I'd like to believe this, but the study makes a bunch of really hasty assumptions.
The authors derive the $1T number from $1.3T in total cost savings and $304B in incremental spend (incremental spend is due to insuring more people). The $1.3T in cost savings come from five big buckets: lower pharmaceutical prices, Medicare-level payments to providers, reduced administrative overhead, less fraudulent billing, and fewer avoidable emergency department visits and hospitalizations.
The buckets themselves don't necessarily survive much scrutiny.
Take "Medicare-level payments to providers". Hospitals have an operating margin of 2-5%. Medicare pays 50% less than private insurance. So doing this would require either layoffs, cutting salaries for doctors/nurses/etc, or both. This may well be the right decision for society as a whole--that's a big part of the debate here--but there's no free lunch.
The line item of "fewer avoidable emergency department visits and hospitalizations" assumes greater insurance coverage leads to greater access to primary care. It's true that great primary care prevents hospitalizations, and can be a net cost saving under certain assumptions [1]. But, we're actually in a primary care shortage. Existing insurance payments for primary care are low enough that private practices are going out of business and fewer residents are going into family medicine. Cutting rates (the paragraph above) would make this worse.
For "less fraudulent billing," a lot of people in the industry believe that Medicare has a large amount of undetected fraud. That's unfortunately the flip-side of reduced administrative overhead. The authors assume an 8% savings here, but the 2003 paper they cite uses the word "fraud" only twice and doesn't give a number.
Healthcare reform is hard.
[1] Reasonable breakdown on the economics of advanced primary care models: https://olearykm.medium.com/the-cost-equation-for-new-primar...
>> Medicare pays 50% less than private insurance. So doing this would require either layoffs, cutting salaries for doctors/nurses/etc, or both. This may well be the right decision for society as a whole--that's a big part of the debate here--but there's no free lunch.
You arent considering
1. Hospitals eating the cost of the uninsured, which this would solve
2. Hospital spending tons on administrative duties fighting with insurers on coverage, which this would reduce
> Hospital spending tons on administrative duties fighting with insurers on coverage, which this would reduce
Would this go away, though? Instead of fighting with insurers they would be fighting with the government insurer?
I am very pro universal healthcare, I just don’t want to pretend there aren’t still going to be fights over what should be paid for.
No matter what, there are going to be disagreements on what medical procedures should be paid for and who needs them, as well as how much they should be billed for.
The way a lot of other countries deal with this is that the government calculates out a benefit vs cost assessment for every new treatment and only covers ones that come out ahead. But, that ends up with things like new targeted chemotherapies being unavailable for years after their initial release, vs in the US where they are available to much of the population once the right prior auth is filed. There is also more top down management of costs, such as long term life support for people in vegetative states.
All of this was branded as "death boards" in the American healthcare debate.
People hate it when faceless bureaucrats decide that some health care expense is too expensive for the large faceless bureaucracy to cover, when they have a medical issue that they would like the large faceless bureaucracy to spend money on. Perhaps in that world, some insane guy with a back injury who's unhappy about the quality of his care assassinates the Secretary of Health and Human Services, rather than the CEO of a medical insurance corporation (and hey, a lot of people hate RFK Jr. anyway, so maybe that assassin still becomes a folk hero for doing it).
> Instead of fighting with insurers they would be fighting with the government insurer?
1. I'd rather fight the non profit-motivated entity 2. We can probably compare to VA and Medicare and even other countries to see what the fight will be like. I'm willing to bet it will be a big improvement.
> No matter what, there are going to be disagreements on what medical procedures should be paid for and who needs them, as well as how much they should be billed for.
Government insurance has a service motive. Private insurance has a profit motive.
Those are two real effects, but together they wouldn't compensate for the rate cuts.
About 8% of the population is uninsured. The uninsured population skews younger, with less healthcare utilization (Medicare already covers everyone 65 and older).
Another comment in this thread estimated billing overhead at 8.5%. Medicare for All would eliminate some, but not all of this, since Medicare is still a claims-based system. You would remove a lot of overhead around prior auths, which I agree is a good thing, but could be achieved with more focused legislation.
> .. 8% of the population is uninsured. .. this is Bogus, one of the first argument hospitals make for inflated pricing is that they have to cover the cost of uninsured. if the uninsured doesnt exist then the whole line of BS argument falls.
> 2. Hospital spending tons on administrative duties fighting with insurers on coverage, which this would reduce
This layer won't go without a fight. Maybe it _is_ the layer we're fighting against. The owners will still make profit, the providers still have jobs.. but the middle layers are useless bloat. They don't have skills to provide care, they don't operate at the capitalist layer. They are useless today, and even more useless tomorrow.
And that is likely useless layer is millions? of jobs.
What hospitals makes has nothing to do with physician pay - those are separate categories. Hospitals aren’t going to magically start giving some of their profit to doctors to help cover their lower fees.
OP makes a good point. The studies assumes two diametrically opposed things will happen - doctors will take a 50% pay cut but access to primary care physicians will increase.
Why would we solve the primary care physician shortage by cutting their pay?
Allow/force medical schools to grow, increasing the provider pool, thereby reducing their pay?
How would this change solve: "Hospitals eating the cost of the uninsured..."?
Wouldn't it just transfer the cost from the hospitals to the universal coverage agency? This would make the financial picture even worse for the proposed system.
>>> Hospitals have an operating margin of 2-5%. Medicare pays 50% less than private insurance.
The hospital can be paid less without reducing their margin if they can remove a cost from their balance sheet. It does not make the system cheaper overall, but it means the hospital does not have to bear those costs directly. They may not have to bear them at all, because hospitals are not the only things in the system.
No, because that cost is included in the $300 billion increase in spending that is part of the calculation they do.
Think about corps merging to save cost on back office. Here is the same idea. With AI, it would even cut additional order of magnitude of cost.
Healthcare reform isn’t actually hard. Every advanced country has done it bar the United States.
In every case costs have gone down and outcomes have improved.
You always build on what you have because you can’t pause healthcare for very obvious reasons.
Hence a lot of different systems all with the same aim. Controlled costs and universal coverage.
The idea the US is somehow different and cannot make the change is the result of propaganda and a mistaken belief that the current Us system is the worlds best despite its costs.
Healthcare reform is easy and there is an ocean of prior art.
Yeah, and they all generally get there by paying practitioners much less than the US does (by integer multiples). Single-payer, which this working paper equates with "universal coverage", is in fact not the norm among universal systems; besides using Medicare to ration the supply of practitioners, the original sin of our system is employer-based coverage, not payer structure.
Health care is an absolutely massive industry (everywhere, not just in the United States), and slashing compensation in a massive industry by top-down fiat is in fact not an especially easy thing to do.
Why do doctors need to be paid integer multiples more in the US than every other country on earth? This is not rhetorical, I mean it sincerely.
And I’m aware that medical debt is a big issue, but it seems like a chicken-or-the-egg type problem. Of course you can charge $500k for a medical degree when the doctor can make it back and then some in 5-10 years.
Nurses are also highly-paid in the USA (relative to other developed countries), and they make up a large part of the wage expenditure in the system. This may not make a difference to your point, but it is important to note that doctors are not the whole problem.
because in the us everything is integer multiple times more expensive
No, that's not why. Doctors also make drastically more than the median wage. Doctors make so much in the US because we have artificial scarcity of doctors.
i mean sure, but all skilled labor is trending towards 200-300K wages in the us.
if a "senior" software engineer can make half a mil, and an electrician can make 200k, of course doctor pay are high.
who is going to take 10-15 years of school and debt otherwise?
No it isn't! The median wage for an electrician in the United States is about $65,000. It's nowhere near $200,000. The median general skilled wage is lower than that.
They don't! It's a huge problem! It's probably the problem in US health care, which, despite my own belief that single-payer is bad policy, is in fact a total shitshow.
I think there's also the gamified confusion of over how much goes to the physician versus how much goes to administrating orgs and liability coverage.
We have numbers for this, we don't need to derive them axiomatically. Practitioner compensation is the largest component of health provider spending. Liability coverage is the second largest component of admin spending, which is 25% of provider spending.
“We have numbers” is always refreshing, especially in a shell game. Cost of all licensed medical practitioners? Or overweighting incomes of outlier CEO physicians? 25% is a steep tax on health in any case.
At the point where you're just dismissing the CMS NHE, you're well into the terrain of unfalsifiability.
Fair enough, but it is a political topic, and there are different and more confusing slices of the healthcare system exposed to patients than org spending breakdowns. Not sure how many of this thread's comments could hold water if falsification were universally applied.
Just so that people reading this thread know that there is the medical expense version of the Bureau of Labor Statistics, and it lives inside Medicare (CMS), and it publishes data. Most things people are trying to derive axiomatically on this thread, you can just look up.
It's really easy now with Claude and GPT5; just ask them a question and tell them to answer it for you, with cites, from the NHE. (The data I argue from precedes widespread LLM research; I built a site for this a couple years ago and didn't bother to update my data, because I assume it didn't get much better.)
Claude, gpt, and ai in general still hallucinate. What data do you argue from and please cite your source.
Funny how one of the arguments against Medicare in the 60s was that providers wouldn’t accept it.
Turns out when you have the choice of accepting lower payment per patient for Medicare or having a lot fewer patients, you choose the lower payment per patient.
I would expect the same situation here. Doctors would grumble, but no one would force them to accept patients on whatever “Medicare for all” would be called. Nothing other than market forces.
A number of things would probably have to change, including the cost of medical school. But the system right now is expensive and essentially unsustainable. So change is inevitable.
Nope. More and more providers are dropping out of Medicare, or imposing limits on the number of Medicare patients that they're willing to see. It's tough to sustain a financially viable medical practice on Medicare rates, especially for primary care in HCOL areas. Medicaid is even worse. There are a lot of patients who nominally have coverage but in practice are functionally uninsured because they can't find a local doctor to take them on.
>In every case costs have gone down and outcomes have improved.
this isn't really true though, if you look at survival rates of many diseases.
Can you give any examples?
A lot of the reason hospitals have to charge so much is that they take massive losses on uninsured people in emergency rooms. Medicare for all means they don't have to treat anyone for free.
They are not taking any losses; they just charge the regular price with a very tiny profit margin. US healthcare costs are heavily inflated. Insurance is a scam that lets the rich get richer. All insurance should be non-profit.
We all contribute to the pool at a time when we don't need it so we can use the money when we do, not to make CEOs or stockholders rich. That is how an insurance pool should work. Any excess money at the end of the year should be moved to the pool for the next year, not as a bonus on CEOs' 100m+ salary.
It doesn't matter what they charge if the patient doesn't pay it; which is what often happens with uninsured people showing up at the ER.
> Any excess money at the end of the year should be moved to the pool for the next year, not as a bonus on CEOs' 100m+ salary
Under the ACA, excess money in the pool must be rebated to policy holders. In practice, this worked for a few years, but eventually insurance companies ended up increasing cost in order to increase the absolute amount they were allowed to keep. Maybe this is still good (more claims approved), but it is counter productive to the goal of reducing healthcare costs.
It often happens with insured people showing up at the ER as well. Many patients don't pay their bills, either because they can't afford it or are just deadbeats. As overall healthcare costs have increased, insurers and employers have shifted more costs to plan members through higher deductibles / co-pays / co-insurance. So hospitals end up with a lot more bad debt, and this in turn causes further price inflation.
Carriers and providers don't make this easy, either.
I had a recent doctor's visit, with very good healthcare coverage, that was an in-network facility but an out-of-network provider. Coverage would have kicked in if I had a referral from my PCP, but my PCP recently retired and I was advocating for my own health for a small dermatological issue. They said it was cosmetic, my old PCP said it was not. I got a stack of 10 bills over many months all stating different things -- everything from $0 EOB to over $2k in uncovered expenses. No one would take ownership of sorting out what I was on the hook for. No one I talked to was empowered to actually solve it. It wasn't an affordability problem over $2k (but would be for my elderly grandparents on fixed income). Even asking "If I give you $2k does that resolve the debt?" was answered with "we won't know until we apply the payment" type non-answers.
Burn the whole stack down -or- earn enough you can operate on cash for the tier of care you want. Nothing inbetween seems to be working.
> All insurance should be non-profit.
Aren't their profits regulated regardless? If all insurance companies became non profit and let's say total prices dropped by 3-5% that still wouldn't change the situation dramatically?
There are many factors, e.g. amongst other things American doctors are better paid than just about anywhere else in the world.
> Aren't their profits regulated regardless?
Yes and no. It's sort of a weird thing where insurance is somewhat regulated nationally but also regulated in a piecemeal fashion state by state.
There's a non-government standards body called the NAIC which provided national guidance for insurers. Most (all?) states basically say that "if you follow NAIC standards, you are good".
> If all insurance companies became non profit and let's say total prices dropped by 3-5% that still wouldn't change the situation dramatically?
It's a huge mess. It's not even really a profit vs non-profit thing but rather "what's the motivation". One major issue is that the ACA put in a loss ratio of 80%. Which isn't a terrible thing in principle, it forces insurance companies to spend money on treatment. The problem is it also means that the profit of insurance companies is tied directly to how much they spend on healthcare. As a result, they are incentivized to spend more, not less, on medical treatments so they can justify higher premiums.
This is a big part of why I think universal public insurance is a must. Basically the only organization that's motivated to keep costs as low as possible is the government.
> American doctors are better paid than just about anywhere else in the world.
This is a problem, but the bigger issue and why doctors are paid so well is because becoming a doctor is one of the more costly and hard to do things in america. There are limited spots, schools, and residency requirements that severely restricts the number of possible doctors we add per year. That drives up the their salaries.
I have a nephew going to medical school in Idaho of all places, and he's looking at $500k in debt by the end of the whole ordeal.
> One major issue is that the ACA put in a loss ratio of 80%. Which isn't a terrible thing in principle, it forces insurance companies to spend money on treatment. The problem is it also means that the profit of insurance companies is tied directly to how much they spend on healthcare. As a result, they are incentivized to spend more, not less, on medical treatments so they can justify higher premiums.
Investors care about margins, not absolute dollar figures. If your non-medical costs are capped, the incentive would be to reduce your other costs to preserve or maximize profits.
So the 80/20 rule is unlikely to have caused anything. More likely it's too low, and the profit ratio that can extracted and passed to investors is still higher than most investing alternatives, which is why it keeps attracting more investment. Without the 80/20 rule we would have seen the same thing or worse, though perhaps slower premium increases but less treatment delivered.
Really this all points to structural problems in the market. Naively we might presume there's not enough competition, and there could be many reasons for that--over regulation, lack of transparency. But it's more complicated than just that because medical treatment, particularly the most costly treatments, presumably have very high price elasticity [citation needed]. Over the long term, investors are just gonna keep trying to draw as much from the well as they can. The problem with public single-payer is that the basic demand curve dynamic doesn't magically change, so rather than complain about high prices people complain about shortages, OR the government just keeps borrowing to maintain satisfactory treatment access until they can't borrow anymore.
Maybe the only solution to rising healthcare costs is to slow down the pace of medical advancements. People love to point out how cheap care is elsewhere, but the most advanced and costly treatments usually become available in the US first, taking years or even decades to spread. (Note, higher prices on pre-existing tech subsidize the cost of bleeding edge treatments, so comparing MRI prices isn't very helpful.) Moreover, people elsewhere don't really know about them so it doesn't detract from their perception of the quality of care they receive. If you're dying and the doctor says there's nothing he can offer you, then that's that and no ill feelings toward the medical establishment. If he says there is something but it's gonna be crazy expensive or there's a shortage/waiting list, now your pissed.
The bigger factor in the American system is taxes. If everyone in the healthcare industry stack, from suppliers to nurses, is exempt from federal and state taxes, healthcare costs could come down by 70%+.
No. Under EMTALA, hospitals are required to treat anyone who shows up to the ER regardless of ability to pay; this is an unfunded mandate.
I'm not necessarily opposed to making all health plans non-profit, but that's kind of a red herring. Many of the largest insurers, like most Blue Cross Blue Shield Association members and EmblemHealth, are already non-profit. They generally don't charge plan members any less than their for-profit peers.
"Insurance is a scam that lets the rich get richer. All insurance should be non-profit." Such empty platitudes never made for a good argument.
> They are not taking any losses;
Not really accurate if you look at the closure of rural and smaller city healthcare facilities. They don't have the base to charge "regular price" to make up for the aging, less healthy, rural populations.
We all pay for it, but some pay heavier costs than others.
No, this absolutely does not explain the US's wildly off-base per-capita expenditure because uninsured people still go in the denominator of the per-capita figure! I'm sure the per-insured-capita figure is worse but that's not what we are comparing!
Americans are constantly trying to exclude uninsured people from their statistics (and, worse, from the care itself) but the comparable countries don't do this so it is utterly ridiculous to propose that the correct statistical comparison is one in which the US excludes the undesirables while other countries don't.
https://en.wikipedia.org/wiki/List_of_countries_by_total_hea...
The fun part is when you break those numbers down between government and non-government expenditure. You’ll find that US governmental spending on health care per capita is higher than every other country’s entire (gov and non-gov) spending per capita.
https://www.oecd.org/en/publications/health-at-a-glance-2025...
Could this be because US gov healthcare spending takes place mostly via Medicare, which is specifically for people 65+?
Per capita stats are computed based on population, not per treatment or per person eligible for treatment. The US spends more per head on giving only a fraction of them subsidised healthcare than other nations manage on universal health, [more years of] education, [more generous] welfare payments etc. Some of that is down to medical professional salary discrepancies, but some of it is down to a terrible system...
>"Per capita stats are computed based on population, not per treatment or per person eligible for treatment. "
Your point is correct, but since the majority of healthcare spending occurs in the last 18 months of life, and the vast majority are on either Medicare or Medicaid during that time of their life (either due to age or ailment-related incapacity), it doesn't make a huge difference.
The spending per capita, unless I’m mistaken, is just “per person in the country” not “per person insured by the government”.
That means that even though government insurance in the US only covers a relatively small percent of the population, we pay more than other countries that cover the whole population.
Close to the same percent that doesn’t have employer coverage, they’re saying, those too old or ill to work fulltime.
I say convert SSA to UBI, set a floor, and let the price of things find a new level with more people in the marketplace:
That number seems hard to believe? Specifically that non government spending would be this low. Presumably "compulsory" includes way more than direct government spending.
https://data.worldbank.org/indicator/SH.XPD.GHED.PP.CD?locat...
According to the world bank it's closer to 40:60 (government spending still being the majority). So that puts it behind Switzerland but still more than combined spending in just about any other country.
In that link, government/compulsory for the United States seems to indicate times when an insurance company covered it. Voluntary/Out of Pocket is when insurance company wasn't required to cover and did or person paid out of pocket.
Even if it's US Government only per capita with people the government insures, it makes sense it would be so high because only people on government insurance are the poor/disabled AND old. Two groups that have extremely high utilization.
That interpretation would require me to believe that a Canadian pays, on average, only 12% less out of pocket than an American. $2483/yr vs $2186/yr.
That claim is at odds with the working paper's methodology, which gets a good chunk of the $1T in savings it discussed by assuming very sharp cuts to practitioner compensation.
A lot of the rest of the reasons are carrying the deadweight of administering regulation, and dancing with the existing and prospective malpractice suits that randomly benefit the system sometimes, but always cost everybody, and warp the practice of medicine and patient healthcare experiences.
So what's the solution? Some states have already limited malpractice liability but that hasn't done much to hold down costs. When patients are harmed by preventable medical errors they should be compensated.
The solution is NOT to decide on one problem at a time to all agree on solving by incremental compromise, or trust free market competition driving what is in reality a non-free market.
Most patients never file a lawsuit, even if things don't go well, and most injuries that aren't deaths or newsworthy are not worth the trouble to an "overburdened" court system itself imposing a lot of burdens.
And the quality life years lost waiting to share a verdict with attorneys ought to count for everyone affected, not just those who spearhead a trial by catastrophe.
I think the solution is to make the practice of medicine more scientific, and less dominated by competitive incentives, but as long as research and development, reform, or even consumer choice, is strictly a cost, that will be considered "too expensive", if not "too risky".
That's a non answer. The medical profession is already embracing evidence-based medicine as well as specific tools such as checklists and EHRs to reduce preventable errors. But there will always be some providers who are simply sloppy or incompetent or even malicious. Nothing else you proposed is actionable, just vague complaints and hand waving.
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When patients are harmed by quacks, it is a true problem and those quacks should be incarcerated and never allowed near medicine again. If there are too many quacks, then this is a systemic problem that needs to be addressed completely separately from malpractice and professional insurance.
When patients are harmed by medical errors caused by non-quacks, that's just tough luck. Not everyone can be saved. Creating a gigantic medical malpractice insurance industry so that a few hundred surviving families per year can have lottery jackpot settlements isn't a solution in any way, and has done very little to incentivize fewer errors.
That's a silly comment. There's a huge difference between establishing civil liability versus a criminal conviction, and rightly so. The quacks aren't going to be incarcerated.
I think instead of my comment being silly, it's just difficult for you to understand because your Overton window only allows people who agree with you but differ on how much compensation should be allowed and the particulars of how that compensation is decided and doled out.
I'm used to this though.
Uncompensated care attributable from uninsured patients is ~2–3% of operating revenue/costs. So it's there but not massive.
It also means that emergency rooms can be used just for emergencies and ongoing and preventative care can happen in clinics. Cheaper to operate and preventing preventable emergencies lowers the load.
Here's what happens in my locale. If you show up in an ER, they quickly decide whether you need emergency care, or regular urgent care, delivered in the same facility. And medicine is anything if not statistical, so they know the amount of each kind of service that they need to plan for.
Usually tied to employer coverage contracts, and with strictly limited menu of offerings for patient health needs.
I think for the math to work you have to consider the bigger bulk of work that could be eliminated by universal healthcare: the payer industry. Insurers, PBMs, and all the smaller sectors that support them. The utility provided to society is fairly low — basically, just selective claims denial.
Any model that gets rid of these frees up a huge swath of capital and work from society, and can use that work elsewhere. Of course, that is easier said than done.
Truly. Aetna, United Healthcare, Anthem, etc are examples of industry that does not need to exist, and exist only to serve the status quo.
Each of those are companies worth billions of dollars that could be instead used to lower the individual cost of providing health insurance.
As you say, this would of course be unsavory in some respects as those companies employ a lot of people. It's not a very economically productive industry though, the main output seems to be consuming patients' and doctors' time, causing financial anguish, and causing stress among people as to whether or not if their condition will be covered.
They do perform one useful service: forcing a hospital that tries to issue a $100,000 bill that should be $10,000 to reissue it, and not leave the patient saddled with a giant debt.
(Medicaid & Medicare claims processors do the same thing. Medicaid claims processing is mostly handled by private, third-party insurers now, and seems to be able to do so more efficiently and cheaply than when it was being run directly by states; the savings is mostly in the area of catching fraud.)
Companies do this because it's massive song and dance by everyone. Hospitals issue big bills to insurance companies knowing they will want a discount so there is plenty of wiggle room. Also, it's free marketing for insurance companies because people see 100k, see all discounts for their insurance and are happy it's only 10% of true cost. It's like car buying except with your healthcare.
Medicare is much cheaper because they have fixed rates and hospitals know what to bill.
> Hospitals have an operating margin of 2-5%
Very curious where this comes from and how accurate it is. For example the $37 a provider charges for an Aspirin seems like more than 2-5% margin.
You can search for more reports, because they do vary based on methodology. But the median hospital in the US makes between -1% (yes, negative, they lose money, because a huge percentage are non profits) and 4% depending on the source.
When the hospital charges you $37 for an aspirin, that singular pill might have a crazy profit margin in isolation. But your entire treatment could very well be losing the hospital money.
In my own anecdotal experience, the one hospital I know enough details about to comment on specifically, had something like 85% of patients costing the hospital more money than the hospital made. It was entirely funded by the relatively small number of people who had the “right” insurance and had the “right” procedures done.
Eg Kaufman: https://www.vizient.com/insights/reports/national-hospital-f...
It is a system where all prices and costs are so far detached from reality for multiple reasons, that looking at any current profit margins is not going to be very realistic either.
Really need to step back and start from first principles.
When I go to urgent care I get 15 minutes with a doctor who on average makes about $300K and maybe another 15 minutes with a nurse assistant who might be making $100K (or less). So that is less than $50 in doctor+nurse salary. Of course there are then all the overhead of rent, utilities, etc, etc but those are not so different from any other business in the same strip mall. So let's say total cost for my visit is maybe $100. But I'm charged $500-$600 for the visit. Someone is pocketing a lot of money and it is not the doctor nor the nurse.
We could do the same exercise for surgery, the costs for surgeons and anestethicians is much higher, but you'll be hard pressed to find any realistic scenario where the cost of a two hour surgery is more than $100K.
How much does insurance, legal representation, a department to argue with insurers, etc cost the hospital?
About 8.5% of revenue. This is not a poorly-studied number.
The old saw about the engineer who says that the $100,000 bill was $1 for the bolt, and $99,999 for knowing which bolt it was... that's just funny AND true!
But if it's a team of nurses, doctors, and other healthcare specialists rushing around doing checklist work to make sure you get that aspirin, that's just evil.
The principle is only applicable to our industry and closely adjacent industries.
fyi: Your link returns a 404 for me.
Oops! We can't find the page you're looking for
It's the salaries. That's where all the money is going. So that 37$ asperin, the profits... most of it is going to pay salaries. Not just of the doctors but administrators and all that.
Not buying any of this when the world is now full of dark patterns¹ and the ultimate result is that people in charge keep getting richer, faster.
¹ https://en.wikipedia.org/wiki/Hollywood_accounting
This is immediately what came to mind to me. You can be extremely profitable but paying out tens of billions in dividends, or a million other things.
Dividends aren't a Loss.
many hospitals are run by non-profits or the government (e.g. universities)
How do the salaries of administrators at such hospitals compare to for profit hospitals? How do they compare to non-medical institutions of similar size? Without a lot more information, your statement doesn't mean anything.
My point was that if it is all Hollywood accounting to scam consumers, then the nonprofits and government hospitals are doing the same thing.
Administrator pay scale is completely irrelevant to the point
Audited financial statements of all kinds of hospitals, both non-profit and for-profit. Here’s data from Moodey’s a credit rating agency: https://www.chartis.com/insights/hospital-margins-trend-high... (“This month, Moody’s credit rating agency released its annual not-for-profit and public healthcare median financial report for 2024, showing that overall hospital performance continues to improve. The median operating margin increased from 0.5% in 2023 to 1.5% in 2024.”).
The $37 for an aspirin offsets huge costs elsewhere for (non-NP) nurses, receptionists, janitors, orderlies, etc., who can’t bill directly to medicare.
Insurance pays the higher of their negotiated rate or the billed charge. Medical facilities set their billed rates so high that they’re guaranteed to be higher than all negotiated rates, ensuring that they get paid.
When you see $37 aspirin on the line, nobody actually pays $37 for it. The billed amount is replaced with whatever insurance rate is allowed for that. If someone is cash paying they get a large discount.
The billed items also have to cover everything. It’s not directly $37 for the aspirin, or the $5 or whatever allowed coverage it ultimately gets billed it. That had to cover the facilities, the salaries of the pharmacy staff who reviewed the request and dispensed it, the staff who inventory and order the medications, and the cost of billing insurance.
The only part that nationalized health care would change are the allowable billed rate and maybe the administrative overhead of billing different insurances. Even nationalized health care systems have admin overhead though.
You can think of it like when you have to pay $11 for a single glass of wine from a bottle that the restaurant paid $10 for. You’re not just paying for the liquid, you are paying into a big bucket of charges that all need to add up to more than the cost of the supplies, staff, building, and everything that goes into running it. The margin on individual products doesn’t make the entire operation profitable.
It almost seems like obscurity is the goal with the current system. Basically, job security (for admin, insurance) via obfuscation.
All healthcare systems have administrative overhead, including completely nationalized systems. The US discourse on health care overestimates the administrative overhead by a large amount. We could remove all insurance company profits and adjust our administrative overhead to be in line with countries with nationalized systems and it wouldn't change health care costs by an appreciable amount.
The discourse also underestimates how much of our health care costs go to our significantly higher salaries throughout the medical system. No politician wants to propose reducing the salaries of doctors, surgeons, or even researchers making new medications. The only acceptable villains are the administrators and insurance companies, but even in this inefficient system that's a much smaller slice of the pie chart than most people imagine.
One of the reasons hospitals operate in this convoluted way and still barely clear a profit is that we require them to treat everyone and attempt to collect payment later. A lot of what you and I pay for health care goes to cover people who can't or won't pay.
> The discourse also underestimates how much of our health care costs go to our significantly higher salaries throughout the medical system.
Well, the salaries of medical personnel only account for about 20% of total healthcare spending. So even cutting those by half wouldn't change much.
> One of the reasons hospitals operate in this convoluted way and still barely clear a profit is that we require them to treat everyone and attempt to collect payment later. A lot of what you and I pay for health care goes to cover people who can't or won't pay.
If that was a major reason, then those who don't pay would balance out those who pay and the grand total of all healthcare spending in the US would be pretty average despite individual premiums and out of pocket costs being sky high. But in reality, the total healthcare spending is just as sky high (several times more per capita then median OECD country).
That number might be true across all health spending, which includes hospital plant, home health care, all public health work (including animal control), and medical equipment. But if you zoom in on clinical and specialist practice, the parts of the health care equation where payer-structure actually enters the picture, compensation for practitioner shoots up; it's the dominant cost of running a health provider.
It’s more like a politically palatable Rube Goldberg machine for transferring costs to those (well-insured through their jobs, the Federal government, rich supporting institutions and donors) able to pay.
Nice comment, and true enough, but $37 aspirin and similar is a criminal fraud, and so are the laws not treating it for the coercive robbery it is.
The laws that define criminal fraud are themselves fraudulent?
Stop asking so many questions and buy the aspirin.
> The billed items also have to cover everything. It’s not directly $37 for the aspirin, or the $5 or whatever allowed coverage it ultimately gets billed it. That had to cover the facilities, the salaries of the pharmacy staff who reviewed the request and dispensed it, the staff who inventory and order the medications, and the cost of billing insurance.
That's the same as any? CVS charging $5 for aspirin has to cover their staff who stocked and checked out the item, the shelf space, the marketing, and the looting.
The comparison you make between a bottle of wine vs a glass is not the right one. It's two different stores selling the same product. What's different about hospitals?
The nursing staff to give the patient aspirin costs a lot more than someone stocking boxes on shelves.
This is like that thing about about $15,000 toilets at DoD. What's actually happening is a cost allocation function where an agreed-on list price for a whole project is getting distributed pro-rata over as many different line-items as possible.
That seems like a way to disincentivize cost optimizations in the project (for the client).
Oh, sure, it's bad! It's just a particular kind of bad.
Sure, it's more expensive, but is it thousands of times more expensive? That $5 bottle probably has 50-100 pills in it. A single dose for $37 is 740X more expensive. And its not just that the apsrin is expensive to cover salaries, EVERYTHING is similarly inflated.
On the occasions that I’ve watched a hospital go through the actual process of selling a small amount of inexpensive medication for a large amount of money, there is a ridiculous amount of ceremony involved. I can easily imagine that it costs that hospital 2 cents for the pill, $5 in amortized capital plus operating expense for the facility that stores that pill, plus $25 in labor and IT expenses to get that pill to the patient.
My wifes a doctor and i can assure you they are gouging you. What it is is that the insurance companys are really in the purchase processing business. So what they do is institute fees on every possible charge and the hospitals in our area mark everything up as a result. Thats part of the problem.
I, too, can invent numbers from nothing.
Yes, but can you personally allocate four people, two computers, a wristband, a HIPAA-compliant database, a HIPAA-compliant data entry system, and at least two barcode scanners to get an aspirin out of the bottle?
I’m making a serious point here: medical overspending is not just gobs of money ending up in a single pocket. The US medical system really is incredibly complex, and the money is moving all over the place and being spent on many things. Most of those cost centers may all zero or even negative value to the patient, but that doesn’t mean they don’t exist.
Hospital billing practices are often terrible or even fraudulent, but stories about the $37 aspirin are generally misleading. Most hospital claims and bills are actually coded around day rates and DRGs, so even if the aspirin shows up as a line item it doesn't actually impact the patient's financial responsibility or the amount allowed by their health plan. (I'm not trying to defend such a confusing system, just explaining how it works.)
To be clear, they are billing for all the coded line items at the listed prices, it is just that the agreements with the insurance company will disallow many of the line items in favor of other ones. They bill everything, because they may accept some insurance that has not negotiated a day rate, and in that case, the day rate code would be disallowed and some of the other line items will be paid at relevant negotiated rates instead (with others still likely disallowed). It needs to be the same bill in both cases, so they need to include everything, and the list prices need to be greater than or equal to what any insurance would pay, or they might lose out on the difference.
This is one of the areas where more standardization would certainly help. If there were more standardization of which codes disallow which other ones (which can currently vary wildly by plan even with the same insurer, must less across insurers), then a lot of line items could actually get removed as truly redundant, vastly simplifying the bill.
I have the best health plan available (as a lifelong heart patient) from my provider, which owns the hospital. I've been charged 250$ for a covid vaccine, which was administered when I was recovering from a surgery to stop Sepsis. My hospital bill was itemized and I called to verify it.
I would be able to dispute a double room billing, but I was sedated and dying so I took whatever they offered, assuming good faith.
>Most hospital claims and bills are actually coded around day rates and DRGs, so even if the aspirin shows up as a line item it doesn't actually impact the patient's financial responsibility or the amount allowed by their health plan. (I'm not trying to defend such a confusing system, just explaining how it works.)
Yep. Hospital "bills" are a fiction. On one occasion I was presented with an "Explanation of Benefits" for a hospital stay where I was "charged" for being in two hospital rooms at the same time. As if that weren't enough I was also "charged" with having a "Pap smear"[0], even though I don't have a cervix.
I complained bitterly and after making a big stink was informed by the hospital my insurer that the items weren't actually "billed". Rather, the insurance company paid $1500/day regardless of the treatment provided.
It's disgusting!
Just in case anyone didn't get the reference (I forgot to include the link -- mea culpa).
A Pap smear[0] is a diagnostic test to detect (pre)cancerous cells on one's cervix[1].
[0] https://en.wikipedia.org/wiki/Pap_test
[1] https://en.wikipedia.org/wiki/Cervix
It comes from the fact that lots of the charges they bill (both of the patient share billed to insured patients and of all costs billed to uninsured patients) end up written down or off because they are uncollectable.
The margin built into the prices bulled is not the actual margin the hospital ends up with.
Medicare has been playing a shell game with reimbursements for decades. They cut the base rate for an office visit or hospital stay to below the cost of the actual service, but allow for separate charges for various things that make up the difference so that doctors don't just stop accepting Medicare in mass. That's why you get billed $37 dollars for aspirin, $15 for drug administration, $50 for IV placement, $10/bag for saline drips, $75 for vitals checks, etc. That way the hospital can make up the money lost from the actual visit charge, this also requires more administration overhead, to both keep track of all the additional charges, and to make changes as the rules change.
You understand that hospitals have more costs than just aspirin, right? Depreciation, amortization, utilities, rent, taxes, maintenance, salaries, etc...
Its all coming out of revenue.
Ever hear of loss leaders? Some parts of a typical hospital make money while others lose it hand over fist. The overall margin isn’t across the board, it’s after everything hopefully balances out.
ER’s for example are money pits, but society really needs them.
https://www.definitivehc.com/resources/healthcare-insights/h...
Exactly this. They need to offset the areas where they lose money. And we have federal laws (justifiably so, IMHO) that ERs must provide stabilizing services regardless of insurance and ability to pay.
And while that law is obviously humane and reasonable, my only gripe is that the rest of our system is so backwards that it increasingly forces people to leverage that. There was a story about a woman who needed dialysis but had no insurance. So basically, she had to wait every couple weeks until she started breaking down, go to the ER, get emergency dialysis, get sent home. Rinse, repeat.
I don't blame her but really just the system that made this her best possible option.
https://kdvr.com/news/local/every-week-this-woman-nearly-die...
There was a story about a woman who needed dialysis but had no insurance.
And who was in the country illegally so she couldn't use Medicare or Medicaid. Still a terrible situation, but not representative of the typical American.
But wouldn't nationalized healthcare help with this? The amount of uninsured individuals would drop drastically.
Nationalized healthcare might help with certain things but it can't create capacity out of thin air. Just because the government theoretically covers everyone doesn't mean that services are actually available when needed. In general the countries with the highest levels of nationalization also have the most problems with shortages. When everything comes straight out of the government budget there's always a political tendency to cut costs by reducing provider payrolls, imposing waiting lists for expensive treatments, or refusing to cover certain treatments at all.
> In general the countries with the highest levels of nationalization also have the most problems with shortages.
Do you have any citations for this? I've heard this rhetoric before, but every time I look into it, searching around for studies on google scholar or the web, I can only find studies and reports indicating that health outcomes trend better in countries with more universal coverage. There are think pieces with anecdata of course, but no actual peer reviewed publications I can find.
One way to begin is look for studies on wait times or procedures of a given type per capita.
Like this one: https://jamanetwork.com/journals/jamasurgery/article-abstrac...
> Among patients undergoing cancer surgery, waiting times to initiation of first-course therapy have steadily increased since 2012, particularly at high-volume academic centers and among patients referred for definitive care. With continued consolidation and expansion of health systems, system-level strategies are urgently needed to monitor and mitigate delays in the delivery of surgical care for cancer.
> Delays were more pronounced at academic compared with community hospitals and among patients referred for care. Predictors of longer waiting time included Medicaid insurance (5 of 6 cancers), lowest-quartile income (6 of 6 cancers), Black race (5 of 6 cancers), increased travel distance (4 of 6 cancers), care in the West region (6 of 6 cancers), and treatment at academic institutions (6 of 6 cancers). Receipt of robotic operations was linked with longer waiting times for nonbreast malignancies (5 of 5 cancers).
How does that compare to other countries? Also seems like government insurance was the worst risk factor.
Why would I want to trade my top tier private insurance for that?
Those studies have all, to my knowledge of them, shown no system mode that is better or worse than any other. The USA for many categories of care has often in those studies had worse wait times compared to nations with fully nationalized healthcare.
Heck when I went to college in Ohio's capital, the recommendation on how to get psychiatry or therapy as a new patient was to call the suicide helpline and claim that you were suicidal. That would get you a new patient appointment within 72 hours versus over 3 months on average for patients looking to get into care through normal channels.
Interesting you weren't able to find any examples. Here are some quick ones for CT scans in US Canada and UK.
The US maintains the highest hardware capacity of the three nations with roughly 43 scanners per million people and performs around 245 to 290 scans per 1,000 residents per year. non-emergency wait times are 1 to 7 days. The UK has 10 scanners per million people and ~100 scans per 1,000 residents, using centralized triage to keep non-emergency wait times between 1 and 6 weeks for NHS targets. Canada does 160 scans per 1,000 residents and 14 to 15 scanners per million, with wait times of 5 to 9 weeks.
When you consider that the US population is not fully covered by insurance, the number of scans is even higher
Okay, but that again seems to just be a few selected data points, rather than an actual trend, backed by peer reviewed study? Japan, Australia, and Iceland all have CT units per capita that exceed the US (~ 112, 70, and 50 /MM respectively), and all of three have universal care, two are full on single payer.
That's true, but obscuring the true costs through hidden cross-subsidies isn't helping anyone in the long run. We would probably be better off with state and local governments setting requirements for ER capacity in each region, and then running an annual reverse auction system where hospitals can bid on maintaining that capacity in exchange for cash payments.
This is because a whole swath of people are getting the aspirin for free (uninsured) so they need to gouge the payers for the aspirin.
Also, then, of course, we need to cover the United Healthcare guy's salary, which decreases margins.
Hospitals, now that private equity is involved, do this weird cost shifting accounting BS with shell companies etc, as such their books aren’t straight forward and the 2-5% thing is likely greatly underestimated given the amount of understaffing PE has driven in that space and how much gouging there is from PBM etc.
Hand-waving numerous details, but - That $37 isn't the price in the hospital's gift shop. It's n=1 pricing, hand delivered to your bedside by a nurse with a whole hierarchy of higher-level medical & admin staff behind her, and documented out the wazoo. Aspirin could be free & unlimited at the hospital pharmacy's receiving dock, and it wouldn't affect the @bedside price.
... and in other countries, medical administrative costs are far lower because they don't need to build entire divisions around correctly coding the same condition and procedure 11 different times before insurance approves it, because the insurance is universal and self-consistent by comparison to our private fractured mess.
It ain't just the insurance crap that drives up medical overhead costs in the US. Our health care system is treated as a money farm by plenty of other industries and interests.
All of which are willing to fight tooth and nail to preserve "their" fat slices of the obscenely bloated pie.
And on top of that you've got synergies like the horrific cost of housing in the US - which drives up the cost of every employee, no matter how essential they might be to providing actual medical care.
Even if universal health coverage lost money it would be better than the current system that is based on a "causing cancer is better for the GDP than curing it" mentality.
The US has top-tier cancer survival-after-diagnosis outcomes. We spend too much to get there, and other countries in our cohort would "argue" that we get those numbers in part by diagnosing earlier and that our outcomes are broadly similar, but if you're going into these debates with "the US private health care system causes cancer deaths", that's a pretty rebuttable argument.
That overlooks the 27 million uninsured Americans. Uninsured cancer patients are more likely to be diagnosed at a late stage, less likely to receive treatment, and have substantially higher mortality than insured patients.[1] They also have worse survival, even after accounting for cancer stage.[2] So excellent U.S. outcomes among those who access care don't rule out preventable deaths caused by barriers to accessing it.
[1] https://pubmed.ncbi.nlm.nih.gov/25092774/ [2] https://doi.org/10.3322/caac.21732
No, uninsured Americans are captured in those numbers.
entirely beside the point.
It is fine to look only at patients with insurance/ access to refute the claim that US doctors dont cure cancer so they can make more money.
This is a cherry picked statistic. We still have lower life expectancy, high infant mortality rates, and one of the highest rate of preventable and treatable deaths among developed countries
The unfortunate truth is that if you break life expectancy out by ethnicity, it tells a different story. Generally Asians, Latinos, and Whites are above while Blacks and Native Americans are below and pull down the average: https://pmc.ncbi.nlm.nih.gov/articles/PMC9256789/#S12 If you break the groups out and individually compare against countries of similiar ethnicity, the US is often ahead.
For infant mortality specifically, in the US we count every baby with a sign of life, regardless of the age. In many developed countries, they simply don't count too premature (under 22 weeks or 500 grams, iirc) and therefore don't consider them in the metrics. It makes for an apples to oranges comparison.
You're right on "preventable and treatable deaths" with heart disease and diabetes being the biggest contributors. The question for that comes down to "is that a result of systemic issues or individual choices?" because we can do lots about one of those.
> they simply don't count too premature (under 22 weeks or 500 grams, iirc) and therefore don't consider them in the metrics
Nope, that's not the reason.
> The U.S. infant mortality rate was still higher than for most Europeancountries when births at less than 22 weeks of gestation were excluded.
https://www.cdc.gov/nchs/data/databriefs/db23.pdf
Statistical hustling is common, but the most usual form is that the US excludes uninsured individuals to make itself look like it belongs in the developed country cluster.
No, the uninsured are included in both infant mortality and, even more obviously, death statistics.
Um... really?
When I Googled life expectancy by ethnic group in the United States, it gave me the following numbers:
Asian: 85.2 years
Hispanic: 81.3 years
White: 78.4 years
Black: 74.0 years
American Indian and Alaska Native (AIAN): 70.1 years
Along with a source. (https://www.kff.org/racial-equity-and-health-policy/racial-d...) (Note: Based on the source, these numbers are for 2023.)
Overall, life expectancy in the United States in the last few years is around 79ish per the sources listed here in this Wiki article: (https://en.wikipedia.org/wiki/List_of_countries_by_life_expe...)
This means that the average life expectancy of white Americans is actually slightly below the average life expectancy of all Americans.
Incidentally, while a lot of developed countries do not track life expectancy by ethnicity, the UK seems to have a few some studies. (https://www.ons.gov.uk/peoplepopulationandcommunity/birthsde...) Though the data is very old (2011-2014), and the data is broken out by sex with no summaries, whites actually fare the worst. Black African females came out at the top, with a life expectancy of 88.9. I asked Google's search what the comparable black American female life expectancy was in 2011, and it gave me 78.2, along with a link. (https://www.cdc.gov/mmwr/preview/mmwrhtml/mm6244a8.htm)
Our overall ranking generally is below all "developed countries" that I can see, which range from Germany (~80) to the ~84 of "developed" countries like Japan, Switzerland, and Sweden (along with a few countries still classified as "developing" like Kuwait). It's not completely terrible, but considering how much the United States spends on health care, that's quite a poor value.
There are multiple identified factors for explaining life expectancy, but access to healthcare is identified as a very significant factor. In a system, like America, that is very expensive (likely due to highly inefficient, over-bureaucratic, overly complex, and over-quasi-monopolized systems) and without universal coverage, it follows that those who are poorer may not have the same access to healthcare and may succumb to entirely curable illnesses. So I don't think it's a coincidence that the racial breakdown above almost matches the median ethnic household income (the median white American household earns more than the median Hispanic household, but elsewise it aligns).
On infant mortality, at least one link I found -- https://www.healthsystemtracker.org/chart-collection/infant-... -- which adjusted data due to the reported difference, and still found significantly higher infant mortality in the United States. Though the data is a little old (2016).
Cite the source for "access to healthcare" as a "very significant factor" in US life expectancy? We have pretty good numbers on the mortality cause differences between the US and other countries and they don't align with this claim (unless you're doing some bank-shot argument about how access to health care makes our car crashes more lethal or something).
You'd want to be looking for a scholarly source that puts numbers on this. It's been done! As I noted elsewhere on the thread, the study we're commenting on is based on 1990s numbers about differing mortality of the uninsured. But here you're looking breakdowns of all mortality causes and tying them to insurance, a trickier proposition. Will be interested in whatever you come up with.
https://www.ncbi.nlm.nih.gov/books/NBK62376/
This article repeatedly makes the point I made; I assume you cited it to back me up?
Our life expectancy and infant mortality rates are downstream of driving a lot of miles and unhealthy behaviors (mostly diet and exercise) of American mothers (i.e., obesity). Those are things it would be good to improve, but it isn't the fault of the ER or L&D departments or their billing models that people get in car accidents or mothers are obese.
Life expectancy differences between the US and other countries are dominated by just a few factors:
* Car accidents, because we drive much more and are much more spread out than other countries.
* Drug overdoses, though other countries are starting to catch up to us there.
* Homicide, because of our gun policy and the universality of firearms (which also bears on our suicide stats).
* CVD.
That last item sounds like an indictment of the US health care system, but it isn't. If you break CVD out by state, northeastern states like Massachusetts have outcomes resembling the Nordics, and Mississippi has outcomes like a developing country. But the structure of the health care system is the same in both places.
> Car accidents, because we drive much more and are much more spread out than other countries.
Somewhat off-topic, but I think this explanation of the car accidents misses the mark. It might be part of the cause, but car accident deaths were dropping in the US and Europe until around 2010 when they kept dropping in Europe, but flatlined and then rose back up in the US.
I don't think we were driving less and less and are now driving more and more. We changed policies. (I think it's mostly bigger cars, plus less focus on traffic infra/systems/rules that prevent fatalities.)
Sure, I'd buy any hypotheses like this. We just have way more traffic fatalities; I don't have a strong take on the underlying cause.
I'm sure there are qualifiers and rationalizations when comparing cancer survival statistics as well. As someone already pointed out, uninsured Americans aren't necessarily included. They cited sources, you rebutted without sources.
I believe a single payer system is a matter of when not if. It works just fine in other countries. In our country, the healthcare industry has evolved into extracting as many dollars as it can from the economy. This is because when someone is sick and needs treatment, healthcare providers hold all of the cards.
Uninsured Americans are in fact universally included in death statistics and in cancer survival outcomes; we have top-tier cancer outcomes.
Europe has several universal coverage systems without single payer. The original sin of the US system isn't private insurance, it's employment-based coverage; that's the thing nobody else has.
Again, you cite zero sources. Survival rates for lung cancer in the USA, the most common cancer in the world, are much lower than Japan and South Korea. South Korea is single payer and Japan has strict government regulation of healthcare costs.
The second most common cancer is Breast Cancer. The USA is "top-tier" but so is pretty much every other Western Country. Australia, also famously single-payer is a mere 0.4% behind the USA.
This is the only source of modern survival statistics by country:
https://pmc.ncbi.nlm.nih.gov/articles/PMC5879496/
Compiled into an easier to read format:
https://worldpopulationreview.com/country-rankings/cancer-su...
Take note of two things: First, some states weren't even included in the study and second, there is no mention of insurance. The statistics are only tracking people who were diagnosed with cancer. It's reasonable to assume that some people who had cancer symptoms did not seek treatment because they didn't have insurance and died without being diagnosed.
Start with CONCORD-3.
I'm not saying that the US is better than every other country. I explicitly said somewhere else on this thread that there's a common critique of our outcomes that we just do detection better, and that our life expectancy outcomes aren't materially better.
What I am saying is that it's difficult to make a case that US life expectancy is materially altered by our health insurance system. You won't be able to use cancer to make that case, because the US has in fact quite good cancer outcomes. That's it: that's the whole argument.
Again, though: this repeated claim that "the uninsured aren't included in survival statistics" --- I don't know where that's coming from. It's not true.
I literally posted a link to the CONCORD-3 paper and made arguments using it and you rebutted it with "start with CONCORD-3".
I'll restate my argument so it's clear: CONCORD-3 does not mention insurance status anywhere in the paper. It does state that the statistics require diagnosis. It's reasonable to assume that if you can't afford healthcare, you're less likely to seek treatment or diagnosis.
You understand that CONCORD-3 is about tracking people who enter the healthcare system. Isn't it reasonable to assume that if healthcare is free or very affordable, there would be higher participation? And on the flipside, if it's outrageously expensive, there would be lower participation?
I don’t see a source being cited other then the assumed llm.
Life expectancy tells you very little about healthcare without controlling for confoudners
I think the parent comment was a reference to the famous “Economists must learn to subtract” commercial that AdBusters ran.
Some good news is that ISH diagnostics manufacturing can go through 510(k) instead of PMA on Sep 16 onward, which should make those diagnostics 10x cheaper and twice as fast to get through.
>The US has top-tier cancer survival-after-diagnosis outcomes.
"Airplanes that get shot in the wing always survive" logic. People _do not get diagnosed and die_ because the US healthcare system is inaccessible to close to 50% of your population. A diagnosis easily reaches a few hundred dollars for the best cases (and several thousand if you need multiple tests/blood tests/operations like colonoscopies). And when you do get diagnosed, then you've just entered a world of having to pay hundreds of thousands of dollars.
>we get those numbers in part by diagnosing earlier and that our outcomes are broadly similar
lmao no you simply don't diagnose people and they just "die of natural conditions" early because they couldn't afford the treatment even if they were diagnosed.
> US healthcare system is inaccessible to close to 50% of your population
So you have no idea what you're talking about. What is the point of making comments like this that are both verifiably false with about 2 seconds of online research and just sound incorrect based on anecdotal data to anyone living in the US.
There is a ton of ideology baked into naive-level analysis of this stuff.
I am constantly told how much less Europeans pay for better health outcomes and all I can think about was the obesity crisis I grew up around in Texas.
Socializing healthcare isn’t going to get an huge portion of the population out of their cars and get them walking as a primary or secondary mode of transportation. Not when it’s 100° and the grocery store is five miles away.
Americans, in no small part, have worse health outcomes because we have dramatically worse lifestyles. I support German-style universal healthcare, but I’m not going to pretend it will suddenly give us German health outcomes.
>Socializing healthcare isn’t going to get an huge portion of the population out of their cars and get them walking as a primary or secondary mode of transportation
You would think so but once healthcare cost becomes a government policy issue people complain about its spending and they are forced to try and bring that cost down. One of the ways they did that in my country was to promote biking to work and build bike ways.
Did I mention the 100° summers or the fact that people usually live 20+ miles from where they work?
I agree with you generally on the incentives, but it took us 70 years to paint ourselves into this corner, and we’re not going to get out of it because of a third-order incentive.
Thats not every where nor is it everyone. Im not saying it will specifically be bikes but the government will be incentivized to have a healthier population. It could be higher tax on cigs, or sugars, it could be more annual leave it could be any number of wellbeing policies.
But it is many places. You can't just magically hand-wave away the fact that the demographics between these places are wildly different, and that changes the burdens on the systems in place.
From a political philosophy standpoint, this is exactly why many people oppose a single-payer healthcare system. When the government is paying for everything it creates a financial incentive for an intrusive nanny state. We can argue about the positives and negatives, and maybe we would be healthier overall, but many Americans simply don't want the government telling them what to do.
https://press.uchicago.edu/ucp/books/book/chicago/R/bo413854...
We are getting the "intrusive nanny state" regardless of financial incentives of a given healthcare system. That ship has sailed. It's a goal, not a side effect.
Europeans do pay much less (though: for roughly the same outcomes --- probably the same outcomes if you control for wild SES variance across the US).
Right… my exact point is that it’s not a like-for-like comparison.
Take Europeans, put them in Kansas. Fund their healthcare as though they were in Europe, and watch their health outcomes take a nosedive because the environment here is non-trivially worse for you health.
Unless I’m wildly misunderstanding these studies, it makes sense that we would need to spend more for the same outcomes because we are starting from a more unhealthy position, so the same results require more resources.
We need to at least be controlling for the 10%+ differences in obesity rates, and the enormous differences in UV index. That’s before even considering weekly exercise minimums that most European get when just walking to a bar.
Then compare, say, Massachusetts to high functioning north Europe systems. You will shrink the lifestyle and climate factors down to a pretty minuscule difference, but you will still find that the spending is dramatically higher.
You're not wrong at all that the US has some systematic issues that place additional strain on the healthcare system, but it's a "yes and" situation here. Even accounting for those, we spend far, far too much because our system is extractive.
You could maybe compare the Boston metro. It should resemble a European city with satellite villages connected by trains.
I would be curious as to the costs/benefits there.
I don't think there's a whole lot to understand in this study; it's pretty wildly extrapolated and its savings numbers come from spherical-cow projections of what single-payer would actually do (somehow, it would drastically cut pay to doctors without chasing them all out of the field).
I think the important bit in all these discussions is that "universal health care" and "single payer" aren't synonyms. Single payer is one way to do universal, and most universal systems don't do it. But this article conflates the two.
One wonders what the lowered stress vis a vis healthcare concerns that a reformed system would take care of would do for our ability, as an electorate, to make better decisions in other arenas.
> Hospitals have an operating margin of 2-5%
I'm curious where you got this figure, because it doesn't track with my own experience.
I used to work for a place that worked closely with hospital clients (and prospective clients) to resolve billing issues with a particular EMR system, and we regularly discovered that a given hospital was losing hundreds of thousands to millions of dollars weekly due to missing charges. The problem was, so much money was sloshing around that the hospitals were virtually always unaware of the missing charges, and many CIOs were more interested in saving face by shutting down further discussion than in walking through the collected data, how to fix the charging issues, and even claw back some of the lost charges (which you can generally do up to several months after the fact).
Not the parent, but here's one source: https://www.vizient.com/insights/reports/national-hospital-f...
There are many others as well.
FWIW, your experience doesn't seem contradictory to the operating margin claims.
Your experience seems to be that hospitals are run very inefficiently, implying that if they were run efficiently that their operating margins would be much higher than 2-5%. That may be the case, but that still means the Yale paper's claims don't make sense (unless they also propose some mechanism by which to suddenly force all hospitals to start operating efficiently).
But I'm also skeptical of your claim that hospitals are leaving a huge amount of operating margin on the table. IME, very little can be explained by "everyone is stupid." Would I be surprised if a given hospital was run very inefficiently or if a given hospital had a particular poor CIO or administrator? Not in the slightest. Would I be surprised if ALL hospitals were run by idiots who were leaving 10% operating margin on the table? Yes, I would be.
To be fair, my experience has been exclusively with hospitals running a specific EMR with a relatively new-ish (at the time) and difficult to configure billing system. Still, we were expecting to see shortfalls nearly an order of magnitude smaller than what we found.
That the hospitals didn't seem to notice the problem, and upon being told of it, often pushed back against moving to fix the problem, is what gave the impression that they must be running on much larger margins than advertised.
> Hospitals have an operating margin of 2-5%
I don't spend any healthcare money at the hospital. It's all all providers office, private clinic, etc.
It costs $300 for my primary care doctor to see me for about 7 minutes. An assistant takes my blood pressure, he asks me a few questions about my habits and diet, and then I come back next year.
If I actually need any services, I go to much more expensive specialist, or urgent care facility. A visit there is about $100 and then a couple bucks for whatever prescription they give me.
"Healthcare reform is hard."
People tackle hard things for nothing, never mind billions in savings.
Yes, but there's a difference between finding out whether P=NP and some of the brightest geniuses in the country actively opposing you.
Hospitals have an operating margin of 2-5%
How does this work when many/most US hospitals operate as non-profits? Quick search shows the for-profits have operating margins nearly triple your figures. And the non-profits are beholden to the community to provide some level of "freebies" to maintain their status, right? IE, they're aren't really all operating on razor thin margins.
I don't think a price transparency reform would be hard. Other than in terms of political will. We did go part of the way there a few years ago, though it's not common knowledge yet.
There’s essentially zero doubt that universal healthcare would save over $1T per year.
How do we know? The experiment has been done multiple times, all over the world. In the worst case (Sweden), healthcare is a bit short of $5K per capita per year, or around $1.7T. We’ve actually got a nice margin to achieve $1T, even if we remain the worst.
I agree health care reform is hard, though. We have a clear roadmap on how it can work a lot better. But what’s the political path forward?
As someone who’s actually fiscally conservative, single-payer universal healthcare is an absolute no-brainer, but, ironically, the people who call themselves fiscal conservatives will fight it to the death (well, not that ironic — at this point we all understand that, in politics, what groups purport to believe and what they actually believe have little to do with each other).
If universal healthcare just made access simpler with less paperwork it would be a major improvement.
The flipside to fraudulent billing is that people that need care are denied. The fraudulent billing was perpetrated by the insurer.
No, fraudulent billing is the natural predator of insurance companies. You have this backwards.
I thought that is what I’m saying.
Or maybe I'm reading it backwards! Has been known to happen. :)
Yes, these cost savings would be a deflationary event. Most layoffs will come from insurance companies and administration necessary to satisfy them in hospitals.
One reason hospitals have such low margins is many people simply can't pay. If you have a payment guarantee like a medicare for all system, this will increase the stability of hospitals. In fact likely bring back some hospitals in places that didn't make sense like rural areas, which have been struggling via hospital closures.
If you are worried a low cost system will reduce doctors and hospitals per capita you don't need to, as countries that have universal healthcare often have more per capita.
https://worldpopulationreview.com/country-rankings/doctors-p...
> Take "Medicare-level payments to providers". Hospitals have an operating margin of 2-5%. Medicare pays 50% less than private insurance. So doing this would require either layoffs, cutting salaries for doctors/nurses/etc, or both. This may well be the right decision for society as a whole--that's a big part of the debate here--but there's no free lunch.
I mean, admin costs at hospitals are ~25%, around half of that is directly linked to billing. Administrative costs in the US (because of course you have the same costs on the other side in the insurance side) are around 30% of cost in general, which is pretty insane.
The lack of regulation around pricing transparency and generally the lack of one-price-per-code (which the government uses to its "advantage" to get lower medicaid/medicare rates for sure) is what has caused this stupid arms race on both sides.
Billing and insurance ("BIR") is reported at around 8.5% of revenue --- admin isn't just BIR, as you note. But replacing private insurance with Medicare doesn't drive BIR to zero; Medicare is also a claims-based system. Estimates are that you'd cut BIR by somewhere around 30-40% (of 8.5%).
Most of the savings in these kinds of reports simply comes from paying doctors less (or delivering fewer procedures, which is also a problem we have.)
Physician/nurse salary is not the major driver of the cost of healthcare. It's around 12-15% spending, depending on the methodology. Even if you force doctors to work for free, it won't meaningfully affect the cost.
It's really the overhead costs that are so Byzantine that they can't be quantified properly. Hospitals have teams of coders, insurance companies have teams of counter-coders, physicians have to waste their time on calls with insurance companies, etc.
"Medicare for all" would alleviate a _lot_ of this. It already works for the elder population, and pretty much every senior has health conditions. So extending it for everybody would result in savings. This is a no-brainer from a purely fiscal point of view.
Another way to fix the mess is to lean on the free market side: prohibit employer-sponsored insurance. Completely. All the health insurance plans must be sold on the open market to everyone.
https://nationalhealthspending.org/
BIR is 8.5% of provider spending, once you add the multiple cells up that constitute providers.
I don't think your argument is going to survive contact with the numbers here.
I just don't believe that it's correct. The Kraken hides here: Hospital Expenditures - 31.2%
I have a bit of personal experience here. I had a partner working as an endocrinologist, one of the higher-compensated medical professions. They were spending at least 1 _hour_ every day on calls with the insurance companies for prior authorization instead of seeing patients.
Some things are also weirdly broken down:
> Net Cost of Health Insurance Expenditures - 6.2% > Administration and Net Cost of Health Insurance - 7.4%
Why are they split?
I also suspect that they included some admin personnel cost in the physician/nurse salary. For my partner, their office employed a person just to deal with insurance. There is no easy way to break down these costs for small practices.
It's the CME NHE. It's literally the same data this study is based on. It's what every study of health care spending in the US is based on.
And they're not split: one row is an aggregate of subsequent rows, as you can see by simply adding them up.
This is just a colorized table view of a spreadsheet Medicare publishes every year.
What do you recommend?
As the article said - it has not been peer reviewed
>"fewer avoidable emergency department visits and hospitalizations" assumes greater insurance coverage leads to greater access to primary care.
This is a hoot. There is an entire cohort of people who use the emergency room as their non-urgent clinic. This is not a small demographic, it must be at minimum tens of millions of people, if not going above the nine digit mark. They do this because their parents did it, and it's the only thing they know, and their parents did it because it's the only thing they knew, and they did it because their parents did the same. It is a culture that no amount of education and public service announcements will ever change.
Heaping one perverse incentive after another on top of this mess won't change it either, but will almost certainly make things worse for everyone.
>For "less fraudulent billing," a lot of people in the industry believe that Medicare has a large amount of undetected fraud.
My grandpa when he was still alive would have one new fraud story with every visit to the doctor, and he wasn't in great shape towards the end, so this was too many to count, every year for the last few. Diabetic, they ordered him compression socks at one point... a dozen show up instead of the two pair that was ordered. He'd come home and wait for a bill in the mail, and a few days later would see itemization for tests and procedures he never underwent. Over and over and over. He was sharp, argumentative, and as far as I could tell, less confused than most his own age. His experience, I think, wasn't atypical.
Why is the United States the only country on Earth where free healthcare doesn't work?
Good old American Exceptionalism.
People wouldn't be externalities if healthcare costs money. Next thing you know you would have to pay attention to the environment or god forbid the food. It would eat away the budget for overthrowing countries and bombing children. Watch them elect a democrat to do the bombing next round and a new republican after that. It sounds like a joke but it isn't funny.
The US' healthcare model is not unique, and almost no countries have zero-cost-to-consumer healthcare systems (and none of them are free -- they're just paid by taxpayers instead of consumers). "Free" healthcare is the exception rather than some kind of international norm you incorrectly make it out to be.
The first step to reforming US healthcare is actually understanding it, and understanding some international designs. Lying about it doesn't help.
Not a single soul on earth thinks single payer healthcare is free. 8 billion people, not one of them thinks it.
They mean “free to the consumer at time of service”, which it is. Nobody is lying, everyone agrees, it’s just you who doesn’t understand.
The vast majority of those 8 billion people do not have single payer healthcare. A lot of Americans get confused on this, because we're the only country in the Anglosphere that doesn't do single payer, but it's far from universal globally.
I didn’t say they did. I said they understand that free healthcare is not literally free, but comes from taxes. Do not underestimate them, they understand very basic things.
> Not a single soul on earth thinks single payer healthcare is free. 8 billion people, not one of them thinks it.
You are incredibly optimistic about a large swath of the population's understanding, unfortunately.
> Nobody is lying
There are plenty of people in this discussion making statements of fact that are false. Call it whatever you want.
No, they’re not false, you’re just misunderstanding. When people say “free” healthcare they do not literally mean all healthcare is zero dollars. They don’t mean nurses earn a wage of 0 dollars an hour.
No, they mean free at time of service, which they are.
Don’t believe me? Great, then ask them, without doing word gymnastics to try to trick them.
Should medical equipment cost 0 dollars to produce? Should doctors not earn any salary or wage? They will say no, 100% of the time.
> No, they mean free at time of service, which they are.
I don't think that's true France, Norway, New Zealand, or Switzerland. (And that's just developed nations. The GP's claim was every country other than the US.)
>Hospitals have an operating margin of 2-5%.
I don't see you complaining that the US military has a low operating margin, so maybe we can just agree that some things are just normal expenses for a population. Which therefore leads to step 2: nationalize every single hospital.
>cutting salaries for doctors/nurses/etc
Considering that over 50% of the money that goes into healthcare is just siphoned off by middlemen, no, just getting rid of these means that your health workers do not have a worse salary.
>But, we're actually in a primary care shortage.
Because people do not even go see their GP since there's a chance it leads to life ruining expenses.
> fewer residents are going into family medicine.
Because they're going where money is. Remove that from the equation, and all you have is a public service with public servants.
>a lot of people in the industry believe that Medicare has a large amount of undetected fraud.
Aside from the fact that "people in the industry" have a financial interest in making you believe Medicare is a net negative, there's a great thing that comes from making healthcare a public service: there's no longer any fraud. And those "fraudulent" expenses you used to have that were costing you millions anyways have just had their costs cut in half.
>Healthcare reform is hard.
It's the easiest thing in the world when you have the amount of money the US does. Healthcare reform isn't a financial or infrastructure problem, it's a political one. Cuba has a working healthcare system despite being under US embargo. Botswana has a working healthcare system. Rwanda has a working healthcare system. Azerbaijan, Sri Lanka, Turkey, Serbia, and the list goes on.
Once you grow the balls to nationalize everything, even a first year economy student could make a plan that works.
Every country with nationalized healthcare systems has lower wages for clinicians. So the notion that this wouldn't lower salaries is just ludicrous. That might be an acceptable trade-off but let's not pretend it doesn't exist.
In practice what we would see under a single-payer system is that many doctors would opt out and shift to a cash payment model. So the shortage of doctors would get even worse for patients who can't afford to pay out of pocket.
Those countries also just have lower salaries for all sectors. The USA is just exceptional in salaries for many professionals. Just look at software engineers pay in Europe Vs US....
> Hospitals have an operating margin of 2-5%
There's no way a Chairman/CEO would ever reduce the operating margin by just giving themselves and their buddies a raise is there?
Are you saying that most hospitals have 50% profit margins, of which 90% are paid to the chairman leaving only a thin margin? That seems difficult to believe.
They may have 4.2% margins knocked down to 4% by exec comp but I don't see that how that fact would change OPs point.
I'm saying if you think that administrative expenses (among others) can't be inflated for a profitable company, I would like to run your company and demonstrate what executive compensation can include:
- Base salary
- Bonuses
- Stock options
- Perquisites (perks) like company cars or private jet usage
Just to be clear - I like my private jet(s) on call in case I want to get away for the weekend. TYSM
Yeah, if the hospital is part of an HMO, it wouldn't even be legal. The ACA sets a floor on medical loss ratio.
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You can quibble with the specific projected savings, or the projected lives saved. But it kinda doesn't matter? If we can have net savings of half what this paper said, or a quarter, and still have more lives saved, that would still be a strong argument to do it.
Somewhere there's a pareto-optimal frontier where one can't possibly save more lives without spending more, or spend less without more people having negative health outcomes ... and the question is whether universal health coverage would be a step towards that frontier (b/c we're all pretty sure we're far from the frontier today). And the fact that plenty of countries have both lower costs and better outcomes through such a system is highly suggestive that it is a more efficient policy regime.
Maybe the big quibble is whether the American penchant for creating corporate givewaways to powerful organizations that lobby politicians would create an especially toxic public-private-partnership monopoly in which the biggest existing private healthcare networks are granted regional monopolies and set crazy prices (or some other dystopian warping of an initially reasonable idea) so costs actually balloon. I do think that would be a risk and so we need to be careful about the specifics of how we implement this.
Yes, I consider big numbers like this to be red flags.
The GDP of the US is $32T. Saving $1T will essentially make 3% of the US economy vanish. You don't vanish 3% of an economy without wide ranging repercussion, it would be a crisis similar in scale to that of 2008.
With such numbers we are not "saving money", these are about rebuilding an entire economy, a painful process. So either the effect will be much smaller than that, or there will be riots.
This is broken window fallacy. The $1T not wasted on healthcare inefficiencies would be spent/invested on other things, creating jobs there. Yes, there would be churn because a good number of people involved in the bureaucracy of private health insurance would lose their job and possibly their career. But these things get smoothed out. Social supports (should) exist to dampen the effects of such churn and keep the economy agile.
At least the laid-off workers would have healthcare.
Only the American mind can comprehend leading to the deaths of tens of thousands of your own people for the sake of 3% of your economy. As long as the line goes up.
If we're taking the $1T figure seriously, let's take the other figure seriously too. Let's slash it to be more conservative while we're at it and say it would only save 90k lives. Do you think 3% of your economy is worth sacrificing to prevent the equivalent of 30 9/11s? And that's before considering that other people here already explained how these 3% are offset by other gains - if not completely then still substantially.
The US spends more than 16% of GDP on health. The UK around 11%.
Shrinking US health expenditure by 3% of GDP while roughly maintaining health outcomes is eminently, obviously doable.
Sure, it's possible in principle. But the US also has a much higher GDP per capita than the UK. The UK is a (relatively) poor country and is increasingly being left behind.
Posts like this truly boggle the mind...
The US is in a class of its own when it comes to health spending. The second highest OECD country (per GDP) is Germany which is 5 points lower than the US (and BTW these figures include public and private spending).
You are clutching at straws to discount clear evidence that shows just how ideologically driven the US System status quo is...
"'No Way to Prevent This,' Says Only Nation Where This Regularly Happens"
https://www.oecd.org/en/publications/health-at-a-glance-2025...
Thats why they used percentage of GDP instead of raw
> these are about rebuilding an entire economy, a painful process.
"Sorry kids, can't turn off the Orphan Grinder 9000, there's a whole supply chain behind it that would have to restructure."
The money doesn't vanish. It stays in the hands of people. People who would spend it on other things, feeding it into the wider economy instead of the pockets of a small number of corporations. There's zero reason to think this would result in anyone rioting except maybe insurance company CEOs.
Well it wouldn't "vanish". The $1T savings (if produced) that were once spent on healthcare would instead be spent on anything else.
Yes, it will, but think about the supply side. If people spend $1T less on health, health professionals will earn $1T less, it means, as GP said, layoffs, cutting salaries, etc... Not just doctors and nurses but also drug researchers, medical equipment manufacturers, etc...
These people will now have to do the "something else" that will be spent on, let's say gardening. But you don't turn a nurse into a gardener just like that, that's the kind of "wide ranging repercussions" I mentioned, and the painful transition period where nurses become gardeners. "Nurse to gardener" is just a random example, it can be "drug researcher to petrochemist", and some transitions we may be happy to see, like "health insurance lawyer to burger flipper", but overall, many good people will suffer in transition, many powerful people too, which make such transition unlikely.
I don't understand why we always pay attention to only the jobs side of decisions like this. Why is the main concern always preserving existing jobs? The extreme version of that is obviously silly. The savings is real and lowers prices, increasing social mobility and spending elsewhere. How many people are locked out of moving for a job that matches them better, or taking some training for a better job and so on just because of medical debt leaving them no flexibility? And if we could save that trillion by eliminating jobs, doesn't that kind of imply those jobs (or at least the system requiring them) were terrible allocation of human capital?
I am not saying it is a bad thing. What I am saying is that when we are talking about trillions we are talking big changes, and big change doesn't come without suffering, and people don't like suffering.
Usually big change doesn't happen without a catastrophic event, like a war, a coup, or an economic crisis, or maybe more optimistically, a technical or scientific breakthrough. So when an article mentions trillions without hinting at such an event, to me, it is incomplete, or wrong.
The French revolution would be an extreme example. It is a win for freedom and democracy, but the period following it is called "the reign of terror", for good reasons.
Americans are already suffering under the broken healthcare system. Overall suffering would decrease as a result.
Yes, but it's a different group of Americans, and the ones who are currently thriving in this broken system will fight tooth and nail to preserve their way of life.
They're killing people, and they're driving others into bankruptcy which is also killing them.
I see. But I think that's kind of the same diffuse vs. visible problem that underlies a lot of impedents to progress. The jobs thing is one example. We focus on one set of workers because we can picture being in their position. We can't internalize and "feel" the diffuse but greater benefit of a more efficient healthcare system, which I'm 100% would be a net positive, just spread out over the whole population.
I don't know the solution, but do you agree that the problem is basically one of individuals not being able to accurately model the tradeoffs in their head?
We're quick to want to automate trucking, manufacturing, even knowledge jobs and say "ooh but the horse shoe maker became the tire installer" but the pointless middleman jobs making everyone's health worse seems to be the line in the sand for job automation.
You can't touch the legions of people who exist to make things more expensive.
This seems a lot like the parable of the broken window but for inefficiency rather than destruction per se.
I mean there's flavors of contributions to gdp. Spending money on make work for people digging holes still counts. I wouldn't mind 1 trilly being freed up for more effective use. I imagine we could get pretty good returns on it just paying it against the debt as a simple idea, effectively a tax cut.