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recursivedoubts: Daily reminder that the United States spends more public money per capita on healthcare than any other country and it's not close[1].If you want to know what socialized healthcare in the US would look like, you are lookin' at it right now bub.[1] - https://en.wikipedia.org/wiki/List_of_countries_by_total_hea...

paulddraper: This is a believable result. Meta-analysis is 141-259% [1].Three reasons:1. Medicare has quasi-monopolistic negotiation power that private insurers can only dream of -- Medicare spend two-thirds of all the private insurers combined. That's why private insurers would combine in a heartbeat if the FTC allowed it.2. Moreover, that Medicare volume is concentrated in a specific segment of the market. If many providers dropped expensive United contracts, the insured people/companies might move to a new insurer. But Medicare's base will never leave.3. Since Medicare covers older individuals, often on a fixed income, there is natural discriminatory pricing. (Think of the "senior discount" at your local entertainment venue.)[1] https://www.kff.org/medicare/how-much-more-than-medicare-do-...

notfried: I like this. It'd be great to see such a table of the key issues with proposed solutions, to highlight how the waste isn't an insurmountable impossibility to solve. Having said that, federal lobbying by the healthcare industry was $750 million in 2024 [1], and this is the blocker that needs to be addressed first to be able to enact change.[1] https://www.managedhealthcareexecutive.com/view/health-syste...

timtim51251: Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits.Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money.Several doctor friends have told me this as well.

cogman10: This seems like we need similar price caps for healthcare providers, medical equipment providers, pharmaceuticals, etc. Done just in isolation for 1 part of the healthcare industry results in this obvious bad effect.Removing the rule wouldn't help things.

rimbo789: Having worked in for profit health care pricing and costing yup that makes sense.The layering on of profit margins causes costs to grow exponentially

shdudns: This. It's hard to believe that the Obama team could have been this financially incompetent.

vjvjvjvjghv: [delayed]

bmcahren: It's easy with hindsight to believe you could have capped expense at 200% medicare but getting what we got passed was nearly impossible at the time. Before Affordable Care Act, insurers had every tool available to deny care, maximize profits, and skim more than 20% off the top. It's great we're getting closer to the point that it feels to you like incompetence that these things aren't fixed today but your anger with the medical lobby is clearly misplaced here.Every major piece of legislation needs revisions to chase circumvention and we're well past due on updates but no legitimate bills have been presented that cover these topics and that's not a one-party issue.

genthree: These limits don’t apply to self-funded programs that are administered by big insurance companies (most large employers’ plans, then) or plans less than two years old (whether there are measures in place to prevent simply rotating plans often to exploit this, I do not know)

phil21: In a vacuum sure. But insurance companies operate the only part of the healthcare system that is moderately competitive. In the end employers are the ones largely paying and they are professional negotiators enough to put price pressure on insurance plans. 20% of $0 is $0.As such, as light of an incentive it is - it’s the only party in the entire system that is incentivized in any way whatsoever to keep costs down.Insurance providers also rarely operate at the full freight 20% either way though. So they are at least at this time incentivized to control costs at some level since every dollar saved is a dollar added to the profit line. Otherwise they would not be known for denying claims so often.This is ignoring a whole lot of very important complexities as well - such as self funded insurance plans that most major companies utilize. There the insurance company is simply a plan administrator getting paid the same either way.It’s one of those tropes that has a source of truth behind it but the actual reality is far less satisfying of an answer. Makes for great sound bites and ability to shut down further thought on the subject though. The uncomfortable truth is that there is no simple fix and no one bad actor that is the cause of all the insanity.

cogman10: It's such a small market that it's really not competitive. Further, because medicine is so expensive, it means there aren't going to be newcomers to the market who can shake thing up. It requires way too much startup capital to start a new insurance company. The agencies with the most negotiation power don't because it negatively affects their bottom line.This is why there needs to be a real second option. A public option like medicare for all would be the way to go. Let everyone choose between either private insurance or public insurance. Then you'd actually see some real competition.

cogman10: Yup, pre-existing conditions, in particular, was a beast. The patient protection portion of the ACA is one of the better parts of the whole bill.

nostrebored: It’s probably the single worst decision of the entire bill and one of the largest wealth transfers in history.If you tell me you’re going to light your house on fire and then ask me for fire insurance, I should be able to say no.Instead what we have is not insurance, but the world’s worst socialized health plan. Insurance is for managing tail risk, not for distributing the cost of healthcare. If we’re willing to pay a tax to subsidize the elderly, we should cut out the middleman and let the government fill that function.

Aunche: Most insurance is funded by employers who would switch insurers if they feel they're getting screwed by them.> So insurance companies spend more so they can collect higher premiums.This part is still true though. Insurers want you to consume more healthcare, so they'll happily pay for your chiropractor, acupuncturist, acne treatment, and Chanel gift bag [1]. Patients are happy with their benefits. Employers are happy with increased employee retention. Insurers are happy with the profit. Of course, you aren't going to see much health improvement from this though.[1] https://nypost.com/2024/07/25/lifestyle/nyc-hospital-bills-3...

prirun: Private insurance companies still do not cover pre-existing conditions. How? By not writing insurance to individuals except during ACA open enrollment. I know this because I tried to get private insurance before going to Mayo Clinic, because my ACA insurance with Ambetter was out of network. When I got through to an insurance company sales person for individual coverage, they told me they don't cover pre-existing conditions for 6 months. When I challenged them and said that's illegal, they hung up on me. Most companies I called had a phone menu that, when I pushed the buttons for individual coverage, would lead me into a loop, hang up on me, put me on hold forever, etc. They simply won't write individual coverage outside a couple of months at the end of the year. This effectively allows them to not cover pre-existing conditions, at least for individuals. For company employees, yes, the coverage of pre-existing conditions is a win.I ended up paying $12K to Mayo for a week of appointments. Private insurance, if I could have gotten it, would have been at least $1000/mo for premiums (in 2020) plus $10K deductible, so I actually saved money just paying Mayo instead of getting private insurance.IMO the only reason insurance companies allowed the ACA to pass was the stipulation that everyone in the US was required to get insurance coverage or face a penalty. When the Supreme Court ruled that provision illegal, I'm sure the insurance companies were furious that they were duped.

nradov: Price caps always and everywhere cause shortages, including long queues for certain types of care. This may be acceptable but we need to understand the trade-offs when making any changes.

levocardia: Also, commercial insurers are essentially cross-subsidizing Medicare: the higher revenue from commercial insurers is partly why Medicare can be paid less. Similar dynamics exist with drug prices: the high US cost is a cross-subsidy to other countries. Maybe this is good (someone's got to fund R&D), maybe this is bad (it's a net wealth transfer to the elderly), but it's an important part of the dynamic either way.

piva00: Would like sources about the pharmaceutical sector being "subsidised" by the American system, heard it many times but haven't seen it substantiated.

watersb: It's almost as if no healthcare legislation gets passed before private insurers have figured out how to extract shareholder value.(Which makes the system worse. The fiction of a fiduciary responsibility to extract top dollar from a business regardless of consequences is the opposite of "capitalism". Which derives its name from the practice of sound investment to build something of lasting value.To say nothing of the social deviance of for-profit healthcare.)

raw_anon_1111: So I happen to be in Costa Rica for the month. Just like every other 1st world country, it has managed to have universal health care that is better and cheaper without private insurance.Even if you do get private insurance for quicker access, it’s still much cheaper than the US.I just spoke to someone who flew down here to save $30K on dental work.The problem isn’t the ACA, it’s the ass backwards American health care system. I was at a meetup of American ex-pats here and half of them said they established residency here to join CAJA - the health care system

nostrebored: ACA enshrined the worst parts of the American healthcare system for years to come. It is a politicized victory that is the best solution for no American citizens. Places I’ve been with fully privatized healthcare or single payer are both significantly better for consumers.Insurance companies have raised prices to restore profit, were briefly a mandatory expense, and will exist for years to come.

omgJustTest: This is correct, but neglects the compounding effect.Insurers are also adding some %+ increase on premiums every year, which is taken as a % of their yearly spend, ie 2-3%.ie (1.025^N)*(base_prem+overpay_prem_increase) = new_premium. The compounding of $ returned is pretty big on this.

nradov: If you want to understand the hidden cross-subsidies in the US healthcare financing system then a good place to start is the book "The Price We Pay: What Broke American Health Care--and How to Fix It" by Dr. Marty Makary.https://www.bloomsbury.com/us/price-we-pay-9781635574128/

Manuel_D: This is the same problem with cost-plus contracts in the military. In theory, capping profit is meant to reduce profiteering. But in practice, if your profit is fixed at 6% of the cost to built a jet fighter then you're incentivized to make that jet fighter as expensive as possible. The way to maximize profit under a cost-plus regime is to maximize the cost.

Retric: > part of the healthcare system that is moderately competitive.That’s only half the story though insurance companies also try and reject way more claims, cover fewer people, and are just harder to get money from than Medicare.This means hospitals can’t afford to give them cheaper rates as they just require vastly more work from staff for the same procedure.The industry isn’t blind to this effect, but has little reason to change.

phil21: Hospitals and clinics can only take so many Medicare patients as a ratio to private pay because it’s very well known that Medicare and Medicaid is often provided at below cost. It’s of course area and demographic dependent but as a rule any private clinic has a cap on these patients they will accept overall. Hospitals cannot cap it realistically speaking, so looking at clinics is a good proxy.Private insurance subsidizes Medicare and Medicaid even after you add in admin overhead.

phil21: Insurance is really not the issue, it’s provider cost. And just the total cost entirely of the system of insanity. If you look closely into it there is no single (or few even) knobs you can tweak to fix the system. Not even Medicaid for all, at least as it’s currently designed.No argument from me that insurance is not competitive enough. But they are almost all public corporations that are highly regulated so the numbers on profit and expense ratios are easy to get for yourself to prove the point. No need to take my, or anyone with an agenda word for it. Almost everyone wants a simple answer to a complex interdependent problem that does not have one. Second answer would be “administrative class bloat” like in all areas of the US today.If there was a single solitary answer of “what is the problem with US healthcare” I’d have to go with it being a principle agent problem. If everyone who consumed healthcare had to pay up front very few services would cost what they do. Even changing it so people were billed directly and then had to submit insurance claims later like how pet insurance or car insurance works would go a long ways. But even that doesn’t solve the problem entirely, as it leaves massive gaps.Single payer is certainly a major part of the answer, but in isolation it’d solve almost nothing and potentially make things even worse as all the inane cross-subsidy comes crashing down overnight.Edit: the point is medical loss ratios, admin overhead, etc. is public information not hidden behind some private company firewall. The fact non profits haven’t captured 100% of the market by being crazily cheaper should be telling on its own.

rayiner: Trying to understand why healthcare in the U.S. is so expensive is like trying to understand why building subway in New York is so expensive: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-.... The issues lend themselves to facile explanations ("insurance companies are greedy," "NYC's government is wasteful") but those are driven by ideology not analysis.

nradov: Many of the largest health plans are non-profit, not publicly traded corporations. This includes most of the Blue Cross Blue Shield Association licensees as well as some other large payers such as EmblemHealth.

lotsofpulp: > Insurance companies have raised prices to restore profit, were briefly a mandatory expense, and will exist for years to come.Why do their stocks underperform so badly?https://imgur.com/S8bNSM2

nradov: Your story is missing some pieces. Why didn't you sign up during ACA open enrollment? Those policies absolutely do cover pre-existing conditions. But not every provider organization will be in network for every health plan.

hardtke: We rarely discuss the primary source of health care cost differences in the United States -- US doctors get paid a lot more than elsewhere. I haven't seen a credible proposal to address that. Most of the salary difference can be blamed on deliberately created shortages of doctors in many specialities. Not enough medical school slots (horror stories among my kid's friends of not getting accepted) and then also shortages of residencies that allow foreign trained doctors to work in the US. The only change in recent memory is replacing some primary care physician services with nurse practitioners.

glenstein: I will piggy back off of your comment because I was going to say a very similar thing. In my state, electric utilities are guaranteed a rate of return on investment of approximately 12%, if I remember correctly. And so there's a lot of incentive for build out and maintenance that's high in total dollar amount and high in volume of work done. In some ways it's the system working as designed but the "cap" can incentivize erroneous build out, as you noted in the jet fighter example.

rybosworld: Why would a 3-year stock chart be indicative of underperformance?

CWuestefeld: This isn't even close to true. Keep in mind that Medicare, together with Medicaid (which operates under much of the same administrative rules), account for nearly half of medical spending. So basically, if a provider doesn't want to play by their rules, they MUST deal with Medicare. That is, the government is nearly a monopsony in this industry.There's a common, misleading, claim that Medicare is more efficient because they spend far less than commercial insurance on overhead like claims processing. This claim is true. But the impression that it gives is absolutely the opposite of reality. The reason that Medicare doesn't spend as much on admin is that they offload all of this work onto the providers. Every hospital in America has a "Medicare Reimbursement" team. A moderate-sized hospital is going to have something like 2 FTEs focusing just on the reimbursements from Medicare and Medicaid. And that's a lot more work than just filing the right forms for each case. There's a ton of additional work. Each spring they have to file a HUGE "Medicare Cost Report", requiring a couple of months of work to get all the data in place for it. (Source: my wife was "Director of Reimbursement" at various hospitals for quite a few years, before going into consulting.)That Medicare Cost Report that I mentioned is, beyond a huge effort sink, the source of many other evils. Because of the amount of work that's needed to gather and collate all this data, hospitals naturally structure their Accounting around the way Medicare wants them to report. The thing is, that's largely orthogonal to the way a rational person would do cost accounting. The result is the common criticism about how widely varying the cost of a given specific line-item is between hospitals: they don't really know how much a given procedure costs because that's not how they track their expenses, so they apply some allocation heuristics, and every hospital does that a bit differently.There are also various perverse incentives in the system. For example, Medicare is smart enough to know that it costs more to deliver care in NYC or SF and so forth. Every locale has a Cost Index that scales how much they expect to need to pay. This leads to hospitals needing to show that their expenses are higher so they should be classified into locale X rather than neighboring locale Y.Another one my wife told me about her hospital: Medicare realized that a lot of UTIs were hospital-acquired, and they rationally said that they would no longer pay for UTI treatments unless the hospital could prove that they were not hospital acquired. Well, maybe that wasn't rational, because with Medicare/caid being such a huge portion of their business, they changed their policy to test for UTI for everyone at admission, so that they could furnish the proof demanded. Think of all that wasted lab work...So no, Medicare is NOT more streamlined and efficient. It's absolutely, 180-degrees, the opposite of that.

gzread: That's how it was supposed to work though? There's an open enrollment period where anyone can sign up, pre-existing conditions or not. To prevent the adverse selection problem, which is where you don't sign up for insurance until you have a condition and then cost the insurance company a lot of money, you can only sign up at that time.The thing you're trying to do - sign up for insurance to cover a specific procedure - is quite literally what the system is designed to prevent. You're supposed to have insurance all the time or none of the time. Did you try asking the clinic how much it would cost if you are uninsured and paid cash?

glenstein: >Private insurance companies still do not cover pre-existing conditions. How? By not writing insurance to individuals except during ACA open enrollment.Sorry I'm struggling to follow here. You think the open enrollment period effectively means that there's no prohibition on pre-existing conditions? Think you're kind of bending words outside of their normal usage because quite literally pre-existing condition policies are banned. The compensating counterbalance is a neutral open enrollment period so people don't just jump when they learn they have a health problem, it's a compromise to ensure financial sustainability.You do understand that before this, it was worse right? One comment after another here is comparing the ACA to a magical fantasy, rather than the status quo that it improved upon.