It's an interesting read and worth bookmarking if you can't get through right now (the page was going in and out as I read it).
It's kind of depressing though in that his point boils down to neither side's solution being all that effective at solving the problem. Moreover his meta point seems to be that it's too complicated a problem for politicians to solve based on their need to boil things down to a sound bite solution.
Politicians don't solve based on the sound bytes. They win power with sound bites. There's no shortage of evidence of sound bites being blissfully ignored, by politicians of any stripe, moments after an election victory.
Politicians 'solve' based on lobbying efforts. And that's why they can't fix anything. Lobbying favors the entrenched and they like things nice and wasteful and anti-competitive.
The biggest point that he is making is that there are a LOT of areas where the US is overspending on health care. Which, if the effectiveness of this health care was in line with the increase spending, it would be alright. Unfortunately, it isn't, so there is a lot of waste.
We are spending money on the wrong things and it is a systematic and cultural problem.
Anecdotally, I tend to see a lot of people in the US go to the doctor "just to play it safe". X-rays for a sore knee, antibiotics used for a mild sinus infection, blood work done because they're not sleeping well at night... we spend a lot of money with the idea in our heads that the medical industry can and will cure all of our ailments.
I may be completely off the mark, but I think that the cost of research may be hidden somewhere in all those huge numbers . US is making breakthroughs all the time in drugs, medical machinery/equipment, IT in medicine, disease discovery & prevention, etc. For example, HPV vaccine came from the US (I know about this, because my daughter will be vaccinated when she reaches teenage period).
Much of the rest of the world is piggybacking on US. That's my opinion. I am from Europe.
I don't think it's hidden at all. He says in the Drugs section...
"The problem is that our drugs, on the whole, cost about 50% more. For name brand pharmaceuticals, we pay about 77% more. Why? Some will say that it’s because we’re wealthier and need to subsidize for the rest of the world. But even if we paid more based on our relative wealth, it would come to about a 30% premium, not the 77% we do pay."
So the problem is obvious. The issue is how to fix it. We in the U.S. can either enforce our own price controls which will break the system or we can force U.S. companies to charge more to other countries and take the chance of denying medicine to sick people because foreign governments won't accept the higher prices.
Not an attractive choice no matter how you slice it.
It's interesting that you mention the HPV vaccine. It's extremely expensive, although that's not entirely based on the research costs.
"Gardasil took more than 20 years to develop, is complex to manufacture, and must be constantly refrigerated, but that’s not why it’s so expensive. Instead, Merck calculated the price based on the money the vaccine will save the entire health-care system—and the CDC approved the price, as it does with other vaccines."
About 60% of new drugs come from the US. And there are only a couple of new molecules discovered every year, mostly it's just about repurposing existing drugs because this much cheaper. More money goes to marketing. So, that's not it.
This is true, but it only accounts for a very small slice of the over-spending pie. This is outlined throughout the series of blog posts. I recommended reading all of the posts in the series, it is well worth it.
I think there may be some truth to this. Even when the developing company is European, they often rely on the American market to fund much of the research.
This article http://www.theatlantic.com/magazine/archive/2009/09/how-amer... lays out the reasons in a convincing manner. Very illuminating is the article pointing out that Lasik eye surgery is decreasing in cost, and why, while other health care costs are soaring.
WOW. Thanks for sharing that article. I'm sorry I missed it when it came out. An article full of novel insights and heartfelt interest in the subject. And I used to work for the company the author headed ten years ago!
Highly recommended, and I'd point out that it's highly relevant the the meme du jour, which is that if you're not paying, you don't have the privileges associated with being a customer. Employer-purchased health insurance and bureaucratic health care programs have robbed patients of their power to be customers, and it's something I was never clued into before.
There are many different aspects as to why health care is so expensive in the US. I never really hear about doctor's salaries being mentioned as a cause. I was browsing glassdoor.com a few nights ago. The professions making more than 300k a year as salaried employees were almost all medical specialists. I really doubt any other country pays their doctors that well.
Here's my problem with it: 60+% (by eyeball) of the costs are not categorized, so there is no real guidance for reform.
Outpatient care is quite high, but part of that is because hospital visits are shorter in the US and many in-hospital procedures are actually done in clinics. A lot of people, especially the poor, go to emergency rooms for routine stuff, because they can get free treatment. But I think the US is way overbuilt in expensive diagnostic equipment. I live in a county of 250K people and there are at least 5 imaging centers that I know of.
Edit: San Luis Obispo is a rural county. The largest city is only about 50K people. This kind of over building is not limited to huge metropolitan areas.
I think capital expenditures is the start of why costs are so high. It is difficult to find a hospital these days that isn't currently renovating or expanding. Hospitals can spend however much they want because they have no pressure on their prices. The insurers don't care how much they are paying so long as it's comparable to other insurers. They can just pass along the increases to employers/individuals who are required to buy. The only pressure healthcare providers have comes from Medicare and Medicaid and whatever they lose there they can just shift to the private insurers.
When you say 60% is not categorized, are you referring to the green slice in his chart? That's the amount he thinks the U.S. should be spending given its wealth and what other countries spend. He is intentionally only categorizing the parts that he thinks exceed other countries' expenditures.
I did a lot of looking into this. Here's some points pasted in from an old comment of mine that was popular -
--
Some reasons American medicine is very expensive:
1. Health insurance, but not treatment, is fully tax deductible. So if you buy your own penicillin, it's with after tax money, but if your insurance company buys it, it's pre-tax money. That's one of the reasons that health insurance is so widespred in America even for routine medicine like antibiotics and checkups. That's a major contributing factor in why the administrative costs are so high.
2. There's a shortage of doctors in America, and qualified doctors from other countries are not allowed to practice medicine in the United States. So there's good doctors from Canada, England, Japan, wherever that'd love to practice in the USA, but can't. This artificially inflates doctor's wages by restricting supply.
3. American doctors are typically required to get an undergraduate degree, medical degree, and do a below market, crazy hours residency in order to be able to practice medicine. That's 8-10 years of study and below market working to practice medicine. Now, medicine is very important and needs to be done right, but I don't believe for a second that a focused apprenceship couldn't teach a very specific kind of medicine - say arithscopic surgery - in just 2-4 years under a highly trained doctor, but this isn't an option.
4. The Food and Drug Administration requires new drugs to be proven not only for safety, but also efficacy. That's an incredibly high and expensive burden to meet - that means that drugs need to be proven to work to a certain standard, instead of just not harm. This adds years of development time and millions of dollars in cost to the new drug development cycle.
Those are all legislated reasons that increase the cost of medical insurance, doctors, and drugs. They'd be fairly easy to remove -
1. All medical and health expenses can be written off taxes regardless of insurance. Employees can choose to convert som of their wages to a medical or health plan tax free to both the employer and employee. (Currently, under most circumstances, only employer-provided health insurance can is tax free)
2. Allow any doctor in a country with reasonably competent medical standards to practice in the United States.
3. Require that doctors be able to demonstrate that they can practice their area of medicine capably. Be flexible in how they demonstrate that. Note: This will incur high opposition from medical schools and current doctors who are currently enjoying the wage premium and had to go through the very long, difficult, and expensive system.
4. Change the drug standard from "safety and efficacy" to only safety. Drugs will come to market much faster and cheaper. There's plenty of people and organizations that will test proven safe drugs for efficacy for free or nominal cost once drugs hit market, and efficacy will get understood with time. Put this way - a proven safe but questionably effective treatment against heart disease being held off the market for five years and costing much more to get to market is not a good thing. If it's certainly safe, then let people make the decisions with their physicians, instead of having the FDA take such a strong gatekeeping stance.
Technology has progressed such that we don't need government protection from ourselves as much any more. The current set of legislation has greatly increased the costs of doctors and medicine. Regardless of political position, and regardless of stance on other health issues, addressing these four points will make the medical system fairer, more effective, and and less expensive with relative ease.
Admittedly, there's some powerful entrenched interests that are winning in the current arrangement, and will oppose these simple improvements.
2. There's a shortage of doctors in America, and qualified doctors from other countries are not allowed to practice medicine in the United States.
Are you sure about this? What do international comparisons say about physicians per capita in countries around the world?
It's conventional supply-and-demand economics to suppose that if there were more doctors, each doctor would make less money overall, and thus the services of each doctor would be cheaper for patients. But actually the economist Martin Feldstein, who conducted a study of the issue in the 1960s based on data from Britain and the United States (with two rather different systems of providing medical care to citizens), found out that generally doctors refer business to other doctors. So that as the number of doctors goes up in a society, the use of doctors' services per patient goes up, and thus overall societal spending on medical care goes up, as does spending per patient. What figures do you have about what is actually happening in different countries, and which countries currently have the best supply of comparable medical personnel?
Your reasoning for point 4 is horrendous and terrible. You are advocating for the return of snakeoil. There are already problems with homeopathic remedies and "magnets" and all this other crap that gives people false hope and leads them to avoid making medically difficult choices while lining the pockets of shysters.
A partial solution to #1 came about during the Bush administration--"Health Savings Accounts", which are bound to your normal health insurance but work as a regular savings account. You put pre-tax money into them, keep a balance from year to year (the older MSA expired every year and you lost your money) and you can even take your money out of the HSA, just by paying taxes on it.
It didn't catch on, largely because people are used to having relatively comprehensive health insurance from their employers. Until you break the employment/insurance bundling nothing else will budge. And no one who has a job with health insurance wants to break the bundling.
On #4: surely in practice the choice is often going to be not "drug A or nothing?" but "drug A or drug B?" where drug B is an established standard treatment. In that situation, choosing drug A does harm if the drug isn't effective, even if the drug itself is perfectly safe.
> 1. Health insurance, but not treatment, is fully tax deductible. So if you buy your own penicillin, it's with after tax money, but if your insurance company buys it, it's pre-tax money. That's one of the reasons that health insurance is so widespred in America even for routine medicine like antibiotics and checkups. That's a major contributing factor in why the administrative costs are so high.
That's not completely true - someone else mentioned Health Savings Accounts.
There are also flex spending accounts, which are tax deductible. However, you only get to change the Flex Spending amount once a year or when you change jobs, get married, divorced, or have children (and possibly a couple of other events). That's okay for chronic problems and other things that you can plan for, but not so good for unexpected events.
Under previous law, there was no legal limit on flex spending accounts. Obama care limits them to $4k.
For point # 3, it's actually even worse than that. These days, the best doctors also do a fellowship after residency. It's slightly less ridiculous than a residency, but it's another 2-4 years of being underpaid tacked on to the previous 10.
My buddy, who is nearly finished with his cardiology fellowship, is nearly 300k in debt at this point. On the other hand, that dude has already saved some lives and I'd trust him w/ mine in a <dorky pun>heartbeat</dorky pun>.
Among the reasons (first list): #s 2 and 3 are ways in which the AMA restricts supply in the US. The AMA may claim 'quality' (and who can gainsay claims of quality in health care) but one suspects that restricting supply and keeping salaries high is an at least equally valid (note the round about elocution) reason.
Claims that something is 'complicated' can be used to obscure and it seems to me to that one very clear source of problems in health care is the AMA. On the other hand, the AMA represents pretty much all doctors in the US and if they're earning above market salaries you can bet that most of them would strongly defend that. "They spent so many years in med school"; "they have so much student debt"; and "health care is unimpeachably a matter of quality" - right?
Financial markets are 'complicated' and that's why we can't do anything about those either.
Another quick comment about doctors and pay (because I had this conversation the other day w/ a young doctor). Doctors are incentivized to prescribe costly tests. They get paid more w/ every test/procedure, and tests also serve to cover their asses. Patients also, often, demand the testing.
Those who are against tort reform often use some statistics showing that tort fees only account for a tiny percentage of health costs, but they miss a deeper relationship between the fear of being sued (most doctors get sued at some point in their career) and the defensive, expensive, care doctors give.
"There's plenty of people and organizations that will test proven safe drugs for efficacy for free or nominal cost once drugs hit market, and efficacy will get understood with time."
So if testing the efficacy of new drugs costs only a nominal amount of money, how would eliminating this requirement save us enough money to make it worthwhile? Also, if anything the market shows us that no one is willing to test the efficacy of drugs except for the drug companies. How many non-profit pharmaceutical companies are there, other than MAPS?
> Allow any doctor in a country with reasonably competent medical standards to practice in the United States.
The malpractice lawyers will love this one.
But put another way, is there any country that claims it has a surplus of doctors? I'm skeptical of claims that there is a "shortage of doctors" in the US and other developed countries when you compare rates to third world countries. FWIW Canada has long claimed it has a shortage of doctors too. In practice that means there's a shortage of doctors in rural Manitoba and Saskatchewan which is why such a high proportion of doctors in Saskatchewan are from South Africa.
I don't think there is so much a shortage of doctors as a lack of nurse practitioners etc. who have the legal authority to treat the medically trivial ailments (e.g., coughs, colds) that most of the time is why we go see a doctor.
Since the medical profession is self governing, it is a cartel and therefore it is in the interests of doctors to control supply to keep prices high.
As a doctor in England that has seen the American system, there are a lot of interesting points.
I agree with number 3 on specialisation; a doctor should first "learn how to learn" then specialise. If they change their mind, they can easily relearn. Most stay with one thing, with many becoming ultra specialists ie. knee surgeons.
Re #2: Most new Canadian doctors get their American certification as a "warm up test" for the Canadian test, since the American test is similar, but easier than the Canadian test.
Can anyone please advice a good resource to read on how US health care and health insurance system works? From a foreigner or extraterrestrial perspective, preferably.
I dream of there being the site where I can read on different aspects of life in various countries, such as education, health care, etc. all described from a neutral point of view. But I'm afraid that such thing may not exist yet due to little demand. I mean, how many people are thinking "hmm, which of those 250+ countries should I choose for living?"
They explain in detail how our system works, explain the origins/history of it, and also explain WHY it is so expensive. It's not a mystery, really, especially for anyone who is involved.
TL;TR: it's expensive because "medical professionals" are greedy: they do unnecessary procedures, hire and keep unnecessary bloated staff and, of course, they overcharge for everything. The probability of you being diagnosed with X goes up as the number of doctors specializing in X in your area increases (listen the podcast for source), that's because the assholes just can't stomach saying "there is nothing wrong with you" and letting profits fall. Besides, you can simply look around: there is no reason for doctors to be millionaires and drug sales reps to own aircraft. The system is expensive because capitalism in healthcare is nonsense: you get greedy assholes milking "customers" who are unconscious, scared or in pain.
What's annoying is that doctors enjoy the unexplained immunity from public anger. It's always the "evil" insurance companies and "big pharma", or government regulators, who are to blame, while its not uncommon for American doctors to make million+ dollars a year delivering results that are no better of their French counterparts. I invite you to a typical cancer clinic in the US, you'll face devastated people who are dying, and who are getting ass-raped by handreds of thousands of dollars of medical bills on top of having an insurance. Those poor folks are sitting in lavish doctor's offices furnished with the most expensive hardwood flooring money can buy, surrounded by mind blowing numbers of "support staff" who have nothing to do with medicine, yet they too need to get paid. For anyone who's ever been to one, question of "why our heathcare so expensive" has an obvious, straight, screaming in your face answer.
My personal solution is radical, simple and effective: ban drug commercials, introduce fixed salaries for doctors, and if someone's unhappy - GTFO, plus open visas for Indian/French/Canadian doctors who'll be more than happy to take their place. Yes, government is grossly inefficient, I know, but NOTHING can be worse that this mess we're in. The amount of money extorted from the public by "medical professionals" is just insane. I've worked for a semi-military contractor that was selling to the government, wasn't rosy, but not nearly as outrageous that this quasi-market monster of a healthcare we have.
You know this might be the perfect opportunity to make history. let me explain. The thing that struck me the most about the post was that there was no one thing to blame and there was no one way to fix this. That's the thing.We are looking at the problem from the human frame of reference.
If someone can make a data analysis program that takes ALL of the data generated everyday and crunches it together for every conceivable variable and then uses machine learning to find common cost patterns vs. time and policy (the time and date of execution of policies and their direct impact can thus be judged). Then we might as well have magic in our hands.
This is hard data that no one can argue against (some will still manage...). If we can make something like this might as well be the first time in history that policy has been made using AI as a crutch. I hope that it won't be the last.
The problem is not that we can't find the answer, but that we don't want to. We have the technology to determine the effectiveness of many policy choices, and we've had it for a while - it's called a randomized trial (basically a great big A/B test).
We choose not to use it - it gave us results we didn't like the last time we did.
Good article, but I'm concerned the premises of the article have been skewed by misleading graphs. The initial graph of GDP to medical expenditure is reasonably convincing, the graphs later in the article much less so. I could be wrong about this, but it feels a little like the data selection and curve fitting have been selected to supported the hypothesis rather than the other way around (something that could easily happen accidentally).
On a tangential note - that pie chart he uses in each section is an unintentionally good example of what not to do when displaying data. I have to confess, I don't really understand it.
What is his hypothesis? He doesn't seem to have any sort of agenda other than saying that it is a complex issue that can't be solved by a political one-liner like "tort reform" or "fixing big pharma".
The reason we don't have a solution thus far is the fundamental disagreement between those who want a total government solution(public option/healthcare) and those that want a complete free enterprise solution.
The idea of the government deciding who lives and dies creeps me out. If you are democrat remember power is cyclical and one day a republican may be deciding whether you or your loved ones live or die.
I don't have the perfect answer, but I know it's not either extreme.
I don't want to make this a huge political debate but i want to address the point that 'X deciding who lives and dies', where X=government. Currently we're just solving for a different value of X.
Certainly people are deciding who lives and dies; life-saving care is denied specifically by insurers, and implicitly by the fact that many don't have any means to pay for care.
That's not an argument for or against single payer or full govt-run healthcare (though i am for that - i just don't have time to get that into the discussion)...
> the government deciding who lives and dies creeps me out
How is that any different than Acme Insurance deciding who lives and dies? And as far as the government is concerned, it's your fellow Americans deciding.
I'd heard arguments that compared the UK's NHS spending to that of the US, and after doing a couple of searches after reading this article, I found quite a nice infographic here:
Interesting. I have lived both in France and in Canada and I find the french health system so much better that I find it hard to believe both countries spend almost the same per capita.
So much debate around simple thing. A private enterprise (including medicine) is driven by profit motive, that means decreasing cost (bottom line, quality) and increasing margin (price).
In a free market, quality decrease and price increase is balanced by competition. Once competition is severely limited and the minimal quality is enforced through things like FDA - the sky is the limit for the price.
How many new drugs on the market will not generate a lawsuit? What is the average amount of time that a patent will last after the drug is approved for sale?
* that does not look like a best fit line, more like a curve
* maybe the curve should slope up more at the end?
* if the curve slopes up more at the end, maybe as you spend more you reach an asymptote. it would make sense if being the best at something requires more than a linear energy increase than being 2nd or 3rd best at something.
You addressing the wrong side of the problem. The issue isn't WHO's paying, the issue is why so much? Have you seen some of the bills that folks without insurance are getting? Nearly every sort of surgery, no matter how trivial, wipes out most people's savings plus some.
[+] [-] SamAtt|15 years ago|reply
It's kind of depressing though in that his point boils down to neither side's solution being all that effective at solving the problem. Moreover his meta point seems to be that it's too complicated a problem for politicians to solve based on their need to boil things down to a sound bite solution.
[+] [-] roc|15 years ago|reply
Politicians 'solve' based on lobbying efforts. And that's why they can't fix anything. Lobbying favors the entrenched and they like things nice and wasteful and anti-competitive.
[+] [-] nerme|15 years ago|reply
We are spending money on the wrong things and it is a systematic and cultural problem.
Anecdotally, I tend to see a lot of people in the US go to the doctor "just to play it safe". X-rays for a sore knee, antibiotics used for a mild sinus infection, blood work done because they're not sleeping well at night... we spend a lot of money with the idea in our heads that the medical industry can and will cure all of our ailments.
[+] [-] jan_g|15 years ago|reply
Much of the rest of the world is piggybacking on US. That's my opinion. I am from Europe.
[+] [-] SamAtt|15 years ago|reply
"The problem is that our drugs, on the whole, cost about 50% more. For name brand pharmaceuticals, we pay about 77% more. Why? Some will say that it’s because we’re wealthier and need to subsidize for the rest of the world. But even if we paid more based on our relative wealth, it would come to about a 30% premium, not the 77% we do pay."
So the problem is obvious. The issue is how to fix it. We in the U.S. can either enforce our own price controls which will break the system or we can force U.S. companies to charge more to other countries and take the chance of denying medicine to sick people because foreign governments won't accept the higher prices.
Not an attractive choice no matter how you slice it.
[+] [-] WillyF|15 years ago|reply
"Gardasil took more than 20 years to develop, is complex to manufacture, and must be constantly refrigerated, but that’s not why it’s so expensive. Instead, Merck calculated the price based on the money the vaccine will save the entire health-care system—and the CDC approved the price, as it does with other vaccines."
http://discovermagazine.com/2007/jun/hpv
[+] [-] toddh|15 years ago|reply
[+] [-] nerme|15 years ago|reply
[+] [-] travisp|15 years ago|reply
[+] [-] WalterBright|15 years ago|reply
[+] [-] zach|15 years ago|reply
Highly recommended, and I'd point out that it's highly relevant the the meme du jour, which is that if you're not paying, you don't have the privileges associated with being a customer. Employer-purchased health insurance and bureaucratic health care programs have robbed patients of their power to be customers, and it's something I was never clued into before.
[+] [-] narrator|15 years ago|reply
[+] [-] russell|15 years ago|reply
Outpatient care is quite high, but part of that is because hospital visits are shorter in the US and many in-hospital procedures are actually done in clinics. A lot of people, especially the poor, go to emergency rooms for routine stuff, because they can get free treatment. But I think the US is way overbuilt in expensive diagnostic equipment. I live in a county of 250K people and there are at least 5 imaging centers that I know of.
Edit: San Luis Obispo is a rural county. The largest city is only about 50K people. This kind of over building is not limited to huge metropolitan areas.
[+] [-] ahi|15 years ago|reply
[+] [-] jcl|15 years ago|reply
(See the last paragraph of the conclusion.)
[+] [-] kscaldef|15 years ago|reply
[+] [-] lionhearted|15 years ago|reply
--
Some reasons American medicine is very expensive:
1. Health insurance, but not treatment, is fully tax deductible. So if you buy your own penicillin, it's with after tax money, but if your insurance company buys it, it's pre-tax money. That's one of the reasons that health insurance is so widespred in America even for routine medicine like antibiotics and checkups. That's a major contributing factor in why the administrative costs are so high.
2. There's a shortage of doctors in America, and qualified doctors from other countries are not allowed to practice medicine in the United States. So there's good doctors from Canada, England, Japan, wherever that'd love to practice in the USA, but can't. This artificially inflates doctor's wages by restricting supply.
3. American doctors are typically required to get an undergraduate degree, medical degree, and do a below market, crazy hours residency in order to be able to practice medicine. That's 8-10 years of study and below market working to practice medicine. Now, medicine is very important and needs to be done right, but I don't believe for a second that a focused apprenceship couldn't teach a very specific kind of medicine - say arithscopic surgery - in just 2-4 years under a highly trained doctor, but this isn't an option.
4. The Food and Drug Administration requires new drugs to be proven not only for safety, but also efficacy. That's an incredibly high and expensive burden to meet - that means that drugs need to be proven to work to a certain standard, instead of just not harm. This adds years of development time and millions of dollars in cost to the new drug development cycle.
Those are all legislated reasons that increase the cost of medical insurance, doctors, and drugs. They'd be fairly easy to remove -
1. All medical and health expenses can be written off taxes regardless of insurance. Employees can choose to convert som of their wages to a medical or health plan tax free to both the employer and employee. (Currently, under most circumstances, only employer-provided health insurance can is tax free)
2. Allow any doctor in a country with reasonably competent medical standards to practice in the United States.
3. Require that doctors be able to demonstrate that they can practice their area of medicine capably. Be flexible in how they demonstrate that. Note: This will incur high opposition from medical schools and current doctors who are currently enjoying the wage premium and had to go through the very long, difficult, and expensive system.
4. Change the drug standard from "safety and efficacy" to only safety. Drugs will come to market much faster and cheaper. There's plenty of people and organizations that will test proven safe drugs for efficacy for free or nominal cost once drugs hit market, and efficacy will get understood with time. Put this way - a proven safe but questionably effective treatment against heart disease being held off the market for five years and costing much more to get to market is not a good thing. If it's certainly safe, then let people make the decisions with their physicians, instead of having the FDA take such a strong gatekeeping stance.
Technology has progressed such that we don't need government protection from ourselves as much any more. The current set of legislation has greatly increased the costs of doctors and medicine. Regardless of political position, and regardless of stance on other health issues, addressing these four points will make the medical system fairer, more effective, and and less expensive with relative ease.
Admittedly, there's some powerful entrenched interests that are winning in the current arrangement, and will oppose these simple improvements.
[+] [-] tokenadult|15 years ago|reply
Are you sure about this? What do international comparisons say about physicians per capita in countries around the world?
It's conventional supply-and-demand economics to suppose that if there were more doctors, each doctor would make less money overall, and thus the services of each doctor would be cheaper for patients. But actually the economist Martin Feldstein, who conducted a study of the issue in the 1960s based on data from Britain and the United States (with two rather different systems of providing medical care to citizens), found out that generally doctors refer business to other doctors. So that as the number of doctors goes up in a society, the use of doctors' services per patient goes up, and thus overall societal spending on medical care goes up, as does spending per patient. What figures do you have about what is actually happening in different countries, and which countries currently have the best supply of comparable medical personnel?
[+] [-] DannoHung|15 years ago|reply
[+] [-] philwelch|15 years ago|reply
It didn't catch on, largely because people are used to having relatively comprehensive health insurance from their employers. Until you break the employment/insurance bundling nothing else will budge. And no one who has a job with health insurance wants to break the bundling.
[+] [-] gjm11|15 years ago|reply
[+] [-] anamax|15 years ago|reply
That's not completely true - someone else mentioned Health Savings Accounts.
There are also flex spending accounts, which are tax deductible. However, you only get to change the Flex Spending amount once a year or when you change jobs, get married, divorced, or have children (and possibly a couple of other events). That's okay for chronic problems and other things that you can plan for, but not so good for unexpected events.
Under previous law, there was no legal limit on flex spending accounts. Obama care limits them to $4k.
[+] [-] bballant|15 years ago|reply
My buddy, who is nearly finished with his cardiology fellowship, is nearly 300k in debt at this point. On the other hand, that dude has already saved some lives and I'd trust him w/ mine in a <dorky pun>heartbeat</dorky pun>.
[+] [-] patfla|15 years ago|reply
Claims that something is 'complicated' can be used to obscure and it seems to me to that one very clear source of problems in health care is the AMA. On the other hand, the AMA represents pretty much all doctors in the US and if they're earning above market salaries you can bet that most of them would strongly defend that. "They spent so many years in med school"; "they have so much student debt"; and "health care is unimpeachably a matter of quality" - right?
Financial markets are 'complicated' and that's why we can't do anything about those either.
[+] [-] bballant|15 years ago|reply
Those who are against tort reform often use some statistics showing that tort fees only account for a tiny percentage of health costs, but they miss a deeper relationship between the fear of being sued (most doctors get sued at some point in their career) and the defensive, expensive, care doctors give.
[+] [-] Alex3917|15 years ago|reply
So if testing the efficacy of new drugs costs only a nominal amount of money, how would eliminating this requirement save us enough money to make it worthwhile? Also, if anything the market shows us that no one is willing to test the efficacy of drugs except for the drug companies. How many non-profit pharmaceutical companies are there, other than MAPS?
[+] [-] jbarham|15 years ago|reply
The malpractice lawyers will love this one.
But put another way, is there any country that claims it has a surplus of doctors? I'm skeptical of claims that there is a "shortage of doctors" in the US and other developed countries when you compare rates to third world countries. FWIW Canada has long claimed it has a shortage of doctors too. In practice that means there's a shortage of doctors in rural Manitoba and Saskatchewan which is why such a high proportion of doctors in Saskatchewan are from South Africa.
I don't think there is so much a shortage of doctors as a lack of nurse practitioners etc. who have the legal authority to treat the medically trivial ailments (e.g., coughs, colds) that most of the time is why we go see a doctor.
Since the medical profession is self governing, it is a cartel and therefore it is in the interests of doctors to control supply to keep prices high.
[+] [-] unknown|15 years ago|reply
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[+] [-] tomwalker|15 years ago|reply
I agree with number 3 on specialisation; a doctor should first "learn how to learn" then specialise. If they change their mind, they can easily relearn. Most stay with one thing, with many becoming ultra specialists ie. knee surgeons.
[+] [-] bryanlarsen|15 years ago|reply
[+] [-] listic|15 years ago|reply
I dream of there being the site where I can read on different aspects of life in various countries, such as education, health care, etc. all described from a neutral point of view. But I'm afraid that such thing may not exist yet due to little demand. I mean, how many people are thinking "hmm, which of those 250+ countries should I choose for living?"
[+] [-] old-gregg|15 years ago|reply
They explain in detail how our system works, explain the origins/history of it, and also explain WHY it is so expensive. It's not a mystery, really, especially for anyone who is involved.
TL;TR: it's expensive because "medical professionals" are greedy: they do unnecessary procedures, hire and keep unnecessary bloated staff and, of course, they overcharge for everything. The probability of you being diagnosed with X goes up as the number of doctors specializing in X in your area increases (listen the podcast for source), that's because the assholes just can't stomach saying "there is nothing wrong with you" and letting profits fall. Besides, you can simply look around: there is no reason for doctors to be millionaires and drug sales reps to own aircraft. The system is expensive because capitalism in healthcare is nonsense: you get greedy assholes milking "customers" who are unconscious, scared or in pain.
What's annoying is that doctors enjoy the unexplained immunity from public anger. It's always the "evil" insurance companies and "big pharma", or government regulators, who are to blame, while its not uncommon for American doctors to make million+ dollars a year delivering results that are no better of their French counterparts. I invite you to a typical cancer clinic in the US, you'll face devastated people who are dying, and who are getting ass-raped by handreds of thousands of dollars of medical bills on top of having an insurance. Those poor folks are sitting in lavish doctor's offices furnished with the most expensive hardwood flooring money can buy, surrounded by mind blowing numbers of "support staff" who have nothing to do with medicine, yet they too need to get paid. For anyone who's ever been to one, question of "why our heathcare so expensive" has an obvious, straight, screaming in your face answer.
My personal solution is radical, simple and effective: ban drug commercials, introduce fixed salaries for doctors, and if someone's unhappy - GTFO, plus open visas for Indian/French/Canadian doctors who'll be more than happy to take their place. Yes, government is grossly inefficient, I know, but NOTHING can be worse that this mess we're in. The amount of money extorted from the public by "medical professionals" is just insane. I've worked for a semi-military contractor that was selling to the government, wasn't rosy, but not nearly as outrageous that this quasi-market monster of a healthcare we have.
[+] [-] todayiamme|15 years ago|reply
If someone can make a data analysis program that takes ALL of the data generated everyday and crunches it together for every conceivable variable and then uses machine learning to find common cost patterns vs. time and policy (the time and date of execution of policies and their direct impact can thus be judged). Then we might as well have magic in our hands.
This is hard data that no one can argue against (some will still manage...). If we can make something like this might as well be the first time in history that policy has been made using AI as a crutch. I hope that it won't be the last.
[+] [-] yummyfajitas|15 years ago|reply
We choose not to use it - it gave us results we didn't like the last time we did.
http://www.overcomingbias.com/2010/03/knowing-too-much.html
http://www.overcomingbias.com/2010/04/too-much-debate.html
[+] [-] matrix|15 years ago|reply
On a tangential note - that pie chart he uses in each section is an unintentionally good example of what not to do when displaying data. I have to confess, I don't really understand it.
[+] [-] nerme|15 years ago|reply
[+] [-] kcy|15 years ago|reply
[+] [-] shrnky|15 years ago|reply
The idea of the government deciding who lives and dies creeps me out. If you are democrat remember power is cyclical and one day a republican may be deciding whether you or your loved ones live or die.
I don't have the perfect answer, but I know it's not either extreme.
[+] [-] rubyrescue|15 years ago|reply
Certainly people are deciding who lives and dies; life-saving care is denied specifically by insurers, and implicitly by the fact that many don't have any means to pay for care.
That's not an argument for or against single payer or full govt-run healthcare (though i am for that - i just don't have time to get that into the discussion)...
[+] [-] jasonlotito|15 years ago|reply
How is that any different than Acme Insurance deciding who lives and dies? And as far as the government is concerned, it's your fellow Americans deciding.
[+] [-] dhume|15 years ago|reply
[+] [-] mootothemax|15 years ago|reply
http://www.visualeconomics.com/healthcare-costs-around-the-w...
Seems that this article matches up against the data in the infographic at least.
[+] [-] galactus|15 years ago|reply
[+] [-] VladRussian|15 years ago|reply
In a free market, quality decrease and price increase is balanced by competition. Once competition is severely limited and the minimal quality is enforced through things like FDA - the sky is the limit for the price.
[+] [-] protomyth|15 years ago|reply
[+] [-] jdavid|15 years ago|reply
* that does not look like a best fit line, more like a curve
* maybe the curve should slope up more at the end?
* if the curve slopes up more at the end, maybe as you spend more you reach an asymptote. it would make sense if being the best at something requires more than a linear energy increase than being 2nd or 3rd best at something.
* doesn't John Nash's work explain this?
[+] [-] barrkel|15 years ago|reply
[+] [-] known|15 years ago|reply
[+] [-] old-gregg|15 years ago|reply
[+] [-] unknown|15 years ago|reply
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