Great post! You briefly touched on the way the existing guild artificially restricts supply, and that's a HUGE deal. (In the 80s the 'experts' were saying there would be a doctor glut and government must step in to protect doctors' salaries)
Certificate of Need laws also need to go. Imagine Burger King needing to get McDonald's permission before opening a new restaurant!
And finally, all the layers between the doctor and patient need to go, as they drive up price and don't actually contribute to healthcare. Going to the doctor should be like going to a fast food place: You walk in, see the price for everything right on the wall, get what you need, and pay for it yourself.
In arriving at their price list, Smith and Lantier did an end run around the whole system. They asked their fellow doctors how much compensation was expected per procedure, factored in necessary expenses like surgical equipment and medical implants, then tacked on a 10% to 15% profit margin. Since their surgery center does not employ the army of administrators that is often required to haggle with insurers and follow up on Medicare reimbursements, their overhead is smaller. The whole operation is 41 people. “Finding an average price doesn’t require complicated math,” Smith says. “It’s arithmetic.” Since posting the price list eight years ago, they’ve adjusted it twice, both times to lower rates.
This is a huge part of the problem in the US--if you ask a hospital or other provider about the cost of a certain procedure, the answer is--What type of insurance do you have? Why should that matter? Why do different people get to pay different prices? Why does it matter where your provider is located? It's all so ridiculously opaque--and if other industries practiced this way, people would go to prison. Yet everyone accepts this nonsense. It bothers me when politicians talk about healthcare costs but they're always referring to insurance costs. Health insurance is the financing mechanism for healthcare. The whole system is a jacked up mess which makes insurance premiums high. This area is like so many others, where lots of politicians gain favor or push agendas by pretending to do something--usually making the problem worse--like the affordable care act. I'm certainly no expert but this illustrates perfectly the havoc that can be achieved through government meddling and regulation versus letting the market do what it does on its own.
I agree with your assessment and solution to the problem, but conventional medicine will never allow it.
A brief perspective on alternative medicine vs conventional medicine economics:
If mediocre, robot, Merck Manual-cookbook, new-Rx-for-every-ailment docs had to compete with what we in natural/alternative medicine offer for cash pay, robo-docs would have empty offices. The main reason for our competitive advantage on a cash-basis level playing field is that cash-paying patients are more motivated to get well, rather than to be subsidized on a health-purgatory treadmill, as many of those with cadillac insurance plans are. Also, we in alternative medicine are trained to look for root cause of pathologies and eliminate that, which deprives robo-doc of yet another permanent customer, but gives us new referrals from happy former patients.
Not only is there a revenue-side problem, there are problems on the cost side.
An acquaintance of mine was prescribed a knee-brace, which was covered by insurance. Well and good, she got her knee brace from an inventory held by the surgeon. She asked if she could have a spare, but was told the insurance wouldn’t cover it. So, she went to Amazon and got the exact same model supplied by the surgeon, and paid around $35. Out of curiosity, she looked to see what the surgeon charged the insurance company. $650. She wrote the insurance company and said (paraphrased of course) “you’re getting done”. The predicable response (paraphrased of course): “Meh”.
Why control cost, which requires staff and computers and all that crap, when its a simple matter to crank up revenue by raising prices?
The illness-prolongation industry is in desperate need of reform in this country. Sadly, probably the only way to fix it is to let it collapse of its own ponderous inefficiency. The gravy train has too many passengers who will fight tooth and fork to keep it keeping on.
Veterinary medicine is a good proxy for what could be done for human medicine. It is more of a free market and people discuss costs with their veterinarian. And costs are a fraction of the price for humans even though the standard of care is actually comparable.
That’s why I had Christian Healthcare Ministries as “insurance.”
It is - like MediShare - close to as catastrophic health insurance as you can get.
The misallocation of resources due to over consumption is appalling.
I know people on Medicare who go for any kind of surgery they’ve ever wanted (non-cosmetic) and are not only sucking dry the Medicare trust fund but are driving up the cost of insurance.
When a middle man gets involved there are usually problems. A system needs to be set up to incentivize people to be healthy. If you knew by not taking medications, treatments etc at the end of the year you could keep that money for a vacation or to purchase something would that be an incentive to stay healthy? And when you did need a treatment you called around looking for the best deal. So that you could Kept what is left of your yearly health care cost.
LASIK surgery along with plastic surgery doesn’t involve a middleman and their cost are opposite of traditional medicine.
We see a naturopathic doctor and pay out of pocket for true health care. But it’s not covered by insurance. Therefore most people can not afford it. It’s not health care it’s disease care. The whole system is corrupt and needs to be destroyed and rebuilt.
We also supplement with vitamins since we feel paying on the front end to prevent problems is cheaper in the long run by not paying on the backend. Again, they aren’t covered by insurance.
The “elites” want us to be sick, fat and unhealthy therefore they have created a financial/medical system to achieve their desire.
So sad that America and the world has gotten to this place. But people are waking up!!!
Back in the 1970s there was a joke in the USSR: Even after the worldwide revolution succeeds (i.e. that "socialism in every country" staple of Marxist ideology) we'll have to keep one capitalist country up and running ... just so we know what things cost!.
Fast forward 50 years and we find that we have no capitalist countries in any real sense and we're screwed.
Same goes for "renewable/green energy" - I heard an industry guy the other day saying (close quote): "the whole industry is driven by government mandates and subsidies... nobody knows what anything actually costs" ... we may soon find out!
I finally had to look up a word! : impecunious. Nice. Ty,gato. Repeated thanks, because you have broken this down and described it in ways I failed to when trying to explain to my 25 year-old son why the medical system. In this country can bankrupt people. Insurance.
You're halfway there on this one, but I think you're too much of a free market guy to see the other half of the problem.
Free markets only work out well when both buyer and seller are free to walk away from a bad deal. This is in large part why prices for cosmetic surgery have bucked the trend. If boob jobs cost too much, people won't get them, and that exerts downward pressure on prices.
For the life-saving/life-prolonging aspect of medicine, that isn't true. Diabetics will willingly pay their entire income and even go into crushing debt to buy insulin at any cost.
Yes, this is a situation where we need an intervention. Essential healthcare should be treated as a public utility. If a city wanted to jack up the price of drinking water by 300% its citizens would never go for it, and the city has a mandate to provide water at an affordable rate so that never happens.
The biggest problem with government intervention/Medicare for All/etc. is, of course, that the government is in the pockets of the medical and pharmaceutical companies who would be happy to negotiate a pork-barrel bonanza for themselves behind closed doors using public funds. So that is not the answer either, however much the left might want it.
The free market is not the answer here. The best I can come up with is establishing local clinics and hospitals that are organized as public utilities rather than for-profit entities, and eventually generating the political will to crack down on exploitative for-profit healthcare.
Spot on. My dad is a retired dermatologist. Back in the 70’s, he would remove moles and say which he thought needed biopsies, go over the costs, and the patient would decide how much they wanted to spend. Once employer-sponsored insurance became the norm, every mole was biopsied every time. One because the patient didn’t have to make a cost decision. And two to protect the doctor in case he was wrong. The second point is important as well-better to be safe and order that additional test in case you missed something. The threat of malpractice suits needs to be addressed, as we all know, lawyers have driven up the cost of everything. Let’s get rid of them too while we’re at it.
2. Allow insured to choose any doctor as long as the cost is not over 'negotiated' network prices. This is important because doctors can't be independent operators today. Otherwise they are locked out of the healthcare market.
3. Publish all prices
4. Make it illegal to charge prices that deviate by more than 15%. It is ridiculous that blood test can cost anywhere from $5 to $100 depending on your insurance status.
5. Get rid of 'free' Obamacare. That is simply a transfer of cost to the paying group.
Who are you Gato Malo? You must be a clouder of big brained felines to have so much economic, social, mathematical, medical and political savvy! I deem you worthy of a subscription plan, even though I am on a humble part-time housewife/rn salary.
The thing that keeps your very rational suggestions from being implemented is emotionalism. Medical care is life or death. Suggest that some should go without because they can't pay and people will screech that you're putting profits over lives. Never mind that such a policy would, over the long run, result in more effective, more affordable treatments becoming available to more people.
I'd be interested to see the same price chart for veterinary care, which so far as I know isn't subjected to the same insane, market distorting insurance system.
In a former life, I tried to get State Level medical pricing transparency passed. The money fought hard and won. Trump somehow managed to get Federal pricing transparency passed, and the industry is outright ignoring the law mostly (10% compliance at best).
The only industry that refuses to post prices on their menu of services is also one of the most out of control. The exceptions are the ones, electives as you listed, where price awareness is built into the advertising.
You want to fix it, they're now ignoring the law because the money is too good, and whatever penalty they pay is less than their profit. It's no longer fixable because they are above the law's reach, and the regulators are captured.
Welcome to the end of civilization. Mind the gap, Express train, few stops left, no exit.
Great post! You briefly touched on the way the existing guild artificially restricts supply, and that's a HUGE deal. (In the 80s the 'experts' were saying there would be a doctor glut and government must step in to protect doctors' salaries)
Certificate of Need laws also need to go. Imagine Burger King needing to get McDonald's permission before opening a new restaurant!
And finally, all the layers between the doctor and patient need to go, as they drive up price and don't actually contribute to healthcare. Going to the doctor should be like going to a fast food place: You walk in, see the price for everything right on the wall, get what you need, and pay for it yourself.
Edit: Relevant link
https://time.com/4649914/why-the-doctor-takes-only-cash/
In arriving at their price list, Smith and Lantier did an end run around the whole system. They asked their fellow doctors how much compensation was expected per procedure, factored in necessary expenses like surgical equipment and medical implants, then tacked on a 10% to 15% profit margin. Since their surgery center does not employ the army of administrators that is often required to haggle with insurers and follow up on Medicare reimbursements, their overhead is smaller. The whole operation is 41 people. “Finding an average price doesn’t require complicated math,” Smith says. “It’s arithmetic.” Since posting the price list eight years ago, they’ve adjusted it twice, both times to lower rates.
"more cash pay with price transparency"
This is a huge part of the problem in the US--if you ask a hospital or other provider about the cost of a certain procedure, the answer is--What type of insurance do you have? Why should that matter? Why do different people get to pay different prices? Why does it matter where your provider is located? It's all so ridiculously opaque--and if other industries practiced this way, people would go to prison. Yet everyone accepts this nonsense. It bothers me when politicians talk about healthcare costs but they're always referring to insurance costs. Health insurance is the financing mechanism for healthcare. The whole system is a jacked up mess which makes insurance premiums high. This area is like so many others, where lots of politicians gain favor or push agendas by pretending to do something--usually making the problem worse--like the affordable care act. I'm certainly no expert but this illustrates perfectly the havoc that can be achieved through government meddling and regulation versus letting the market do what it does on its own.
The Surgery Center of Oklahoma is doing some great things in this area. I recommend this interview: https://www.econtalk.org/keith-smith-on-free-market-health-care/
I agree with your assessment and solution to the problem, but conventional medicine will never allow it.
A brief perspective on alternative medicine vs conventional medicine economics:
If mediocre, robot, Merck Manual-cookbook, new-Rx-for-every-ailment docs had to compete with what we in natural/alternative medicine offer for cash pay, robo-docs would have empty offices. The main reason for our competitive advantage on a cash-basis level playing field is that cash-paying patients are more motivated to get well, rather than to be subsidized on a health-purgatory treadmill, as many of those with cadillac insurance plans are. Also, we in alternative medicine are trained to look for root cause of pathologies and eliminate that, which deprives robo-doc of yet another permanent customer, but gives us new referrals from happy former patients.
Not only is there a revenue-side problem, there are problems on the cost side.
An acquaintance of mine was prescribed a knee-brace, which was covered by insurance. Well and good, she got her knee brace from an inventory held by the surgeon. She asked if she could have a spare, but was told the insurance wouldn’t cover it. So, she went to Amazon and got the exact same model supplied by the surgeon, and paid around $35. Out of curiosity, she looked to see what the surgeon charged the insurance company. $650. She wrote the insurance company and said (paraphrased of course) “you’re getting done”. The predicable response (paraphrased of course): “Meh”.
Why control cost, which requires staff and computers and all that crap, when its a simple matter to crank up revenue by raising prices?
The illness-prolongation industry is in desperate need of reform in this country. Sadly, probably the only way to fix it is to let it collapse of its own ponderous inefficiency. The gravy train has too many passengers who will fight tooth and fork to keep it keeping on.
Veterinary medicine is a good proxy for what could be done for human medicine. It is more of a free market and people discuss costs with their veterinarian. And costs are a fraction of the price for humans even though the standard of care is actually comparable.
That’s why I had Christian Healthcare Ministries as “insurance.”
It is - like MediShare - close to as catastrophic health insurance as you can get.
The misallocation of resources due to over consumption is appalling.
I know people on Medicare who go for any kind of surgery they’ve ever wanted (non-cosmetic) and are not only sucking dry the Medicare trust fund but are driving up the cost of insurance.
When a middle man gets involved there are usually problems. A system needs to be set up to incentivize people to be healthy. If you knew by not taking medications, treatments etc at the end of the year you could keep that money for a vacation or to purchase something would that be an incentive to stay healthy? And when you did need a treatment you called around looking for the best deal. So that you could Kept what is left of your yearly health care cost.
LASIK surgery along with plastic surgery doesn’t involve a middleman and their cost are opposite of traditional medicine.
We see a naturopathic doctor and pay out of pocket for true health care. But it’s not covered by insurance. Therefore most people can not afford it. It’s not health care it’s disease care. The whole system is corrupt and needs to be destroyed and rebuilt.
We also supplement with vitamins since we feel paying on the front end to prevent problems is cheaper in the long run by not paying on the backend. Again, they aren’t covered by insurance.
The “elites” want us to be sick, fat and unhealthy therefore they have created a financial/medical system to achieve their desire.
So sad that America and the world has gotten to this place. But people are waking up!!!
Back in the 1970s there was a joke in the USSR: Even after the worldwide revolution succeeds (i.e. that "socialism in every country" staple of Marxist ideology) we'll have to keep one capitalist country up and running ... just so we know what things cost!.
Fast forward 50 years and we find that we have no capitalist countries in any real sense and we're screwed.
Same goes for "renewable/green energy" - I heard an industry guy the other day saying (close quote): "the whole industry is driven by government mandates and subsidies... nobody knows what anything actually costs" ... we may soon find out!
I finally had to look up a word! : impecunious. Nice. Ty,gato. Repeated thanks, because you have broken this down and described it in ways I failed to when trying to explain to my 25 year-old son why the medical system. In this country can bankrupt people. Insurance.
You're halfway there on this one, but I think you're too much of a free market guy to see the other half of the problem.
Free markets only work out well when both buyer and seller are free to walk away from a bad deal. This is in large part why prices for cosmetic surgery have bucked the trend. If boob jobs cost too much, people won't get them, and that exerts downward pressure on prices.
For the life-saving/life-prolonging aspect of medicine, that isn't true. Diabetics will willingly pay their entire income and even go into crushing debt to buy insulin at any cost.
Yes, this is a situation where we need an intervention. Essential healthcare should be treated as a public utility. If a city wanted to jack up the price of drinking water by 300% its citizens would never go for it, and the city has a mandate to provide water at an affordable rate so that never happens.
The biggest problem with government intervention/Medicare for All/etc. is, of course, that the government is in the pockets of the medical and pharmaceutical companies who would be happy to negotiate a pork-barrel bonanza for themselves behind closed doors using public funds. So that is not the answer either, however much the left might want it.
The free market is not the answer here. The best I can come up with is establishing local clinics and hospitals that are organized as public utilities rather than for-profit entities, and eventually generating the political will to crack down on exploitative for-profit healthcare.
Spot on. My dad is a retired dermatologist. Back in the 70’s, he would remove moles and say which he thought needed biopsies, go over the costs, and the patient would decide how much they wanted to spend. Once employer-sponsored insurance became the norm, every mole was biopsied every time. One because the patient didn’t have to make a cost decision. And two to protect the doctor in case he was wrong. The second point is important as well-better to be safe and order that additional test in case you missed something. The threat of malpractice suits needs to be addressed, as we all know, lawyers have driven up the cost of everything. Let’s get rid of them too while we’re at it.
A few ideas to reduce medical costs -
1. Allow import of medicine
2. Allow insured to choose any doctor as long as the cost is not over 'negotiated' network prices. This is important because doctors can't be independent operators today. Otherwise they are locked out of the healthcare market.
3. Publish all prices
4. Make it illegal to charge prices that deviate by more than 15%. It is ridiculous that blood test can cost anywhere from $5 to $100 depending on your insurance status.
5. Get rid of 'free' Obamacare. That is simply a transfer of cost to the paying group.
Who are you Gato Malo? You must be a clouder of big brained felines to have so much economic, social, mathematical, medical and political savvy! I deem you worthy of a subscription plan, even though I am on a humble part-time housewife/rn salary.
The thing that keeps your very rational suggestions from being implemented is emotionalism. Medical care is life or death. Suggest that some should go without because they can't pay and people will screech that you're putting profits over lives. Never mind that such a policy would, over the long run, result in more effective, more affordable treatments becoming available to more people.
I'd be interested to see the same price chart for veterinary care, which so far as I know isn't subjected to the same insane, market distorting insurance system.
In a former life, I tried to get State Level medical pricing transparency passed. The money fought hard and won. Trump somehow managed to get Federal pricing transparency passed, and the industry is outright ignoring the law mostly (10% compliance at best).
The only industry that refuses to post prices on their menu of services is also one of the most out of control. The exceptions are the ones, electives as you listed, where price awareness is built into the advertising.
You want to fix it, they're now ignoring the law because the money is too good, and whatever penalty they pay is less than their profit. It's no longer fixable because they are above the law's reach, and the regulators are captured.
Welcome to the end of civilization. Mind the gap, Express train, few stops left, no exit.