Merged "Bitter Pill": Major article on US expensive healthcare (Time)

[Newtons Bit]

you people

 

[Nessie]

Or just cut taxes and/or the deficit.

But the problem with creating a UHS in the US is that some people (mostly on the right) feel that it will be abused by hypochondriacs and people who don't work. They're so concerned with the above that they would rather their own health care cost twice as much as what it should than someone get a free ride. It boggles my mind.

Why then does that not happen with education? Why try and educated people who are not interested?

 

[Morrigan]

Reading this thread, I'm just wondering if people have actually read the article. It's long, but eye-opening, and shows that the real, core problem isn't even really the insurance, but the obscene prices hospitals charge for everything, from cancer wonder drugs to alcohol gauze pads (which cost about 1 cent a unit and they charge... $7 per unit!!!).

Not to mention the "non-profit" hospitals racking in ridiculously obscene profits that make software companies and friggin' Hollywood seem modest, and these wide profits being made even after paying similarly obscene salaries to their CEOs and CFOs.

This journalist did a wonderful job in following the money and exposing this disgraceful industry, but I have little hope that much will change. Maybe in 40 years from now the situation will have improved and it will be traced back to this article, I dunno... but this "chargemaster" is just outrageous and it boggles my mind that a civilized nation would allow such a thing to go completely unregulated.

Oh, and this article is the final nail in Beerina's coffin that healthcare costs so much in the USA because of R&D (not that he'll ever stop trumping it up). The Grifols example is quite enlightening in particular.

So do tell how we're going to control health care costs when we pay everyone involved far more than any other nation.

Eventually, as government is forced to pay for an ever-increasing percentage of health care costs, they will dictate what they will pay. At this point hopsitals will have to make a choice - go out of business or reduce costs.

Go out of business? LOL, have you read the article? Even if their profits were taxed at 75% (after paying all salaries and costs of operations, mind you) they'd still be swimming in millions of dollars. And these are the so-called "nonprofit" hospitals. If they simply reduced their chargemaster prices to a profit margin similar to that of a successful software company, the cost to the patients would be ludicrously lower and they'd still be a successful business.

 

[jimbob]

Reading this thread, I'm just wondering if people have actually read the article. It's long, but eye-opening, and shows that the real, core problem isn't even really the insurance, but the obscene prices hospitals charge for everything, from cancer wonder drugs to alcohol gauze pads (which cost about 1 cent a unit and they charge... $7 per unit!!!).

Not to mention the "non-profit" hospitals racking in ridiculously obscene profits that make software companies and friggin' Hollywood seem modest, and these wide profits being made even after paying similarly obscene salaries to their CEOs and CFOs.

This journalist did a wonderful job in following the money and exposing this disgraceful industry, but I have little hope that much will change. Maybe in 40 years from now the situation will have improved and it will be traced back to this article, I dunno... but this "chargemaster" is just outrageous and it boggles my mind that a civilized nation would allow such a thing to go completely unregulated.

Oh, and this article is the final nail in Beerina's coffin that healthcare costs so much in the USA because of R&D (not that he'll ever stop trumping it up). The Grifols example is quite enlightening in particular.


Go out of business? LOL, have you read the article? Even if their profits were taxed at 75% (after paying all salaries and costs of operations, mind you) they'd still be swimming in millions of dollars. And these are the so-called "nonprofit" hospitals. If they simply reduced their chargemaster prices to a profit margin similar to that of a successful software company, the cost to the patients would be ludicrously lower and they'd still be a successful business.

Reading this article I am reminded of this post from 2009, which did demonstrate Poe's law:

If we had an actual free market, then most of these problems would disappear. First of all, in a free market there are no barriers to entry, and this assumption holds up particularly well in the case of health-care where anyone can start a local business. All of this competition means lower prices for you (and lower profits for business). Second, consumers are informed (no asymmetries); they're not swayed by silly superstitions and they don't need something like ten years of training. Moreover, bad decisions are perfectly reversible and consumers have lots of time to shop around. Third, indivisible benefits and costs: not happenin' here. When other people get sick and die, it's on them. Some people -- yes, I'm talking about communists -- like those two old white guys in the video -- will complain about how much is lost in "worker productivity" on account of days missed due to tooth aches and chest pains. Well, boohoo. Fourth: the children. It's actually better if fewer kids see doctors because it toughens them up. It's like my doctor says, "what doesn't kill you can only make you stronger." This may sound counter-intuitive to you. If it does sound counter-intuitive, then you're stupid, and you need to get your "duh-face" checked out... if you can. Fif: no government bureaucrats. Instead of decisions made by some poindexter in Washington who thinks he knows more than your doctor, under a free market they'll be made by some business major in Connecticut who doesn't care if he knows better than your doctor.

 

[Denver]

I just finished reading the article, and so am a little behind in this thread.

As I was reading, I began to wonder if the article was mis-titled. And should have been something more like "Why Socialized Medicine Is Best", but that title would have been too political.

As I got near the end, there was more I suppose balance between what Medicare can and can't do well, and other non-Medicare solutions. Though it seemed to be couched more in language about the reasons why a Medicare solution for all would not be likely to be implementable due to the power of the medical "island".

Overall the two things that stuck out for me was:

1) Medicare and a government-controlled solution would be financially best for the country, and still safe.
2) The ChargeMaster is unethical. Not only does it let prices be set on a whim, it allows things like "We gave 30Billion in services to charity", or "We lost 30Billion in uncollected charges" fairly meaningless.

Like I said, I just finished reading it. Lots to still digest.

 

[Alareth]

Don't forget that Santorum was spreading the story that the Dutch just kill their old people when they hit a certain age. He left out if runes that change color with age were involved.

I'm a few years past Carrousel ...

And I'm unaware of them jacking up prices once "they're the only game in town". If they did Target or Kmart or someone would just come in and undercut them.

When Wal-Mart was aggressively expanding across the country years ago they would move into a new town and undercut the average price for goods in the area. Once the existing local businesses began to whither away because they couldn't compete the prices would rise or the initial location would shut down and a newer "Super" Wal-Mart would be opened farther from the town/city center where the land was cheaper. The effect on the traditional "downtown" shopping districts was devastating.

Wal-Mart has become a somewhat ubiquitous retailer at this point so the practice has slowed for the most part now.

 

[quadraginta]

Do you have any evidence that our doctors are significantly better than those in say, the UK?



What are you trying to say? He pays taxes for his medical coverage. It's right there in his post. He pays no additional money for private medical insurance, because it's not needed. And the taxes that he pays to access universal healthcare coverage are on par with what Americans pay for coverage that many of us can't access (Medicare and Medicaid).

You're right, of course. I wasn't following the conversation carefully enough.

Thanks, ZB.

Nothing

Because like many, if not most Brits, I see no need when I have public coverage paid for from my taxes and at a slightly lower rate than that which fails to provide coverage for a large proportion of the US population.

Mea culpa, or "Post in haste, repent at leisure".

I can get a little crazy on this topic, since I'm one of those people who had a great career and 'the best' insurance ... 'til I got sick.

Then Mrs. qg did, too.

Switching from a six figure salary and full-coverage insurance to disability SSI, Medicare, and lots of hate mail from collection agencies in just a couple short years can do that.

I only wish that the U.S, had a rational single payer plan.

 

[jimbob]

You're right, of course. I wasn't following the conversation carefully enough.

Thanks, ZB.




Mea culpa, or "Post in haste, repent at leisure".

I can get a little crazy on this topic, since I'm one of those people who had a great career and 'the best' insurance ... 'til I got sick.

Then Mrs. qg did, too.

Switching from a six figure salary and full-coverage insurance to disability SSI, Medicare, and lots of hate mail from collection agencies in just a couple short years can do that.

I only wish that the U.S, had a rational single payer plan.

I can understand you being touchy on this subject. It annoys me that our government seems to be trying to dismantle a very cost-efficient system for ideological reasons, and a lot of the media is spinning the stories about the NHS to make it easier.

 

[Bob001]

I've posted these links before whenever it seemed appropriate, and this looks like a good place. T.R. Reid is a journalist who has written extensively, including two books, about how health care is delivered around the world. One thing to keep in mind is that many countries provide universal health coverage through private insurance companies that are closely regulated like utilities. Not every system is run by the national government. For this PBS "Frontline" special he went to several different countries and asked how they would treat his own old shoulder injury and how much it would cost, by way of illustrating how those systems work. One key fact is that administrative costs in the U.S. can exceed 25 percent of all health care expenditures; in other countries, they are as low as six percent. The show is accessible online, along with some of his other reports:
http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/view/

This is what he says about the U.S. system:
".... These four models should be fairly easy for Americans to understand because we have elements of all of them in our fragmented national health care apparatus. When it comes to treating veterans, we're Britain or Cuba. For Americans over the age of 65 on Medicare, we're Canada. For working Americans who get insurance on the job, we're Germany. For the 15 percent of the population who have no health insurance, the United States is Cambodia or Burkina Faso or rural India..."

The four basic models:
http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/countries/models.html

How the systems work in five capitalist democracies:
http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/countries/

 

[rocketdodger]

Reading this thread, I'm just wondering if people have actually read the article. It's long, but eye-opening, and shows that the real, core problem isn't even really the insurance, but the obscene prices hospitals charge for everything, from cancer wonder drugs to alcohol gauze pads (which cost about 1 cent a unit and they charge... $7 per unit!!!).

This does have quite a bit to do with insurance, though: If you have decent insurance, the hospital isn't allowed to charge obscene prices.

I asked my dermatologist why they initially wanted $1500 for a run of standard biopsy tests when the insurance only allowed them to charge $200. He spewed some BS about "oh, that's just a number we use for bookkeeping, it doesn't mean anything" as if I was stupid enough to not realize that if one has no insurance, that's what the dermatologist tries to squeeze from them.

I'm actually coming around to think that the ACA, while an abyss of compromise, has promise - its the only real legislation in, well, *forever*, that can have a huge impact on this problem of providers overcharging the uninsured.

I'm starting to think that all these people complaining that the ACA isn't a solution don't really understand the problem -- it IS a solution, actually. It might not be the best, but I don't see how any other solution ( like limiting provider profits by law ) would ever make it through congress.

 

[Dr. Keith]

This is what he says about the U.S. system:
".... These four models should be fairly easy for Americans to understand because we have elements of all of them in our fragmented national health care apparatus. When it comes to treating veterans, we're Britain or Cuba. For Americans over the age of 65 on Medicare, we're Canada. For working Americans who get insurance on the job, we're Germany. For the 15 percent of the population who have no health insurance, the United States is Cambodia or Burkina Faso or rural India..."

The four basic models:
http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/countries/models.html

How the systems work in five capitalist democracies:
http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/countries/

Fantastic summary! Thanks for sharing it.

 

[uk_dave]

One key fact is that administrative costs in the U.S. can exceed 25 percent of all health care expenditures; in other countries, they are as low as six percent.

This doesn't surprise me.

From what I have observed in the US, a county hospital will have a whole department dedicated to figuring out how a patient will pay for the medical treatment. This will involve lengthy interviews with people on crutches and in wheelchairs and parent with small children, all there to receive treatment but having to jump through the financial hoops first before they are approved to proceed.

The other process which appears to be time consuming and wasteful is the pharmacy. Again you have alot of manpower employed in dispensing the medications the doctors will have prescribed but much of the conversations which appear to go on are questions about the costs and alternatives both of the drugs themselves and the places where they can be obtained.

Add to this the financial haggling with insurance companies and private individual and the employment of debt collection agencies to try to obtain payment for billed services.

 

[Morrigan]

This does have quite a bit to do with insurance, though: If you have decent insurance, the hospital isn't allowed to charge obscene prices.

From what I understood of the article, they are, they just don't because the insurers negotiate the prices. But when the hospitals keep merging and acquiring labs and other facilities and gaining near-monopoly power, the insurance companies are losing their negotiating powers, and will simply pass this along to the patients with increased premiums.

I'm starting to think that all these people complaining that the ACA isn't a solution don't really understand the problem -- it IS a solution, actually. It might not be the best, but I don't see how any other solution ( like limiting provider profits by law ) would ever make it through congress.

Did you read the article in full? It says the opposite: ACA does some good in preventing caps on insured amounts and preventing an insurance refusal due to pre-existing conditions, but then, since insurers are more liable to lose money, they'll just increase their premiums.

ACA is a step in the right direction, sure, but the real solution is giving Congress power to regulate the chargemasters. If only ACA had focused on that...

 

[cwalner]

I asked my dermatologist why they initially wanted $1500 for a run of standard biopsy tests when the insurance only allowed them to charge $200. He spewed some BS about "oh, that's just a number we use for bookkeeping, it doesn't mean anything" as if I was stupid enough to not realize that if one has no insurance, that's what the dermatologist tries to squeeze from them.

This was also addressed in the article. Extrapolating from the examples in the article, those biopsy tests probably only cost the Hospital $10-$20 and Medicare, which pays based on a cost + scheme, would only pay about $25-$30.

That 'discount' is mostly illusion.

 

[Rolfe]

I work in a veterinary lab. Actually processing the biopsy and reading the slides is about £35 I think. Although there would also be a cost for taking the sample.

And our pathologists are also MRCPath just like the human-medicine pathologists, and we're not starving.

Rolfe.

 

[WildCat]

When Wal-Mart was aggressively expanding across the country years ago they would move into a new town and undercut the average price for goods in the area. Once the existing local businesses began to whither away because they couldn't compete the prices would rise or the initial location would shut down and a newer "Super" Wal-Mart would be opened farther from the town/city center where the land was cheaper. The effect on the traditional "downtown" shopping districts was devastating.

I note you forgot the part where you offer evidence for your claims.

But thanks for the cool story.

 

[PhreePhly]

I think another take-away from the article is that this is not a problem just about the Uninsured. Most of the case-studies dealt with people who had insurance, but the insurance was insufficient. However, these folks were paying a pretty big premium percentage wise compared to their income.

So, when folks jump in here and claim that the issues are only about the uninsured, they are forgetting about the large contingent of under-insured that exist in this country.

 

[jimbob]

I think another take-away from the article is that this is not a problem just about the Uninsured. Most of the case-studies dealt with people who had insurance, but the insurance was insufficient. However, these folks were paying a pretty big premium percentage wise compared to their income.

So, when folks jump in here and claim that the issues are only about the uninsured, they are forgetting about the large contingent of under-insured that exist in this country.

Indeed:

You're right, of course. I wasn't following the conversation carefully enough.

Thanks, ZB.




Mea culpa, or "Post in haste, repent at leisure".

I can get a little crazy on this topic, since I'm one of those people who had a great career and 'the best' insurance ... 'til I got sick.

Then Mrs. qg did, too.

Switching from a six figure salary and full-coverage insurance to disability SSI, Medicare, and lots of hate mail from collection agencies in just a couple short years can do that.

I only wish that the U.S, had a rational single payer plan.

 

[Blue Mountain]

I can get a little crazy on this topic, since I'm one of those people who had a great career and 'the best' insurance ... 'til I got sick.

Then Mrs. qg did, too.

Switching from a six figure salary and full-coverage insurance to disability SSI, Medicare, and lots of hate mail from collection agencies in just a couple short years can do that.

I only wish that the U.S, had a rational single payer plan.

It appears that getting sick preceded the loss of income, and the loss of income occurred because you found yourself out of a job. Out of curiosity, did you lose your job because you got sick? Or was it another major piece of bad luck on top of your medical issues?

One reason I'm asking is that here in Canada, even though one has health insurance when out of work, a person who loses his job obviously has no income. Having your medical bills paid for does not preclude ending up in poverty if you're chronically ill and unable to work. Although it's obvious that not having a stack of medical bills to pay makes the situation a bit easier.

Another reason I'm asking is I'm curious to know if the reason you became unemployed (or one of the reasons) was due to pressure from the health insurance provider your company was using; sort of, "The premiums your company will be paying next year are going to triple unless you can find a way to reduce the amount of claims we're getting ... hint hint as to who the big claimant is ..."

 

[Bob001]

From what I understood of the article, they are, they just don't because the insurers negotiate the prices. .....

The article makes the point that insurance companies typically negotiate prices down from the Chargemaster, every hospital's database that assigns the highest possible charges -- often with no factual basis -- to its thousands of products and services. These are the prices charged to someone without insurance. So if the insurance company negotiates 50 percent off the Chargemaster rate, it looks great. But the Chargemaster rate is still exorbitant.

By comparison, the article makes the point that Medicare is required to limit its payments to the hospital's actual costs (remember, they're supposed to be non-profit), and it is full of astonishing contrasts of the Chargemaster price vs. the Medicare payment. In a lengthy section about one patient's charges, it includes this:

But Janice S. was asked to pay them. Moreover, the chargemaster rates are relevant, even for those unlike her who have insurance. Insurers with the most leverage, because they have the most customers to offer a hospital that needs patients, will try to negotiate prices 30% to 50% above the Medicare rates rather than discounts off the sky-high chargemaster rates. But insurers are increasingly losing leverage because hospitals are consolidating by buying doctors’ practices and even rival hospitals. In that situation — in which the insurer needs the hospital more than the hospital needs the insurer — the pricing negotiation will be over discounts that work down from the chargemaster prices rather than up from what Medicare would pay. Getting a 50% or even 60% discount off the chargemaster price of an item that costs $13 and lists for $199.50 is still no bargain. “We hate to negotiate off of the chargemaster, but we have to do it a lot now,” says Edward Wardell, a lawyer for the giant health-insurance provider Aetna Inc.

That so few consumers seem to be aware of the chargemaster demonstrates how well the health care industry has steered the debate from why bills are so high to who should pay them.

The expensive technology deployed on Janice S. was a bigger factor in her bill than the lab tests. An “NM MYO REST/SPEC EJCT MOT MUL” was billed at $7,997.54. [emphasis mine] That’s a stress test using a radioactive dye that is tracked by an X-ray computed tomography, or CT, scan. Medicare would have paid Stamford $554 for that test...."

In TV interviews, the author of the article contends that the net U.S. health care expenditure could be greatly reduced just by lowering the age for Medicare participation.