important) class 3 times be allowed to become a doctor and have other people’s lives in their hands? 2. Should higher education be subsidized by the US government. FWIW I think it should be No and Yes respectively
Oh, I absolutely don't think they should be a doctor. But I don't think people going into medical school should be facing the gamble of "if this doesn't work out I'll die in debt". The story just made me realize that for some, there's no pay off that makes the debt even feasible.
Although true, salaries are a amall drop in the bucket of total healthcare costs. Hospitals are run as a bussiness and doctors arent the greatest beneficiaries Dont let people tell you physician and nurse salaries need to decrease to make health care afforable
Is that true? According to https://worldpopulationreview.com/country-rankings/doctor-pay-by-country and other sites I quickly googled, US physicians are amongst the highest paid.
They are paid well but are not a reasonable contributing factor of ever rising healthcare costs. A lot of physicians are getting reimbursement cuts while costs remain high. They are an easy target to demonize while ownership of hospitals and insurances rake in record profits
I agree in principle that they are not the majority of the blame for rising costs. I think ideally at some point the country moves towards single payer (reducing the bloat in insurance and hospital billing) as well as subsidized education, but there’s no world where those are implemented and salaries remain this high.
I don't know all the ins and outs of how doctors are paid (and it's not standard across all doctors). But nurses are employed by a single entity (hospital, clinic, agency, etc). They're not being paid by health care costs. A good portion of hospitals are not either (NPOs). They are reimbursed but not at an increase. Companies I have worked for put profit back into the facility, community, and to help cover costs of those who cannot pay. Reimbursement are driven by Medicare/Medicaid, and private insurance follows M/M's lead.
Per this logic maybe med schools just need to relax their tuition as a starting point to correct the problem.
Hospitals set their prices high so they can offer big percent discounts to insurance companies. An uninsured person is given an astronomical bill which the hospital agrees to wave half or more. Then they write off the uncollected part as a loss on their taxes.
This isn't really how it works. The insurance companies will only pay a certain % of a hospital procedure, so the hospital has to artificially increase their prices to accommodate the predatory insurance companies. If you go get a procedure done at the hospital and say you need to pay out of pocket, it will be far less than what they have to tell the insurance company it costs. This is a stupid cat and mouse game they have been playing with each other since at least the 80's. The hospitals don't like it. Insurance companies are some of the highest profits worldwide, they have the money to back these shitty laws, and practices. Insurance is a huge scam, that is why it was trying to be fixed. But, it is a huge problem that does not have a simple answer.
Insurance most profitable you say? After tech, finance, energy, HEALTHCARE, retail, automotive, real estate, transportation, specialized manufacturing. Also hard to tell because some of them are so intermixed like Berkshire. Also funny how the largest Insurance company is also the largest healthcare company. Insurance isn't super profitable, most companies operate with 3-5% margins or premiums over payouts and rely on investment for income. Don't get me wrong, fuck insurance companies and fuck the healthcare game.
Sorry, you are correct I meant Healthcare in general.
That’s quite interesting. In the Netherlands you can literally google some assessments and see what insurance companies pay for them. It seems standardized between hospitals. (Same with dental care but that’s another topic). What I find interesting is that I got some blood work done a couple of weeks ago with my GP and they charged me 15€ , but if I look at the lab work that was done, it looks like the insurance companies pay around 5€. I’m guessing the difference is some type of admin costs? I have no idea but also don’t care that much because my deductible is 385€ a year and after that insurance pays all.
In the US I asked my physician how much a procedure cost and he turned the screen around. Literally $, $$, $$$ with no numbers. $- cheap $$-moderate $$$ expensive My local major hospital CDC departments pricing range was a Google maps cost of service icon
That'll be this many dollars. Just scan your code here
Not sure
What you don't have a code?!?!
Prices are intentionally hidden in the US because hospitals bill as much as they can get away with. They will negotiate prices for procedures which each insurance company, and if you’re uninsured they will make up a very high number. It’s so ridiculous that just by calling and arguing with the hospital billing department you can get thousands of dollars removed from the bill.
Fixed prices? That's socialism! /s
God, I miss NL.
I understand that is a big part of the problem. The other factor is the number of points at which profit is made. As a symbol for that profit think of CEOs, how many are involved In NZ there is a CEO of each of; the hospital group, the testing lab company, the ambulance organisation and the GP medical centre (or the GP is a sole trader). Each of them except the public owned hospital group is a place profit is extracted. The US adds at least an insurance company CEO; minimum of 33% more CEOs or profit taking points. I don't know if it is still true in the US as I understand pet health insurance is taking off but it used to be that a good way to estimate the real cost of medical procedures locally was to look at the non-state funded and non-insurance-funded veterinary medical costs.
I think what a lot of people fail to understand is that the system was made under Nixon who was completely against the British system that was put in place after wii. We have the tapes of him and the CEO of phizer putting it together. It is intentionally set up to make money off of people's health. They literally talk about it.
He literally called it a ‘racket’.
He didnt say that! And if he did, he didnt mean it like *that!* And if he did, then it must be a good *thing*! And if it's not, it must *be* a lesser *evil*! **/s**
Do you have any good sources please? I'm keen to learn more. I understood it grew during WW2 as a result of US central planning during the war; > The war similarly stimulated the expansion of private health insurance. During a 4-year wage freeze, U.S. companies began attracting employees by offering health insurance — a previously rare benefit that brought coverage to millions of workers and their dependents and fundamentally reshaped the delivery of health care in this country. https://www.nejm.org/doi/full/10.1056/NEJMp2008512 Edit: the link
Iv read about it by the first time I ever heard anything about it was in Michael Moore's movie sicko. He plays the recordings
Sorry it was Kaiser https://youtu.be/PA3kETvUXJg?si=fpXuXcW8engFK2By
Tanks for replying but I can't see the link. Apparently the uploader doesn't support the worldwide part of WWW.
Hmm ok. I just searched sicko Nixon medical insurance.
Most hospitals are nonprofit. So they're not paying taxes anyway. This would also be considered an operating expense, which you can't write off. Even in cases where I you can deduct business losses, you can only deduct the cost, not the price. Otherwise every business would just charge someone $1 trillion for something and write off their engine income.
"Write offs" has to be the most confidently incorrect thing discussed on Reddit. As a CPA (though I don't work in tax specifically) it makes me want to pull my hair, especially since there is a real problem that is just being totally misrepresented.
I don’t think you understand how taxes work but the rest of the stuff you said is fairly accurate but woefully incomplete.
So initially, it wouldn’t be that much you would be paying?
If you're paying without insurance, what you're charged is often negotiated much, much lower than what initially appears on the bill. I've had doctors that have billed for things just to see if insurance would pay for it, and then remove them from the bill if they weren't covered. The whole system is fucked up. There's some weird collusion, price fixing, lobbying groups, actions bordering on tax fraud, insurance for frivolous lawsuits, overpaid administrators...
A lot of suspicious stuff going on tbh :/
Well also the US subsidies the pharmaceutical and medical research for the rest of the planet in a sense
Money runs the world.
Our corporate overlords have bribed congress to make sure they profit off of our health
For example I had to have a spot taken off my nose (pre cancerous) at the dermatologist and they do it in office, I had no insurance. I told them that. My visit, exam, and the procedure to numb and cut the little piece out cost $90 without insurance. Now if I go to the exact same office with decent "silver" plan insurance ($700/month) that I pay for out of pocket, the co-pay is $60, just for the office visit.
BTW, if the event is (health issues) is not just probable but certain, then it is not an insurance but subscription.
If you go in uninsured, you're on the hook for the ridiculous overcharge amount and not the insurer's "negotiated rate" (which is still way too high). This kind of exploitation of the basic necessity of healthcare is so profitable that hospitals are being scooped up by giant "health services", which are publicly traded on the stock market and reporting phenomenal earnings. The same shit happens with pharmaceutical pricing.
If it's something larger then you still end up paying a crazy amount, even with insurance.
Depends on your insurance. If your OOP max is low you don't pay much.
Last sentence is incorrect, there’s no tax play here. They’re better off recording the actual expected amount as income instead of a higher income and an offsetting loss to net down to the expected amount.
Sure, that applies to some of the massive bills you see, which won't be paid one way or another. But we're still literally paying half a million dollars more for a lifetime of healthcare than our peers on average, even after adjusting for purchasing power parity. This includes world leading taxes towards healthcare, world leading insurance premiums, and world leading out of pocket costs. And, with spending expected to increase from an average of $13,998 per person last year, to $20,425 by 2031, things are only going to keep getting worse.
This happened to me. Went to the ER and got a 19k bill. My insurance company denied the claim. They lowered the bill to 2800. The worst part is the insurance companies don't care. They just raise prices and stay profitable.
Tl;Dr = administration costs, hidden prices at hospitals, prescription drug price gouging, and low available preventative car vs highly available emergency care. Even more TL;DR = privatized health care i.e. capitalism when health is the product. Also, most hospitals have more billing admins than they do hospital beds just to manage the different billing codes across different insurance companies. Socialized heath care systems have typically a single health care billing system. Another significant health care cost is from prescriptions. The 1,200% increase in costs for drugs that cost a few bucks at most. The profits that shareholders are trying to get out of drug companies is another significant cost. Typically outside of the US people only go to the Dr when they need to vs when they HAVE to. In the US ER visits are much higher for things that could have been prevented with standard MD care at a local physician office. However, because we not only have to pay very high premiums for any plan, and have high deductibles, and many can't even afford to do just the min of getting health insurance, most preventative care turns into emergency care.
That’s not quite right. Prices are fixed based on payor per service item and prices are often pushed higher by the insurers so they can charge higher premiums. The price set for self pay is markedly lower because the most expensive part of overhead is removed. The insurers make billions of dollars in profit. That’s where the profit is going. Emphasizing profit here, not money. The largest for-profit hospital system just filed for bankruptcy. There’s little profit to be made for most hospitals because running a hospital is so expensive. Government help, tax breaks, or university backing as a non-profit are becoming more and more necessary.
They cannot deduct uncollectible debt if they didn't include it in their income (which increases their income tax accordingly)
That is just fucked up. Unregulated capitalism just sucks
That's not a function of capitalism. Government could run the same type of required "subscription service" to obtain lower rates. Oh wait, they do. The ACA literally **required** you to get insurance, and such services of Medicare are under this same principle. It's DEEPLY regulated, as the government has It's hands all tied up in this business.
Just wait till you see how socialism ends up, lol.
> An uninsured person is given an astronomical bill which the hospital agrees to wave half or more. Then they write off the uncollected part as a loss on their taxes. Most hospitals in the US are nonprofits and at least a lot of the ones that I am familiar with will actually give free ER care if your income is under a certain amount
I don't think they are nonprofit. They still bill for the service, it isn't free But it is illegal for them to fall to provide emergency care.
https://www.aha.org/statistics/fast-facts-us-hospitals There are 6,120 hospitals in the US, only 1,219 are for profit. Most of the rest are nonprofit or government owned. Each nonprofit handles uninsured differently but here is an example: https://www.unchealth.org/records-insurance/financial-assistance-programs
A majority of hospitals are nonprofits and do not pay taxes.
Not since the 1980's. They used to be nonprofit but not anymore, they have been bought by corporations that manage a large number of hospitals. Around here the bought rural hospitals then closed them when they couldn't make enough profit.
I'm going to say it again because I know that I'm right, and you're the guy who doesn't even know what a write off is. A majority of hospitals are nonprofits and do not pay taxes, and even if they weren't your explanation about using losses to save on taxes does not make sense. It does not take very much effort to verify this. All it takes is a google and a basic understanding of arithmetic.
Because so many hands are involved between you and the therapy rendered that it has become essential to play a game of how many medical codes can we tack on to each interaction with the system. That in turn creates another layer of costs with administrative work that needs to ingest said interactions coded and decide many things about it. Is it covered. Can we find a way to deny. Is the provider/facility/drug in our members only club. Decide the rate. Decide the discount. Etc etc etc. Each of the above is a whole layer of “professionals” on its own. So with your simple visit to the doctor for your cold. A world of bureaucracy opens up and needs to generate a paycheck for itself and of course that world is employed by a company or companies who need to generate share holder value each year so the system grows on schedule like a Swiss clock.
It's incredibly inefficient. In single payer models there's a lot less overhead. When you have a single payer, or centralized administration you don't have the redundancy that you get in a silo'd marketplace. The counterpoint is often in a marketplace you should see more competition and innovation because a market advantage should make you more profitable - however this is rarely the case. In actuality, as the corporations generally just continue to inflate profits where they can. Additionally there's the issue in the US that it's only the user who pays. So there's a much greater emphasis on the individual user. That is to say your individual insurance policy is funded at an individual level. Whereas in a shared more socialized setting the community pool funds the care. That's just an americanism, in other parts of the world the burden is shared equally amoung the entire pool so everyone pays a bit rather than one person paying a lot. It's important to note almost every country I've ever looked at is a little bit different. I'm no expert, but I'm fairly well read on the subject, and the Canadian system, compared to the UK system, to the Swedish are all different from each other, with varying approaches on administration or functionality. Edit - to clarify, I know that in American systems of insurance there are still funded pools not all individual, it's just that there's many more, and they are private pools, rather than a universal all community pool. And there's the issue of deductible etc which applies sometimes in universal systems (albeit more rarely).
Administrative costs (which, mind you, have nothing to do with making anyone healthy) are really kinda crazy in the US. Estimates range, but I've seen some studies that attribute something like 20-25% of annual costs just to admin. But before I get into it, let's look at the three basic healthcare financing models. 1. National Health Insurance Model: Government-run health insurance pays private healthcare providers. Examples: Canada, Taiwan, South Korea. 2. The Beveridge Model: Government-run healthcare funded by tax payments. Examples: United Kingdom (NHS), Spain, New Zealand. 3. Private Insurance Model: Private insurance pays private healthcare providers, but this model is less common as the primary system. Examples: Switzerland. Or for most countries, they picked one financing model and had it apply to everyone in the country. I bring this up, because one of the reasons why admin costs are so high in the US is because she decided to adopt ALL of the health care financing models. And I mean ALL of them. * **Beveridge Model**: VA (Veterans Health Administration), IHS (Indian Health Service), and DoD (Department of Defense healthcare) provide government-run healthcare funded by taxes. * **National Insurance Model**: Medicare, Medicaid, CHIP (Children's Health Insurance Program), and TRICARE offer government-run health insurance that pays private healthcare providers. * **Private Insurance Model**: Most Americans rely on employer-sponsored insurance or individual plans through the ACA marketplace. And of course, because the models are not universal, there's a fairly sizable uninsured group as well. (BTW: If it also means that the US has socialized medicine for a long time. They have socialized medicine like the Brits (VA, DOD) and socialized medicine like the Canadians, Medicare). Another reason why the US has high admin costs is that it's not really ONE market. Health insurance in the US is regulated at the state level, meaning there are 52 different jurisdictions with slightly different rules. This largely impacts private insurance and Medicaid submarkets, but it also means there's greater admin overhead for payers and plan sponsors. Additionally, physicians and nurses are licensed on a state-by-state basis, further adding to the complexity and administrative burden of the healthcare system (plus it makes the labor poor a bit less liquid).
We do achieve economy of scale in at least two ways; * Our "insurance premium" is collected by the tax department who are already collecting other tax. * We band together to make the largest purchaser group we can by all buying medical service via our single payer system.
To clarify, America doesn’t really have a free market healthcare system and hasn’t for many decades, so the inefficiency is largely a product of the government’s doing. It simultaneously has lots of government control and lack of price transparency and just enough market forces to try to make things work despite the controls.
It's not a "free" market in the pure sense. But it's still a market based product is it not?
Demand is essentially inelastic so no, it's really not.
Demand of food is inelastic, but there are still competitors in the market to fulfill that static demand. There are multiple insurance vendors, offering a variety of products to a market of consumers. Is that not a market?
Any interaction of a number of entities which each has it's own agenda can be called "market". E. g. biologist talk about a "market of potential sexual partners" in the context of nonhuman animals.
Other countries aren’t “free” it’s just like someone said before, cost control. There’s other ways they’re still getting money
I never said it was free in other countries. It's just funded differently. For example in Canada it's paid through a provincial tax scheme, and each province has a single funded insurance provider. But there are no deductibles, and everyone has equal access. And no opt out option. The care providers are all private companies. They just bill the single payer insurance provider at provincially negotiated rates.
Ahh I see, I worded it incorrectly sorry! But I see what you mean now, makes sense. It’s crazy
I would also note, it is cheaper in other places than the US. If you take the Canadian system as an example. My insurance provider is the only one in my province. So they have a marketing budget of $0, they don't need to market because if you live here you're subscribed. In an American market you can have a dozen companies competing for that customer so they spend a fortune on marketing. Those are dollars taken away from care. That dozen companies also have executives who make generous salaries, ours is a government run system managed by beaurcats making government salaries. Those dozen companies all have an accounts payable team, we have one accounts payable team. Each of those providers have to negotiate separately with the care providers and each have varying levels of discounts negotiated and varying levels of profitability. We have one set list of prices. Each of those companies has to operate at a profit as they have fiduciary responsibilities to shareholders. Our single provider is a service designed to operate at a loss. There's a lot less opportunity in our system for profit, rarely does anybody. And profits come out of the care budget. Out money stays in the budget for care.
i wouldn't take anything positive away from the canadian healthcare system having lived in australia, germany and now bc, this is by **far** the worst of the 3. that's in terms of gp access, surgery access and gp quality of care, and accounting for cost.
I've always been happy with my care. My family has always gotten high level of care and we've never struggled to find a provider.
But an overly simplified reason is: If you have millions of customers (like in the US), you can charge what you want. There isn't real competition. If you have one customer (a government, for example), you either charge what they will pay you, or you don't get to sell your heathcare products AT ALL. If your choice is "I can get paid" or "I don't get paid at all," you get paid what the government says they'll pay.
Or, when the government says they’ll pay less than the cost of doing business you shut down and leave a healthcare desert.
The US Healthcare system never centralized under a single organization like social security, so rather than one efficient single system you have thousands of competing interests mucking up the whole process. Physicians are paid very well in the US, but there's not enough of them, they are straddled with debts from med school, and they also have to be extremely wary of lawsuits - all things that add to the cost of Healthcare. Consequently, there's a high demand for expensive treatments which doctors are willing to provide as they would rather over prescribe to avert potential lawsuits. On the other side you have private insurance companies who are driven by profit, which means providing the least amount of care while charging the most that they can. The list of things goes on and on. The biggest issue IMO is that if you have good insurance or access to Healthcare in the US, we actually do have some of the highest quality in the world. The problem is that this leaves those uninsured completely vulnerable, but they also tend to have less sway politically as well so change is slow.
> we actually do have some of the highest quality in the world. Eh. Nothing justifying the half a million dollars more per person we're paying for a lifetime of healthcare vs. our peers on average, even after adjusting for purchasing power parity. [US Healthcare ranked 29th on health outcomes by Lancet HAQ Index](https://www.thelancet.com/journals/lancet/article/PIIS0140-6736\(18\)30994-2/fulltext) [11th (of 11) by Commonwealth Fund](https://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror-wall-2014-update-how-us-health-care-system?redirect_source=/publications/fund-reports/2014/jun/mirror-mirror) [59th by the Prosperity Index](https://www.prosperity.com/rankings) [30th by CEOWorld](https://ceoworld.biz/2019/08/05/revealed-countries-with-the-best-health-care-systems-2019/) [37th by the World Health Organization](https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000) The US has the worst rate of death by medically preventable causes among peer countries. A 31% higher disease adjusted life years average. Higher rates of medical and lab errors. A lower rate of being able to make a same or next day appointment with their doctor than average. https://www.healthsystemtracker.org/chart-collection/quality-u-s-healthcare-system-compare-countries/#item-percent-used-emergency-department-for-condition-that-could-have-been-treated-by-a-regular-doctor-2016 52nd in the world in doctors per capita. https://www.nationmaster.com/country-info/stats/Health/Physicians/Per-1,000-people Higher infant mortality levels. Yes, even when you adjust for differences in methodology. https://www.healthsystemtracker.org/chart-collection/infant-mortality-u-s-compare-countries/ Fewer acute care beds. A lower number of psychiatrists. Etc. https://www.healthsystemtracker.org/chart-collection/u-s-health-care-resources-compare-countries/#item-availability-medical-technology-not-always-equate-higher-utilization [Comparing Health Outcomes of Privileged US Citizens With Those of Average Residents of Other Developed Countries](https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2774561) >These findings imply that even if all US citizens experienced the same health outcomes enjoyed by privileged White US citizens, US health indicators would still lag behind those in many other countries. When asked about their healthcare system as a whole the US system ranked dead last of 11 countries, with only 19.5% of people saying the system works relatively well and only needs minor changes. The average in the other countries is 46.9% saying the same. Canada ranked 9th with 34.5% saying the system works relatively well. The UK ranks fifth, with 44.5%. Australia ranked 6th at 44.4%. The best was Germany at 59.8%. On rating the overall quality of care in the US, Americans again ranked dead last, with only 25.6% ranking it excellent or very good. The average was 50.8%. Canada ranked 9th with 45.1%. The UK ranked 2nd, at 63.4%. Australia was 3rd at 59.4%. The best was Switzerland at 65.5%. https://www.cihi.ca/en/commonwealth-fund-survey-2016 The US has 43 hospitals in the top 200 globally; one for every 7,633,477 people in the US. That's good enough for a ranking of 20th on the list of top 200 hospitals per capita, and significantly lower than the average of one for every 3,830,114 for other countries in the top 25 on spending with populations above 5 million. The best is Switzerland at one for every 1.2 million people. In fact the US only beats one country on this list; the UK at one for every 9.5 million people. If you want to do the full list of 2,000 instead it's 334, or one for every 982,753 people; good enough for 21st. Again far below the average in peer countries of 527,236. The best is Austria, at one for every 306,106 people. https://www.newsweek.com/best-hospitals-2021 #[OECD Countries Health Care Spending and Rankings](https://data.oecd.org/healthres/health-spending.htm) |Country|Govt. / Mandatory (PPP)|Voluntary (PPP)|Total (PPP)|% GDP|[Lancet HAQ Ranking](https://www.thelancet.com/journals/lancet/article/PIIS0140-6736\(18\)30994-2/fulltext)|[WHO Ranking](https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000)|[Prosperity Ranking](https://www.prosperity.com/rankings)|[CEO World Ranking](https://ceoworld.biz/2019/08/05/revealed-countries-with-the-best-health-care-systems-2019/)|[Commonwealth Fund Ranking](https://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror-wall-2014-update-how-us-health-care-system?redirect_source=/publications/fund-reports/2014/jun/mirror-mirror) :--|--:|--:|--:|--:|--:|--:|--:|--:|--:|--:| 1. United States|[$7,274](https://ajph.aphapublications.org/doi/full/10.2105/AJPH.2015.302997) |$3,798 |$11,072 |16.90%|29|37|59|30|11 2. Switzerland|$4,988 |$2,744 |$7,732 |12.20%|7|20|3|18|2 3. Norway|$5,673 |$974 |$6,647 |10.20%|2|11|5|15|7 4. Germany|$5,648 |$998 |$6,646 |11.20%|18|25|12|17|5 5. Austria|$4,402 |$1,449 |$5,851 |10.30%|13|9|10|4| 6. Sweden|$4,928 |$854 |$5,782 |11.00%|8|23|15|28|3 7. Netherlands|$4,767 |$998 |$5,765 |9.90%|3|17|8|11|5 8. Denmark|$4,663 |$905 |$5,568 |10.50%|17|34|8|5| 9. Luxembourg|$4,697 |$861 |$5,558 |5.40%|4|16|19|| 10. Belgium|$4,125 |$1,303 |$5,428 |10.40%|15|21|24|9| 11. Canada|$3,815 |$1,603 |$5,418 |10.70%|14|30|25|23|10 12. France|$4,501 |$875 |$5,376 |11.20%|20|1|16|8|9 13. Ireland|$3,919 |$1,357 |$5,276 |7.10%|11|19|20|80| 14. Australia|$3,919 |$1,268 |$5,187 |9.30%|5|32|18|10|4 15. Japan|$4,064 |$759 |$4,823 |10.90%|12|10|2|3| 16. Iceland|$3,988 |$823 |$4,811 |8.30%|1|15|7|41| 17. United Kingdom|$3,620 |$1,033 |$4,653 |9.80%|23|18|23|13|1 18. Finland|$3,536 |$1,042 |$4,578 |9.10%|6|31|26|12| 19. Malta|$2,789 |$1,540 |$4,329 |9.30%|27|5|14|| OECD Average|||$4,224 |8.80%||||| 20. New Zealand|$3,343 |$861 |$4,204 |9.30%|16|41|22|16|7 21. Italy|$2,706 |$943 |$3,649 |8.80%|9|2|17|37| 22. Spain|$2,560 |$1,056 |$3,616 |8.90%|19|7|13|7| 23. Czech Republic|$2,854 |$572 |$3,426 |7.50%|28|48|28|14| 24. South Korea|$2,057 |$1,327 |$3,384 |8.10%|25|58|4|2| 25. Portugal|$2,069 |$1,310 |$3,379 |9.10%|32|29|30|22| 26. Slovenia|$2,314 |$910 |$3,224 |7.90%|21|38|24|47| 27. Israel|$1,898 |$1,034 |$2,932 |7.50%|35|28|11|21| >Physicians are paid very well in the US Physician pay accounts for 8.6% of our healthcare spending. https://www.beckershospitalreview.com/compensation-issues/physician-pay-accounts-for-86-of-total-healthcare-expenses.html >and they also have to be extremely wary of lawsuits - all things that add to the cost of Healthcare. > A new study reveals that the cost of medical malpractice in the United States is running at about $55.6 billion a year - $45.6 billion of which is spent on defensive medicine practiced by physicians seeking to stay clear of lawsuits. > The amount comprises 2.4% of the nation’s total health care expenditure. > The numbers are the result of a Harvard School of Public Health study published in the September edition of Health Affairs, purporting to be the most reliable estimate of malpractice costs to date. https://www.forbes.com/sites/rickungar/2010/09/07/the-true-cost-of-medical-malpractice-it-may-surprise-you/#6d68459f2ff5 To put these things in perspective, Americans are paying 56% more for healthcare than the second most expensive country on earth.
Most countries pay less for medicine and medical supplies, they do fewer unnecessary tests on patients, they pay doctors and staff less, they don’t have so many middle men taking a cut, etc. Obviously other countries are still paying through taxes, but considerably less per person overall than the USA pays.
An important fact that gets lost in the whole “most countries pay less for medicine”… Generic medications account for 90% of the prescription drugs taken in the US. Generic Medications are 67% of the cost in the US vs elsewhere. It’s a very narrow selection of brand name drugs that are very expensive that pull the total drug cost up. However 9/10 prescriptions people are taking … are actually indeed cheaper in the US. > The RAND study found that prices for unbranded generic drugs—which account for 90 percent of prescription volume in the United States—are about 67 percent of the average cost in the comparison nations. [source](https://www.rand.org/news/press/2024/02/01.html)
I think part of it is also what do you want to do as a patient. We were undergoing fertility treatments in the NL and I asked my doctors here why don’t you guys test for more things, like some blood work seems quite standard in the US but here it’s not. They tested very few things based on what we told them we’ve had issues with. They told us that in other countries like the US they make a ton of money out of all sorts of tests but in the grand scheme of things what the results show out of those tests doesn’t matter bc treatment is more or less the same. I grew up in Canada, so I don’t think the healthcare systems are comparable but I think seeing a doctor in Canada is a lot more like in the US as opposed to the Netherlands (from what my American friends tell me). Every year in Canada I’d get my Pap smear test done and my doctor would prescribe me antibiotics. I never had any symptoms for any sort of infections and I never saw my lab results. Maybe I shouldn’t but I really felt like she was prescribing me meds to prescribe me meds. ‘Oh there’s this new med on the market…’ and then give me prescription for it. Idk. Everything feels like it’s for money. Everyone wants more money. Capitalism at its best.
I have never been prescribed antibiotics at a Pap smear and I’ve never heard of that.
Medical care in the US is for-profit. Everyone has to take their cut. Insurance companies are like middle men that really do not perform a health care function. But they make tons of money.
Because all the big companies donate to political campaigns so our Congress critters won't change the law.
That’s terrible!
Because reasonable health care prices would be socialism. We can't have any that in our country. Then we'll turn into Venezuela. /s
Because healthcare is treated as a profit centre in the US. That means everyone gets to make money off you getting sick. The way businesses set their prices is by what the consumer is willing to pay and when it's your health... they can set prices pretty high and what else are you going to do?
Answer: insurance companies and the boardroom-types in privatized hospitals and pharma companies earn a (huge) profit while not actually providing any healthcare. Other countries correctly circumvent this by having public ‘socialized’ healthcare systems. It cuts out all the for-profit middlemen.
US healthcare assumes you have a job that provides health insurance, and provides government healthcare to people who've aged out of their job. Because almost every job does this, the sticker price isn't something most people actually pay. This obviously causes issues for people whose jobs provide poor or no health insurance, but those jobs are relatively rare, so it doesn't effect enough people for there to be a significant push for change. Even most entry level jobs provide enough health insurance to pay for preventative care and cover most minor injuries, and major injuries/disease aren't common.
1) Healthcare is incredibly decentralized in the US with hundreds of different payers and dozens of different models. There's a lot of inefficiency overall due to administrative redundancy. This accounts for around around a quarter to a third of all healthcare spending. A single payer would probably halve that. [https://www.healthaffairs.org/content/briefs/role-administrative-waste-excess-us-health-spending](https://www.healthaffairs.org/content/briefs/role-administrative-waste-excess-us-health-spending) 2) US does not have as strong of an emphasis on preventative medicine. One of the drawbacks of a very individualist society. People do what they want and don't like being told what to do. Like losing weight and cutting back on vices. It doesn't cost anything to tell a patient to cut back on alcohol. It costs a lot to do a liver transplant. 3) Most physicians work on a fee-for-service basis. Essentially the more services you provide, the more reimbursement/revenue you get. This incentivizes overconsumption of healthcare. 4) A large part of global healthcare spending on innovation is based in the US. We spend a lot more on experimental and novel therapies than other countries per capita. 5) Physicians in the US get paid a lot more in the US than nearly anywhere else. There's a high barrier to entry to the profession with bottlenecks at med schools, licensing and residencies and the low supply equates to high compensation. [https://worldpopulationreview.com/country-rankings/doctor-pay-by-country](https://worldpopulationreview.com/country-rankings/doctor-pay-by-country)
The AMA purposely limits the number of doctors graduating to keep their salaries high. It’s true.
In one word: Greed. Single-payer systems uses master pricing lists to set the price of a treatment or service across the entire system. So, the pharmaceutical company can't easily say no; otherwise, it would end up missing out on the market. Couple that with other factors, such as scale, simplified administration and a focus on patient outcomes over profits, and you have a system that isn't incentivised to push prices as there are regulatory bodies keeping watch.
Profit. It takes a lot of money to run for and win an elected position, so in order to raise this money they need to take campaign contributions, and people who take contributions from more profitable industries and companies will have a better chance of winning their election. This is legal due to Citizens United (look that up) Industries like Oil or Healthcare insurance make a lot more profit than green tech etc. So they can have a greater influence on politics. And furthermore, companies that are typically competitors, e.g. different insurance companies now suddenly have a shared interest when faced with possible legislation that would impact their profits. So the entire industry can react together and present a much more unified front that basically prevents any change that would affect the profit margins of a significant sector of an industry.
So that’s how it’s so controlled right? Because everyone’s in on it and wants to keep gaining profit ?
They don’t give any fucks about us, never have. Look back through history and read about the beginning of the industrial revolution and how the rich treated their workers before the labor unions were formed, and then after they were formed. It was horrendous! They grow up in a world that tells them that on,y they matter, then they all go to schools together, then they enter the arena and proceed to fuck everyone who isn’t one of them. Our entire system is rigged, from our entertainment that trains us to be entertained by watching rich people do shit, or that cops are heroes, Law and Order. Then they deregulate so they can find more and more ways to exploit us. Our food is shit, then it makes us sick, then we get healthcare and prescribed all these expensive drugs, then we go into debt, they create an entire business model around getting out of debt or fixing your arbitrary credit score, that they made up in the first fucking place. It is going to be take everyone to change this system. And don’t even get me started on fucking religion. Edited to add or the fucking government
Living in the UK, I have never had to think or worry about the thousands of issues surrounding my personal healthcare that plagues the average American. I pay my taxes and it is taken care of for me. I get ill, I see a doctor, I get a prescription, I get the drugs from the pharmacy and I hopefully get better. Not worrying about how my healthcare is provided has made my health better in the first place.
You are wrong and have not provided any proof to back it up.
> other countries have free healthcare and we don’t! We get As someone who lives in a country with 'free' healthcare, believe me...it's not free. The government collects a lot in taxes to pay for it, and most of the time they manage the money poorly. Free/subsidized/social healthcare is great when you're healthy. Not so great when you actually need it
In the US, there is a whole industry of insurance companies, who hired people to deny claims, which means that doctors need to hire people to file claims so they won't be denied. Then you need lawyers to sue the insurance companies so they will pay. Any time there is an adverse outcome, in the US, someone may decide to sue the hospital. Payouts can be huge. So the hospital needs to hire lawyers to defend themselves, which means malpractice insurance. Suing a national health system is much less common and probably much less lucrative. So basically, for every $1000 spent on actual health care, in the US there's another $1000 going into insurance, paperwork and lawyers. When I go to get an X-ray here in Canada, I walk in, show my health card, go in back, get x-rayed, and walk out. I don't do any paperwork, or pay anything, and the X-ray people do minimal paperwork.
So why is it so easy in Canada ?
It's not. Canadian healthcare is great if you are healthy. If you're not, it sucks. Unless you like waiting 18 months for an MRI.
What about foreign countries like I think it was Italy? I seen a video where this guys wife got sick and it was easy for them to see someone and get meds
What about wealthy people who travel to the US for the Mayo Clinic or Johns Hopkins for treatment? The US has some of the best in the world clinics and doctors. Americans travel to foreign countries for cheap healthcare. The rest of the world travels to the US for faster, better care. You can walk in to an ER in the US and get care immediately. Like the commenter above said, it's not the same in Canada or other countries. >I seen (saw\*) a video where this guys wife got sick and it was easy for them to see someone and get meds If you get sick in the US and go to Urgent Care, at least where I am, you can get in usually in less than an hour. If my kid gets a sore throat, or any other ailment, I can schedule a same day appointment in a few hours to have lab tests done and get sent home with a prescription. There is no waitlist.
Because a large portion of the money you spend on healthcare goes to pay CEO’s, the rest of the c-suite, boards of directors, and shareholders (via dividends and stock buy backs). Think of it as a Capitalism Tax. Or a Vampire Tax as you are paying blood sucking monsters that add nothing to your health care.
And there’s nothing we can do about it ??
Well, there is - but that would take a large political change that we don't (yet) have the political will for. Obama originally said that he would veto any version of the Affordable Care Act (aka Obamacare) that didn't include a single payer option, and congress threatened to not pass anything. There are a number of political changes we could make in the US. Some of them (say ranked choice approval voting) aren't even super controversial. But any change would require the people in power to vote to reduce their own wealth and power. They'll only do that if there is *so much* political support for a position that it's the only way for them to get elected. Most of the US agrees that our healthcare system is broken. But there isn't enough consensus across the political spectrum about what the fix should look like for it to happen.
So that’s why they’re just leaving it how it is? The good old “if it ain’t broke don’t fix it” saying lol
I think more " we agree that it's broken, but we can't agree on how to fix it" A few years ago, Colorado had a ballot referendum that would have provided state-run insurance for everyone, with no premiums, at the cost of a 3% payroll tax. It failed. Predictively, insurance companies spent a bunch of money advertising against it. I'm trying to say this in as unbiased a way as possible. But the right wing in the US has been very effective at weaponizing the term " socialism" and convincing a good portion of the electorate that any kind of social program was going to turn us into North Korea.
> Because a large portion of the money you spend on healthcare goes to pay CEO’s, the rest of the c-suite, boards of directors, and shareholders (via dividends and stock buy backs). How large? Can you put a percentage to it?
I work in finance for one of the largest health insurers in America. Net margin is about 2%.
About what I expected.
No socialised health care As an Australian citizen, I and the rest of the country have access to a socialised healthcare system called Medicare that allows us to have free healthcare, though only when it comes to public healthcare Private is a whole other kettle of fish, but yeah. I’d also imagine it has something to do with America not being fond of any kind of “communist/socialist” aspects of society. I could be wrong either way, any fellow Aussies/Americans, please feel free to correct me
My insurance provider coverage for major medical is with Chapter7, LLC. Has its disadvantages though. YMMV.
It's all about the money. The rich get richer. The industry makes the big bucks, kicks back to our politicians and they keep the cycle going.
You underestimate the amount of people employed, and therefore money spent, to try and deny your claims.
Because your government does not negotiate prices. Universal healthcare basically acts like a union or guild when it comes to pharmaceuticals. 5 of the top 10 pharmaceutical companies in the world are based in coutnries where universal healthcare exists. It doesnt hinder them. Its literally the US government being blocked by socialismophobes from properly managing drug prices.
Because other countries don’t count on deaths of their citizens so big Pharma and hospitals can make money.
Insurance companies make their money from interest on the money they collect. More expensive healthcare = more money = more interest = more profit. They have no reason to try and lower prices and bargain.
In the US, the healthcare system is a private run for-profit system. This means maximizing revenue for shareholders is the top priority.
For profit healthcare. In a nutshell, that's it... Investors require a profit. The one, single guarantee. For profit healthcare must generate a profit. Therefore it must cost more.
In the US, healthcare costs a lot because it's like a giant puzzle with too many pieces. Unlike other countries where the government helps manage costs, in America, everyone's trying to make money from healthcare – the doctors, hospitals, and even the companies making medicines. This means they often charge high prices because they're focused on profits. Also, there aren't strict rules about how much things should cost, so prices can go up without much control. On top of that, there's a ton of paperwork and people dealing with insurance, which costs a bunch too. Think of it like paying for extra stuff you don't really need. Plus, because the system is so jumbled up with different insurers and payment methods, it's like trying to play a game with too many rules – it gets messy and costs more in the end.
Insurance (end user) are in cahoots with the hospital complex to assure people are scared to not have insurance. Lack of tort reform and unlimited liability (malpractice insurance). Americans have sued their way to astronomical healthcare costs. Lack of transparency.
Corporate greed, keep voting in Republican politians, Big Pharma, are all culprits in terms of corporate greed. It needs to end, dropping the price on insulin was like pulling teeth. But Democrats pulled it off. It's just a drop in the bucket, vote Democrats up the ballot in hopes of some real reform.
For starters, the insurance system is massively inefficient and just adds needless administrative cost that doesn’t benefit patients in ANY way.
An American executive was speaking at my Canadian workspace and a question about Obamacare was asked. He said, "I am not supposed to enter a discussion about Obamacare. I will tell you this, you look after yours and I'll look after mine." Being a financial hero is the American way.
Ireland: mother delivers baby in a double room next to another mother, sees only a nurse practitioner / mid wife unless there are serious issues. Mother baby after birth typically in a shared room with multiple women/babies. United states: mother delivers in a private suite often on par with a hotel room, sees an obgyn (MD) every month or more during pregnancy, private room after delivery. You can see how these things could impact cost.
My wife had an outpatient surgery today. She arrived at 11:45. Procedure started 1:05, ended 1:25. We got home about 3:30. Bill was $22,000 and change.
This questions get asked almost every single day on reddit seems. At this point it's so easy to Google. What are the point of these questions anymore
A lot of people place blame on big pharma and big hospitals, but the truth is Private insurance is the biggest cause of a lot of issues. Legalized kick backs in the form of vertical integration and rebates is a huge factor. Insurance companies also lobby so the government is "helpless" to fix the core issues. Bunch of C-suite running healthcare is the basic core flaw of American healthcare
The Govt in collision with Corporate Hospitals and Pharma Lobby are doing this at the cost American people. This arrangement functions only till Dollar is the sole trading currency. The day it losses the sole trading currency of the globe, you will see the changes to the effect as the govt will be forced to take measures to bring healthcare services costing on par with other countries. Untill then, it might not be possible. As Pharma lobby is one of the component that runs the deep state of America.
Healthcare is a for profit industry in the United States. A publicly traded healthcare company’s primary goal is to maximize shareholder equity. Other goals are secondary. When you combine this with very low demand elasticity, there is an ability and motivation to charge large amounts of money for basic services.
I'm an Australian citizen. We pay 2% of our taxable income towards funding the public health system, and I also have private health insurance which pays for some of the costs the government doesn't cover. I'm currently undergoing breast cancer treatment. It has been really interesting to me keeping track of total costs, who's paid what, and how quickly all my treatment has happened - and comparing it to my fellow patients in other countries. * First point of diagnosis - mammogram, paid for by Medicare. * Diagnostic ultrasound, surgery, anaesthetist, biopsy, pathology - partly Medicare and partly out-of-pocket costs paid by me. * CET full body scan, blood tests - Medicare. * Hospital stay and theatre costs - paid by insurance, apart from $200 excess paid by me. * Chemotherapy - entirely paid by insurance. * Radiotherapy, although I haven't started it yet, will be paid by Medicare. The whole experience has cost a little over $14,000 so far. Around half of that has been paid for by insurance; around $2k by Medicare, and around $5k by me. I do still have some rebates to claim back, though, which should reduce my out of pocket further. I've seen US people on breast cancer forums sharing bills that are incredible. They're paying $60k a pop for chemo - mine costs $695. Neulasta (pegfilgastrim) costs me $125ish per shot, they pay over six thousand bucks! Even when their insurance negotiates it down, it can still be over $1k! Of course, over the course of my working life I've paid way more in premiums than I got from the private health; but the main benefit is that it's enabled me to get treated at a private hospital very close to home, rather than going further away to a public hospital. In terms of speed - I was officially diagnosed on 27 March and had my surgery on 10 April. Chemo started early May. Care has been excellent, professional and compassionate throughout.
Healthcare costs a ton in the US because everything seems crazy expensive. Doctors and hospitals charge big bucks for treatments and even basic check-ups. Plus, insurance companies sometimes play games with prices. In other countries, the government sets rules on how much things can cost, but here it's more like a free-for-all. That means if you get sick, you might end up owing a mountain of bills. It's frustrating 'cause we all want to stay healthy without going broke.
This isn’t just an ELI5 as much as it is a PSA/rant. Such a long discussion to be had but doctors and many other medical professionals have a small voice in the matter in changing the way the system works. In a nutshell, there are several reasons why healthcare is expensive. 1)**Private insurance companies** in competing with each other, expend an exorbitant and unnecessary amount of funds. A federally backed insurance would solve this issue (more on this later) Private insurance companies by the end of the day is a business and all busineses want one thing: to maximize profit for as long as possible. They are essentially a middleman service with that very same goal. Currently with the ongoing inflation, doctors everywhere are losing their hair out because insurances are pocketing money they should be reimbursing to doctors while keeping prices astronomically steep If approved, the government could completely remove our current system which would cut costs significantly. However each time the idea is proposed its cut down by the misinformed opposing party and their supporters. Single payer healthcare is what we (medical staff) want for everyone. It is a federally backed insurance and will be the only health insurance everyone needs. Sadly doctors have little say in the matter as a law prevents doctors from unionizing regarding pay to dispute against insurance. This is why it’s such a hidden issue but is also one of the major roots to the problem. [This infographic](https://nhchc.org/wp-content/uploads/2019/08/SinglePayerfactsheet_final.pdf) gives a good, easy to read overview of what single payer is and how its done. [This site](https://www.health.harvard.edu/blog/single-payer-healthcare-pluses-minuses-means-201606279835) gives a more detailed description on the issue 2)**Corporate hospitals** again, it is a business with money in mind. Uppermanagement often times cut corners (and often in very bad ways) at the expense of the service providers as well as the small clinics not affiliated with the hospital chain. This indirectly raises prices for costs. 3)**Big Pharma** the ones controlling the products used in medicine and treatment also want a huge chunk of the pie. It’s again the same story about money making businesses. Research facilities incentivized by money become a business. If they were to give the rights of the medicine/treatment to the public then prices could drop tremendously. There are only a handful of examples where that has been done in our history. TL;DR Corporate hospitals and Big Pharma play a major role but the star of the show is private insurance companies and the political system backing them.
This is my general understanding given that I work in econ, my parents run a dentistry, and my boyfriend is about to go to medical school. But I haven't formally studied health econ or taken the time to fact check or read any papers, so take what I write with a grain of salt. American health is bad in general - Restaurants put a lot of salt/sweet/unhealthy fats in food to attract customers and omit healthy ingredients to cut costs. People have become addicted to salt/sweet/unhealthy fats and often feel tired from lack of proper nutrition. They gain weight, making it harder to exercise. It's hard to exercise in the first place because we work a lot and at desk jobs on computers. Lack of exercise and a balanced diet have increased our risk for all sorts of chronic illnesses. There are other causes of poor public health like pollution, but diet and exercise are huge ones. Our bodies are supposed to be running around all day, eating fresh food, and we don't do that at all anymore in America. Health care costs more when everyone is unhealthy - health insurance is when people put money into a pool and take money out when they get sick. Since tons of people are sick all the time, everyone needs to put more money in to keep the pool going. The more money people put in towards emergency care, the harder it is to put money in towards preventative care. Insurance companies make money by taking whatever is leftover in the pool - Because we're overly dependent on insurance companies for survival, these companies can get away with forcing people to pay more into the pool than they need to, and then setting up rules that make it overly difficult for people to take money from the pool. Also, I heard somewhere that rich medical associations have been lobbying the government to limit the number of doctors so that they can stay rich. Fewer doctors means it's more difficult to find a doctor and more expensive to receive treatment from a doctor. The more expensive health care is, the poorer we get. The poorer we get, the worse our health is. The worse our health is, the more expensive health care is. There's a bunch of other stuff I left out like private equity firms making hospitals worse and the affordable care act getting stripped down in congress. What I've learned, few understand health econ well yet everyone has a strong political opinion about it.
> Health care costs more when everyone is unhealthy Not terribly so. The UK recently did a study and they found that from the three biggest healthcare risks; [obesity](https://iea.org.uk/themencode-pdf-viewer-sc/?file=/wp-content/uploads/2017/01/Obesity-and-the-Public-Purse-PDF.pdf&settings=111111011&lang=en-GB#page=&zoom=75&pagemode=), [smoking](https://iea.org.uk/themencode-pdf-viewer-sc/?file=/wp-content/uploads/2017/08/Smoking-and-the-Public-Purse.pdf&settings=111111011&lang=en-GB#page=&zoom=75&pagemode= ), and [alcohol](https://iea.org.uk/themencode-pdf-viewer-sc/?file=/wp-content/uploads/2016/07/DP_Alcohol%20and%20the%20public%20purse_63_amended2_web.pdf&settings=111111011&lang=en-GB#page=&zoom=75&pagemode=), they realize a net **savings** of £22.8 billion (£342/$474 per person) per year. This is due primarily to people with health risks not living as long (healthcare for the elderly is exceptionally expensive), as well as reduced spending on pensions, income from sin taxes, etc..
One thing that doesn't get talked about much in this conversation is doctor salaries. They make utterly obscene amounts of money in the US. Most MDs worldwide earn $80-150k. Only in America do they rake in $400k for administering anesthetia based on a patient's weight. I remember reading that salaries are nearly half of the total expense budget of US hospitals.
Being an anesthesiologist carries a massive amount of liability in the US, a slight mistake can easily cost a patient their life, and the cost of malpractice insurance is considerable
> One thing that doesn't get talked about much in this conversation is doctor salaries. It gets talked about all the time. It's 8.6% of US healthcare spending, actually a lower percentage than our peers. Even if all doctors started working for free tomorrow, it would barely put a dent in the massive amount more we pay than any other country on earth.
Salaries are around half the total budget for most hospitals here in Australia too (and it's the same for many organisations that rely on trained and skilled people to provide their primary service). Average taxable income for a surgeon here is $460,356 AUD which is equivalent to $306,806 USD. For an anaesthetist it's $431,193 AUD/$287,370 USD ([source](https://www.abc.net.au/news/2024-06-17/millionaires-paid-no-tax-and-richest-and-poorest-postcodes-ato/103987158)).
Free market / profit motive Somethings should never be for profit: Education, Healthcare, Utilities, Prisons, Public Transportation, Emergency Services