At 85 I just had an appendectomy. not ruptured, that cost 103 thousand bucks. Medicare and insurance got stuck paying all but 450 bucks.
24
A direct correlation exists between socio-economic status, amount spent on healthcare, and longevity. Thus, in our ever more income stratified society, ever more folks are dying earlier. Really, how complicated is this? The rich get healthier and richer, and the more numerous and sicker poor get sicker and poorer, in our unregulated Capitalist system of wealth distribution, which generates an ever larger pool of those in the lower socio-economic classes who live shorter, more miserable lives. Unregulated Capitalism is the problem for the vast majority of Americans. No wonder the rich Republicans running the big show are anti-regulation. Income redistribution saves lives. This is not a complex problem, unless you're afraid of losing your wealth advantage and try to make it appear more complex than it really is. Wait a minute!
I'm sounding like Bernie Sanders! Stress R Us
28
As long as insurance companies are in it - a profitable business and that pay millions to their CEO’s- they have the control ignoring Americans’ needs that literally have to choose between life or death. As long as lobbyists line the pockets of our politicians (and probably our president in lieu of our current situation) this problem will continue. When will our congress listen? When will a solution be found? It sure as heck won’t be in my lifetime. How old is this problem? Old. And Obama tried to help the uninsured but continues to be blamed by the uneducated, the old blame game, instead of helping to find a solution. Oh yes, following trump’s great analogy ‘who would have thought healthcare could be so complicated”. Too complicated for our congress to figure out, too scared to upset the Apple cart.
18
when a routine check-up at the dentist costs $400 in the US and 40 euros in France... you wonder where the greed is?! Sorry, I meant, the reason behind this mystery of spending and getting less! An MRI in France, no contrast, one knee: 200 euros; USA: $1,200 etc... I keep a list! I have the corresponding one for medications in case anyone has doubts on the advantage of the unique payer system that all European countries adopted. One example: Epipen: 74 euros in France, $600 in the US... Keep thinking that health is a service you buy if you can, not a right for all, and that's what you get!
30
Dr. Frakt,
I came to your excellent article via Paul Krugman in his column. Your factor analysis agrees with my observations as a policy analyst from the period of oil price hikes of the 70s to the present time.
I would only underscore the financial stress that the oil price spikes put on the economy, including rapid inflation of all prices that prompted Paul Volker at the Fed to close the window driving interest rates to extreme levels that brought the economy to nearly a full stop. I was in the midst of this financial stress resulting from the double-dip recession in the early years of the Reagan Presidency.
Along with soaring energy costs and the beginning of some pretty hard times for Americans, we also experienced a steadily increasing cost of health care. There were lots of factors, as you observed, but I also observed the efforts of Senator Dole, Bill Clinton, and Barak Obama to control rising healthcare costs but getting to the core factors that caused the change in costs and outcomes were defeated by very powerful vested interests in the existing system of healthcare.
One piece by a journalist named Steven Brill that was reported in a dedicated issue of Time magazine, "Bitter Pill: Why Medical Bills Are Killing Us", Apr 04, 2013 was enlightening. His report was accurate. It was an eye-opener.
I urge you to expand on this piece, it should become the basis for a new political awareness that could lead to a renewed focus and change in the US system.
12
The Reagan/Thatcher mindset brought us the "money men" who took over; making money became the only reason one should get up in the morning.
Just reading this while watching the opening vignette of "The Meaning of Life"....by '82/'83 the Monty Python crew had it all figured out where things were going....beware of the Very Big Corporation of America: the "good" fight against It, with little guys brandishing umbrellas, wasn't going to last very long.
11
What happened? Reagan and the republican wave happened and slowly started to destroy protections for society
17
President Reagan created the concept of DRG's (Diagnosis related groups) within Medicare as a "cost saving" measure, linking payment to diagnosis. In reality, the most complex diagnosis yielded the greatest reimbursement. Every insurer copied Medicare and prevention became passe. DRG's have been a gift to hospitals and insurers. For the patient, this cements an "illness care" model to "health care" which plagues our country. Healthy people are not profitable. Illness care does nothing to help life expectancy. Cuts in government spending have gutted Public Health measures. Now, even childbirth has become an "illness" event. The AMA also bears responsibility for spiraling costs, because almost all health care is dependent on physicians. Over the years, the AMA has either blocked or provided little support for Universal Health Care, or robust Public Health, ever since the 1940's. (http://www.pbs.org/healthcarecrisis/history.htm)
13
Perhaps this has something to do with our epidemic of obesity? People in this country have big appetites, for food and, apparently, healthcare.
2
How can you end the article with a quote from Jha, who spoke at the WHO’s annual meeting last year in Geneva and was clearly in favor of no universal healthcare.
2
As concerns: “Medical care is one of the less important determinants of life expectancy,” said Joseph Newhouse, a health economist at Harvard. “Socioeconomic status and other social factors exert larger influences on longevity.” I recommend:
"Child mortality in England compared with Sweden: a birth cohort study" Lancet 03 May 2018
Author last names: Zylbersztejn,Gilbert, Hjern, Wijlaars, Hardelid,
Direct quotes from article:
"The UK has one of the highest child mortality rates in western Europe. Sweden is often viewed as a benchmark for reductions in child mortality that should be achievable in the UK."
"Child mortality was substantially higher at all ages in England compared with Sweden; however, birth characteristics largely explained the increased risk of death. Adverse birth characteristics are strongly associated with maternal health."
" Therefore, the largest reductions in child mortality in England relative to Sweden could be achieved through universal programmes to improve the health of women and reduce health inequalities before and during pregnancy."
My suggestion: A similar study comparing US with these 2 UHC countries would place the US far lower. Within UHC countries the universal program that contains more support elements, not just medical, produces better results.
Are such improvements possible in the US? Not a chance until...?
Only-NeverInSweden.blogspot.com
Dual citizen US SE
5
Changing billing codes sounds illegal. I think your doctor friends could blow the whistle on that one.
2
Simple. Ronald Reagan happened.
5
“Citizens” became “taxpayers,” consumers,” a means to an end for unbridled greed of the Reaganites and Wall Street.
4
Didn't Regan make ketchup a "vegetable" right after 1980?
6
Gee, I wonder if twelve consecutive years of Republican administrations had anything to do with it?
11
Well, anyone who reads much knows our system is geared toward treatment — usually by drugs — rather than prevention & healing. Add to that that much of our spending occurs in the last 6-12 months of life and a picture emerges. Other countries’ citizens are smart enough not to shout “death panel” at even the slightest hint of rational spending and acceptance that people don’t live forever. They have accountable governments and solid, secular education. We, on the other hand, have Trump, Fox (with and without Friends) and crazy evangelicals. Easy peasy. Uwe Reinhardt (RIP), Krugman, et al told you so 30 years ago.....
7
Now, what happened in 1980 that might have caused the development... let me think...
2
We can have access to supposedly the best sickness care and medical drugs that money can buy and still not be healthy.
I've been forced the hard way to seek to cure myself and my wife of our long term ailments: acute and chronic neck and back pain; migraines; chronic repeating plantar fasciitis that lasted for over a year; pelvic prolapse, inguinal hernia; excruciatingly painful carpel tunnel syndrome; chronic ear infections; chronic and intractable skin infections; acute and chronic knee and hip pain.
Our painful conditions are commonplace. Billions will suffer from them at some time in their lives. Weve seen countless GPs and specialists around the world, spent thousands on medical treatments. All to no avail.
In the end, free published reports from the US Academy of Sciences, Google Scholar, Cochrane, PubMed and cheap, used graduate medical text books plus other specialist texts have provided the clues I've needed. Plus intelligent reviews from Amazon users of popular self help guides more often than the guides themselves. Plus advanced YouTube demos of calisthenics and barwork.
Heal thyself. Don't rely on others to do the hard work for you.
2
Dont need to be a scientist for the answer. Open your eyes, take a look around! The amount of seriously obese people and the way they are lured to gain more weight is the real problem.
3
It's called the biggest rip off against the citizens of this republic...preying on the sick and elderly , designing a catastrophic health management model and charging mafia like rates with zero accountibility...
3
Happened under Reagan, so it must be good. Just think, all that extra money going to (undefined vortex) from who it will trickle down to the rest of us and boost the economy. Any day now.
Sure, starting under Reagan, there was no shame if something was legal (or hard to catch the illegality) - charge whatever the market will bear rather than the actual cost of the service or product, or the social benefit, and damned be the ethics; problem is, when people's health and lives are in the balance, the market price is whatever the provider or middleman wants it to be. That is why 'the market' needs to be regulated, why patients need to have some power in the game. Right now, it is still the insurance companies, big pharma, big middlemen/suppliers, and increasingly big medicine (large groups) who are setting prices and calling the shots.
3
Single Payer. Every other civilized nation has it. Cradle to grave, and for virtually HALF the cost per person. Literally billions of people have proven it works. There is no cogent argument against it's implementation if the desired goal is a healthier nation instead of richer oligarchs.
7
The Dean of my grad school was he former health care price control Czar under Nixon, and still had deep industry connections. He said spending will rise from 17% GDP to 33% in a generation. He was not lamenting this, but boasting. Completely corrupt sector, millionaire doctors and drug pushers leading it. Have you seen the massive futuristic hospitals rising in every major city, greater than any cathedrals?
4
Medical care is a part of a larger whole (called life). In the USA there are many options. One has health coverage or (rats) one does not have health coverage or (darn) one has quasi coverage (a junk plan that’s not worth the paper it’s written on... the Trump Administration favors this type of policy). These are big stressors which along with no cost of living increase for the bottom 90% over the past generation and no real quality time away from work (vacation) lead to lots of stress which leads to different outcomes than other first world nations. Other reasons that life expectancy is lower might be the atrocious diet Americans cling to which has led to nearly all Americans being morbidly obese. Another cause is connected to our healthcare industry via big pharmaceuticals. There’s a pill for that condition and it’s advertised on the television so that patients can point out to their doctors that there’s a pill for that. No other country in the world would permit this but in the USA it’s A-OK... along with mass murder via semi automatics. But that’s another article.
3
The political system in the U.S. is rigged against the interests of the many in favor of benefits for the few. Politicians cater to those who support themselves financially. People and families with middle to low incomes lack they clout that might give them the ability to help elect candidates who could effect changes in the health care system that could improve their life expectancies and reduce its costs. Unfortunately, most politicians and their enablers aren’t overly concerned about the differences in health care availability between the classes in the U.S., and so it should be no surprise that your chances of dying younger are greater if you are poor.
1
But too many of the working class and increasingly insecure middle class still vote for Senators and Representatives who refuse to address this issue. Not to mention the millions who voted for Trump.
The elephant in the room, which has not been answered to my satisfaction, is why millions upon millions of Americans continue to vote election after election against their own economic interests.
Why do voters prefer economic insecurity, retirement insecurity, healthcare insecurity?
I can only conclude that these voters prefer things other than decent, guaranteed health care.
3
Your chart, "A Different Trajectory After 1980", graphically reveals (plain as day) the moment an industry declared that its new business was separating old people from their life savings.
1
“Medical care is one of the less important determinants of life expectancy,” said Joseph Newhouse, a health economist at Harvard. “Socioeconomic status and other social factors exert larger influences on longevity.”
So giving people make-work jobs in healthcare, and providing a decent wage, does more for their health than minor improvements in the efficiency of the system?
Or should we throw millions out of work with better efficiency, and give all the newly unemployed a universal basic income to sit at home.
Healthcare inefficiency: bug or feature?
1
“For starters, we could have a lot more competition in health care. And government programs should often pay less than they do.”
Really? I find this disingenuous, and like all "free market/competition" explanations a kind of tunnel vision.
And why is the 1973 act by Nixon Administration overlooked...the enactment that moved healthcare from a service oriented industry to a profit earning endeavor? While this standing alone is also tunnel vision, it marked a turn that added to our pain now.
To address such a large problem just by looking at numbers and singular events without addressing broad societal issues and impact is one reason we sadly have a mess on our hands...not just in in healthcare, but infrastructure, education, and in the government itself. Ill conceived band aids that cost us dearly.
5
In Colorado we are trying to change all of this--and when we do, it will be to change the entire nation. What we need is competition drives from a system of truly transparency pricing in all aspects of the system. Broken Healthcare dot org writes about what is really going on, and the economics of how it can change. We are now stuck in a vortex of sorts, dominated by industry giants that control 18% of GDP and by virtue of their money, they control politics. Dwight Eisenhower warned us about the Defense Industrial Complex. How did we allow the healthcare windsurf to become 5 times the size of the defense industry? If you will help us drive change in Colorado, we will show the entire country that there is a better way.
2
What happened in 1980? There is a very simple answer: Jimmy Carter, who promoted legislation to contain costs as a precursor to national health insurance, left office. Hospitals and other health care providers undertook the so-called Voluntary Effort to contain costs in a deal made with Congress to kill Carter-initiated hospital cost containment legislation. When he left office, the volunteers left the effort behind and health cost containment was left in the dust.
6
Well said Wayne. "Voluntary" change sounds good, but it is akin to the fox guarding the chicken coop. And we all know how that story ends. The article says it best in the last paragraph--we need competition.
We just recently made pharmacies available for vaccinations, whereas other countries have had better public health access.
This is an example of how our poor and rural population (located away from easy access to health care) have not been accustomed to seeing doctors regularly and have been reluctant to spend money (that they do not have) on health care.
This better access to health care elsewhere helps explain why other countries have diverged from our outcomes over time. Our population has been habituated into costly and dangerous delay or avoidance practices.
And our health care system is not one based on "free" market forces. In a loose sense of the term, "market" forces are part of all health care systems, and as such need not be noted. Other countries make sure the market is kept open and they balance it when it is not. We allow non-market (monopolistic) forces to overpower the free open market supply and demand forces. So ours is actually much more of a controlled manipulated imbalanced market.
We do not even have pricing transparency. The way each insurance package charges different prices for the same medical care, makes our system more like a medieval bazaar when everyone bargains for their own price. But unlike buying a trinket, this is a market filled with sick people desperate to get home from the market and on to recovery. Only the merchants have the time and composure to do the real bargaining.
8
This may not be on-topic, but I have to laud the discernment of the commentators. Citizens are obviously paying attention to not only medical care but health, which is not at all the same thing. Thank you Times and The Upshot for a timely article.
4
Here's a radical idea: tax-supported medical training.
That sounds prohibitively expensive, but we are already overpaying enormously for medical care. Doctors graduate medical training with huge debts and this has a profound effect on medical costs--they have to pay all that money back somehow. Suppose they had no debt to repay; there would be less pressure to overcharge.
We would also get better doctors. How?
Let's do a thought experiment: Let's say we could rank all prospective students each year by quality. The first thing we do is cut out all the prospective students who can't afford to pay for medical school. (And many young people don't even consider becoming doctors because they know they can't pay for training and can’t even get the necessary loans).
So let's say we cut out half of the top candidates because they can't afford training. We then have to dip down into the less qualified prospects, again discarding all those who can't afford training. We keep doing this until we fill all the slots for training that year. When these candidates graduate, many of them less qualified than those we have rejected for monetary reasons, they have to repay all their debts by overcharging us.
So we pay for their training in the end anyway! Tax-supported medical training doesn't look so expensive now, and we may well end up with much better doctors.
7
I've been saying this for years. Forget about some of the equal opportunity and college diversity stuff, and approach it logically. Offer SUNY scholarships to talented kids in The Bronx in exchange for 5 years at a corner health clinic in the South Bronx.
The neighborhood wins with better local access. The city gets a cheap doctor for 5 years. The kid and his family win big. Heck, maybe the kid likes and stays there.
3
Why stop at training of physicians? Malpractice insurance is prohibitive for many specialties. So let's pay for that. And the complex process of billing for services. Why not that too? Let's toss it all out the window and emulate countries that have the most efficacious health care systems. Oh, gee . . . is that too socialistic?
I work in healthcare, so I think about this a lot. 1. Competition to lower prices cannot work in a market that is Byzantine and opaque. We need greater transparency of prices explained in plain English.
2. Some communities have only one choice of healthcare network. Lack of competition leads to higher prices. Some regulatory price controls are needed.
3. American healthcare profits from chronic illness, such as poorly maintained diabetes, cancer, and Alzheimer's disease. Treating the chronically ill raises insurance premiums for everyone. Healthier lifestyles could cut costs.
4. Since 1980, wealth inequality has skyrocketed. Per Thomas Pocketty in his book, Capital, reducing wealth inequality is best achieved through higher tax brackets on the wealthy.
5. Every fulltime worker deserves a livable wage. For those having to work two jobs, they lose out on sleep and family time.
6. Racism and bigotry can literally make people sick. I suspect there has been an uptick in illness in ethnic and racial minorities since Trump took office.
7. The single best way to health is to live in a healthy way. Eat more produce. Cut down on sugar, processed foods, and alcohol. Exercise in a way that gets your heart pumping. Spend face time each day with friends and family. Pray. Sleep 7 to 8 hours. Use less chemicals. Read the Blue Zones on how centenarians lead simple, healthy lives. Theirs are the health success stories.
9
Yup, it should seem obvious, but it isn't even mentioned in the article. #7 is, imvho, every thing there is to know about health, and healthcare costs.
Kudos!
I work in healthcare... 1980s was also when "managed care" started, along with insurance co's directly taking profits from the gap between premiums and payments (rather than older practice of earning their profit on investments of the premiums.) Profit motive for higher prices & worse care, and rising administrative costs required to play cat & mouse with these companies, create gap between what is ultimately spent & quality of care/outcome.
15
Did the folks who ran the study consider demographics?
I am referring particularly to the demographic change that took place in the 1970s-80s, where the Great Depression+WWII generation started retiring (if you were 25 at 1945, you were 60 in 1980) and the Baby Boom generation entered and dominated the workforce (born in '45, you were 35 in 1980, born in 1960 you were 20.)
Firstly you have the larger number of Boomers compared to previous generations, then you have the stoicism of previous generations which would have minimized doctor visits despite having "health insurance" versus the Boomers who were used to a better quality of life and to going to doctors if they had problems and expecting better living through Chemistry.
Couple with this demographic shift, the dramatic shift in medical technology. CT-scans, MRIs, Laparoscopy, etc... came into being in the 1970s and popular use in the '80s. These made medicine better and less difficult on the patient and doctor, but these also increased the number of things you could diagnose and treat which would have been dismissed as untreatable before.
Now, other developed countries, in principle, also should have experienced these changes, but at the cost end the story diverges. Since they tended to have regulation, costs were constrained. So most of the R&D costs ended up being paid by Americans through the shell of "health insurance". Something that continues to this day.
Then add litigation, ... ouch!
1
The median age in Italy, Germany and Japan are roughly a decade higher (47) than us at 38. This undermines your theory, as does the suggestion that they do less R&D on drug and therapy development.
6
I believe this is mostly due to prescription drug advertising that started in the early 1980’s. This is not legal in most countries. Americans are going to their doctor asking for all kinds of medications because they saw an ad on television. Now, Americans are taking all sorts of drugs that have little to no effect on their life expectancy. But, it’s not mostly poor people who are doing this. It’s middle and upper class Americans with insurance. Meanwhile, poor people are not getting the treatments they actually need.
9
This article loses the plot and pretty quickly gets lost in the medical-cost-containment weeds. Early on, an expert states that medical care is NOT the most significant determiner of longevity, that social status and connections play a larger role. But most of the article focuses on possible ways to contain costs of that very necessary but less critical aspect.
So what did happen around 1980 that squares with the social impacts the aforementioned expert spoke of? Reagan introduced trickle down economic policies that launched the greatest upward flow of wealth since the Gilded Age and that ultimately led to income inequality that is now at historic levels.
Ever since then, the middle and working classes have continued to struggle with stagnant wages and loss of social status while a relative handful of people at the top have enjoyed previously undreamed-of wealth.
22
In fact there is even less competition in health care markets in other OECD countries than in the US, but prices are still lower.
That's because they're determined by negotiation between public insurers, providers, and the government, not the market.
9
Are poorer citizens less healthy because they are poor or are they poor because they are less healthy? The answer to this conundrum would ultimately provide one of the key answers as to why America spends more but gets less from health care expenditures than other wealthy nations.
There is a relationship between poverty and health that is not fully understood and therefore cannot be explained. Poor people tend to have many more health problems than those who are well off. In turn, when health problems hit, they impact on the individual, and the family's general economic state, much more than on the well off. It appears to be a downward spiral that forms a major part of the forces keeping people in poverty.
While people say we can't have universal health care because of the high cost, they are wrong. We are, at the present, paying about twice per capita for health care as western Europe. The "tax" exists right now, it is just paid in various forms rather than through government collecting revenues.
The choice is not over whether we are going to pay for health care for all or not, but over how well we can organize paying for it to get the best deal all around to bring lower costs and better outcomes. In other words, we are diverted into a phony debate the skips over the truly important issues. Sooner or later, we have to stop arguing over the wrong things and look for the best solution for all. Otherwise, we will just keep wasting billions, year after year.
11
I'd like to see if the trends in compensation for executives of healthcare organizations (hospitals, insurance companies, etc.) and the profitability of those organizations compare with the trends in healthcare costs.
10
Has anyone looked at the impact of for profit health care providers and the decreasing regulation on non profit hospital expenses since the 1980s?
The unbridled growth of mega hospitals and what seems to be competing high cost, low utilization procedures and services certainly must contribute to operating costs.
How many MRI departments does a mid sized city within reasonable distance of a major medical center really need?
7
Valdovinos E, Le S, Hsia RY.
In California, not-for-profit hospitals spent more operating expenses on charity care than for-profit hospitals spent.
Health Aff (Millwood). 2015 Aug;34(8):1296-1303.
... Using data from California, we examined whether the levels of charity and uncompensated care provided differed across general acute care hospitals by profit status and other characteristics during 2011-13. The mean proportion of total operating expenses spent on charity care differed significantly between not-for-profit (1.9 percent) and for-profit hospitals (1.4 percent), in contrast to the mean proportion spent on uncompensated care. Both types of spending varied widely across hospitals. Policy makers should consider measures that remove disincentives to meeting the persistent considerable need for charity care-for example, increasing supports to offset rising Medicaid shortfalls resulting from program expansion-and facilitate the tracking of ACA impacts on the distribution of charity care and uncompensated care delivery.
In my city, Raleigh, North Carolina, when an heathcare organization wants to build a new facility, they have to apply to the atate for a "certificate of need." Only when that is granted can they build.
It is very simple. We have a much more unhealthy population, we pay almost everyone more than most other countries, and we allow other countries to get say drugs cheaply as we pay for their development. No surprise or mystery there.
5
Nothing whatsoever to do with the fact that we are the only country whose ‘healthcare’ system is profit-driven?
1
Of the top 20 drug manufacturers in the world, ten are American. The concept that other nations benefit from our exclusive R&D is a lie. No surprise or mystery there, we tell this lie to enable our flawed system to continue despite all evidence proving it doesn't work very well.
Insurers negotiate contract rates for procedures with hospitals and hospital groups. While I see a handful of procedures that are paid at 100% (or slightly more) than what the hospitals actually bill, by far most insurers pay contract rates of 50% or less than what is billed. Medicare and Medicaid pay contract rates around 14% of what is actually billed. The hospital writes off the difference. What's more shocking is how much the poor insured must pay, between deductibles and coinsurance(sometimes as high as 25%-35%). So it all seems fantastical to me because it makes no sense as a business model. What's the purpose of the high billings just to be discounted sometimes up to 86%? I've also had doctor friends tell me that the hospitals with which they are affiliated are changing the billing codes the doctors submit to codes that favor the facility rather than the doctors. It's a mangled mess that seems to smack of collusion between insurers and hospital companies.
10
Not just the poor insured. The shocking flaw of 0bamacare is/was that those who buy plans on the market also pay full MSRP, rather than any negotiated price, since nobody is negotiating for them. Even under a 1300 dollar policy for a healthy young family, specialist visits cost 500, epinephrine shots 600, emergency room dr visits 3000, and so on.
4
For superf88, this is not the case in Boston's Obamacare exchanges. A lab visit w/o deductible: $74, without insurance, $484. The exchanges use the same networks that private and employer-based providers use. If this is the case in your exchange, is it because you do not have network providers?
Obamacare requires a commitment at the state level, from regulators, and insurers. Here in MA, we fortunately have all of that but other places might be different.
Huh? Not at all true, in California at any rate. My insurance, obtained thru California's Covered CA (Obamacare) program, paid a negotiated fee of about $7000 for what the hospital originally billed at just under $30,000 for my recent medical services. My portion, for copays and deductibles, was about $900. Still a lot of money but a fraction of the ridiculous charges for services rendered in three 1.5 hour outpatient ER visits that included no surgeries.
4
Sugar consumption, processed foods, corporate profits, and a dissociation between living a healthy lifestyle and expecting medical care to make people healthy for bad life choices. Chronic diseases are consuming our medical care with no end in sight. Diabetes, heart disease, smoking induced diseases; these are all lifestyle diseases and medicine treats the symptoms when prevention is the solution. Health care should have a component of self responsibility. Obesity, metabolic syndrome, non-alcoholic fatty liver disease are preventable with self restraint. The US is a nation that lacks self control when it comes to living healthy lifestyle.
8
1-Add a $5,000 pa premium if you are a smoker.
2-Add 1% for every pound in excess of 15% overweight, and subtract off 1% for every pound less than 15% overweight (assuming the weight is not a medical issue.)
So true. Much of healthcare costs could be prevented by changes in lifestyle. As a country, we need a c-change.
Each time I see childhood education, I think of Parents. We cannot spend ourselves into a situation that forces two parent families. Simply put, most childhood education comes at home. We cannot ignore that fact and every hope to deal with this critical time of development. Is it a village, is it a two parent family or is it every person choses and we all try to support that choice, however difficult?
But every child does have two parents.
Virtually every politician proudly proclaims that the United States has the finest health care system in the world. The data hasn't supported that claim for far too long. Perhaps a question for politicians seeking federal office this year should be; "If the US health care system is so great, why has no other nation copied it?"
23
It's great for some. Most people in most nations think it should work for everyone.
Health Greed, Not Health Care
Other nations have health care: the mission of doctors, and medical staff, in these nations, is to optimize health of the citizens. However, in the USA, starting with the presidency of Reagan, greed came to be viewed as the best motivation for everything. Reagan himself, as governor of California forced the University of California to charge for education. Initially the University, including its hospital, had been public, 100% publicly financed and free for Californians. Reagan made sure only the wealthy could attend, in the long run: now only 13% of the University of California financing is from the state.
That model, that only the wealthy could pretend to full human rights, has been extended to the entire society. Of course, “Your Money Or Your Life!” works best when people are otherwise dying, or in pain.
The propaganda of the powers that be, the propaganda of the power of greed, is incredibly deep. It's a programmation not just of ideas and systems of ideas. It is a programmation of feelings, emotions, occupations. A programmation of moods and inclinations. A programmation of souls and hearts!
We the People of the US has not understood that we are confronting the formation of a new aristocracy, the aristocracy of wealth. Some individuals, famous and esteemed, in the US, have made billions of profit in health care. Now life expectancy of US citizens is going down, as in the dying USSR.
Time to understand that greed is antagonistic to care.
26
When I went to Berkeley, a student body membership cost more than tuition. The tuition fee for a semester was $75. I put myself through school mostly on what I made as a laborer during the summers. And yes, health care was free. I worked for California's Department of Public Health when Reagan was elected governor and left a year later, as did a lot of other persons more important to the public's health than I. Reagan got neither education nor health.
5
Profit soars in a for profit system.
It's not a wellness system, wellness doesn't generate $$$$.
24
The simplest explanations for the US’s downward departure in life expectancy are lack of universal health insurance coverage and poverty. The reality is clear when you look at life expectancy by income quintile. Americans of middle income and up track the international averages. Those below middle income trail the averages. Within the United States the difference in life expectancy between someone in the lower quintile of income versus the highest is approximately 12 years.
22
The US passed the HMO Act of 1973 setting the stage to allow profiteering by insurance companies. It also divorced us from price sensitivity by trading coinsurance (% coverage) for low or no copays (HMO model), supercharging our spending on health care.
14
Half of Americans have private insurance with a 20-25% overhead due to large overpaid bureaucracy trying to deny coverage paid by employers who pass the costs to their customers and employees, Public insurance like Medicare, Medicaid, the military, VA , and Europe have a 3% overhead.
20-30% of the medical cost come from overdiagnosis and overtreatment because patients want everything free (because it it prepaid), doctors want to play safe to avoid suits, please patients, order tests and procedures which have a high profit margin,and there is a surplus of technology and specialists in this ultra capitalist country.
America's lower class is sicker because of poor health habits, violence, stress,and obesity.
7
Given the additional tests for safe playing one would expect an extended life expectancy as justification for the 20-30% higher medical cost. As far as the lower class is concerned, it must be very large indeed in order to drag life expectancy down below that of most other countries - given most other countries have a lower class demographic as well.
4
Studies show that meds prolong life as long as heart surgery, much orthopedic surgery is ot better than meds, PT, stretching etc I was once billed $20,000 for ER tests,etc I refused and did not need.
Many poor (in the bottom quartile) are dying in their teen, 20s and 30s from guns, suicide, overdoses,and accidents
I am a retired EM doctor
Might the "health" measurements be applied incorrectly? Try looking at the size and profitability of insurance companies as a measurement of health. I'm sure there are some correlations.
5
You explained it very articulately. The profit motive took over the need for pharmaceuticals, providers and insurers. We are also a fix it, alleviate it rather than stop it from happening,
The other issue in the 80's that really took hold was AIDS and the cure for AIDS was in drugs. So perhaps once the cure for AIDS was found to be drugs and the pharmaceutical companies saw the profits then they focused on fixing rather than stopping.
We are a prescribe culture once you hit a certain age and a cancer culture. I just look at Chicago where we have some huge medical complexes. Those complexes need to pay for themselves so higher margin procedures where they can capture revenue.
The US healthcare system is run with a Trump mentality, where can we make money, where are the patients, not how can we prevent things from happening.
I don't fault individual doctors but it is the system.
5
This is all in the name of profits. Healthcare should not have a middle man profiting off whether people are healthy or sick.
13
Its also about the time insurance companies cooked up the managed care scheme which ended up costing even more. Employment probably ski-rocketed at that time indoctor's offices etc., with people required to watch over all the ridiculous numbers of forms. You had to see your primary care doc every single time you needed to see a specialist driving up costs. It was lunacy and hasn't solved anything except expanding obscene profits.
6
Everyone is beginning to realize it is a total mess. And Obamacare didn't help. We have to start over and the sooner the better.
7
When you mandate by law that everybody has insurance (regardless of how lousy the plan), guess who gets even richer? Ding ding ding insurance companies. More and more, I see my peers turning to cash pay boutique models of practice as insurance companies reimburse terribly for our services and are a hassle. The two tiered system is very much alive and well and may have even been exacerbated by the ACA.
8
But Obama tried to help those that couldn’t afford healthcare - a start and yes can be improved. We need an overhaul but our politicians won’t have the guts to do it.
We also spend ten times more on defense than any other country and have nothing to show for it other than some very, very rich defense contractors. The only “upshot” possible is that these industries are intensely corrupt and have currupted our government as well, and in the face of this we get attempts at obfuscation or complete silence from the mainstream press.
16
Would love to see:
Mandatory Hospitalization Insurance for every individual.
Stop having employers pay for their employee's health insurance. Individuals are fully responsible for their healthcare.
Primary Clinics - CVS - Walgreens - Walmart
Joe
Nobody is 'having' employers pay for insurance. They came up with that idea themselves as a tool to recruit and retain employees.
Its all their idea.
Yes, there are regulations to assure the quality and reliability of the plans (ineffective as they may be), but the plans themselves were a corporate brain child.
Now that they realize they can abuse their employees and still have people begging for jobs, the companies' only worry is how to keep executive plans while dumping employee insurance on the backs of taxpayers.
So far, nobody is doing a better job of that than Walmart, which saves billions by making you pay for their employees' insurance.
All other first world nations have nationalized health care.
I'm not crazy about clinics in pharmacies; they're just a venue to sell more medicine.
The medical healthcare scam that exists in the US is hidden behind lies such as 'choice' and 'we have more MRI machines in our city than the whole of Canada' or 'death panels' or 'SOCIALIZED medicine' etc etc. All these lies are created by the media propaganda companies to keep the funds flowing to their corporate healthcare buddies. People of the US, you are being lied to. Universal healthcare is better than what you have. Don't believe what the media tells you.
9
The MRI thing is likely true. MRI unit per person rankings show us as #2. Japan is #1 by far, Germany slightly behind us, but Italy, at #4, has about 25% less units than we have.
Canada is about 25% of the US level, so if the ratios hold true, NYC probably has more units than Canada.
The bottom line in the USA is... can you afford to visit the doctor or have medical care whenever you want? Can you afford any medication? It is never going to get better. Support the troops or support health care for all, your choice.
7
I can't agree enough about pinpointing the year of 1980 in which the American health system, once a decades long beacon of high quality, equal access and sound cost containment, began it's quest to become what we have now- a convoluted, intensely complicated, fragmented and highly exclusionary, profit seeking serpent which is never satiated, monetarily.
Which also means, too many people who were unlucky enough to be born in my generation, the last of the boomers and the proceeding x-generation, have never truly known what real health care is, the one my parents had -to take care of them.
Which also tells me plenty about both my and my parents generation. The greed that took over everything during this and subsequent decades- was (and remains) relentless. Politically, sociologically, culturally, and economically.
Question is- will I ever- in my lifetime experience a stable and decent health system, the same one my parents used to help them to save, and ultimately, to retire with? THAT is the million dollar elephant in the room question.
10
No we won't because every time it came to the last 8-9 years of the baby boom generation we were cut off. The older ones are retiring with pensions and other things we'll never get. Everyone got tired when those of us born after 1955 came around.
2
The shift to High Fructose Corn Syrup (HFCS) as the primary sweetener in products occurred during the 1970’s. The US remains the top consumer above all.
11
The answer those of us who are healthy enough have come up with is to skimp on medical care. We don't go to the doctor unless we're seriously ill and then it costs much more to treat. If we can't afford the medication and it's not a life or death situation we don't bother filling the prescription (the system in NY notwithstanding). Or we buy it and cut the pills in half to save money.
Since I've been forced to job hop since 2013 I've stopped taking medication for my asthma and my allergies. I've not gone for any sort of preventive testing because I can't afford any treatment anyway. I'm unable to find a decent job because of my age (almost 60) and on Medicaid but that insurance isn't worth anything.
For the chatter about the value of our lives our politicians and our businesses and our society do not value our lives. If one is not rich in America one is invisible. We're living in a country that has two separate systems for everything: one for the monied and one for the rest of us. What the rest of us get is the leftovers. That goes for medical care, the justice system, education, and everything else. And it's only going to get worse with the GOP and its minions in charge.
25
Re: "But none of this explains the timing of the spending divergence. Why did it start around 1980?"
This is a complex topic, but it useful to look at this graph
"https://www.epi.org/productivity-pay-gap/"
That shows that around this time the classical macro economic connection between productivity and started to fail.
Productivity increased, but pay stayed flat. Since ~ 1980 productivity of American workers increased by 242%. Wages by 115%.
The divergence is a distributive effect of globalization (outsourcing, immigration of workers willing for less, moving manufacturing to Mexico in response to request to wage increases) that hit most sectors, but NOT the medical profession.
In 1998 the mean annual wage of Physicians and Surgeons was $ 102 020. By 2017 it reached $238,540.
Why so?
The medical profession is largely shielded from international competitions . Regulations (sponsored by the AMA) makes it nearly impossible to import physicians and surgeons willing to work for less - unlike , say IT workers on H1B visas. Add to this that fact that medicaid will not pay for services carried out in Mexico or Canada , and that the elderly consume a disproportional section of health care costs.
We see here yet another example of a bifurcation in US inflation : Services and goods not exposed to global competition have a comparable high inflation rate, services and goods exposed to global competition a comparatively low
17
Don’t blame physician salaries. 230k is pennies for the 4 years of college, 4 years of Med school and 3-10 year residencies working 80hrs/week at teaching hospitals for 50k annually ensuring that the urban poor receive health care. We don’t have enough MDs because we don’t have enough residency spots and residency spots are funded by Medicare; it doesn’t matter if there are more Med schools as an MD without a residency is useless.
I would also be careful in assuming that a medical education abroad is comparable to one received in the United States. Consider the multiple board exams one must take (at 1-2k per exam) just to be eligible for residency. It’s not that there aren’t lots of physicians from other countries who don’t want to practice in the USA but they, the best of their lot, are competing with US grads for limited spots.
The guilty culprit here is the bloated and useless administrative salaries all written into the ACA.
Physician burnout is very real, and frankly closely tied to all of these non physicians who dictate the way in which medicine is practiced. Those of us who are physicians could very easily jump ship into something more lucrative. Reducing our salaries in order to fund more non physician salaries “to reduce costs” will result in worsening health outcomes and a poorer quality pool of people operating on your grandparent.
7
Consider too the phycians’ need for liability insurance for their practice- protection from lawsuits. In fact many ob-gyn’s left rural areas because of it. And a reason most physicians form a group practice. Their education etc and hours worked plus liability all contribute too.
You must excuse me for appearing to insult you VanessaMD, but physicians do not go to school for many years so that they will be able to cash in and demand high salaries or big payments when they become a practicing doctor. The time and rigors of a medical education are so you don't cause harm to your patients, so you don't make a mistake and accidentally kill or cripple someone. But this system has failed in the USA since medical error is the third leading cause of death and there are approximately 10,000 (ten thousand) non-fatal injuries daily of people due to preventable medical error.
You epitomize the corrupt mentality in the medical profession that contributes to the failure of our health care system.
I wish this article included the history of the rise of for-profit HMOs and hospitals, beginning in 1973. I watched as my employer became a for-profit institution in the early 1980s, and suddenly the cost of our patients' care sky rocketed. Instead of just giving and reporting care, our job descriptions and evaluations began to include charging the patient in detail for each service given. Hospital administrators, formerly thought of as bosses, became The Enemy for those of us who wanted to provide quality care without charging for ridiculous trivialities. The problem persists today.
26
Greed Over People 1980 - 2018
"The point is that you can't be too greedy."
--- page 48, Trump: The Art of the The Psychopath (1987)
Nice GOPeople.
14
The underlying reasons for this is that America is a Capitalistic Nation. America is run for the very rich and for corporations. Profit always comes before people. The mystery is why the people that would benefit the most are the always the most opposed to any socialist policies. It's good for capitalists if the populace is uninformed.
14
On America's below average Life Expectancy Rate vs comparable OECD Countries.
" The lack of universal health coverage and less safety net support for low-income populations could have something to do with it, Ms. Glied speculated. “The most efficient way to improve population health is to focus on those at the bottom,” she said. “But we don’t do as much for them as other countries.”
Could have something to do with it???
In fact, Ms Glied confirms and validates it has everything to do with it whilst at the same time, hitting the nails on the head... on what Exactly is driving Life Expectancy down whilst it also highlights the main weaknesses and shortcomings that still reside within the current healthCare system and the coverage it should, but does not provide any of let alone ALL.
3
Let's ignore everything but the elephant in the room. Other countries have system in which the quality of health care is a primary consideration. In the US. making money is the first and often the only goal. Set up a system in which barely regulated privateers can make money supplying what people *have to have* and this is what you get. Do we really need tarted up studies to figure this out?
16
We do if we ever decide to try something besides what we've got. Those tarted up studies prove that access to medical care when and where it's needed is important. Without those studies there's no reason for anyone to suggest a change. The real elephant in the room is the GOP, the Greedy Oligarch Party that is subservient to its rich donors who don't want working Americans to have decent medical care.
The saddest thing about our system is that there are many intelligent Americans who believe any sort of socialized medicine is worse than what we have. But in other countries health insurance companies are NOT dictating who lives and who dies or who receives treatment and who gets to go bankrupt. Being middle class and seriously ill in those countries is not a recipe for bankruptcy and/or permanent indebtedness. In America it is.
17
No mention of direct-to-consumer advertising of prescription drugs? This is illegal in much of the world, and for good reason.
15
I do not see this as rocket science. Might explain,, may explain,,,
Medical costs too much. When a simple physical in a doctor's office, with blood work, costs 1,422.00 dollars, do you get a physical ? (actual cost) 315.00 to the physician and her office, and then a second bill for the blood work up of 1,107.00. They should have done an EEG to find out if I am nuts for not asking in advance about that small 'extra'.
A cut finger, 2 stitches, at the emergency room, 3,400.00.
Heart bypass 250,000.00 (for four days in the hospital).
Health insurance,,, that does not insure my finances,, 1,100.00 per month. It does not insure my finances because of 80/20 and deductible,,, a 30,000 dollar exposure per year.
And the kicker of that 80/20,,, For a gall bladder removal some years ago, 36 hours in the hospital, cost 62,000 dollars,, and my portion was 13,000 dollars. After the fact, the insurer negotiated a much lower amount,, for the insurer only. The insurer paid 3,000, I paid the 'other' 13,000. My portion did not go down.
Cost. More people die younger because you cannot afford to go to the doctor. Pure, simple, unequivocal. Half, fully half of all 'health workers' are insurance and billing. The other half are the Doctors, Nurses, techs, maintenance people, Pharma manufacturing costs, and direct administration. The other half are all paid by you,, to deny your claim, and raise costs. Half.
13
What you said. I've had the same exact experiences, made 10000 times worse by lousy, worthless Obamacare. I avoid doctors and the ER now, because otherwise I'd have to pay the first $12,000 out of pocket -- premiums and HIGH DEDUCTIBLE. BTW: here is a hint. If you do have to go to the doctor and they want a blood panel -- SAY NO. Explain what you say here. Ask the doctor precisely what tests you really need, not just "do all of them". Then go to a private lab that posts prices (yes, they exist -- google it) and have JUST THOSE tests done. Still costly, but more like $250 vs. $1300.
1
When the buyers aren't paying for what's being bought, inflated prices are precisely what you should expect. Doctors don't care that the drug they're prescribing costs $100 per pill - it's not their problem. The patient with the $20 co-pay doesn't care either. If you're told that you need a stent put in, do you shop around? You shop for the "best doctors", if anything.
Relying on "free market" forces to establish rational prices is simply preposterous under the current US medical system. Unfortunately, it's heresy for Republicans to do anything else - and too many Democratic pols join them, at the bidding of their big donors. Reforming an out-of-control system that's making so much money for so many people will take principled and thoughtful leadership - and we sure don't have that right now.
5
"do you shop around? You shop for the "best doctors", if anything."...
You are correct though I've never seen a price list in any doctor's office or hospital nor, have I ever found anyone in a hospital hat could explain the charges that I will incur prior to any type of procedure. It's called the pricing mystery. One thing is for sure, if you do not have insurance (even though they pay and providers settle on only a small percentage of the billed cost), a simple visit (much less anything more complicated) is ridiculously more expensive. The insurance companies are like gangs, to have to join to survive.
6
After 1980?? Anybody remember Reagan? And that brilliant concept, Supply-Side Economics?
10
Probably has something to do with the Health Maintenance Organization Act of 1973, where Nixon sold out the healthcare industry to Kaiser and ended non-profit rules.
9
Its pretty easy to see what happened in 1980 - Ronald Reagan and the onslaught of out of control greed capitalism. This philosophy which has been running the US now has created a society which permits the very wealthy to take most of the money, and denies the importance of social services including health care. Its out of control and killing the USA.
9
Since Reagan there has been no enforcement of anti-trust laws, and you wonder why everything has consolidated? And yeah, there is no competition, and there won't be until anti-trust laws are once again enforced. All the rest of this is academic.
3
Gee, 1980 was a pivotal year in politics, when Ronald Reagan, an AMA-paid opponent of "Socialized Medicine", became President of the United States. If Reagan and his fellow travellers couldn't get rid of it, they could (via de-regulation) create the zombie that pours our wealth into the pockets of the healthcare-industrial complex. I'm told it was considered very important that Reagan was president, and had a compliant Congress. Was it?
Or is it un-necessary to ascribe malice for what can be adequately explained by ignorance and foolishness? In any event, the timing, by year, has to be telling us something.
4
How long should we live?
Psalm 90:10
Seventy years are given to us!
Some even live to eighty.
Length of life is not the only barometer; quality of life -- even if medicated, is an intangible.
How much was spent keeping infants from their first breath?
I agree up to a point, but going by the life expectancy in THE BRONZE AGE is setting the bar awfully low.
1
It's food. Meat and fat intake is way up since 1980. Cut meat and fat back down to 1980 level, and our life expectancy will fall right in place with other nations along with big reduction in medical cost.
Raegan and de-regulation happened.
5
It's not exactly plagarism to report the source of your graphic as "Source: National Research Council" but it's borderline, since it doesn't fully give credit where credit is due. It would be very helpful to be more explicit in the source of the graphic, and even better for the underlying data, for those of us who'd like to upload the data and study it a bit ourselves.
What mystery? It’s common knowledge in the year 2018 that the American healthcare system is totally out of control. Why? Profit of course! Services get more and more costly so health insurance premiums get higher and higher. What incentive do medical providers have to lower prices? None whatsoever! Big Pharma raises drug prices daily. Unscrupulous doctors prescribe expensive treatments and lab tests because they own the labs and treatment centers. It’s utter insanity. Put it this way, imagine if you’re auto insurance company also owned the auto body shops? Of course this is illegal but not in healthcare! The only real answer is universal healthcare for all but of course the healthcare lobbyists will fight that to their dying day. So in the meantime if you’re wealthy you get the care you need but if you’re not wealthy you don’t get the card you need. That’s a broken system and it’s no mystery.
4
This article ignores three big factors in life expectancy that have nothing to do with healthcare. We have twice the highway death rate compared to Europe because Americans drive twice as many miles per year. We have a higher suicide rate especially among teenagers which skews the life expectancy down. We have higher murder rates, especially among minority communities. These three factors make up most of the differences in life expectancy. We have better five year survival rate after a cancer diagnosis than most other countries. Using just healthcare to understand the disparities in life expectancy is intellectually dishonest.
We still can do better and need to adjust the system to fix the problem of spiraling costs. Overhead costs are ridiculous. Standardizing billing procedures would be one possible improvement. Requiring healthcare providers to charge everybody the same price for services might actually put market pressures on prices. Requiring prices to be publicly published would be another fix so patients could shop around for non-urgent care would be another.
1
We are also the only one of the nations listed that were measured, who is this big -- I think Japan is the closest, at 1/3rd our size -- and many like Denmark are teeny tiny nations of 5 million (the size of a not-huge American CITY). We are also incredibly diverse -- Japan is a monoculture with no immigration. Scandinavia is overwhelmingly white, blond and blue-eyed. ONLY the US is this diverse, and some of our diversity is in having a huge underclass of poor black and hispanic urban citizens. Because they are poor, and have health problems that are pre existing -- and countless bad habits -- and are intransigent to help & social programs (for generations!) -- and would require massive welfare interventions at everyone else's expense -- AND on top of that, have genetic predispositions to many ailments -- it is a nearly insurmountable problem. Oh and add to that: 25 million ILLEGAL ALIENS that the Democrats refuse to deport and who would all need 100% FREE Medicaid welfare. (That's...5 times the size of Denmark...ALONE.)
2
Health care costs have risen due to several factors, some of which were described in the article. However, with the consolidation of insurance companies, the takeover of nearly every independent hospital by a for-profit corporation, and the minimally regulated pharmaceuticals, the result has been the drive for profit. Everyone of the companies involved in the medical industries has utilized methods to increase profitability. They have calculated the costs the Federal Government, through its Medicare/Medicaid programs will fund and then turned its efforts to get every last dime from the American consumer. Recall when the Bush Administration passed Medicare Part D, it was supposed to help seniors afford medication. Instead, Big Pharma increased their prices in order to absorb every dime the government had put into the program. This had the additional effect of driving up costs for everyone else. Big Pharma noticed that people were buying their medication and continued to raise prices, while selling the same medication globally for pennies on the dollar.
The same problem was happening with durable medical devices. A device that costs 100 to make was being charged to insurance companies 10-20x. The cost was passed along to all insurance policies.
Insurance companies charge different rates in different parts of country, based not upon the health metric of the region, but the average household income.
What would happen, if tomorrow, Americans decided to not carry insurance?
3
It's not all that mysterious. The Sunday AZ Republic Real Estate section highlights a major cause of the explosion in health care costs. They have a feature that lists the most expensive homes sold in the Phoenix Metro area, many of the buyers of these multi-million dollar mansions are listed as executives of Health Care and health care related companies.
Executive compensation in health care related industries, extravagance in health care related company's "business entertainment expenditures, high end retreats at posh resorts, extravagant meals, and also the need to show ever increasing profits while building marble lobbied medical edifices.
Applying "Free Market" laissez faire capitalism to an essential human need where the consumer is held captive to businesses that also dictate to the government via lobbying and campaign bribes er 'donations' that the system will allow them to extort maximal profits from those captive consumers who must "pay or die", gets you what we have got in the US today.
Gee, 1980....Reagan was the start of this and it's continued to accelerate to stunning levels under the extortionate US Health Profiteering industry. Big Health CAre, big pharma, big insurance.
8
Drug advertising on TV was allowed in 1983. The amount spent on marketing drugs is staggering.
4
When asked how we could reduce healthcare costs, president Obama said, "stop doing things that don't work." Amen.
Many comments are focusing on broad macroeconomic changes, and the profit motive behind health care. Fair enough.
But one driver of expenditure is our willingness to provide any treatment, at whatever cost, regardless of how efficacious it is. Many of these have no impact on life expectancy. Example: expensive and ineffective treatments for cancer patients at the end of life. Some increase the quality of life but do not increase life expectancy, example knee replacement. We have the highest rate of knee replacement in the western world. In other countries if you have knee arthritis, well ... you're old, what do you expect!
1
A valid point, but allow me to describe my own ongoing healthcare situation:
This past winter I began experiencing chest pains, especially at the start of exercising (I bicycle). I went to an urgent care facility. They checked my BP and did an EKG - all normal. They referred me to a cardiologist. Another EKG - normal. Cholesterol levels are excellent. A cardio ultrasound showed an enlargement of the right side of my heart muscle - possible sleep apnea. A sleep study (that I paid for out of pocket) showed little to no apnea. My cardiologist really needs to do a nuclear marker stress test to definitively rule out narrowing of any cardiac arteries, but my insurance won't cover it.
So I still don't know what's causing the pains. Maybe arteriosclerosis, though not likely considering my level of fitness, BP, cholesterol, etc..
And fwiw, in the last few weeks the pains have been less often and much less severe.
2
Mikeweb: you need the nuclear marker test. Your cardiologist should have fought the insurance company to demand they pay for this, and explain fully WHY you need it. If he won't...find a new cardiologist. You can almost always file a dispute and challenge a denial -- I have had to do this -- and there is a reasonable chance they will reconsider.
That the adults in charge allowed medical care prices to rise way above inflation for decades is nearly criminal, in the same way that college prices were allowed to rise at even higher rates over the same bloody time period. It is almost unbelievable that our democratic system was unable to respond to these two out of control sectors, that now eat up such a large share of our GDP and/or family budgets. I guess this lack of finding solutions before things spun out of control speaks volumes about entrenched, corrupt private interests controlling the debate and the politics. And it also speaks volumes about the inability of progressives to rally the American people to find more sustainable solutions.
3
Do not forget that clinicians are socially competing with lawyers and MBAs. They put in more educational and training time then those professionals, work worse hours, and so when the executive suite salaries and attorney compensation went up into the stratosphere, physicians felt left behind. So part of the problem is the 1% disparity which plagues all our economy. A progressive tax structure is the only solution.
2
The Free Market does not work with health care. The system we have is more like Pay or Die, a form of extortion.
7
As medicine has slipped into a total for-profit scheme and the Republicans have long abandoned protecting the people from such shenanigans and now serve only the corporations that double and triple the price of their products and services at will, the cost of medicine has risen primarily as a function of greed.
To dress it up in fancy studies, is refuse to see the elephant on our necks.
4
The astronomical amounts of money that the pharmaceutical and health insurance cartels pay for lobbying explains why they have been able to corrupt our self-serving politicians: Democrats as well as Republicans and we have to suffer the consequences. Trump's drug scam won't change a thing.
3
As least there is an attempt by this administration. I can admit that.
Medical schools stopped opening. There's a gap from 1973-2008 in which only 5 new schools opened within 35 years. Meanwhile, the population boomed from 211.9 million to 304.1 million. Now there's a shortage in which healthcare industry hopes to fill with visas, and doctors trained abroad. A medical student authored a good letter explaining this to the Times, linked below.
https://www.nytimes.com/2013/06/23/opinion/sunday/sunday-dialogue-will-t...
2
All this and no mention of the huge elephant in the room. We pay our healthcare providers 30-70% more across the board then the nations we are comparing to. Everyone can continue to complain about pharma, insurance, and CEO comp. But the reality is that Dr's, Nurses, and other technical specialists here in the US are comped much higher than most other countries.
This McKinsey is a good look at this even if it is a little old.
https://www.mckinsey.com/industries/healthcare-systems-and-services/our-...
3
But, how does that relate to the costs of the physicians education?
2
This article is full of wise observations from the Institute of the Painfully Obvious. “Periods of rapid growth in U.S. health care spending coincide with rapid growth in markups of health care prices.” Wow. Who knew? Unrestrained greed in a medical system that is regarded as an “industry” and the neglect of anyone who can't pay will yield exactly the results we see: high costs and lots of sick, dying people. Where's the mystery?
So what is the proposed solution? The market, of course! More competition. More greed. Until we have universal health insurance and real price controls of drugs and procedures we will continue in this downward spiral. When will we wake up to this simple truth: when we all do better, we all do better.
1
This is tragifarcical: when the senile Reagan was elected in 1980, my parents, both life-long public health professionals, knew that things would only get worse, never better. At 17 then, I knew, but didn't know I knew (and wanted to be wrong). But by 1985, I knew. And when I teach or speak in other fora, I use 1980, when Mr. "Make America Great Again" Sr. was elected as the public marker. (Today I see the irreversible trend as having started in 1973, and 1980, with the beginning of the USA's unrelenting reactionary turn, as a more public acknowledgement.) If I were to meet a public health professional -- or just a health professional -- today who didn't agree with the obviousness of this judgment, I certainly wouldn't trust them about much of anything -- let alone health or public health. At 55, I lend my trust to fewer and fewer people, and today health professionals of any kind are, sadly, almost gone from my ever-narrowing circle of trust (professionally or privately). The Cold War pretty much stamped out causal thinking in the USA. The Axis of Evil doctrine of 2001 was its obit. As one who has devoted his life to understanding causality and causation, I do not think much of the return of causal, structural, or systemic-systematic thinking in the face of the supporters of the current US regime, and other US-Americans, who prefer 'I believe' and 'I feel' to 'I think, because. . .' -- and who rather believe and feel that the Resurrection is at hand. Sad.
3
What happened in the decades leading up to this explosion?
Massive legal and illegal immigration of poor, unskilled families. The American middle class was burnded with not only educating, feeding, housing, incarcerating them, but providing top level medical services.
Our first resonders, front line doctors/nurses and hospitals became overburdened. Costs skyrocketed.
1
Not only are the outcomes not better, they are worse by most measures!
2
Please keep digging and looking , NYT.
I have first hand experience of this and the disparity between the medical costs in US and elsewhere for THE SAME DRUG.
My dad needed a shot of Avastin to stop the spread of glaucoma in his eye. Out of pocket in the US, it cost him upwards of $600
Same shot in Asia costs 1/7th the price, ie less than $100
Why this disparity, esp since Avastin was discovered in US?
No Fair.
4
Nevertheless, Ashish Jha, a physician with the Harvard T.H. Chan School of Public Health and the director of the Harvard Global Health Institute, is hopeful: “For starters, we could have a lot more competition in health care. And government programs should often pay less than they do.”
Good places to start.
I'd be surprised to find government programs paying generously for health care. The exception being Medicare payments for drugs which are not getting the same discounts that state Medicaids can negotiate.
1
Actually I'm just going go ahead and assume that this had something to do with the HMO Act of 1973 that Nixon signed.
from the Oval office tapes:
Ehrlichman: “Edgar Kaiser is running his Permanente deal for profit. And the reason that he can … the reason he can do it … I had Edgar Kaiser come in … talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because …”
President Nixon: [Unclear.]
Ehrlichman: “… the less care they give them, the more money they make.”
President Nixon: “Fine.” [Unclear.]
Mr. Frakt seems obsessed with the year 1980, but if you look at the chart, it's in the years immediately after 1973 when health spending in the U.S. really starts to accelerate.
I'm somewhat surprised that an article exploring the causes for our 'a lot of extra money for no results' health care industry, wouldn't explore economic topics like the nature of demand for health care, inelasticity of demand, especially as these relate to the for profit model.
Overall social spending, and where that money goes is worth exploring. However, in my opinion the other macroeconomic factors I cited have a lot more to do with it than overall inflation or the oil shocks of the 1970s, which frankly is a ridiculous claim.
3
Things are even worse than they appear, and the results have far more reaching implications than hinted at in this article.
I vividly remember a lecture in medical school where the difference in health care costs for a US company like Ford was roughly the difference in price between a comparable car made in Japan and one made in the United States. Of course those making the cars deserve their health care, but the Japanese had the same health care. Only it was covered by the government instead of the company. Socialism has been a dirty word in this country for decades. Often hollered loudest by those collecting their Social Security checks and using health care courtesy of Medicare.
Then there's the handicapping of the entrepreneurial spirit. You'd like to move, but your current job actually pays for health coverage for you and your family. Or you'd like to leave that company after working there for fifteen years, and attempt to use your knowledge and experience to begin a start-up firm. But a child has a chronic medical condition and there's no way you're risking a time without comprehensive coverage.
Everything in this country is even worse than it appears. None of the MSM has the guts to tell it like it is. Ironically while the NYT might do as good a job in that department as any alternative, it's accompanied by articles gushing over fancy restaurants, boutique hotels, designer dresses, and auctions at Sotheby's. None of which the average American can afford. Eat cake!
9
Or we could have single payer, universal healthcare.
5
What drives up healthcare costs and insurance premiums are ridiculous surgeries in the the elderly, more accurately called torture. More than 30 percent of Medicare patients undergo an operation during the year before death.
https://www.scientificamerican.com/article/surgery-near-end-of-life-is-c...
Is this doctors/hospitals wanting to make more money off Medicare patients, or does it speak to a deeper desire of Americans to see death as having "lost a battle"? And we Americans do not like to lose.
2
The Times conservative commentators, like Brooks and Douthat and Stephens, should read this. Interestingly, they never acknowledge or discuss that the U.S. pays more and gets worse outcomes than other countries, as they tout their "free market" fixes for everything. Inconvenient facts, I guess.
4
I have been in Private Practice for over 27 years. In my humble opinion it all comes down to just a few things. But the major one is MANAGED CARE!! Or the Corruption of Managed Care, that is. Managed Care was first introduced around 1973. They sold the government on actually being able bring health care costs down. But in reality, once it became entrenched in the system(took about 10 years), costs went through the roof. All they became was a hand skimming money out of the system(a VERY big hand). In my opinion no different than the Mafia.
9
No mystery...blame it on neoliberal policies and the Clinton and Obama health care plans were an example of that. MCOs, ACOs, HMOs, etc. are all aspects of the neoliberal policies enacted from the 1970's onward, according to a new book by Howard Waitzkin, et al., called "Health Care under the Knife: Moving Beyond Capitalism for Our Health."
1
Did you read and understand the article? Problem began long before Clinton and Obama. I know and have witnessed how healthcare costs exceeded cost of living. While Americans received no raises I experienced an 11% increase in one year for my healthcare in the mid 80’s. From there it sky rocketed plus we had very limited choices. In addition I worked for the largest employer in the state. Sick of this blame game and blaming a president for insurance companies decisions.
Hate to be cynical, but seems to me there are some who seem to have been involved in the raking in of profits and who then later blossomed into medical industry mavens who ranted and raved about those high costs, and then sold solutions to curb risings costs... same peeps. Somewhat Barnum and Bailey.
4
Our healthcare system is run by stupidity, greed and confusion. Doctors have sky-high administrative costs because of the hundreds of different insurance plans. A doctor I'm acquainted with used to make do with his wife doing the billing. Starting in the 1980s, he employs nine or more people to do the billing. Another problem is the lack of diagnosing capability of so many doctors. When I was walking bone on bone with my left hip, even with expensive tests like MRIs, etc, the doctors kept saying the pain was coming from my back. After two years of the worst pain I have ever had in my life, it took a nurse practitioner to recognize the fact that I needed a hip replacement just by watching the pain in my face while hobbling into the office on two canes. The powers-that-be don't care about the average person, and until the average person starts revolting en masse, our system will only get worse.
1
Hi Dr. Krugman,
since it has been widely noted that income inequality soared right before The Great Depression might it be possible there are two culprits to this wealth gap in our nation. The first is the long term capitalist economic cycle in this country. Our economy mimics an ecological system.
The Lodge Pole pine stands of Yellowstone is the example I have used in my accounting and finance classes for years. Lodge Pole Pine stands grow stagnant over time and require forest fires to reinvigorate them. The Great Yellowstone Fire of 1988 served this purpose and led to more diverse flora and fauna in the park.
Ours is a Yellowstone economy. Over time the great pines (large corporations and robber baron investors) sop up an increasingly untenable amount of resources creating an over concentration of wealth. At the end of such a cycle our economy requires an economic forest fire which we call a depression to destroy wealth and create opportunity.
So our government made the wrong call in terms of eliminating wealth inequality in 2008 when it bailed out Wall Street. It should have applied Keynesian policies and allowed Wall Street to fend for itself.
The second culprit is marginal tax rates that are too low. This is the other parallel between 1929 and 2007. Cycle ends will always lead to struggle. The stagflation of the seventies is an example, but here high tax rates mitigated against the wealth over concentration allowed in 29 and 08 by low marginal rates.
4
Reaganomics and and greed-is-good capitalism happened.
3
Gosh... what society destroying event happened in 1980? It's like all our values and progress got zapped with some kind of ray gun.
3
“Other countries have been able to put limits on health care prices and spending” with government policies.. The United States has relied more on market forces, which have been less effective..."
A most facetious and underwhelming statement and conclusion , it risks and minimises the real issue at hand as it misinforms readers of the true nature, outcome and efficacy of America;s Health Care Spending/Insurance/Coverage, vis a vis other Nations ...ALL OECD Nations...that provide more, better and hugely more affordable health Care to ALL it's Citizens as compared to America's , the most expensive and often less efficacious and least inclusive system.
Reading the extract most would be forgiven for thinking that :
1. "Other Countries have been able to put limits on health care pricing and spending"..this insinuates that other countries limit,ration or curtail procedures , pills, processes and /or medicines to the detriment of people who don't get the full retinue of things available but considered too expensive to supply or risk financial failure and system damage if was available to those that could benefit from such things.
A Complete Fallacy.
2. " The United States has relied more on market forces, which have been less effective..."
Does anyone need reminding of ALL the costs, consequences and reality experienced by what is referred to above as "...less effective " ?
Grossly Ineffective & Expensive at least!
This article is pushing a wrong and damaging Agenda
1980?
Seems to coincide with the GOP's assault on the Great Society programs, eh?
Looks like clear proof that "compassionate conservatism" is truly deadly after all.
5
1983,,, T.V. advertising was allowed for prescription drugs, enough said.
1
2 words: Food and Education
The first diagram is a poster picture of mismanagement, theft and greed that started with Reagan years.
4
I was working in a hospital emergency department from mid 1980 to the end of 1983. I was in pre-med at school and wanted to be a doctor. I saw the change in how medicine was practiced into what it has become today. I saw the writing on the wall and left the medical profession completely.
The most obvious indication was how we started charging for every conceivable item that was previously covered by a blanket charge for ER services. A suture tray charge covered the cost of the sutures, the bandages and gloves, antibiotic ointment, etc. Later each individual item had its own charge. They gave us legal size sheets of paper to itemize all of the supplies used on each individual patient.
Today my doctor's bill has individual line items for systolic blood pressure and another line item code for diastolic blood pressure. There are three different line item charges for a flu shot. During a regular doctor's visit if I ask the doctor about a rash in addition to the regular subject of my visit I am charged extra for a rash consultation. If the optometrist sees an eyelash in my eye during the regular exam there is a separate charge to remove it. If there is another eyelash that seems to be growing at an odd angle there is a separate charge to pluck that out. You see, the doctor had to use two separate instruments, a Q- tip and a pair of forceps. These all have a pre-determined numerical billing code.
The doctor's assistants are under trained, uneducated idiots.
7
The poor? Let them eat cake.
1
If you want to know more about why healthcare costs have gone up so much, ask the only man to have been a practicing physician during this transformative time as well as a US Congressmen, Dr. Ron Paul.
http://www.ronpaullibertyreport.com/archives/there-is-only-one-healthcar...
2
The number one cause of death is being born.....100% fatal....no amount of governmental intervention will change this fact......
Greedy Pharma and Greedy Doctors. Anything else?
"Why did it start around 1980?" Try the recent Atlantic article, "Paul Manafort, American Hustler" on the rise of "modern lobbying." Dates roughly concide.
4
Uhm . . . I'm a little confused here. What could *possibly* have happened in 1980?!
Ronald Reagan was elected president and began--with vicious enthusiasm!--tearing down the paltry support for the poor that we'd put into place, along with the "spiderweb constraints" that might have held back Big Med from pillaging and looting.
I'm wrong about that? Okay. Show me. To not even **mention** the political landscape? That's just journalistic malpractice.
13
It's the prices, stupid.
Costs going up and results going down aren't a coincidence; Ronald Reagan, America's second-worst president, deregulated industries and the markets, making C-suite scum realize they could charge more and do less. And Bush, Clinton, Bush and Obama stayed the dumb, bad course.
Anytime someone says "Let's treat healthcare like a business," you can tell they're not very smart. healthcare isn't a business: it's a social benefit that promotes stable, happy societies. If America had single-payer healthcare -- easily paid for by, say, a 20% reduction in our nuclear forces -- you'd see a wave of entrepreneurship as people realized they didn't have to stay in low-paying, over-stressed jobs just to keep their (and their families) healthcare. We're the only country that lets drug companies advertise to consumers, and that hurts as well.
Single-payer socialized medicine would be a much better use of our tax monies than more unneeded missiles or more unneeded prisons; it would improve lives, reduce crime, cut the inevitable cost when uninsured people go to the ER and we pick up the bill and allow for the kind of preventative care that saves money and lives -- no more skipping the doctor when you have a cold to save money and then seeing it become pneumonia, which means an ER visit taxpayers foot the bill for.
You could fix American Healthcare in a half-hour: Nationalize it, Socialize it, and kick out anyone who makes more than 10x the salary of the lowest-paid employee. Done.
8
The article is trying to make this state of health care too complex. The price of service is what your willing to pay. Repeat that to yourself. One goal of any for profit business is to maximize the price. In many medical cases the consumer is willing to pay an infinite amount. A common solution is to define providers of basic needs a "utility". Government regulators overseeing a private utility can demand that price be set at cost plus defined margin and still allow budgets for investment in research and efficiency. Think electrical, water, utilities. All this babble about negotiation and competitive market forces is ridiculous. There is no market place, the pricing and quality is purposely opaque and the consumer is willing to pay anything to stay healthy. For basic necessities socialistic concepts work better. Capitalistic/Market based solutions have their place when the consumer can walk away. Since socialist verses capitalist ideologies is a problem in the US we need to define when to apply one and when the other. Not every job must be done with a screw driver especially when an appropriate tool is handy.
1
Teh divergence coincidences with the Reagan revolution. Instead of a cohesive society with government directed social imperatives, we chose the mirage of pure capitalism with private entity market mechanisms. In every universal sphere - health care, education, public health, resource regulation, banking, advertising - the U.S. has developed inefficiencies and ineffectiveness based on inefficient "free" markets. The rest of the civilized world has opted to become social democracies with adequate governmental planning and resources to achieve societal benefits, while still allowing personal capitalistic competition and innovation.
We are now seeing the next chapter evolve as we become consumers of digital output without safeguards for privacy and against fraud, while the rest of the technologically more educated world will seek a better balance between social justice and capitalistic profit.
3
How could the coincidence of the election of Ronald Reagan and 1980 not be significant? I appreciate the on the one hand, and on the other hand approach of the article, but it is just this kind of dithering that Republicans portray as elites talking to each other. You keep saying the US did not have the controls other countries had: it did not have the controls because Republicans removed them. Let's say that and have the progressive position be as clear as the Republicans make their positions (from welfare queenns to the makers and the takers).
5
I would look at the fact that while the rest of the world increases preventive medicine the United States concentrates on treating diseases when they are already established and costly to treat. The concept of family physician with its ability to diagnose diseases in early stages and to educate and prevent is being lost in this country. It is appalling that sometimes insurance companies won't cover a simple blood pressure measurement and will later pay thousands of dollars for a coronary bypass or a heart transplant. There is an obesity epidemic in this country and the best way of combating it is for trained physicians to educate the population at the family level, not when they arrive at the hospital with a Diabetes or Stroke diagnosis. That's what the rest of the world is concentrating on that the United States is falling behind in my humble opinion: Preventive Medicine.
3
It seems unlikely to me that the lack of universal coverage is NOT a factor, yes--but we should also consider the fact that we've built a culture around the idea that we should all work ourselves to death, and that "work isn't supposed to be fun," which means that more of us work ill-fitting jobs in toxic environments than we might otherwise do--which also accelerates our collective demise.
It certainly seems a reasonable question, especially as outlets like the BBC have recently been reporting on how work/stress is killing us. There's even a book called "Is Work Killing You?" by a doctor named David Posen, which came out five years ago. I haven't read it yet, but it's not difficult to imagine that the answer might very well be a resounding YES.
5
Pharmaceutical companies have no controls and are hiking prices beyond what Americans can pay. In 2016, 25% of people couldn't pay for their prescriptions and it is no doubt worse in 2018.
Hospitals now operate on the business model, not healthcare model, and hire more and more administrators and CEO's with exorbitant salaries. This was not the case in the 80's. The industrial healthcare complex is making money not providing healthcare.
6
A typical sort of health-related article which focuses on economics. Why aren't we getting better outcomes? Lets look at unrelenting stress, reduced hours of sleep, lack of movement, increasing loniless/isolation, the SAD diet (Standard American Diet), massive intake of sugar and startling rise in related disease, the flood of toxic chemicals we're exposed to every day in highly processed food, chemical-laden water, polluted air, stuff we slather on our skin, toxic fire retardants on everything, etc. How much of all these things flooded our culture around 1980-ish and beyond? You can do all the high-priced medical procedures you want, and analyze all the economics you want ... all the above conditions will never gain you years on your life ... but they WILL line the pockets of the medical industry, the chemical industry, the food industry, and so on.
3
There's one key thing this article and the overzealous commenters overlooked.
The United States has a much more larger aging, senior population proportionally than it did before. And it will continue with the baby boomers too.
1
But is this unique to the U.S? I doubt it; most developed countries are experiencing the same demographic shift.
2
The population of most western European nations, as well as Japan, (all of which are included in the charts shown in this piece) are also aging, some of them even more than ours. So how do you explain that considering their better less costly outcomes?
Sometimes it's better to be overzealous than uninformed.
1
The most important point here is the lack of value for the money the US spends on healthcare. Politicians tend to focus only on cost, but for example if life expectancy in the US was 50% greater than the next highest country, we'd think we were getting great return on our investment. Instead we pay more and get less, than almost any other country. We need to address systemic problems, like why we spend hundreds of thousands of dollars on ICU care for terminal patients but underfund cost effective things like prenatal care and vaccinations. Why does an asthma inhaler cost 100 times more than the same drug in a different country? We need to focus on value and outcomes related payments for medical care, to have any hope of reversing the appalling situation we are in.
6
No, neoliberalism is the reason. A belief in market forces and privatization of all health care institutions, the commodification of healthcare, the financialization of health care, the push to make doctors into employees (proletarianization), etc., are all reasons why we are spending too much for health care...it is to make profit for the companies and for the investors.
Read "Health Care under the Knife"
1
Our love and celebration of more greed and the thought of getting over on everything, anyone, anywhere led us here. Books were written, stories were told, movies were made and finally we all participated. We lost our moral center.
2
We have achieved the point of "healthcare singularity", at which the cost of disassembling and reducing healthcare costs would be more damaging to the economy at large than the costs of doing nothing.
We have become a society dedicated to the never ending refinement of two publicly endorsed machineries. The war industry and the healthcare industry.
As a country, those two endeavors alone, seem to have become the exclusive essence of our existence.
We could, and should have a National health care program, as they have in other Western democracies. Those employed by private insurers could transition into employment with a National program; they might have to be retrained to avoid the gate keeper mind set. When I was a benefits administrator in a multi-State corporation, the increasing premiums eventually caused a reduction in benefits and higher employee costs. There were three large insurers which drove the premium costs. As I recall Disability coverage was the most corrupted; it was eventually dropped.
3
That it began around Reagan.'s time is no coincidence. Reagan used "pro-life" as a political issue. It wasn't just abortion. One of the things he ordered was a change in end-of-life care policy, such that providers were expected to "extend life" of terminal patients -- really prolong death -- as long as possible. So spending on terminal patients grew, and has continued to grow, and our culture has accepted a long, slow, painful, and very costly medically-prolonged death as the norm for many terminal conditions. The rest of the world spends less on that.
Witness the incessant TV commercials for "A Chance to Live Longer!" for a very costly cancer drug that occasionally extends life a few weeks.
9
It is possible to have a signed DNR form on site: Do Not Resuscitate. That is important; it requires a family doctor to oversee the hospital staff, because hospitals charge for endless "end of life" care. This happened in my former husband's family; my daughter reached a doctor friend from school, and he was designated as a primary care doctor; he stopped the treatment. The family was grateful to have an 89 yr. old woman who was dehydrated and unable to move taken off "life support". Give a trusted immediate family member Power of Attorney in the event of a terminal illness. No one sane would want to stay in a hospital bed on a ventilator, unable to move, unable to ever return home or have any kind of life.
3
I am not a Reagan fan, but at least part of this particular comment's explanation is not consistent with one of the two graphs, and therefore cannot be a major factor in explaining the data. The first chart shows life expectancy versus per-capita health expenditure, and the USA trends well below the envelope of the other countries. One would expect that if an emphasis was being made on life extension, the USA curve would not trend beneath the envelope even as per-capita expenditure rises, and would just be at the bottom of the envelope -- not *way below* it. Comparing the envelope with the US curve suggests a different issue is dominating.
As a general rule of thumb, the probability of dying from natural causes in any given year doubles every 8 years or so in adulthood (Gompertz-Makeham). The curves on this NYT article chart suggest that the probability of US persons dying could be roughly twice as great as in some of the other peer countries. What dominant mortality factor is so much greater in the US than in these other countries (i haven't done the homework, but pose it as a question for the interested)? Money is apparently not efficient at lowering this mortality factor in the US because of something endemic to the USA. Only one other country on this graph is similar, and it could be useful to know which country that is to understand whether that yields a clue as to what factors correlate. This is not a small effect and should stand out in data comparisons.
We have a predominately private health care system and we allow private contracts between providers and insurers that keep prices hidden. This results in a great deal of intransparency and distortion of prices for a number of unrelated reasons, such as whether your insurer has a price agreement with your provider or not. Without transparency, there is very poor market competition, to the extent it is even possible. In short, we suffer because the US tries to force a market solution into a health care sector that could never be efficiently organized under free market principles.
8
Without a single payer healthcare plan, like Medicare for All, as for cost-effectiveness, American healthcare system will continue to spiral down.
Further, as Sen Sanders proposed, the patent system of drugs, purportedly to cover the huge cost of drug discovery & development, has to end. Taxpayers would be far ahead if they just foot the bill for the entire cost of research and testing - Drug companies don't then have to justify the huge cost of drug development. Now most who need high-priced drugs can't afford them.
On top of that they could be awarded prizes including cash prizes.
9
I'd liketo see drug patents' duration tied to a reasonable multiple of development costs, instead of a term of years. Successful drugs would be profitable enough to attract investors, but without insane price-gouging. Orphan drugs would remain protected indefinitely, allowing them to recoup costs and turn a reasonable profit.
1
Not to mention the mountain of bad science that comes out of pharmaceutical companies which not only leads to ineffective treatments and redirects money away from quality care but stunts the progression of scientific knowledge itself. All to serve the singular prime directive of any company. to make a stinkin' buck.
3
There are several components.
1) The US does not regulate prescription prices as other countries do. We in effect subsidize the creation/research of new medicines as well as allow drug companies to make do with a much smaller profit in areas that regulate the pricing.
2)Emergency rooms are required to accept patients w/o the ability to pay. These costs are passed on to those that can.
3) Illegal aliens have been coming and staying by the millions. They create a surplus of labor that drives down wages/benefits. Until the 70's there had been a steady increase in the percentage of the population covered, but the new paradigm made it possible for those that did not want to provide health care to do so and it make it harder for those that wanted to do so to do so and compete.
4) Law suits based on bad science and doctors investing in businesses that did tests made it far more more likely that unneeded tests would get done.
4
Number 3 has nothing to do with health care spending. You don't understand that market forces and privatization and commodification and financialization have wrecked havoc with our health care system...it is all for profit for the insurance companies, pharmaceutical companies and their investors.
Ah, all of the old GOP canards.
And none of the real problems listed.
1
I am a physician who has given up on our health care system. I am in a specialty - psychiatry - where there is a nation-wide shortage. I have a small fee-for-service practice and I spend the rest of my time doing disability reviews. Low overhead and no interaction with insurance companies - much less stressful now that I am free of the yoke of insurance and corporate healthcare employers with their expectations of seeing more and more patients each day to maximize the profits.
Over 50 % of doctors are unhappy practicing medicine. Many will retire early or are moving into non clinical areas, as I did. I would never recommend to any young person to go into medicine. It is a sinking ship, and the boomers - with their high expectations for high tech care- will bring that ship to the ocean floor.
9
I just attended a meeting today about medical billing. I treat a lot of very disabled patients with autism, whose parents have many concerns about their behavior and development. I give a lot of advice, and do a lot of listening.
I was told that my visits were "not complex enough." Even though I spend 30 minutes on a follow up patient, I was getting downgraded by the billing company.
How could I increase the amount insurance pays for that visit? - order more tests and prescribe medications. I am nauseated at the realization that no one cares nor values how much time I spend with the patient. We are incentivized to spend money, and perform procedures.
This is what's wrong with our medical system.
13
Other studies have shown that the slowdown in the rate of US life expectancy improvement is almost entirely due to changes in the female population. http://www.realitybase.org/journal/2013/2/11/whats-killing-american-fema... This female life expectancy problem is concentrated in those under 50 years old and in certain regions of the nation and in certain socioeconomic groups. Very complicated.
1
I'm going to suggest a possible hypothesis as to why female life expectancy in certain areas of the country may contribute more to the over all picture of mortality rates. The high rates of divorce in the U.S. creates greater numbers of single mothers living in poverty. This is in large part due to the fact that in our society divorced mothers are still expected to have custody of children, while frequently many fathers fail to consistently (or ever) pay child support. When men remarry they are even less likely to pay child support to former wives because having a family is expensive, and when men have to choose which family they will support financially it is more often the current, rather than the former family they choose to provide for. This leaves many single women not only poor, but often reliant on welfare, which is an exceedingly stressful way to live. All due to stereotypical gender expectations that make it next to impossible for single mothers to both work and pay for child care so that they can be employed (Talk about a catch 22). At the base of all health life expectancy inequalities are a variety of social inequalities.
3
Have you considered vehicle miles (kilometers) traveled with a lag? People in the US spend a lot more time sitting on their rears in cars than people in the rest of the world do. It creates a significant exercise deficit, which over time contributes to increased morbidity.
What happened in 1980? You should consider that VMT dropped in the late 70s, and skyrocketed after that. Along with that change came driving to the new malls, and driving back to new suburban sprawl developments. Biking for transportation was suddenly much more dangerous, and even running took a hit for a while.
There's also the change in the nature of work, with a lot of people suddenly losing jobs, particularly ones that involved exercise, and new jobs being lower wage and more sedentary.
5
I worked four years on software for medical testing lab billing, keeping labs running to do blood and urine tests in four states.
I then got recruited to work on the other end of the system for an insurer - at a 120% pay increase.
That's where all the money is in the system, with the private insurers, not with the people in the trenches providing healthcare.
19
"And government programs should often pay less than they do.”
Really? NYS Medicaid pays $30 per primary care visit, regardless of complexity (https://www.emedny.org/ProviderManuals/Physician/PDFS/Physician_Fee_Sche....
You try running an office on that.
As for the explanation for the increase in medical costs since 1980, just print a curve showing the portion of administrators in the medical field - the increase in price exactly follows the ballooning of administration personnel of all types, who deliver no medical care, and contribute nothing of value to the patient, the physician, or the nation.
11
Change the curve to provide for essential administrators who supervise file organization, track prices, hire personnel, organize food service, etc.
Without them there would be chaos in small offices up to large hospitals. Or do you expect physicians to learn accounting and personnel management? There's an administrator somewhere in there who supervises food choice and delivery for patients, employees, and visitors. Medical personnel have neither the time nor training.
Administration can be bloated, but presenting it as a wholesale target for removal shows some lack of thought.
1
Obviously, Barb, you don't work in medicine.
But, if you insist, files don't need to be organized: They are already organized within the computer system, which, if correctly written, would require minimal upkeep and correction by computer experts.
You don't need an administrator to track prices. Again, a computer does this just fine. Amazon and eBay seem to be able to track prices pretty well.
Large organizations may need so-called HR professionals, but these are unnecessary in smaller offices, and in larger organizations should be subordinate to the medical personnel, not acting as though they are superior.
Food service is organized by a Registered Dietician.
Physicians seem to have run offices and, indeed, hospitals, just fine for decades, so, no, one does not need level after level of administrators to do it.
Read the great series in the Times "Paying Til it Hurts" by Elisabeth Rosenthal.
http://www.nytimes.com/interactive/2014/health/paying-till-it-hurts.html...
6
The percentage of doctors going into primary continues to decline and took steep declines during the time frame of this article. Medical spending clearly goes up when specialists do the care while outcomes do not improve.
4
What this article revealed and what we all know is that the life expectancy of the US is significantly lower than other countries. This list of countries includes ones that have not made as much strides towards medical advancements. Not shocking but this article although it explores why it began to decrease in 1980 does not fully answer the question to me. According to the article we made significant advances, but with those advances the access due to cost is an issue. To me it seems as if it was designed that way. Other countries are doing similar things and although we are somewhat the front runners I tend to think that this was a means of population control. I am curious as to what else was going on in the years leading up to 1980 like 1970. I mean really. This is not shocking, it's criminal and it's sad. With all of the advancements I struggle to fathom just how we haven't cured anything at all. The truth is that health care became a business where those in power created ways of making sick people comfortable until death while paying astronomical costs for this "comfort medicine." The bottom line is that our advancements were never about the cure.
5
This article fails to mention what I believe are two significant factors associated with the astronomical amount of money spent on health care in the US: end-of-life care even in the face of terminal illness (and I'm not talking about palliative care); the integration of business majors (MBA, etc.) into the health system, which I believe has contributed to a top-heavy, profit motivated administrative system that seems endless.
15
Sure, we have a tremendously wasteful, complex, and painfully bureaucratic healthcare system, in which corporations amass huge profits and individuals including both patients and doctors suffer. But at least we have avoided the vague and as yet unspecified horrors attributed to "socialized" medicine! Who would want to live longer anyway if one had to endure a system in which healthcare was expected to keep people healthy and productive, where corporate profits were limited by prudent regulations, and vast bureaucracy was minimized in the service of getting people's needs met? Sounds downright awful doesn't it?
19
In other countries with universal healthcare, a patient is a patient.
In America, a patient is a customer.
Sounds small but it's a significant difference in attitude and approach.
30
There is huge profit being made by various stakeholders in the healthcare industry, and patients, families, businesses and taxpayers are the ones footing the bill. The focus should be on taking care of people's health. Instead, it's on making money for shareholders.
8
There is no mystery at all. The early 1980's is when the courts started awarding obscene amounts for medical malpractice cases which caused astronomical increases in malpractice coverage which then spread to product liability and that all lead to over treating and over teasing. Tort reform would offset a lot of the problem as well as less underinsured and uninsured people.
4
You are wrong. I worked as a lawyer in med mal defense in NYC in the 1970s and huge awards were a commonplace. By the 1980s, tort reform was well on its way.
This is wrong. Like supply-side "tax cuts that pay for themselves"(TM) fictions, tort reform as a means to bending the medical cost curve has been demonstrated by study after study to be fiction. Medical malpractice /defensive medicine /etc. fall in the range of 2-3% of total system costs, so even if in some fairy tale scenario all such costs were magically eliminated (a bad outcome for harmed patients), the effect would be negligible. States that have pursued some flavor of tort "reform" also have found the effects to be negligible at best. Improving any system requires the best information available at the time-- the tort reform question has been evaluated and demonstrated for a long time now, and there's little excuse for egregious misinformation. Here's a *tiny* sampling of information more reflective of reality:
Low Costs Of Defensive Medicine, Small Savings From Tort Reform
https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2010.0146
National Costs Of The Medical Liability System
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3048809/
Medical Malpractice: Myths and Realities
http://truecostofhealthcare.org/malpractice/
2017 Medical Malpractice Payout Analysis
https://www.diederichhealthcare.com/the-standard/2017-medical-malpractic...
Wall Street MBAs decided they wanted a cut of healthcare. To monetize an essential service. To pay insurance CEOs multi millions. It bothers the masters of the universe to see a pot of money they cannot get their hands on. Same with toxic mortgages, 401ks, food. Wall Street has to get their percentage of anything the average American needs.
13
According to the CDC (and as understood by most public health experts), medical care only accounts for about 20% of population health. Another 25% is determined by genes/biology and personal behaviors, and the rest is all driven by social determinants of health (e.g. physical environment, social status, wealth, etc.). [Source: https://www.cdc.gov/nchhstp/socialdeterminants/faq.html]
It's no wonder other countries that have increasingly favored spending on social services vs. medical care in recent decades have done a better job improving the health of their populations. In the US, however, we prefer spending on heroics rather than interventions, to borrow a comparison from Atul Gawande, so we end up spending heavily on the downstream (i.e. more expensive) problems of individual and population health rather than holistic, broad-based prevention.
8
Gotta agree with the holistic approach. The posters in here are blaming everyone but themselves. If you are 50 years old, eat a healthy diet, exercise every day, and don't smoke, there is a chance you've never been to the doctor.
We're in the treatment business, and we should be in the prevention business.
5
Or, you could be 50 years old, never have smoked, exercise every day, eat a healthy diet with lots of fresh fruits and vegetables, and still get terminal cancer. My brother died at age fifty from pancreatic cancer. A good friend in her fifties is dying of lung cancer. Both individuals lived the healthy lifestyles I outline. I also know obese, sedentary smokers who are well into their seventh decade. Prevention doesn’t always work. This is why health care is a human right, not an economic privilege. You cannot always control your health, and no one deserves to be punished for losing the good health lottery. Losing the lottery is punishment enough.
1
aem: genuine question here. Why is health care a human right? On what basis do we define what is a human right? Is there a basis in law, and not simply the decision that it *should* be a human right because, well, it's really important and sounds so darned good?
Is housing a human right? College education? The latest vaccinations? Clean drinking water? Or are they simply desirable policy goals? (You may discern that I'm really skeptical of minting new "rights" simply because they sound like a good idea).
Where is the discussion about societal and patient choices? Choices to not adhere to a diabetic diet, be 100 pounds overweight, or put 92 year old family members in an ICU for a month who end up dying regardless? Accountability and expectations are placed on the health system but not the patient.
5
Explains nothing about why this problem would be unique to the US, other than to suggest that there are particular Americans you don't like.
3
Had a sinus infection. Dr prescribed a nasal spray. When I picked up the prescription, I was told it was $270. I asked the difference between the spray and Nasacort - was told there was none. I bought an OTC instead for $12.
My son had ringworm on his back. Dr. prescribed a tablet to take as he felt it was systemic now and a $9 OTC cream would only work temporarily. Cost of those pills - $320. No substitute, so I had to purchase. Didn't expect to spend that much that month.
Prices are high because consumers aren't equipped to know how to treat an illness, which drugs work and don't work, and many still don't question their doctor or pharmacist. They need the procedure or drug, so they are forced to pay whatever the cost may be. What's the incentive for pharmacies, doctors and drug companies to charge less? None. Inelastic market.
Other countries have governments that recognize this in- elasticity and do something to help their population. Ours believes in a "free"market. These costs are the result of a free inelastic market.
13
When I see a Medicare payment statement, Medicare pays far below the health service provider's "list" price. Now, this list price may be exaggerated -- in that a provider need not receive the full amount to carry on profitably -- but I assume that some other payers are making up the difference between Medicare's payment and list. In other words, private and state and local government employers are paying more because Medicare is paying less.
It could be that the list prices are fantasies, with no basis in actual costs. Or it could be, if everyone paid the Medicare rates, hospitals etc. would go out of business.
How to ratchet down the costs while still maintaining a viable healthcare system? That is the question...
2
I once got a $94 bill for a lab test. I saw on the bill that the lab did not send the bill to my insurance carrier and notified them of this. The new bill was for the $3.50 negotiated price. (Since this was below the $10 cost of my minimum co-insurance, I was responsible for the entire amount.)
Since the negotiated price provided a profit for the lab, the additional $91+ is pure profit which a person without insurance would have to pay.
With Universal Health Care, we'd all pay the $3.50.
Medicare-for-All!
17
Hornbeam where you are mistaken is assuming in your final sentence that there exists a viable healthcare system in the US - try living in another country with universal health care systems for awhile as well as reasonable prices, publicly paid University and Medical School and you will experience a viable system. We have a viable working system of various levels of universal health care in Mexico since about 2000 covering all. No reason at all the USA can´t do this except the greedy sucking money in profits, enabled by the uber-capitalists, the bankers, insurance companies, the financiers all of whom introduce some ridiculous notion of "fear of socialism" - I mean come on - how dumb do Americans get!
Its clear how dumb they are - they are dying in droves and elect monstrous thieves to office.
Uninsured people are frequently charged less than insureds.
I was working in a doctor's office during this time period, and it was the point when insurers were switching from reimbursing their client to "assigned" payment, where the money was sent directly to the doctor.
The catch was that the doctor had to contract with the insurance company and then accept what they determined was appropriate. Before that, if a plan reimbursed horribly, the patient had to pay the balance, and would usually argue with the insurance company, or change to a better one. If they couldn't, they would work something out with the doctor.
Although assigned insurance appeared to be a good thing, it rapidly devolved into the current state, where even hospital doctors are tied to different insurance networks and so may not be covered by your plan. Insurers spend their time finding ways to refuse claims, and doctors have staff whose sole purpose is dealing with insurance claims.
10
One explanation is that for $10,000, we get only $5,000 in medical care. Then our data line in the top graph doesn't look so bad. Low, sure, but not a significant outlier.
2
The elephant in the room is inequality. Since 1980, the rich have been contributing less in taxes and making much more in terms of income and wealth accumulation than the middle and lower income populations in America. The result is a highly unequal society, with highly unequal life chances, increasing segregation by neighbourhood, differential access to key health resources like education, high quality jobs and pleasant safe surroundings, and much else. Countries as diverse as Canada and Costa Rica, Sweden and Slovakia, Finland and France, Austria and Australia have all done a much better job of dealing with inequality, applying fairer taxes, assisting less advantaged citizens, and keeping the gaps between income and social groups from getting too large. Those who have been really good at this (Norway, Denmark, Germany, the Netherlands) enjoy health and life expectancies that can only be dreamt of in the US (and much happier people, too). You can think of this as the legacy of Reagan -- turning America into a mean, materialist, greedy and sick nation, now headed by an obese property speculator intent on further rewarding those who are already on top. You can bet mental and physical health will continue their decline in America.
12
Costs ballooned for the same reason, viz. Republican politics: Deregulation, corporate consolidation, price fixing, laws protecting returns to healthcare corporations barring public institutions from exercising price controls, sweet heart deals with BigPharma -- all associated with Reagan/Bush remaking of America. No mystery here. Hence the opposition to ObamaCare which itself is a hodge podge of half-hearted measures, now mostly gutted. So costs will keep rising, too, as health and wellbeing tank.
8
"assisting less advantaged citizens"
Which is always a good recommendation, but your health is largely intertwined with your lifestyle. If you are an obese smoker, it won't matter too much how rich or poor you are.
It is obesity.
I have some knowledge of this, having examined medical/disability insurance claims for about 15 years. Insureds hand over signed claim forms to the front desk of a hospital, doctor, or whatever type provider they are seeing. The provider then bills the insurer. Note that the claim form is pre-signed as the patient leaves the office.
Many providers are scrupulously honest. A large minority charge for their services and add a bit more than if they had to face a money-paying patient. The honest are tempted by these forms.
Very few are just plain crooks, like the memorable one who had patients sign their names to stickers which were then pasted on claim forms. I'll leave the rest to your imagination. I routinely threw these "sticker claims" into the trash. Never once did one of these providers call me and complain about non-payment. Had they called, I would have requested a form with a real signature. Then there was the one who billed $10,000 for a $2,000 surgery.
This could turn into a book. I'll condense it by suggesting that every American, from birth through grave, have a Medicare type insurance paid through a means-based tax. Anyone who doesn't want it can negotiate payment in full with a provider.
Our family has the enormous HMO.org in the West. We have never been under-treated. I'd recommend it as the gold standard for national insurance.
9
Physical fitness could be a driving factor in lower life expectancy. Levels of physical activity, the behavior that contributes to the attribute of physical fitness, have been steadily declining, especially in comparison to other countries. Cardiovascular fitness is a major player in many health related outcomes, even the obesity paradox.
4
It is politically incorrect to blame the victims for their own behavior, but undoubtedly true. The graphs in the article are identical to the obesity graphs.
Overweight people was at about 42% in 1978, and up to 69% in 2016. Obesity went from about 15% to about 38% of the same time frame.
This is where the money goes. I've been involved in healthcare accounting at two jobs. All the expenses were for smokers and fat people. There are always some people that just lose the DNA lottery, but if we eliminated smoking and obesity, our healthcare costs probably get cut in half.
3
I might agree with you, but have you ever been to Europe or to Japan? I seems like everyone smokes! And the typical German diet? You don't want to know... Yet their health costs and life expectancy are very good.
1
How much do we pay people who are in "healthcare accounting", and other parasitic positions? Maybe that's where the money goes.
https://www.nytimes.com/2018/05/16/opinion/americas-dismal-turning-point...
May 16, 2018
America’s Dismal Turning Point
By Paul Krugman
Austin Frakt had a very interesting piece in the New York Times the other day, on U.S. health spending – and U.S. health — in international perspective. Everyone knows that U.S. spending is more or less literally off the charts compared with everyone else, while many are aware that we have also diverged, in the wrong direction, on measures like life expectancy: we’re falling further than further behind the rest of the advanced world.
What Frakt points out is that it was not always thus. The dismal U.S. combination of high costs and poor results only began to emerge around 1980, which poses a mystery:
[Graph]
What changed? ...
1
Obesity. The graphs I looked at shows obesity declining until about 1978. Now it is off the charts. We always had kids in elementary school that were in better or worse shape, but the obviously fat ones were very few. Now I'd say half the kids in the local school are fat.
My previous comments focused on my mother's nursing experience but negative comments here about doctors motivate me to address the devastating consequences they've also experienced.
A past boyfriend of mine was a neonatal physician who came to LA in the 80s to work in several hospitals. We've remained friends over the decades and ohmygod, did he do major battle with corporatized medicine that eventually drove him to early retirement.
Corporatized medicine forced university medical school hospitals to also up their business ante to the detriment of the communities they're supposed to serve. UCLA responded by becoming a mammoth competitive cancer that metastasized into every community of Los Angeles. It bought up local hospitals and/or set up large rival physician networks, staffed solely by UCLA doctors, that attacked long established doctor-hospital relationships. UCLA strong-armed local hospitals into systematically denying newly admitted patients to staff physicians in favor of UCLA physicians. It destroyed another key pillar of non-profit, community-based health care that's now out-of-reach for all but the wealthy and well-insured.
My friend's eventual legal battle is another long, heartbreaking story; he "just wanted to help preemies and their parents". But he lost to UCLA and retired. Commenters need to know that corporate medicine made your doctor into what s/he is today, every much a victim as nurses and patients.
12
http://cepr.net/blogs/beat-the-press/u-s-health-care-spending-began-to-d...
May 15, 2018
U.S. Health Care Spending Began to Diverge from Everyone Else In the 1970s, not 1980s
By Dean Baker
Austin Frakt had an interesting New York Times piece * noting that the U.S. leads the world in health care spending per capita, but badly trails most other wealthy countries in life expectancy. He notes this divergence began in 1980.
While that is true in terms of life expectancy, the divergence in spending actually began in the 1970s....
1
Do affluent Americans live as long as affluent foreigners? If they do, then our shorter lifespan is perhaps due to our greater income inequality. We do not like to think in terms of class analysis, but maybe we should.
Do we have any information about how much our health care systems spend on marketing and administration compared with other countries? When we buy drugs, we subsidize our TV networks and our magazines, for example. Although competition lessens prices (at least when the competitors do not manage to stifle it), the administrative and marketing costs of competition must be paid for, and these raise prices. It may be be that some of our higher health care prices originate with the costs of competition.
7
Globalization pushed healthcare worldwide and left the US stuck with the bill. Almost every country has price controls on medical expenses except the US. With these price controls it makes it harder for the medical companies to run profits in those countries, so it looks to places like the US to surge prices. Also the US spends more on medical research than almost all other countries combined. We publish more medical research paper by factors higher than 3. We need to either to force other countries to start paying their fair share of medical expenses or just price control the whole medical industry and force it to stop.
7
We are talking about spending as a %age of GDP here, which the U.S. leads in as well. There are several coutries that spend more per capita and more as a %age of GDP on medical research than the U.S. See:
https://en.wikipedia.org/wiki/List_of_countries_by_research_and_developm...
1
It is a measure of deep corruption in the Medical Pharmaceutical complex, where rational policies are subordinated to buying legislators.
The longevity data should convey the difference in life expectancy based on an index of personal wealth - and life time pensions and health care such as some government unions. Those of the top tier, I'm sure live as long as IE Japanese, while those on the lowest are that of a third world country.
I'm on Medicare, and appreciate that my particular care this year is unlimited, yet why my cohort and not poor children? We need a powerful elected leader who will "clean this swamp" not get elected by such a promise that he will simply ignore.
5
You've demonstrated the actual effects of private sector "managed care". It's not difficult to understand how the US spends a third more money on healthcare than the next closest country on Earth when the average overhead of an insurance company runs in the range of 35%. As an upside, we get worse outcomes by almost any measurable metric. Yet, this country still pretends that "privatizing" Medicare and the VA is the way to go for efficiency. Medicare operates at an overhead in the single digits. Lets see Humana do that; and at the same time deliver healthcare better then Medicare. Americans keep drinking the Kool-AId of "private sector efficiency" despite all evidence to the contrary.
12
Health care is not something for the healthy, to extend their life expectancy. It is often for the sick. Americans, due to sedentary lifestyles and poor diets, are more obese and suffer from more obesity-related diseases than do Western Europeans. Can we compare obesity rates or instances of certain diseases to health care spending, rather than life expectancy?
This medical care might improve the quality of life, but not life expectancy, of patients. Along similar lines, American culture might encourage having more tests, taking more drugs, having more surgeries, to enhance comfort and quality of life rather than improve overall health - painkiller prescriptions are one prominent and infamous example.
5
Medicare DRGs (case rates) began in the early 1980s, and hospitals were getting a lot less money from Medicare. They increased their individual billing charges because some of the non-Medicare contracts were paid as a percentage of charges. Hospitals would call other local hospitals to find out what they charged for various services or used consultants to get this information. This would allow hospitals to price themselves within the range of their local market but still get as much revenue as possible. This was what I observed when I worked as a hospital analyst.
7
I would guess these numbers vary widely by state and would further guess the numbers relate more to cultural lifestyle than government spending per capita. I expect states like Vermont, Minnesota, and North Dakota, for example, compete very well with peer nations.
Western Europe and Canada depend largely on NATO for their defense. NATO is funded mostly by the U.S. Western Europe and Canada have been channeling the money they need not spend on their own defenses to social service programs. We could inform the NATO countries that we will be cutting back on our support of NATO in the expectation that they will be contributing more. We could redirect our money to the education of our own citizens.
Between 3 and 3.5 million refugees have been accepted and resettled since Congress passed the Refugee Act of 1980. Before this, most refugees were assisted by private networks of religious and charitable groups. The Refugee Act shifted this responsibility to taxpayers. Refugees are now eligible for all kinds of government assistance. Our schools, hospitals, and other public institutions in the lower income neighborhoods have had to focus so much on integrating the continual flow of refugees that they have had less attention and fewer resources left for our own citizens. At least many of our earlier refugees, such as the Vietnamese and Chinese who were fleeing Communism, placed a high value on education, and are now repaying our generosity in taxes. The current refugees come with less education and seem less able to become taxpaying citizens down the road.
Instead of spending so much on the world’s defense and on accepting refugees from cultures who place little value on education, we could redirect our money to our own citizens.
4
There is little doubt about the role obesity plays in causing chronic complex diseases for those of us who treat it's increasingly costly consequences rather than the cause. Type II diabetes, Alzheimer's disease, nonalcoholic liver failure, atrial fibrillation, heart failure and degenerative joint disease all flow directly from obesity. In light of the U.S. obesity epidemic, it it hardly surprising that the gap in what we spend for healthcare and slowing improvements in life expectancy is increasing.
9
HMO's first came into widespread usage in the 1970's in an effort to provide better health care at a reduced cost. In reality, insurance providers increased their administrative overhead with HMO's dramatically because of all the paperwork they processed and those costs have been passed on to employers as higher premiums.
HMO's have not contributed to an improvement in health as was expected and there has been an incentive for doctors to require annual visits and testing for their otherwise healthy patients, which has also increased costs.
5
Here's how a visit to the doctor or the ER goes (if you aren't in cardiac arrest or unconscious)
1. What's your insurance?
2. Sign here. (To say that you'll pay the balance)
3. Take a seat and doctor will be with you.
4. Wait two hours even if you have an appointment.
5. Wait another 30 minutes in the exam room.
6. Doctor comes in and does the once over.
7. What's wrong today?
8. Write out prescription (whether or not you ask for one)
9. If sinus infection with ear involvement or bronchitis and sinus doctor only types one to pharmacy for antibiotics. YOU have to request ear drops and cough medicine with codeine for earache and cough control.
10. You pray that the medication is on the insurance company's accepted list.
11. Do your co-pay and pray that insurance pays its part.
12. If there are complications or tests you need to make sure that you're using the correct lab.
Notice that YOU do most of the work and if you're really ill and can't you need to hire someone or depend upon a family member. This is not how medical care should work. And before you even think of visiting the doctor or the ER you do your own wallet biopsy. In other words, can you afford to pay and can you take the time.
22
4-If you make an appointment, always try to make it for the first appointment of the day. One time, as soon as I walked in, and I was the only one there, one of the admins put out the 2-hour wait sign. They saw me in five minutes, but put out the sign out of force of habit.
8-I have never left a hospital without a pain medication, and never needed a single one. I shocked, shocked I say, to learn that we have a opioid addiction.
10-Copays are generally cheap, and you can ask for a generic.
2
"And before you ever think of visiting the doctor or the ER you do your own wallet biopsy."
I'm stealing that one but I'll definitely give you credit!
5
May be too much worK? In small dosis work is health, but working too much is unhealthy for health. We are blown
1
What changed? What happened around 1980 that created this mess we call "American Healthcare". One thing - we removed the old rules that said - "lawyers may not advertise". Soon it was: "turn the phone book over and call 1-888-SUE-ADOC." It's been a downhill catastrophe ever since.
4
The phrase "since 1980" is used a lot when it really should be "since Reagan." As the article states, "The United States has relied more on market forces, which have been less effective." Reagan.
18
This is simplistic thinking.
It is obesity. We have seen the enemy, and they are us.
What happened? HMOs happened. Starting in the 1980s medicine in the US was transformed from a cottage industry to a corporatized industry. Medical decisions were increasingly made by MBAs, not MDs. A business person decided what medicine and tests you needed, not your doctor, and certainly not you. The goal was proft, not health care. HMOs were later consolidated and bundled. The result is today's behemoth health care corporations.
Take another look at the graph -- it illustrates a divergence of goals. Why do costs go up but life expectancy remains flat? HMOs put profit before patients in a market ripe and vulnerable for exploitation. Why are health care costs so high? Don't blame the doctors. They make a fraction of what they made two or three decades ago. No, all of that spending has gone to feed the A-level executives. Check out what the CEOs of the top health care organizations made last year. Then compare the coverage your plan provides this year to 5 years ago, then 10 years ago. You're not going crazy: your options are decreasing, on purpose, for profit.
The academically high-minded economic analyses of soaring health care costs blame doctors, big pharma, Reagan-era policies, consumer expectations, advancing technology, and more -- everything and everyone other than the elephant in the room: pure business greed.
28
The obvious, obvious answer is that we are too far. Way too fat. Why is it that everyone wants to look to someone else to blame?
1-Stop smoking.
2-Eat sensibly.
3-Exercise every day.
Do that and our medical bills disappear.
You need to study history and the basic laws of cause and effect before casually dismissing "Reagan-era policies". It was Reagan who pushed to deregulate health care. With government regulations in place, ever-present business greed is at least held in check and the good of patients is made paramount. It was Reagan's policies of rampant deregulation that freed and enabled "pure business greed". So, yes, "high-minded economic analyses" are absolutely correct to blame Reagan-era policies. We wouldn't be here without them.
1
Why does reading this make my stomach hurt?
Alas, no visit to the Doctor for me.
Make too much money to get subsidized insurance on the exchange, but can't afford the premiums. Small employer can't afford to offer health care. As a person working prior to Reagan as president, I believed that I should have access to reasonably priced health care.
My diagnosis? Medical/Pharma/Insurance Complex Corporate greed.
Rx: I need a really good lobbyist in DC.
26
In America decisions were made to fatten the bottom line, keep up the profits no matter what the cost to the patients. In America we let health insurance companies decide what we pay, what treatments are acceptable and who will treat us. We have an inefficient system in that doctors offices, hospitals, etc., have to hire personnel to deal with health insurance companies. Americans have to pay high deductibles, co-pays, worry if the claims will be denied out of hand, switch doctors because they leave the plan or are tossed off, and pay the monthly premiums. Each calendar year starts the clock again. Yet surveys show that many cannot afford a $1000 shock to their budgets. Medical care, even the simplest sort, often costs more than that.
Our system is confusing and out of control. Doctors do not serve their patients well either. They don't even know who we are and we don't trust them. We fear that wherever we go for health care their main interest is making a profit from our illness or, in the case of health insurance, denying us care.
The ACA could have worked had the GOP worked with Obama. But they and quite a few Democrats are bought and paid for by the wealth care industry. Therefore their interests do not align with patient needs at all. Our needs consist of doing a wallet biopsy before we even consider medical care.
In America we get the best care money can buy. No money, no care.
25
Americans get the most expensive health care money can buy, but it's definitely not the best.
6
Well put, Hen3ry! In my experience, most doctors on my Medicare Advantage plan are busier entering information into a computer than making eye contact with me, and I am lucky to be able to get a timely appointment with them. Our system is broken, at least from my point of view.
6
My husband is a practicing physician with a group of other physicians and I take exception to your statement regarding doctors not serving or knowing their patients well and that their main interest is making a profit from a patient's illness. They care deeply and passionately about each and every patient, and are truly saddened when they lose one of their longterm patients. I have been in healthcare 45 years and for those physicians I have worked with and known I have never met one who put profit over a patient's care. I am sorry for you that you have had frustrated healthcare experiences.
Sure fundamentally the private healthcare system is messed up, but it is the loss of the Gold Standard that has resulted in the hyper inflation. The US system was built to profit off fiat currency that has no limit.
3
A feature not a bug in our system that puts constant revenue growth and profits over everything, including delivering actual quality healthCARE. The drive to over-test and do costly procedures towards that end a big contributing factor. All roads lead back to Wall Street here too, as they drive this push.
14
The big divergence is in how infant mortality is reported. Every baby born with a heartbeat counts in the U.S. in most European countries, basis born under 4 lbs, under 20 weeks, or who die within a few hours from birth defects are not counted.
6
I don't really think this is such a mystery.
A disparity between our spending and the rest of the world starting in the 1980s is largely a reflection of our failure to create a rational system after WWII. We were the dominant economy with limited global competition. US industry relied on US workers out of necessity and were willing to provide benefits like health care in order to attract and keep those workers. In the setting of global competition those benefits (and others) are a significant cost to contain.
Our system, or more accurately lack of a system, for delivering health care was always inefficient. Now as the amount we can and should deliver and the true cost has increased, the rest of the world is showing us just how inefficient it is.
15
So many thoughts here.
Incarceration stands out as a major difference to me. It is hard to be healthy in jail with no choice of food, little freedom, and little hope.
So does the rise of sugars and high fat foods, and the death of healthy meals. But the root cause I believe is very complex and likely extends beyond any single component, like gun deaths.
We cannot discuss this without pointing out that Medicare does not negotiate drug prices. For a “free market” to work, market participants need to make at least some decisions about prices. It is strange to me that the Republicans can get away with appearing to be champions of the free market, yet in our recent healthcare overhaul never allowed the largest market participant to negotiate. I don’t think it takes a conspiracy therapist to figure this one out.
14
"...the United States has higher health care administrative costs than other wealthy countries."
Reagan deregulated the health care industry in the 1980s, handing the non-profit, service-oriented system it had been forever to market forces. Big corporate profits and health care don't mix. Remove the fat CEO salaries, shareholder demands for dividends, the bulging middle management devoted to chasing and concentrating profits, and a giant chunk of health care spending disappears. It's that simple.
Early in my adult life I worked in health care. My first job was at a local community hospital in the Valley often used by Hollywood celebrities who wanted anonymity and a more personal experience (yes, I have stories). When I started in 1983, it still had the ethos of its Presbyterian founders and was headed by a kindly administrator with a board of doctors, nurses, and local community members. The administrator retired a few years later, Reagan declared war on the community/social welfare model of health care, a corporate CEO was brought in who didn't give a fig about the spirit of the institution, and the hospital was never the same again.
I have a long list of insults that institution put upon those in my family who worked there, including my dedicated mother, a critical care nurse there for 35 years who witnessed a death due to profit-minded, nursing staff reductions. Suffice it to say, spending went up and health outcomes went down when capitalism took over.
65
Thank you for attempting to offer a review to others that have no memory or experience with the quality of care in the years prior to President Reagan.
When the medical community was unable to mount and accomplish the refusal to allow their skills to be destroyed by the market, this debacle began.
Now, citizens are provided minimal care and are at the mercy of corporations that offer no medical service, just the exchange of paper, or computer entry.
7
We dont have healthcare, we have sickcare, and the sickcare-industrial complex exists only to maximize its own profits. It should come as no surprise then that outcomes arent improving. If anything, I am surprised they arent worse.
With a few more years of trump and the collaborators in Congress, I am sure we can push that wellness line down even more.
21
The biggest difference between the U.S. and other countries is how health care costs are managed. We're the only country with a for-profit "system." We're the only country without government-regulated universal health care. These differences were magnified when Reagan became president. Corporate greed was good and government control was bad. The low-tax Republican agenda has been dominant tge past 40 years.
Reverse this trend (hint: elect Democrats) and the U.S. will improve its health-care outcomes. (See, for example, Medicare for all.)
23
There is no good reason that the government cannot negotiate lower pharmaceutical prices for medicare other than the fact that Big Pharma legally spends mega dollars on lobbying Congress.
20
The US treats healthcare like an industry. It is referred to as the healthcare industry. As in every industry, the primary goal is growth and profit, while giving you as little as possible in return.
The rest of the developed world treats healthcare like a basic human right, like the right to a fair trial at court, protection by police, education, rescue by a fire department, etc. No one refers to healthcare as an industry, like no one would refer to "policing industry", "fire rescue industry", "education industry" or "judicial industry".
Here in the US the goal is total privatization, profit and growth. That is why we have the "education industry", private prisons forming a new "prison industry", private companies taking over roles of the military (supplying troops, fighting wars, etc).
it is a never-ending process of privatization and part of what is happening in this country for decades, and this may have been exacerbated exactly in 1980 by electing that particular POTUS who accelerated that process.
46
Conservative mantra: Government=Waste. Private=Efficient.
Google "health care CEO compensation".
There's your answer.
9
This is what happens when a government deregulates these services. If you give someone money for a service and get nothing in return, you were ripped off. The "healthcare" industry has been ripping off Americans. Simple. Regulators need to throw them in jail.
5
"Each dot below represents one year in a country between 1970 and 2003" - and yet there are 44 dots for the US?
You're forgetting to count 1970 itself. That's the 44th year. 10 years in the 70s, 10 in the 80s, 10 in the 90s and 4 in the 00's.
2
For the last ten, it was clearly measure twice, pay twice.
The CEO of the “non-profit” hospital here makes $4M a year.
She sits on the board of the large Medicaid provider. Their CEO of a “non-profit” makes $3.2M a year.
The CEOs of the two major “insurance companies” that serve our community have peen paid as much as $144M a year.
It’s not rocket surgery to figure out what the problem is.
27
While those may be out-sized salaries, there are only a few thousand people in the system that make that type of money. In a country that probably spends about $3 trillion or so per year on healthcare, this is peanuts. The vast majority of the money goes to the usual suspects: drug companies, hospitals, insurance companies and, to a lesser degree, doctors (and probably in relatively equal percentages of the overall healthcare dollar spent). To get a hold on prices requires going against all four of these powerful groups. Changing the salaries of CEO's, while symbolically important, will not affect overall spending.
2
"Another study, published in JAMA, found that even accounting for motor vehicle traffic crashes, firearm-related injuries and drug poisonings, the United States has higher mortality rates than comparably wealthy countries."
In America today medical error is the third leading cause of death nationwide. Authoritative estimates suggest that up to 400,000 people a year are killed as a result of preventable medical error. Google this: 400,000 medical error
6
I have near-personal experience with preventable medical error. My mother, a critical care nurse, fought big battles against administrators brought in the late 80s to turn her hospital into a profit machine. Not only was cutting nursing staff levels key, but also reducing payroll by eliminating experienced and qualified nurses.
The biggest battle that ended her career there was when administrators brought in lower paid LVNs to replace RNs who always staffed the critical care unit. Critical care is such an intensive, life or death situation that it was always just THE RULE that it was staffed with the most qualified and experienced RNs. When she witnessed an LVN overlook subtle changes in a patient that resulted in death, she went ballistic and used her great reputation in the nursing community to wage war on the administrators and their agenda of bargain-basement nurses. She lost and was "layed off". It was devastating to her and our family, not so much financially as most of us were grown and well-off, but to her sense of spirit and identity as a dedicated nurse healer.
My attorney sister suggested lawsuit and Mom was lucky to find a Michael Avenati-type lawyer who went after the hospital like a bulldog. He extracted a big settlement but what she wanted most, an apology and return to quality and experience as the key factors in nursing staff decisions, never happened. It's among the saddest episodes I've ever witnessed in the long capitalist-driven decline of America.
7
Every time I read about US healthcare expenses I wanna scream. How are you people not up in arms? This should be the number one issue in America. You guys pay 100s of billions towards useless international wars and untold billions on health care yet you can't manage universal healthcare and seem to have greater mortality rates than your developed peers. The situation is absurd.
43
Change is hard. There are the obvious groups with a vested interest in the status quo. Moreover, I would say that many, if not most Americans, are reasonably satisfied with their healthcare. But my sense is that this satisfaction resides disproportionately in the more upper income groups. So, politically, it is the middle and working class that would most benefit from a national healthcare system but they do not have the same proportionate political influence as those that benefit from the current system.
3
I don't see where the American lifestyle, diet and obesity was mentioned as a contributing factor. Pardon me if I missed it.
11
Ads for prescription drugs started in 1983.
Today, daytime TV (including the evening news) have more ads for prescription drugs than for anything else.
6
Reagan and HMOs.
the decline started there.
2
In the US, patient = profit center.
4
VERY interesting data but "Upshot" implies a synthesis. This article is little more than a litany of individual opinions. At least perhaps provide a table to summarize and contrast the opinions of these varied researchers.
Is the final opinion by Ashish Jha meant to be the conclusion or just the tail end of the litany? If it is The Upshot, you neglect to mention that most of the peer nations health care systems are not market driven -- and thus that their health care costs are not contained by competition. And is increasing competition even a practical solution for the US? How would we go about increasing competition in the health care sector?
Finally, as a quibble, peer countries are itemized in the second graph but not in the first.
4
Want to improve your life span & health? All free.
1. Eat less, weigh less.
2. Walk more
3. Don’t smoke
4. Drink less alcohol.
Result. Less obesity, lower chance of diabetes, less chance of heart disease, need fewer medications, fewer cancers, better health, longer life. Corporate greed is not a problem for these personal choices. Accept responsibility for a big part of your health.
CER. Md
8
Giving out patently obvious advice with a healthy dollop of judgement doesn't work any better than Nancy Reagan's "don't do drugs". Actual change comes when our institutions treat us better.
3
5 work less
Apples and oranges, dear doctor.
Demutualization of the insurance companies under Ronald Reagan is the real culprit here.
4
"We have big pharma vs. big insurance vs. big hospital networks"
That's what you would have us believe.
What we really have is Individual Patient vs. The Ungodly Tag Team Big Pharma/Big Insurance/Big Hospital Corp., if you smell what they're cookin'...
After a rough start with the HMO debacle when corporations, as conservatives always do, took a small opportunity for graft and tried to run with it "Oh sure, we'll approve your two-year-old's tonsillectomy, if you take a bus to Dubuque, sleep in her room overnight and hitchhike home the next day. You're welcome", for-profit healthcare has soared since the 80s to the detriment of every other facet of the healthcare sector.
What I can't understand is how ostensibly intelligent authors such as yourself can feign confusion or surprise at these developments.
This is what American Capitalism does, what it stands for. "The business of business is maximum profits. Nothing else." How many times, in how many contexts, have you sanctimoniously offered up this benediction, as a fervent hope and as proof positive that everything about America is better than everything about the Communists pretending to be Capitalists in Europe.
What exactly is the problem here? American health business is raking it in. The super good thing about this market is that, unlike stepladders that melt in the rain or energy sources that kill the planet, when corporate policies kill a patient everybody just shrugs and says, "Well, dammit, we tried".
3
Of course it was 1980. That's when everything started to go downhill: public education, the middle class, unions. That's when St. Reagan and his GOP barbarian horde persuaded Americans that private profit was the greatest good to which this country could aspire and civic virtue something to mock. The greater good? We don't need no stinkin' greater good.
16
Private insurance is not a good policy for health insurance. Because when you get sick with insurance policy you are likely to have paid as premium more than the actual medical cost. But I can see this is a good policy for benefit of insurance companies. Which must be the main reason for soaring medical spending.
4
But from a business perspective, what a great success! Look how much more revenue (sorry I meant "value") per life US healthcare providers extracted from consumers for the same result.
Just as we moved up from a 50 cent coffee to a $5 Double Chocolaty Chip Crème Frappuccino, we now go from the $100 Epipen to save you child's life to the $600 Epipen with all its original features authentically intact.
7
Some "deserving" people become very wealthy and the rest die early cost them less money. It seems like the perfect Republican plan (regardless of who is in power).
Get sick and die. Get sick, we collect, and die, we save.
3
Anyone who has lived in Europe knows that the American health care system is a scam, plain and simple. The hospitals, doctors, pharma and insurance companies are nothing more than uber-capitalist vultures. Everything within the health care system is designed to empty our wallets. We can't even find out what services cost when encountering the system. It's always a gamble if you must see a doctor in the States. You never know if bankruptcy is in your immediate future!
There are other models, but Americans seem unable or unwilling to move in a different direction.
9
It is not a mystery -- it's Ronald Reagan and the start of the "we need to run healthcare like a business" dogma.
9
If we had at least a public option on health care we would be much better off.
2
Americans like the current system. The better-off get good health care, the less well-off don't . This is completely inline with American values. It is part and parcel of American culture. And what other countries do is of no interests to real Americans.
3
Americans hate the current system, asany healthcare poll will show you. They hate it because the wealthiest - by which we mean the luckiest -actually get to live past 64. The rest are culled by early death from treatable diseases.
It's Republicans who love this system, because it kills off wage earners.who lose healthcare when their jobs disappear. These fellow citizens have paid into the Social Security Trust Fund all their lives. This is the Fund that the GOP borrowed over a trillion dollars from to give tax breaks to the wealthiest, and give money to defense contractors. But the GOP had no intention of paying bit back. They intend to kill off the workers before they get to collect after a lifetime of contributions.
4
One word: Greed. Take profit out of the equation and life expectancy will go up.
1
1980 and the Reagan presidency also marked the lifting of the prohibition on advertising presecription drugs. I was working outside the USA for two years 1983-1985 and was astonished at the breadth of the change when I returned.
6
Medicare and medicaid. Look at when those programs were implemented. It lines up with your chart which actually starts to bend in the mid 1970s not 1980.
Currently subsidy makes up about 1/3rd of all medical spending in the US. That easily explains what could be distorting the price discovery mechanism.
As to other countries that have higher levels of subsidy but lower prices, they have largely socialized production which means they're basically playing Solitaire. Where as in the US system because services are provided by private entities you're playing Poker instead. Very different game with very different rules. Point is that we're in a worst case zone with subsidiarity. If we had less, the prices would go down and if we totally socialized the prices would go down. We have chosen the worst case zone where we have lots of subsidy but primarily private service.
This means the government is going to pump infinite money to keep services going and the market is going to charge infinite money because apparently the customer is not price sensitive.
All obvious stuff really, kids. Couple minutes playing around on wikipedia and some basic economics.
Subsidizing and industry to the tune of 1/3rd and you call it a mystery? Shame.
1
My French primary care doctor said "Americans are better at treating very rare illnesses that affect very few people. We (the French) are better at focusing on everybody."
This focus on preventative care — you can’t even buy Imodium here without a prescription because they want you to visit a doctor to see what’s wrong — is the reason for the lower cost and better results. But preventative medicine is neither as sexy nor as profitable.
One side effect of this is French doctors are used to checking on little things. If you are a tourist her and get sick go see a doctor. Even without insurance it’s inexpensive. Don’t ruin your French holiday, or your life, by ignoring illnesses until they become serious.
4
As a physician who started practice at about the same time as health care spending started accelerating, my perspective is that organized business began to notice the revenue stream of medicine in the United States and burrowed its way into that stream like a tapeworm. At first it was to just siphon off some of the cash flow, but as business became more sophisticated and, yes, greedy, it began to monetize its existence in all the myriad ways business has become good at. Yes, some of this attention has brought efficiency and new innovations, but the money to be made is too irresistible, business has become too powerful and politicians too spineless.
5
What about advertising? For drugs, physicians, dentists, hospitals etc etc etc. I'm sure that this is a critical piece of the puzzle.
Interesting that Cuba has about the same life expectancy we do but spends a fraction of what we do on health care.
1
and their doctors drive cabs to make ends meet and are sent to latin countries to work for money the Cuban government takes. Better comparison is Canada.
1
We've decided that people and companies get to make as much money as possible at any expense.
1
Am I the only person who got an advertisement for chocolate ice cream bars in the middle of an article about the U.S. health care crisis? I had to laugh out loud...maybe if folks in the U.S. laid off all the chocolate treats, we might see an improvement in life expectancy? (but no doctor is going to tell you THAT)
Taiwan's National Health Insurance system most definitely has cost controls, including on the purchase of expensive testing devices. Also, everyone, including foreigners (legally) resident for over six months, is required to enroll. This means that income from premiums (assessed on a sliding scale based on income) is sufficient to cover each year's medical expenditures. Every month about $50 is deducted from my salary for the premium. I paid the premiums from 1976 to 2002 without needing to use the system. When I started using it, I was amazed by the breadth of coverage and quality of care. In 2016 my primary care physician diagnosed me with pulmonary hypertension. I was referred to a cardiologist who is a professor at Taiwan's top medical school doing research on this disease. He found the cause of my problem and prescribed the necessary medication. All the costs, including exam fees, various tests and lab work and the medications, were covered by NHI. I couldn't afford this quality of medical care in the US. I can't understand why Americans don't want a system like this!
4
What do you expect if every player juices the system for their individual profit ? I type this in front of yet another lavishly produced ad on TV for some drug you never want to need, that is scrip only, and that I"m not qualified to assess, NOT being on Oncologist by training. I'm used to getting $1200 basic blood test bills (Insurance $125) and had a $6,000 facility fee surprise bill from recent colonoscopy (insurance paid $300). You have to buy insurance because the numbers are crazy and you pay full retail unless an insurance company is your agent. Single payer with one price list, published for all,now. Medicare/medicaid to negotiate prices of drugs. All the cures for this we know, that work in other nations, but that our captured Congress won't do.
3
Really - more hand wringing over health care costs? So very complicated it seems, but the answers have always been there, the same answers your comparator countries use. De-link health care from employment. Stop advertising drugs. Have a centralized public option with regulated reimbursement. Support health care education so that it doesn't start and end with a focus on money.
But none of the will happen and I get to read this article, or one like it with the same tone of 'why is this happening?' next year and the year after as well.
4
I am sure someone from the Heritage Foundation or the Cato Institute will catch this, but there is a fundamental flaw in this data that makes it irrelevant for US policymakers.
It includes data about outcomes for lower class people whose lives don't matter.
5
How about the fact Americans are notorious for NOT taking care of themselves, waiting until medical intervention is needed rather than maintaining a healthy lifestyle.
1
It is almost impossible to maintain a healthy lifestyle when you are not upper class. You don't have the time or energy to exercise after a 10 hour day. You can't afford healthy food because it is expensive, especially when compared to the cheap sugary processed food so heavily subsidized by our Federal government. Where in our political spending is their support for a healthy lifestyle? None except for pamphlets telling people what they should be doing.
You want people to lead a healthy lifestyle? Give producers of fresh vegetables and whole grains the money that we now spend on sugar and wheat producers.
3
This is pretty old news. Increased spending means little if all the money goes to drug makers (who charge far more in the US than elsewhere), higher doctor salaries, and to medical equipment makers who make sure that hospitals buy more than they need.
1
The change is pretty consistent with the change in policy where medical insurance companies and hospitals became for profit companies. Part of the Reagan administration policies. Furthermore it also tacks on with the ever increasing cost of medication, medical devices and ever more expensive laboratory and radiology diagnostic testing. AS a laboratory professional I see it every day. A simple biopsy now incurs thousands of dollars of additional of genetic, and ancillary testing. A good example is lung cancer testing previously a simple biopsy categorized the sample as benign or malignant within a few simple categories. At present, after that gets accomplished the tissue is further submitted to a slew of additional molecular and immunohistochemical testing that increases the original price tenfold. All those tests are to tailor treatment for individual drugs. Many of those tests are owned by the companies that make the individual medication since companies own the genes that are being tested for and thus can charge whatever they want. The overwhelming majority of the tests are negative and even among those positive, which greenlights another ridiculously expensive drug therapy, only a few benefit. Thus we spend exponentially larger amounts of money for increasingly small benefits. If even half of that money were spent on better preventive and continuing care, our medical outcomes would be as good if not better than they are now.
6
It's not complicated. Other developed countries support people's health directly, with guaranteed health care and strong social safety nets that help prevent health problems up front. Not us. We demonize the poor, hungry, and homeless as loafers, make health insurance and health care unaffordable for tens of millions more, let people's health deteriorate, then pay doctors, hospitals, and pharmaceutical companies gazillions of dollars to fix things. Profit before people. It's the American Way.
9
Ronald Reagan happened. He brought the profit motive into the 'art' of medicine. It was during his administration that FDA restrictions on direct advertising of prescription medicines to the general public were changed, for example.
6
Is it any accident that the acceleration in costs coincides with the rise of for-profit HMOs in the early 80s? I don't think so. The promise of all medically necessary comprehensive healthcare by coordinated teams of doctors at a single flat rate - what could go wrong? What patients soon realized was that the main component of cost control was having HMO bureaucrats, not doctors, determine what was medically necessary. The overwhelming backlash against this practice eliminated most of the HMO system, yet its legacy remains: opposing armies of providers and insurance bureaucrats spending their well-compensated time bickering over which patients are sick enough to qualify for treatment, a shielding of patients from even awareness of what the treatments cost, and sense of entitlement by patients that "insurance" should cover everything, from routine care to expensive surgeries. If you tried to devise the most costly system possible, you couldn't have done a better job. As a means of cost control, the HMO revolution was a bust, yet it was fabulously successful in transforming what was a largely nonprofit enterprise into a lucrative profit center.
9
High costs with high deductibles. My family waits until the last possible moment to receive any medical care due to our outrageously high deductible of $5000. By the time we spend the $5000 out of pocket for our health care, it's the end of the fiscal year for our insurance and it resets. We end up just going to the emergency room for things like infections or viral illness because we don't have the money up front for doctors visits. It's a never-ending loop that we're stuck in, and it's ridiculous.
8
This is good news. Very good news. The US could afford anything post WWII and unlike all other Western democracies had private and expensive healthcare. Now that other countries are finally catching up and Asia is coming on strong too, the US isn't keeping up. The gist of the article is that US healthcare is vastly more expensive and Americans simply cannot afford it finally, and it's not worth what we're paying anyway. Inevitably America will be forced to get a single payer healthcare system. This is good news. Very good news.
2
Is it just me or is it like many in the media who were alive back in the 70's and 80's seem to have not participated at all and perplexed as to what happened right in front of them.
Our so called health care started to decline in the late 70's when the stock market took a bath and they figured they'll get money from the one's with money: doctors. Also at this time in history there were the very first REAL malpractice law suits also dramatically increasing the price of insurance. Prior to this it was impossible to win a lawsuit against a doctor. Simultaneously doctors realized that if they had a small practice with 3 or 4 doctors they could incorporate with others to form a large clinic. This was the end of house calls and maintaining one GP doctor like the old days was gone. Now add the hard fact we have a corrupt gov't that has allowed big pharma monopolies to run the show with zero consequences because they used the tactic of always blaming the patient. And now here we are. We are about the ONLY nation left that hates is citizens so much that our own gov't still refuses to provide national health care. Keep in mind that we are the richest nation by far and can seem to always be able to afford endless wars but zero health care. And this article like ALL articles on health care always leave out that HARD FACT that currently according to a very detailed Johns Hopkins report that our heath care system is now the third leading cause of death and the #1 cause of bankruptcy.
7
As the rest of the world has already figured out, the best solution for healthcare for all is a single payer system, NOT CAPITALISM.
For profit healthcare in this country will bring about its own end.
Every single first world nation has figured this out, but we haven't.
It is time to fix this, if not we will lose it all.
10
Aside from the obvious - that we have an absurdly inefficient, misguided, and unfair medical system - there are two other underlying factors.
One is the Buckley vs Valeo SCOTUS decision in 1976 that treated political donations as protected speech. That made the US a plutocracy and made life more miserable for poor and middle class people. It also gave the for profit medical/drug lobbies more power.
The other is the change in corn subsidies in 1975. The govt had been buyer and seller of last resort, keeping corn prices roughly stable. Sec. of Ag. Earl Butz pushed through cash-per-bushel subsidies that crashed the price of corn. That gave us cheap high fructose corn syrup, cheap corn oil, and cheap corn fed meat. The cheap calorie revolution created the obesity epidemic.
8
I'm always amazed at the way food is just better when I travel...Mexico, Europe, etc....
So, we have healthcare system that no average American can afford. That's the reality even with conservatives blindly following Republican efforts to kill Obamacare.
There are no cost controls on hospital care, physicians often provide unnecessary care following a fragmented system with assorted specialties, and drug costs although once subject to controls under Medicaid now have no controls. Medicare Part D was created by Republicans to benefit only pharmaceutical companies, and this direct access to taxpayer money continues.
There is of course a hidden driver of costs resulting from physicians profiting from pharmaceutical company kickbacks while driving up drug usage.
There is also the use of emergency rooms as the only point of entry. Just about every American enters healthcare through the emergency room that point of care is generally duplicated and generally again several times after admission.
The system is broken. I blame corporations, the AMA and the U.S. Chamber of Commerce.
1
Rampant full-bore capitalism essentially recommenced with President Reagan where taxes and programs were cut and the money went to the rich. Income disparity is one leading cause of poor health outcomes in this article. Wages haven't really risen for decades as all the profits are taken for owners. Trump is increasing this one-way flow. He wants jobs for all, but when tax policies in place give the vast % of profit to one class, those new jobs will be working poverty. His voters were deceived. And now they're dying.
3
Many Americans, even those with insurance, can’t afford preventative care and self-deny until an issue becomes urgent. This is the major factor behind as many as 40,000 preventable deaths each year.
The US system is run for profit. Why would anyone expect it to compare favorably with systems run for patients? It’s monstrous by design.
14
My theory: Intensification of marketing of unhealthy foods and prescription drug "solutions" to unhealthy health choices have created a vast consumer market that accounts for rising medical costs and worsening health outcomes both secondary to poor nutritional choices and the overworking and over stressing of the American worker. It would be interesting to compare the average number of prescription drugs a 55 year old American takes on a daily basis with the average in the EU.
11
The view point feels more like a policy suggestion than an academic conclusion. More competition and the government pays less. That definitely sounds more political than scientific. Like something the Senate Health Committee would cook up. Republicans want a market solution and Democrats won't pass an opportunity to buttress Medicare. Moderate compromise. Personally, I think we can do better. We can all agree though, the US is under performing expectations by a wide margin. We need to come up with some sort of plan.
2
Fascinating. I spent some time in the UK as a student, and was both mystified and pleased with the medical care there. Within a week of arrival, I got a very nasty flu. I had already gotten my NHS card and within the second day of being ill I went online to figure out how I could get my flu treated. The website was very easy to use and I got a free box of flu supplies from a pharmacy a block away. No payment, nothing. It was a very pleasant surprise.
Upon getting the box, it was full of all these medicines that would've cost a fortune here in the U.S. And the system was so easy to use. I nursed the flu and got better pretty quickly, and in time for classes.
I didn't need medical services after that. But at the end of my year in the UK I figured I should take advantage of the free health care and went for a check-up at the local NHS office. The doctor was baffled as to why I was there. He said--"We only treat people with actual illnesses and serious injuries. People don't come in for check-ups." I answered, "Can you at least do something? I came all this way and made an appointment." And he weighed me.
After that visit to the doctor I understood what the NHS was doing--preventive medicine (like the flu box) and keeping costs low at every turn (like not spending time and resources on extraneous check-ups of healthy individuals). It works. Their system provides great care at a fraction of the U.S. cost, and it's totally free.
27
Failing to providing check-ups and screening leads to worse outcomes - especially for diseases such as cancer for which cure rates are high when detected early but low when detected late.
1
An anecdote:
I was living in London when a friend of my girl friend showed up one Sunday night with a high fever. We rushed him to the local hospital. The ER was dark and dinghy and empty. There was a widow with a woman behind it. We were sent to an examining room and in a minute a doctor showed up. He treated my friend and handed us two prescriptions. He said the pharmacy was around the corner.
I handed the pharmacist the scripts and in five minutes had the drugs, I then asked, "Where do we pay?"
"Pay?" she said, "There's no money in this hospital."
"You don't understand, " I said. "We are not British citizens. We are just guests."
"No, YOU do do not understand, This is England. This is a hospital.. We treat sick people. We treat all sick people, Brits, Frenchmen, Chinese, even Americans. And that's all we do. We just treat sick people."
7
PS Some data.
Here are the per capita figures for health care costs:
US - 9507.2
UK - 4192.5
OECD Average - 4003
These figures are from the OECD and are for 2016 and are in PPP dollars which takes cost of living into consideration.
Let's compare some bottom line statistics between the US and the UK.
Life expectancy at birth: UK - 81.1 & US - 78.8
Infant Mortality (Deaths per 1,000): UK - 3.8 & US - 6.0
Maternal Mortality (WHO): UK - 9 & US - 14
As Einstein said,
"The difference between genius and stupidity is that genius has its limits."
5
I am confused. The article states that the most improvements are seen with people at the bottom of the socioeconomic scale including an improvement in the child mortality rate, yet we still lag. So the solution is further spending for the poor?
What is not mentioned is the important role that nutrition plays in our well being. Americans have one of the highest obesity rates in the world across all socioeconomic levels but especially among the poor. It could be that the abundance and low cost of the wrong types of food have made us very sick and have shortened our lives with increased rates of cancer and heart disease. If we focus our energies and money on the cause of disease,poor nutrition, which leads to obesity and its consequences we will improve. Of course, single payer would also be great, but improper nutrition is the number one culprit of our poor health outcomes.
4
When you have a healthcare system that is based on profit, of course the costs are going to sky rocket and folks will not be any healthier. The system is designed to maximize healthcare industry profits and not to cure people. It's that simple, it really is.
112
In most countries, health spending is about improving health outcomes - fewer deaths, less illness. In America health spending is first and foremost about corporate profit. No surprise therefore that the spending is out of control, or that the health outcomes, on average, are worse than you'd find in many poor countries.
The irony is that with a single payer system, America would shoot to the top of the health charts AND save a fortune - great health care can be had for much less than America is paying.
73
But won't you think of the hospital executives and insurance co. executives and shareholders?
2
Managed Care. Mergers of once charitable hospitals, the move from doctor driven care to profit driven care. hmmm, did we forget about the patient?
15
Sadly, I came of age during this 80's nightmare decline, not only in health care access due to rising costs and employers being legally allowed to drop all the cost sharing on to their employees, but also the nasty war beginning to be to waged on the salaries and benefits of decent and hard working blue collar and middle class Americans. I can still remember, when I was in my late twenties, listening to Reagan and his minions expounding to millions his dog whistle 'welfare queen' label and everyone seemingly lapping it up, except me.
As many here agree, THIS is why our health care system has mutated into the mass mess that we have now. I wish this writer had connected his correct analysis about the intense privatization occurring with the guilty - the political administrations who were laying the pavement for our current 'gotcha' medical system. Like some say, this ISNT rocket science. Other developed nations do it right. Until we decide we deserve the better system, universal government regulated care, the billion dollar insurers, pharma and hospitalist corps will continue to bankrupt America. Your choice.
52
Many legitimate comments brought up here. In addition the impact that lack of adequate sleep has on overall health, the economy and quality of life is jaw dropping. Professor Matthew Walker at UC Berkley wrote a book "Why We Sleep" and I heard a podcast about this subject recently. Truly amazing and disturbing. Our health system is very complex with regards to the myriad of competing forces and money is the driver here make no mistake. The real struggle is how to maintain access to healthcare and innovation while controlling our capitalist urges that pits what makes the most money over what makes the most sense. Needless to say simplifying our processes and our lives would go a long way but some cultural and corporate attitudes would need to change.
4
This problem doesn't strike me as political per se, though Democrats have tried (and failed) to take a more reasonable line than Republicans. But both parties have championed free markets and deregulation (remember Bill Clinton?) in all areas of American life.
Problem one: lack of a single payer system, which would cut down on administrative costs. On Medicare now, my health care bills are a hodgepodge of contradictions and irrational payments. I have no idea what and why Medicare pays, still less with my secondary insurance.
Problem two: failure to regulate drug prices (see problem one) together with the money spent on advertising new drugs that are little better than what they replace (new isn't always much better).
Problem three: obscene salaries for physicians. They aren't gods, just well-educated workers.
Problem four: the propensity of physicians to offer useless treatments to patients in final-stage care (where much money goes). The outcome: prolonged suffering, not quality of life.
Problem five (most important): lack of emphasis on preventative care through regular checkups and common-sense monitoring, together with the promotion of healthier life habits. Some insurance plans reward patients with lower premiums through smoking cessation, weight control, having a primary care physician. But the screams such measures provoke: it's apparently the right of Americans to be obese. The best exercise is pushing away from the table.
19
The divergence in health care outcomes per public investment began the day Ronald Reagan declared that government is the problem, not the solution." Successive Presidents up to Barack Obama bought into this bumper strip philosophy (including Bill Clinton), and here we are.
The details explained in this article have been known for years. It is the disconnect of policy from politics that is the reason for the declining outcomes. Health care simply cannot succeed without countervailing market forces on the part of government to insure competition and reform. Left to its own devices, i.e., price hikes for needed services, investment in drugs with all but insured profits, and the prohibition of government negotiation of drug prices are all playing a direct role. But in looking for the root causes of the current Rube Goldberg-like health care system, look to Reagan and his happy indifference to actual problems confronting the nation.
14
You've hit the bullseye, @Tammie! HMOs changed everything. Up until then, you could go to the Doc of your choice when you were sick, and after in depth questioning , she could diagnose according to wisdom and expertise grounded in training and experience.
Under the thumb of HMO's, doctors became hamstrung by all kinds of rules and regs to "keep costs down". Doctors had to hire more employees to handle the paperwork (which raised costs) and could not practice medicine as they once did, shortened patient visits to ten minutes, assigned more expensive tests as a matter of course, etc. Higher rates of doctor burnout is a big problem, too.
15
Into the Pockets of Hospital Administrators,Consultants,Drug companies Etc...Not into patient Care or Nursing.
12
Because large corporations skim billions off the top in profits. As long as the USA refuses to acknowledge healthcare as a basic human right, and remains the only developed nation without a state-run, single payer, national healthcare system, the situation will persist.
Add to mix the further indignity and insult of bankruptcy resulting from catastrophic medical costs - which only happens in the USA.
American Exceptionalism - Exhibit A.
21
In 1978-80, US drug manufacturers were first allowed to advertise directly to consumers. Drug prices have sky-rocketed ever since. Inappropriate advertising of procedures, hospitals and doctor groups were also allowed at that time. The results speak for themselves.
13
Before 1973, it was illegal to profit from healthcare. The Healthcare Maintenance Act of 1973 opened the door to a system that values treatment over outcomes, and profit over everything.
83
I googled the HMOA Act of 1973, it was passed as an attempt to keep healthcare costs down. It required HMOs to offer the same benefits at lower costs, which, it can be argued, let to more frustrations with healthcare. However, it seems that there was already plenty of profit in healthcare before 1973.
3
Pamela your comment is all that needed to be written on the subject. Thank you.
4
What happened during the 1980s? The top nominal rates on personal income taxes were dramatically cut. This removed the brake on professional fee inflation. The need for legal services may be elective; not so for medical. As these occupations are subject to both guild and corporate controls there is no "free market" to increase the number of providers or induce price competition. Hence costs increased without a concomitant increase in benefits.
15
The article missed a few key changes in US healthcare that have a large impact. Insurance companies reimburse for medical treatment, rather than by outcomes. The more treatments, the higher the revenues. Is it any wonder we end up spending more with this system?
And a study a few years back showed that patients who received more treatments and more intensive medical attention had an inverse relationship to outcomes. The more treatment a patient gets (beyond a certain level), the worse the outcomes became. That helps in part to explain why we spend more for medical care, but have worse outcomes. Those with platinum policies don’t end up healthier than silver. They just spend more. And until our medical system stops being incentivized to generate more income, rather than doing what’s required to make patients healthy, the poor outcomes will persist.
9
Could we also consider that we Americans may be less healthy than others, we may not eat as healthy a diet, walk as much or exercise, may not relax and enjoy ourselves as much as other countries ?
8
Reread the article, because this point is touched upon and for the most part, rejected.
1
Less healthy than everyone else?
How interesting that so many commenters here read that we have low competition and then conclude that the free market has failed.
The truth is that the federal government has refused to allow a free health care market. By mandating comprehensive health care plans, and by providing lush tax incentives to receive health care plans through employers, the government has created an oligopoly.
A free market would allow me to see the price of doctors' services before receiving them. Of course there is no free market, of course there is no competition, when there is no price transparency! What did you all think would happen? Of course doctors will charge whatever they can, and of course insurance companies will pass along whatever tax-subsidized costs they can. Customers have no recourse by shopping around for a better deal the way they would in a free market.
And free market would allow me to buy whatever insurance I want - and most people would pick a catastrophic plan given a true choice. I want insurance for big things - cancer, getting hit by a bus. For the rest, please leave taxes and bureaucracy out of it. Just let me pay for it myself.
People pay for cars and car insurance this way. Why is health care any different? No one buys a "car care" plan that bundles insurance for catastrophic events with regular maintenance like oil changes. We pay for these things separately, and for good reason.
6
I agree with you to a point. You can afford the “maintenance”. What happens to those that cannot afford the maintenance or anything else?
As the article sites, the main driver is not health care. The primary determinants of health and longevity are socio-economic and in order to tackle this beast of a problem we have to provide more education, and programs for the poor.
6
I am no healthcare administrator, but I doubt the majority of healthcare spending is on "maintenance". Maintenance is included in order to keep some catastrophic costs down. With a car, changing your oil does not prevent accidents. Further, a person can choose to live without a car, to cut down on the maintenance of oil changes AND the catastrophe of an accident. But they could STILL get hit by a bus...as a pedestrian.
3
RH, here is a way you can tell the difference between your car and yourself.
Your car is the device that if it does not start in the morning, it is an inconvenience, not a tragedy.
2
Maybe if we were not number 24 on the list of the world's healthiest countries we would have a better showing here.
see:
http://news.bbc.co.uk/2/hi/health/774434.stm
2
What happened? The baby boomers is what happened. Just like they liberalized the 60's in their teens and twenties, partied at the disco in the 70's, went to work and made money starting in the 80's, and are now geriatric fanatics moving the US into a pseudo right wing spiral of telling kids to get off their lawn and complaining about healthcare.
The US isn't getting Far-Right, it's getting Far-Elderly.....
4
So are you proposing killing us all off? Sounds like it. Also there are many of us who have maintained our liberal leanings into being elderly. In this age where we are trying to be more sensitive to race and gender issues it seems it is okay to bash people based on their age.
2
It wasn't the Boomers who turned healthcare into a capitalist profit generator and voted in the policies and tax programs that gutted the social safety net. That was the Greatest Generation, who are now the truly elderly who are being used by "healthcare providers" who see Medicare for the eldest as cash macihnes.
The Boomers inherited the world that their elders and corporations created. They are broke throughout the 70s. Any money they made in the 80s was stripped from them by stock market and housing market crashes. Their cohort voted against these political changes. Now a crude slandernot based onfactsis driving attempts to set the generations against each other. This view only helps to ensure that the top 1 percent stays on top while the rest of us consume each other.
2
Sorry but things occurred in the 60s, 70s and 80s that significantly contributed to healthcare cost trajectory we've been living with for almost five decades... Medicare starts in 1965, significant price inflation from 1996 to 1982 (avg healthcare costs increased at an annual rate of 13% over that period) and in 1983, the creation of the IPPS and hospital reimbursement through DRGs.
2
I wonder if America's failure to keep pace with the rest of the Western World isn't BECAUSE of our higher health care spending. For the rest of the world, routine healthcare is essentially free to individuals, so they get it, and they identify potential problems before they start to reduce life expectancy significantly.
For a large portion of Americans, routine healthcare is prohibitively expensive -- do you get that lump on your neck looked at, or do you pay the rent? You pay the rent.
And, beginning around 1980, we started to have a big enough uninsured population -- and medical costs started rising enough -- that I would bet that the number of Americans force to make this sort of choice was large enough to affect national statistics.
17
Isn’t 1980 about when inflation ended everywhere, thanks to Fed Chair Volker appointed by Carter and Reagan, except in healthcare and tuition where it continued unabated?
4
We all seem to know what that "something" was- changed Republican party in general and Ronald Reagan in particular. It negatively affected America in many ways, besides health care- e.g. declining quality of education, America's ability to create wealth (and growing infatuation with finance and management), rise of religious fundamentalism and superstitions, crony capitalism, gun culture, racism and few more.
23
Two thoughts: As some have noted, healthcare really is not a free-market commodity. It is a "common good" and should be funded that way (like public education and public safety). Second thought is unavoidable if you have ever worked in a hospital: The incredible proliferation of vice-presidents, directors and coordinators; and ridiculous pay for all of them. There is no way these people can add that kind of value to the enterprise.
21
Yes, I think the addition of expensive layers of management has had a huge influence on the increase in prices. The average top administrator in a hospital makes many times what the emergency room and trauma docs do, with salaries in the millions. And what do they really contribute to the delivery of care? The techniques they learned in business school, techniques designed to increase the bottom line.
17
In 1964 the American people overwhelmingly rejected the John Bircher Barry Goldwater, but by 1980 they voted in his protegee Ronald Reagan. 12 years later the Democrats converted to John Birch-lite behind Bill Clinton, and the party establishment remains John Birch-lite to this day.
The result is an economy configured to redistribute wealth and income upward, enabling outrageous profits for the pharmo-medical mafia and leaving most Americans vulnerable to less than ideal health outcomes.
The fact that "life expectancy growth has been higher among minority groups" doesn't change the fact that those groups haven't caught up. And meanwhile segments of the white population are actually dying at younger ages than in the past.
None of that will change as long as incomes stagnate, inequality increases, and predatory elites continue to run the country for their own benefit.
18
Perhaps because doctors order MRIs for sprained ankles?
Perhaps because drug companies bribe doctors to prescribe overpriced, dubiously more effective meds?
Perhaps because prescription drugs are advertised on TV?
Perhaps because litigation for malpractice exploded?
13
Yet another Reagan revolution. Besides emptying mental hospitals onto the streets and exploding the national debt, the Reagan years pushed up medical profits without an increase in effectiveness.
23
What happened since 1980 is that greed almost completely took over the Republican party and deeply infected the Democratic party. One can only hope that we are hitting bottom on this.
16
Two words: Ronald Reagan
34
In finance, a "sunk cost" arises from an incorrectly selected investment that loses more money than it can produce. Thus, once identified as misspent, further spending on this miscue should be promptly redirected toward more profitable alternatives. Simply put: cut bait and redirect.
In medicine, studies have documented that patients entering hospitals without health insurance have higher mortality rates during hospital stays than those with health insurance. From the hospital's perspective, when does marginal spending on an uninsured patient become a type of "sunk cost," with little ROI?
Also, many hospitals are organized as nonprofits. And many do issue charity care to uninsured patients very generously. Yet, there is no minimal dollar level of health care that these nonprofit hospitals must dispense to maintain their non-tax status.
In a recent column (5/7) by the Times' Mr Sorkin, covering a debate between Mr Buffett and Mr Musk of Tesla, Mr Buffett argues that businesses must use "moats" or "barriers to entry" to protect the market shares of their most profitable investments. In medicine, state of the art technology acts as a similar "moat." Another "moat" is the increasing concentration of hospital-based services to increase hospitals' pricing leverage. To gauge this market concentration: an extraordinary per unit: (Gross margin/Sales Price) or (Contribution Margin/Sales Price) metric in the drug and hospital sectors suffices.
5/15 Tu 10:17a Greenville NC
3
Medicare is not just a social welfare program. It is also corporate welfare. If health care providers know that Uncle Sam will foot the bill - no questions asked - then they have incentive turning Grandma into a guinea pig. Especially if the providers are owned by Wall Street!
Medicare tax dollars end up in the pockets of investment bankers. This never happened before 1980.
8
Perhaps the introduction of advertising for prescription drugs, in 1983, helps explain the divergence. Allowing ads to persuade ignorant people to spend someone else's money seems a recipe for runaway spending that would compound over time.
9
Let's get health insurance that is not tied to employment. That restriction is preventing the free flow of labor. People can't quit their jobs because they can't lose their health insurance. That system is foolish. I'd love single payer. I'd much rather spend money on medical care than medical billing.
27
Concurrent with the explosion in costs was the advent of the Reaganite philosophy of "Government isn't the solution, Government is the problem."
Healthcare is unlike all other markets. Consumers (patients) sick and in pain are in no position to bargain and shop around.
8
American exceptionalism? So many people have been fooled into thinking that the American way is best. Medicine and market forces are an oxymoron. Private insurance is not more efficient: just look at the administrative costs. We spend much more than other countries, yet we don't get any benefits. Something needs to change - the political party running our government.
12
Every successful business today learns to provide value within the rules of the game. This article is pecking at the fringes, when the real issue is the rules of the game. Starting in 1977 and accelerated in 1982 and beyond the rules began (through Stark and Anti-kickback law) defining the tiles of relationships doctors could have with hospitals and patients. The extreme intrusion was met with a fracturing of physical entities providing care increasing overhead and inefficiency, all out of policy fear that doctors may self enrich and the government hammer of law was the only way to control them... This alone in my professional healthcare governance consulting opinion applied reverse thrusters to natural market drivers that increase efficiency and quality over time... Until these are fixed nothing else will dent the issues
The power of corporations over citizens increased dramatically in the 1980s, in tandem with lobbying activity. Today, lobbyists spend over $3 BILLION a year to influence legislators, and every major corporation has at least 100 lobbyists. Vast sums are spend on insidious PR campaigns to convince Americans that healthcare for everyone is some devious plot, and sadly, many of us fall for it. Prices are high because we keep electing officials who protect the profits of global corporations and deny the needs of the American people.
6
Dr. Jha says: “For starters, we could have a lot more competition in health care.” And how’s that going to happen? Take, for example, prescription drugs Consumers are prohibited from importing prescription drugs. Has there been a concerted effort by the President or Congress to allow Americans to buy their prescriptions from lower cost Canadian or Mexican pharmacies? Or have the insurance companies offer lower cost policies that encourage their subscribers to get extremely high cost procedures at the lowest cost facilities that may be 100 or 1000 miles away? Or have the President or Congress supported modification of the ACÁ Marketplaces to encourage more competition?
2
I haven't read all the comments, but the fact that this article totally overlooked the change in our collective diets that occurred with the adoption of the food pyramid and the increased amount of carbohydrate and processed food that came along with it...and the immediate increase in obesity and type 2 diabetes....well, it's staggering to me that this was overlooked in the article.
2
Wait a minute--I'm older than you commenters, so I do have an advantage. The prices of medical insurance for doctors took a big jump in the mid-1970's because of malpractice suits. Therefore, the Docs (and I suppose hospitals) had to pass costs on to customers. So, even without the Reagan intervention, by 1980's cost of a simple check-up would have doubled. Obviously, many people did not have the money to go to the doctor, so life expectancy would and did go down. I did work as a contractor at Blue Cross, Blue Shield in San Francisco in late 1980's. The scams the Docs were pulling to get more money from the insurance companies was a big problem... which would have made insurance costs go up and more unaffordable.
Of course, we have to separate the two groups: those whose company paid the insurance, and independents, entrepreneurs and agriculturists who had to pay out of pocket. Then came Obama Un-Affordable Care and everyone's medical insurance doubled--even those who worked for companies. Did that help people's life expectancy?
4
I have worked in hospitals since 1983. The growth of technology and staff have exploded over the years. It used to be so much work to get a piece of medical equipment approved by both the hospital board and NYS. Those days are long gone and every hospital has whatever the latest and greatest technology is even if they don't have enough patients to utilize it. You can add on all the information technology systems that get bought and replaced on a regular cycle. Millions upon millions of dollars are spent on those along with the employees and consultants to care for them.
Finally, you have layer after layer of administrative positions that never used to exist. Delve into the employment numbers at hospitals along with the salaries and benefits paid and you will have at least a partial explanation for why our healthcare system is so expensive.
Finally, what do physicians across all specialties make in the US versus Europe. I bet that is another area that will explain the huge discrepancy between us and the rest of the developed world.
6
The "Greed is Good" Reagan years are what happened. I was in healthcare prior to the 1980s. Yes, there have been some new and pricey drug developments stemming from the biopharmaceuticals, but the rise of what was then called "managed care" took the cap of profits on all levels. Companies and providers were no longer taking care of patients, they were taking care of shareholders. Mergers & acquisitions stifled competition and manufacturing; now stock buybacks. One need only look at the annual compensation packages of healthcare company CEOs prior to 1980 to today.
8
What happened in health care is the same thing that happened in college costs and income inequality: The rise of the right wing broke the social contract in America. Prior to the Reagan revolution, physicians and health administrators felt a social constraint on what they charged. University administrators saw themselves as a kind of faculty father (mother) figure, not as a CEO. They took as a big part of their reward the outcomes for the people they served.
Post-Reagan, it's all about competition with one's peers. Who has the best second or third home? Who takes the most luxurious trips? Who has the best stock portfolio (and a bit of insider trading is A-okay now)?
12
In 1980, as a newly minted reporter, I attended public hearings of a state cost control agency that would determine which and whether a hospital could get a CT scanner. The concern was that these expensive machines would raise usage and health care costs. And we didn't need one at every hospital, because the "market forces" would dictate said hospital would try to get them used more, raising costs. That was then. Now the brakes are off, there ARE indeed MRIs, CTs and robotic surgery and other amenities at every hospital. And indeed, market forces compel those hospitals to put up billboards and otherwise advertise to increase usage to pay for them. So much for market forces bringing down health care costs. Europeans kept those controls on. We didn't.
Another factor is the proliferation of different health insurance policies causes an insane level of administrative complexity, accounting to about 25% of the preventable cost of care.
9
There is no real mystery here. This is the result of unfettered capitalism applied to health care. Our ingrained economic and social ideology has consequences which are now coming home to roost. As a result, we have a system that cares more about the health of its bottom line than the health of its patients.
10
It’s claimed that the problem is lack of competition, but where are the data supporting that? There are soft words about the orphan drug effects and costs of high technology, but that’s all. What’s different about American health care? Look north to Canada and you’ll see.
3
Just review the number of mergers & acquisitions just in the biopharmaceutical industry since 1980 to see how it has affected competition. Not one of the 4 biopharmaceutical companies I used to work for, one over 100 years old, exists today. Reduce the number of and take control the manufacturing lines, control what promising molecules receive research & development funds and you control the marketplace.
3
This is no mystery at all. Health providers and insurers finally figured our that the marketplace was ripe for stealing. Physician practices consolidated or were bought up by large health systems. Suddenly, the cost to visit a specialist tripled. When you used to see a new doctor, you could be fairly sure your health was the primary concern. Today, you have to be concerned that some of the ordered tests are unnecessary . . . except to generate revenue. Just recently, an $11 old-time generic drug I was taking jumped to $72 without warning through the PBM I use. While we are told we get the lowest possible negotiated prices, I now find that I can buy this drug directly from the local pharmacy for less money.
I could go on and on, but this is really no mystery. It is all about greed, with health outcomes secondary, and it happens to average Americans every day.
15
I have a paper explaining exactly this. Basically, abnormally high markups in the health care sector relative to the rest of the economy, especially during the 1980s, explain this situation. Obviously, healthcare markets in the US are less competitive than what most people think.
https://academic.oup.com/jeea/advance-article/doi/10.1093/jeea/jvx059/48...
2
It’s hard to believe that the divergence of costs from outcomes in the 1980’s didn’t have something to do with the the Health Maintenance Organization Act of 1973, signed into law by Richard Nixon.
This allowed medical insurance agencies, hospitals, and clinics to function as for-profit business.
10
Good observation. The 'krankenkasse' health insurance in Germany is still not for profit. It's a good system- I was a part of it for three years.
There are aspects of our US system that's better, but truly no one in Germany is left behind or bankrupt because of medical costs.
5
You are precisely right. It was illegal to profit from Health Care in the United States before the 1973 HMO Act. The political parties will say nothing to you about it because they both profit from the death and suffering of human beings. And the New York Times and any other controlled media are not going to say anything about it either.
5
The belief that competition can exist in any aspect of health care is an unrealistic concept. When was the last time you or anyone that you know shopped around for health care? After visiting your doctor did they tell you how much it would cost? How often does anyone ask a pharmacist how much a prescription will cost or get prices from several pharmacies? Competition cannot exist unless the consumer directly pays for a product at the time of purchase commitment, where the purchaser is aware of the entire cost is of the product and has the opportunity the compare costs prior to commitment.
4
The insurance industry response to this - with the assent of employer groups - is the high-deductible health plan/HSA combo. The theory is that when people have more "skin in the game," they will start shopping for care. Health insurers have spent hundreds of millions developing apps and programs to make costs visible, hoping to tap the same consumer impulse that leads us to comparison-shop for cars, TVs and computers. They hoped consumers would help tap the brakes on costs. How many of those insurers are bragging about success? I don't see any.
3
“The boomers inherited a rich, dynamic country and have gradually bankrupted it."
What changed around 1980 was the coming to political and economic power of the boomer generation. They became a majority of the electorate in the early ’80s, and they fully consolidated their power in Washington by January 1995. And they’ve basically been in charge ever since.
Most of our problems - definitely including health care - have not been addressed because that would require higher taxes and therefore a sense of social obligation to our fellow citizens. But again, the boomers seem to have no appreciation for social solidarity. It's been replaced by a cult of individualism.
In business, it was all Peter Drucker: business bears no responsibility to workers, communities, environment, or the future.
Sadly, I predict that America will only begin to address the shortcomings of our healthcare policies when the boomers are largely gone: 2025.
4
Peter Druckerwas no Boomer -he was born in 1909. Ronald Reagan was born in 1911, Ayn Rand in 1905. The Boomers weren't the ones who broke the Social Contract -it was the Greatest Generation. They controlled policies, politics, corporate boards and media throughout the 1970s and 1980s Boomers inherited a social and political system created by the wealthiest, and they have never been able to dislocate them from the top.
The Boomers didn't vote these guys in.
2
For-profit HMOs started to appear in the 1980s. Marketing healthcare services to consumers started. Medicare as well as private insurance began to cover routine, outpatient care which, with the proliferation of tests and drugs for chronic conditions added huge expenditures on top of increasing costs of inpatient care. Communities invested huge amounts building new healthcare facilities to replace aging post-WWII structures. There wasn't one factor, it was a perfect storm.
1
True, but it was not until 1990 that they become a relevant player in insurance market. After the 1990s healthcare cost started to rise at the same pace as the rest of the world. For profit HMOs make money if healthcare costs are contained. What happened in the 1980s is that healthcare costs were not contained.
1
Yes, The Reagan-Bush 12 yrs are not turning out so well for people that have to work and for people that have to pay.
Healthcare is best delivered in a single payer system.
A single payer system is most cost effective.
The most people get the most care for the best results.
Very simple.
12
Ronald Reagan, by which I mean the triumph of neo-liberalism in the US. Government as problem, not solution, the market as the answer to everything, and the worshipping of wealth. All this led people in healthcare, just as in finance, to treat what they did as just a way to extract wealth from the system. Doctors, hospital administrators, drug makers, insurers, politicians, device manufacturers, etc. All asked how can I use health care to make more money? Our politics didn’t try to limit this. We encouraged it. It is not like this in other countries.
9
You look at the wrong data. While we see survival as the obvious measure for health care diversity is by far the better measure for the health of a system. That's true in ecology and evolution and it's true in the living complex system that is our health care. If you look at our health care's diversity you will see the answer to what happened. How to fix it requires empowering the patients with both the ability to pay and the understanding to do so as well as seeing that our system is based on illness care rather than health care. Follow the money! Chris Rock has it right.
1
I know what happened. I was part of it. In 1979 The FTC allowed medical professionals to advertise. It's not like the advertising created demand for illness, or warm and fuzzy hospital ads actually cured anybody. They did add cost, though.
14
Sales & Marketing was always at least 45% of every dollar the biopharmaceutical industry spent convincing healthcare professionals to buy their products -- it increased just 5-7% with DTC ads.
And R & D remained unchanged or decreased; 23%.
No mention of the steep rise in obesity was made. Sugar became ubiquitous.
Obesity, especially amongst our poor contributes to increased diabetes, heart disease, HTN, esophageal cancer (from GERD), and breast cancer. All requiring increased medical care. Which leads people to choose between expensive medications, food and rent.
Public Health is about clean water, good sanitation services, and above all else good nutrition.
Stop subsidizing corn, soy, and sugar.
Instead subsidize ALL produce: all fruit and vegetables.
Mandate all grain products be 50% whole grain and increase this percentage by 10% each 5 years till we have 80% whole grain as the norm.
Mandate all ground beef contain 20% fruit (U.of Michigan's study adding cherries made the beef juicier, tastier and of course decreased fat).
Tax all sugar drinks 10 cents per ounce.
Yes, a can of soda should cost $2.00, or more.
Within our children's lifetime we will see dramatic drops on obesity and all of it's concomitant chronic diseases.
Oh, and of course have Single Payer health insurance, and negotiated drug prices.
18
If you're anti-sugar, you'll probably see the issue with adding cherries to beef. There's no reason to fear fat. The demonization of fat and resultant increase in our carb load, is really the problem. Not just "sugar". If you're going to tax all sugar drinks, tax the fruit juice that parents allow kids to guzzle all day. Same amount of sugar as a soda and no, it doesn't matter that it's "natural" sugar. Your liver's glucose response is the same.
3
One other fact: the rise of managed care organizations during this time. How anyone thought that adding more people seeking to make a buck out of the healthcare system would end up reducing expenditures is beyond me. It didn't end up benefiting anyone except those who owned those companies but, of course, they weren't interest in healthcare; they were interested in the healthcare business so it didn't matter to them whether people got care or not just as long as those owners got rich.
13
So if we had price controls like peer countries do, we could reduce insurance premiums by 40% without sacrificing quality.
4
About $50 a month is deducted from my (high-end) pay for Taiwan's National Health Insurance. Enrollment is mandatory, including for foreigners resident for over 6 months. I paid the premiums from 1976 to 2002 without needing to use it. When I started to use it, I was amazed by the quality of care and breadth of coverage. In 2016, my primary care physician diagnosed me with pulmonary hypertension. I was referred to a cardiologist who is also a professor in Taiwan's top medical school doing research on this disease. He found what was causing it and put me on the necessary medication. All exam fees, tests, lab work, medications, etc., fully covered by NHI. I couldn't begin to afford this kind of medical care in the US. Why do Americans not want this?
6
On innovation, I think in the US system, the incentives are all wrong. If profit is the chief driver, then innovation focuses on drugs/devices that will be needed long-term by the largest numbers of patients who are most able to pay. Thus, Big-Pharma wasn't interested in Zika, which they saw as mainly affecting poor people. However, academic researchers with government funding were able, in a relatively short period of time, to discover the mechanism by which Zika causes birth defects and develop a vaccine. Similarly, researchers at Taiwan's equivalent of the NIH, beat teams at Harvard and Oxford to new discoveries about cell biology related to dementia. In academia, competition to achieve the best and most useful discoveries drives innovation. "Free enterprise" in pursuit of profit isn't the best way to achieve good healthcare. The incentives are all wrong.
22
Start there
".....an M.R.I. costs $1,150 in the United States and $140 in Switzerland"
https://www.nytimes.com/2018/04/03/magazine/can-doctors-choose-between-s...
The Economist recently did a stab at what causes the high prices in the US. It's conclusion : Too many middlemen.
Economists call this rent seeking. It has become a high art in the US , as each rent seeking group tries to cement its rent seeking, via campaign contributions.
This interpretation is supported by striking correlation between health care spending and the cost of running for office. One of these days I will write an article on it.
Mean time click here
http://assets.time.com/interactives/campaign_inflation_charts/screenshot...
and make up your own mind.
18
The phrase you're looking for is "fettered capitalism." That's the largest difference in prices between the US and every other market-based national economy on healthcare prices. Profits are constrained, which will never occur in the US.
2
Several factors:
1. The introduction of expensive radiologic techniques such as CT scans and MRIs
2. The rise in outpatient procedures such as all those nerve blocks and epidural steroid injections performed by anesthesiologists who were looking for money making things they could do outside of operating rooms
3. Greed. At one time it was virtually unheard of for physicians to be making what was the equivalent of $1 million dollars or more a year. Now it is common place. And much of that money comes from unnecessary tests and surgeries. We waste tens of billions of dollars a year just on tests and surgeries for low back pain that have no science to support their use in the overwhelming majority of patients who receive them so it wouldn't be unexpected to see that they would have absolutely no positive impact on public health much less overall life expectancy.
16
Very few MD's make a million dollars a year. They work long hours, weekends, holidays for decades taking care of often very sick people. They certainly deserve to make that much. All of these CEO's and MBA's running the hospitals certainly don't deserve to make their multi-million dollar salaries on the backs of the people who actually train for 15 years and do actual work.
6
Malpractice insurance gobbles up much of Docs income?
I would think that life expectancy is more dependend on general health condition than on health care. General health in turn is largely dependent on food quality.
In a country where obesity and diabetes is among the highest in the world it seems logical that life expectancy is starting to fall.
Do not expect doctors and medicine to be able to undo the effects of unhealthy living
9
The TWO biggest advertisers in the media today are the food and pharmaceutical industries. Hmm, is there a relationship here?
3
When I took up with my first wife in 1981, she was working as an executive recruiter, specializing in health care. That was about the time that MBAs were starting to pay attention to the money that could be made in health care. That is really all you need to know to understand the trends discussed in this article.
57
Shakespeare's saying "First we kill all the lawyers." needs updating to "Then we kill all the MBA's. Enormous damage is being done to working people by the organisations that have a preponderance of MBA's on staff . Foremost being Private Equity and Hedge funds using ,"pump and dump" as well as "strip and flip" tactics. Job insecurity, unemployment, low wages are a direct result of the hollowing out of corporate America in the untrammeled pursuit of short term gains and long term pains. The Supreme Court's legalization of buying politicians is just one of many cases where fraud and corruption is perfectly legal. May God help Americans because their governments certainly will not.
11
The 1980's ushered in new forms of financial entities for doctors: they started to create health centers with many more groups. One could get insurance from the group of doctors instead of getting insurance for ANY doctor. And it was much less expensive than the private doctor insurance. Did that make the sudden difference? A difference in the form also created a difference in the quality? Did the new entities hide bad practitioners perhaps? I don't know the answer.
2
Every time one reads a column such as this, the same old arguments for and against come forth about changing the healthcare system in America. Americans have been haggling about what to do about this since Harry Truman was President, STILL, with little resolution. Despite the fact that the polls continually confirm that the majority of Americans want some sort of universal healthcare, until the voters start electing politicians who are not beholden to special interests and in particular, their corporate donors and are committed to implementing such as system, the discussions are fruitless.
11
Why are other countries health care costs lower than ours? Because other countries are single-payer socialized medicine systems and doctors/medical personnel/hospitals are government employees. If you want government employees providing your health care....well...........................
On the contrary, the only country whose physicians are direct employees of the government are those in Britain. All other countries doctors with universal healthcare, including my own, Canada, are private business people. In fact, in order to further reduce their tax burden, some doctors incorporate.
"Single payer" means just that. One entity that pays the doctor's fees, in this case the government i.e taxpayer, NOT, insurance companies.
52
I have read that the NHS in Britain doesn't start screening women for breast cancer until the age of 50 using mammograms. Then they do followup mammograms every three years till age 74 when they stop screening. I don't think that most American women would find that to be acceptable. They also do not start screening for colon cancer till the age of 55. You have to be "invited" to get a colonoscopy as it is not available in all the parts of the UK. I read this on their website. Are Americans okay with rationing of healthcare? I suppose that people without employer provided health insurance would be, but people who currently get their insurance through their jobs would take exception to cutting back on these screenings. Employers probably would then offer health insurance to attract highly qualified employees. Also is the technology used in the UK as advanced as in the U.S. where tomosynthesis (3D) mammograms are becoming commonplace in the larger population centers? American women want the most state of the art imaging possible for early detection of breast cancer which can mean the difference between life and death. My 80 year old mother just had her 3D mammogram last month, when she found out it was available she asked for it. If she lived in the UK she would not be "invited" to have a mammogram, they would deem her to be too old. So this is clearly a problem with single payer health care. They are assuming an 80 y.o. is going to die of something else besides breast cancer.
I'd rather have dedicated government employees yes, than the current crop of for profit doctors and hospital administrators.
1
“The most efficient way to improve population health is to focus on those at the bottom"
I'm sure it is merely a coincidence that the U.S. diverged from our wealthy peers at the same time that we shifted toward the anti-poor ideology of the Republican party at the beginning of the Reagan revolution.
25
Here's a thought. Stop gauging Americans on health insurance premiums! I used to pay $50/month for a two person policy twenty years ago. Now I pay $2000/month. NOT FAIR and not affordable. Drumpf has taken off the breaks and even these outrageous prices are set to soar while the advantages of the ACA are stripped away. They want to bring back Lifetime Caps, Yearly Caps, and pre-existing condition exclusions meanwhile paying their corporate donors billions on our backs. The GOP "policies" cost lives.
13
The elephant in the room: In every country, doctors are the best paid or among the best paid professionals. But in no country do they make what they do here. In no first world country do patients sue doctors like they do in the US. In no first world country do doctors have to hire staffs just to do insurance billing. In no first world country do doctors know what SES the patient comes from based on insurance.
And--doctors chose to work for these systems--they are not forced. If they don't want to take insurance, they don't and patients are free to pay what they want to charge, just like here.
If doctors are willing to take a price cut--will their malpractice insurance rates decrease? There are so many factors besides for profit hospitals, for profit health care, etc. This has to be considered.
6
FYI, not ALL American doctors "choose to work for these systems", in fact, there is another alternative that you have not considered and it is something not really reported by the American media, they leave the country. In there desire to just not have to deal with the uncertainty of the patchwork system and the sometimes untenable dealings with private insurers, just in the last few years alone we have seen a number of U.S. trained doctors(several department heads from major hospitals) relocate to Canadian Institutions and many Canadian doctors who once practiced in the United States, return home, all for pretty much the same reasons. It is not "worth the aggravation anymore".
Despite the rhetoric, in the first year of the Trump administration, the uncertainty of the future of what is left of Obamacare has resulted in a reduction of over 3 MILLION Americans with healthcare coverage from the year before((2016). It has been predicted that because of further rising costs, in 2018 the number of uninsured will increase by another 9 MILLION.
Other than the wealthy doctors who can pick and choose their clients, what doctor would want to work under such an unpredictable system?
7
One macro political trend that arose in 1980 was Reaganism. Not since the end of the Hoover presidency had the balance between societal and individual interests become so skewed in favor of the latter. I think that the loosening of constraints on individuals was at least one reason that 1980 became the jumping-off point between us and Western Europe.
14
I'm not certain that the early-1980 period is such a dramatic turning point. However, there are other socio-economic forces at work over the last 40 years: Income inequality makes health care less affordable for those at the bottom. Although we're smoking less, we're eating more, resulting in the obesity epidemic. And lately we have the opioid epidemic, which affects those who cannot afford medical procedures that might alleviate their pain. Add those to the deterioration of the social safety net as big causes.
5
Opioids prescribed by Docs after surgeries, dental procedures, accidents, etc., were a major propellant of the epidemic, TY big pharma.
The takeaway in this terrific article is buried in the last part: the attack on our social safety net is one, if not the, key factor in the increase in cost and decrease in positive outcomes from our health care "system." No surprise that the trend correlates with the neoliberal takeover that started with the election of Ronald Regan and continues to this day under both Republican and Democratic auspices. Just to be clear, effective regulation is a piece of the safety net, (although the most important aspect of the safety net is keeping the poor from abject poverty).
8
The solution is simple, the government should provide catastrophic health insurance with a deductible that is income based, like 20% of income per year or whatever experts recommend for lower income brackets. At the same time we should generally make the wealthy and upper middle class pay for their own health care by cutting subsidies to private health insurance and ending the tax write-off for employee healthcare, and allow everyone to open a tax free HSA. This will make people much more price conscious about their health care especially the wealthy but also support the poor at the same time. It would be relatively easy to do, changing some lines in the tax code, and adjusting Medicaid a bit and I would bet it would solve most of our healthcare problems, but this is also the last thing the powerful healthcare lobby wants, so it would take voters to do it, and I'm not holding my breath.
I think Jeb Bush had a similar proposal, like Jeb himself it went right over the heads of the modern Republican voter and yet it's all a bit too market based for Democrats plus the Dems get all their money from the healthcare lobby these days.
6
This is one approach. I believe the system in Switzerland is similar. We cannot have it all. There has to be a disincentive on expensive (often with no better outcomes) treatments. A reasonably high deductible (made more fair by income based) combined with a guaranteed coverage for catastrophic scenarios (so that people are not ruined financially) makes sense. Unfortunately, the healthcare system, just like everything else, is beholden to the special interests, big pharmas, medical device insurance companies, etc.
7
"Catastrophic Health Insurance" is useless. There needs to be comprehensive health insurance that covers preventive and maintenance care. Have you seen the American population? They are overweight, diabetic, and hypertensive smokers. Catastrophic is a daily thing. Health Savings Accounts cannot pay for a 3 week hospital stay for just about anything. The costs can run in the millions. Republicans are the ones who need to take their head out of the sand.
12
Does the price tag for health care spending include money for research? The US is a leader in basic and clinical research and spends far more on it than many nations. Are we comparing apples to apples in this article?
5
Trends on health spending look like many comparative trends in the US turn bad. This is when inequality starts to increase— wealth taxes are cut, massive deregulation, poverty programs are decimated, wages stagnate.
5
What happens after 1980 was the explosion in managed care, an attempt to control costs that has now become a primary driver of healthcare costs. As a result, we spend 30% of each healthcare dollar - around $1Trillion annually - on paperwork, for preauthorizations, denials, appeals, and other non-productive administration. Many other things happened as well, but administrative overhead is the elephant in the room. Simply halving that - by moving to a single-payer system - can save more than enough to provide universal coverage with zero out-of-pocket spending. Don't look to Europe; look up to Canada and over to Taiwan. All other factors are trivial by comparison.
60
These facts may all be true but they don’t explain spending or bad outcomes. Other countries manage costs better yet have lower admin costs. And they have better outcomes.
3
When Medicare was introduced in the 1960s, hospitals were paid based on cost, put simply, the Ratio of Cost to Charges (RCC). Over time, hospitals and the army of consultants that exist within the healthcare sector, figured out ways of driving up charges to exceed cost for every activity.
When DRGs came about, Medicare would pay a fixed price for each hospitalization, except for outliers. These were paid based on cost (the RCC) and a slippery mechanism for the RCC -- the statewide average. If the hospital's RCC was extraordinarily low, it was evidence that the hospital was efficient, and if it was high, the opposite. This is ultimately what brought Tenet Healthcare down in 2002, because getting to the statewide average is easy if you raise your prices 50% or more each year.
Add to this, HMOs pay for hosptializations based on a fixed amount per day, except for when the patient is so sick that charges get to, say, $60,000 and then they pay 60-80% of total charges (stop-loss). It's really easy to get to $60,000 if you do the above, and at one point, I saw 2/3 of all patients falling into stop loss.
And to pick up on a comment to an Elizabeth Rosenthal article from some years ago, executive (and other compensation) is really high such that in many small towns in America, the highest paid people in the town will be the hospital executives.
None of this is definitive but it's all part of the reason why the costs in the U.S. are so high.
15
Physicians started reporting the bad practices of the managed care industry in the early 1980s and the mainstream media largely ignored them, as did the Ivy League professors who have promoted turning over health care decisions to managed care. Politicians and courts (read big donors) facilitated the business takeover of medical practice. Tort reform meant that there were no brakes on bad care and in Texas maternal mortality is the highest in the developed world. Prices reflect Wall Street's push for higher profits and pay. This article features the same old experts always quoted who should be blamed for what has happened. No one has or will compete for sick patients - unless they can upcode and manipulate government re-imbursements. Risk avoidance is the prime activity of managed care, along with profit making.
16
The author misses some obvious reasons for the runaway costs of health care and the mortality differential. Nixon signed into law the HMO Act in 1973, allowing health care organizations to be for-profit entities, and also provided the big insurance companies with the market. However, Nixon's giveaway to Kaiser Permanente created an imperfect market, that is, a tripartite market perverted by the third party paying the costs for the consumer, to the provider. Hence, there are no market forces to control costs.
Mortality is skewed also, since we have the most violent society in the world, and health care is heavily tilted toward those who can afford it.
7
"Nevertheless, Ashish Jha, a physician with the Harvard T.H. Chan School of Public Health and the director of the Harvard Global Health Institute, is hopeful...government programs should often pay less than they do.”
The words, spoken like a man who has a Cadillac health care plan. Medicare payments to providers have been cut, over and over, and contrary to the pronouncements of the politicians who order these cuts, they DO get passed on the patients in the form of decreased services which lead to decreased health outcomes.
BTW, so long as the AMA allows the great majority of MDs to specialize in various areas of medicine (so they can make more money), we will have the most expensive system in the world. Here's a great report that shows why more specialization also equals decreased outcomes:
https://www.theatlantic.com/health/archive/2012/07/our-unsustainable-cul...
8
BTW, when young Doctors emerge from Residency owing $300K and rising in debt. with compounded interest (thanks to Ronald Reagan), working as a Pediatrician making $90K a year or less ain't gonna cut it. Spread the blame around to Politicians raising in-state tuition and Private Schools gouging students like everyone is Bill Gates. If you want well trained Doctors either pay for their schooling or pay them when they graduate. Many spend well into their 30's training, working 80 hour weeks making no money so that they can provide you with the healthcare you demand.
9
Do international differences in legal/liability costs factor in the discussion? Into the 2000's Oregon had a legal cap on medical liability for its flagship treatment hospital; Oregon Health Sciences University (OHSU). When this cap was tossed out by the court system there were wide ranging negative consequences.
https://news.ohsu.edu/2008/01/18/ohsu-announces-significant-financial-im...
2
Some somebodies would have to agree to big reductions in their incomes. No more likely for medical workers than for our grossly overpaid corporate execs.
7
But the medical sector is nearly 20% of GDP. They employ a very large number of people indeed - Kaiser Foundation says 12 million, not including self-employed. This does not count their family members either.
In the 2016 election, 138 million votes were cast.
3
Correct. If medical spending were cut 10%, the national economy would be in a recession
Clearly, the answer is more funding for healthcare.
Hard to believe, isn't it, that 1980 was the year the Federal Government got involved in its first effort to reform the health care industry.
4
No, that would be 1965, when Medicare/Medicaid were passed. Original Medicare (not the more expensive Advantage & Drug programs) operates with a 2-3% overhead, a fraction of private insurance companies'. The solution is single-payer, which can control costs and dramatically decrease overall healthcare spending.
18
I would like to see the study in this article control for inequality. That is, break out the data into three groups: upper, middle, and lower class, and then compare life expectancy within each group among different countries. If wealthy Americans are dying earlier than their wealthy counterparts in other countries, we have a serious issue. Otherwise, all this article demonstrates is that America has greater inequality than other countries, which is certainly not a new conclusion.
6
You are 100% correct about the hidden ill effects of the wide wealth gap in America. Interestingly, the upper 1% in America ( wide wealth gap) are less happy than the upper 1% in the Scandinavian countries( narrow wealth gap). Ref Richard Wilkins " The Spirit Level" The toxicity of inequality is in the air that we all breath!
7
I am not surprised some comments below blame Mr Reagan since he followed Mr Carter, but I am taking that with a pinch of salt.
I am approaching 70 so, the 1980's were the time for me when I was just getting "richer" thanks to a profession in the oil patch.
And I remember those were the days when employers were competing with each other for better benefits including health care. Because, first with high inflation, more dollars from a pay check did not mean much and you just got pushed into higher brackets.
Couple that with technological revolution courtsey of pc etc - America was ready for fancier medical care.
I submit these expensive plans at most major corporations with a zero deductible led many if us to conclude, who cares what a dentist or a pediatrician charges ore recommends - my employer is paying.
So, this 1980 could be an inflection point because of explosion of employer plans at least for large corporations.
1
Looking at the U.S. divergence in and around 1980, one could also cite the demise of comprehesive health planning under President Reagan. Initiated in 1975, the network of state and not-for-profit health planning agencies were intended to introduce a rational planning process to control costs and ensure access to the burgeoning high-cost services and related facilities that science and technology were making available, as the story points out. Reagan and his Republican minions favored competition to sort out access and cost, which we've learned is not an ideal mechansim for costly, time-limited medical care. Their philosophy also set in motion the curtailment of other social safety net programs and marked the end of the Great Society efforts of the 1960s. "Starving the beast" led to decades of erosion of social supports and services, leaving the poor and working classes more dependent on high-cost, acute medical treatments after problems developed.
7
It is part of the Reagan Revolution, just like the National Debt.
15
As the article points out, it is well documented that life expectancy has less to do with the availability of health care providers and much more to do with things that we would generally classify as public health measures. And we have too many nuts running around objecting to public health measures.
Vaccinations are probably the most effective public health measures available. What other country has campaigns against vaccinations?
Educating pregnant women about prenatal care is also effective. But many of them are poor, and the poor deserve to be poor and it is a sin to help them, so . . ..
And what about sanitation? The rich have garbage collection, healthy water and sewage services. But what of the poor outside of the rich blue states? Does Mississippi spend Billions on public water supplies as NYC does in building Water Tunnel No. 3?
Where is the "fast food" concentration the greatest?
Readers know the answers.
For many years I asked my Assemblywoman to make it a capital crime to be a Republican, and she laughed. But the sad fact is that the Republican party is almost uniformly against anything that allows the average American to lead a peaceful, healthy, satisfying life. That is to say, they are anti-American.
15
Totally agree with you Eugene. We can take it a step farther than measures for clean air, water and public health although that is seriously needed.
In general I think more people walk more in European cities, have healthier diets (more non GMO food) fruits and veggies, more health regulations w regards to food and drugs, and have more access to medical care and preventive care than Americans.
In general Europeans seems to also have more respect for nature and the environment.
3
@Anne - A big contingent of the anti-vaxers are the non-GMO, organic food crowd, who think big Pharma is covering up the harm done by vaccines to make money.
Speaking of Europe, compare the list of ingredients on food package of supposedly identical US and European products such as Heinz ketchup. The European product typically has far fewer ingredients than its US sibling.
1
Trickle down economics provides top notch health care to the wealthy.
6
American Healthcare is an accumulation of big business over healthcare. All the players, HealthInsurance Companies Physicians, Hospitals, Pharmaceuticals, and Medical Devices learned how to game the system. That system was to earn as much monies as possible but payout as little as possible.
It truly began in the 1950s with the creation of Health Insurance Companies.
Currently, we have the wild Wild West of profits on healthcare, what we lack is actual healthcare that benefits the patients.
Obamacare was a good starting compromise because we could not pass the legislation to expand Medicare for all. The Republican Party and their big business donors would not allow it and convinced too many voters that this was the case. But in reality Obamacare delivered what it promised but it is being destroyed by a million little cuts to deliver nothing.
America does not provide healthcare for its citizens and more than likely never will.
17
When you treat health care as a for profit business (pharma, middle managers, high cost tech, large scale providers) and not as an enterprise to prevent disease, use efficient secondary prevention, this is what you get. Until the public puts pressure on gov't to negotiate drug prices for medicaid, lowers the cap on administrative costs of insurance companies AND the public improves its health habits, nothing will change. Ira Tager, MD, MPH
22
Maybe hospitals love the big expensive diseases and find little or no profit in preventive medicine. Expensive Kidney transplant vs Cheap life style changes. I suspect The patient is also part of the problem,
5
Why would this be any different than in countries with universal healthcare? Why did my doc bill to get my BP meds come to $900 when in other countries it would be $0 or some minimal amount?
3
As one who worked in the pharmaceutical industry for many years (years ago), I believe that a drastic reduction in competition through mega-mergers within that industry has greatly contributed to escalating health care costs. As marketing managers, we were once kept on our toes by many competitors making the same off-patent drugs. Huge corporations have bought up the ever-fewer manufacturing sites, shut many of them down, relied on "just-in-time" scheduling, and determined that many older medicines simply aren't profitable enough to make, despite their efficacy. This further forces the system to use newer, more costly single-source drugs. Reining in mega-mergers would greatly benefit consumers both financially and in terms of health.
70
Not to mention that big pharma companies block upstarts from approval for generic medicines.
7
I would suggest also that the cost of advertising prescription drugs via multiple media types contribute greatly to medication costs.
8
The U.S. pours vast amounts of money into medical research. Other nations benefit as much as the U.S. does from American discoveries and innovations.
We spend more, everyone benefits. It doesn't put us ahead in health, just in spending.
3
We can spend more on medical research than other countries because we have the largest economy in the world. We do the research to benefit the health of our population. And our companies profit very nuch from their research, so much that they can afford to spend much, much more in marketing than they do on research.
As a nation with 5% of the world population while consuming some 25% of the world's resouces, we may want to share some benefits with others.
3
@PacNW - This research is very expensive because scientists and researchers get high salaries in the US, and so does everyone else at the large pharma companies. It could be done much more cheaply in other countries.
1
For the record, the Ebola virus used in Africa to quell the disease and now being used again in Niger was primarily the development of the Winnipeg Biological Laboratory in CANADA, an agency funded by the Canadian Government. Many major pharmaceutical companies i.e. Glaxo Smith-Kline, Bayer, Roche, etc. etc. are NOT American based. Much development throughout the world is done on a collaborative basis or through public institutions. To make the misguided assumption that the U.S. conducts all the medical research in the world is just that an assumption, not fact.
7
I agree that healthcare costs are too high, but I am not sure I can accept the premise that US outcomes are in some way deficient. I do not know how reliably the authors have controlled for the variations that occur in the source data. For example, in some countries (France being one of them) any newborn infant that dies within a certain number of hous/days of birth is recorded as stillborn. These post birth deaths would be counted in the infant mortality stats for the US.
In the final analysis more people come to the US for advanced healthcare than leave to seek it elsewhere.
All in all, it appears the US population as a whole engages in personal behavior that has a greater impact on outcomes than does the state of our healthcare system.
How much of our spending is driven by smoking, obesity, drug use, and so forth?
5
Actually, studies have shown that in terms of numbers of procedures, we are average for developed countries. Our smoking, drinking, and obesity is no worse than everyone else. We just have to pay three times as much for each medical procedure.
9
I remember when large new technologies like scanners were limited to a community, rather than found in each & every hospital. one contributing reason for our problems.
6
Absolutely. If there are two hospitals in a medium size town and one gets, say an MRI, then it will market that. Then the other hospital will get a better MRI and market that, however, the "market" for MRI scans remains static so that the equipment sits idle and the people staffing it still need to be paid. Of course, the number of scans does go up as people demand the scans from their docs but how many of these incremental scans are really necessary?
2
Managed care companires and insrance products were offered in the 70s and 80s as cost controls. They failed to curb cost partly because they added huge administrative cost that are still in place plus huge profit margins.
22
wasn't the 80's the time period when we went from non-profit to for-profit hospitals and health insurers? how much did the profit motive effect the increase in spending?
20
You are right. For profit increased costs of administration and profit.
In the 80s, before managed care, one insurace executive told me that about 65-70% of the premium would go to care, 15% for adminitration, 15-20% for profit.
Managed care came in and administratve cost went up so about t0-55% went for care.
Today this artcle points to multiple factors raising health care costs.
It won't happen but Medicare fore all would help greatly if presciptiin medication and medical devices are negotiated.
7
Health and life expectancy are complicated and have very little to do with how much access one has to health care. 5% of the US population is responsible for 50% of health care spending. Obviously, these are not healthy people. But here's the catch, the majority of this 5% is subsidized through Medicaid and Medicare. So you have people getting something cheaper than it's real value and are therefore consuming more of it while not necessarily getting any healthier.
6
One important(if not the most important element) that was ignored in this article was in the years leading up to 1980, it was ultimately deemed that money and contributions in political campaigns were now in the same category as "free speech" which started to allow the "gloves to come off" in the increase in lobbyists and their influence in Washington. From then until now, the healthcare industry has been among the biggest contributors to political campaigns all with the purpose of maintaining the "status quo".
It would have been more interesting to see that in the last 38 years the comparison between the rise in healthcare costs and the amount of money the industry has spent in Washington so government and politicians would "keep their hands off" any changes that would influence their profit margins, let alone their existence.
12
You can't describe complex macro-systems using averages - average life span assumes a normal distribution and a host of other measures that there is no reason to believe exists in US medical outcome data.
Here is a hypothesis you can test - if you have good insurance then you will get access to potentially life-saving skill and technology more quickly in the USA than in say - Canada.
Which may be the reason Canadian Premiers bypass their public system and get treated in the USA - similarly for Adele
and Sam Smith - no NHS in Britain for her or him - they came to see a Harvard-based Dr.
4
So the 1% of the wealthy countries come here to get to the head of the line because they can afford to. While the rest of the folks in those countries report being generally happy with their healthcare while experiencing lower taxes (healthcare expenses + social services taxes) AND better outcomes AND longer life expectancy overall. So your point is effectively that the rich the best available and are willing to pay to get better than their neighbor. How is that relevant here?
3
So you take a couple of anecdotal examples and assume that is the norm? How about these examples?
Until it was blocked, thousands of elderly Americans used to cross the border to purchase pharmaceuticals that were considerably cheaper in Canada then they were in the U.S., all done because it was either that or not pay the rent.
There was also other instances(and front page news) that nurses in local hospitals were complaining of Americans coming to hospitals in Toronto looking for and willing to pay for medical care that was either too expensive or not even available in their own country. , in other words, they were trying to get treatment ahead of Canadian taxpayers whom actually fund the system.
3
Sigh - no that is not even close to my point - here it is again: folks in the USA with good insurance get the best healthcare in the world - that is not captured by using averages and I doubt folks that currently enjoying this good healthcare are willing to give it up in the pursuit of 'free' healthcare for everybody
I’d like to see some cross-national data on the incomes of physicians, by specialty, and of other healthcare providers. While this obviously would not bear on longevity data, it might tell us much about the reasons for our high medical costs.
5
We need broader dara. Compare medical education costs with developed countries and then look at pay comparison as well as regional living costs.
If your medical education does not bury you in debt, if your higher ucation or you and your children are very affordable, and you health care is universal, you do not need a big salary if you also have modest assured retirement.
About 13% of the top 1% in incomes in the US are doctors. That's a household income over $450K. They are the largest occupational group in the top 1%, followed by lawyers.
4
All we seem to be able to do is to write articles like this one. By now, it should be evident to just about everybody that the current healthcare "system" in the US is broken and unsustainable. Some other people have said it: take the profit out of healthcare. Eliminate all insurance companies, for profit hospitals and negotiate prices for all drugs; costs will go down! And, life expectancy may go up as more people will get proper coverage.
176
Under your sensible plan the insurace companies will ot totally diappear. They will still do some the very limitted paper work that is sublet to them, and they will still have high end insurace plans for the 1 or 10%.
4
So the "non-profit" hospital with dozens of administrators and doctors making over $250K is OK?
5
That "over $250k" you'll find if you pull the Forms 990 ends up being closer to almost or over $1 million even for some "po dunk" hospital.
1
I would like to know what percentage of jobs in the US are healthcare related. Not just doctors and nurse, but claims filers, claims adjustors, auditors, analysts, reinsurers, and all the staff that goes with this. How does that compare to other countries. I'd wager that high health care costs are tied to lots of health care jobs.
9
18% of our economy means....18% of our economy. It's not just "money going out". As Krugman likes to say: "your spending is my income and vice versa". All those highlyl paid doctors, nurses, claims adjusters. CEOs of hospitals, bean counters and the like spend money, eat out, buy new clothes and cars and stimulate the economy. Obama was terrified of upsetting that applecart, which is why his "reforms' did nothing.
1
I am not a fan of private-sector insurance-run healthcare, but this article leaves much unsaid. We ought to also ask where US life expectancy would be without the "American lifestyle." Controlling for other factors like obesity, screen time, workplace stress income inequality...could reveal that we are actually buying more years of longevity per dollar than most countries, but some of these other factors are holding us back.
2
The AMA agreed to allow the government to determine patient care costs when it agreed to accept Medicare for payment. That one decision is the pivot point of what has happened to health care costs in this country.
4
The concluding sentence states that government payments are too high and should be lowered. Actually Medicare rates are so low that many physicians cannot survive seeing those patients and refuse them. And Medicaid rates are often half those of Medicare so those patients must go to community clinics.
I remember there being a charitable element to delivering medical care in the 70s and when government intervention increased somehow medicine became a business. Non-profit hospitals got greedy, paid their CEOs millions and coalesced to stifle competition. Pharma raised prices far exceeding the rate of inflation and no new medication costs less than $300 per month.
The Democrats may criticize Trump's drug price proposals but Obama wouldn't challenge pharma either. Our system is completely out of control and will only get worse until it breaks.
30
Medicare payments are fine for most docs. They complain that they lose "x cents on the dollar" but these numbers are usually just made up numbers, like their charges. For an internal med/family practice doc, Medicare may be 40% of their practice. For cardiology, closer to 80%, for nephrology, closer to 90%...
5
Insurance payments are low enough that specialists, unable to make it on their own, are being bought out by hospitals.
4
Congress would not let Obama challenge anything.
9
I graduated from Medical School in 1982, maybe that was the problem.
Seriously I would like to propose two possible causes.
1 As concerns to poor gains in life expectancy, we do quite well with the top 80% insured population. We will spend whatever it takes once you are in the system. But for the bottom 20% we really don't care much. And we Really do not want to pay for someone else's health care.So when you average out 80% living to 82 and 20% living to 72 you get the 78 we are at.
2 Cost. We rely heavily on the efficiency of the market to keep costs down, except health care does not function as a true market. We don't really want to ration care out like that. If you put 2 gas stations across the street from each other they will push the price down as far as possible. but put two ophthalmology offices across the street and they will push the price up as all they compete on is amenities not price. Unless we are really willing to accept the brutal realities of a true free market we have to give up the illusion and go to a single payor system.
159
Bob, in economic terms, it's called market failure. Just like when one hospital gets an MRI so the other one does too to remain competitive.
15
Bob, people have to get over the notion of paying for "someone else's " health care. Insurance is not direct payment, robbing Peter to pay Paul. It's pooled responsibility for community health based on the principle that someday, it might be you in that gurney.
With our adherence to the gospel of feral capitalism, any notion of communal responsibility isn't going to go over. I'd just like to see Americans receive good government insurance or nothing. That's what our philosophies have bought.
6
Bob, we are rationing care through the health insurance industry. If your insurance isn't adequate, you have none because you can't afford the premiums, or you haven't got a job, the care you receive is less than optimum. We're comfortable with income and insurance coverage being the selection factor in how much care we can afford. We equate someone's working with being worthy of health care. If you can't find a job you're considered worthless. If you haven't got insurance the care you receive is adjusted down accordingly.
6
That the U.S. has dropped to number 50 in the longevity sweepstakes among nations makes this topic critically important. Mr. Frakt offers. 1) As Health Economist James Newhouse says, "Socioeconomic status and other social factors" can be more important than health care in longevity--although those factors can include access to health care. Thus, the continuing rise of inequality in the US. deserves more attention in the article. The US now ranks higher in inequality(according to the Gini coefficient table, UN Happiness Report) than most countries other than those in South America and a majority in Africa. Poverty and unemployment are known to cause our epidemics in "diseases of despair" that have lowered our life expectancy relative to those of other nations.
Mr. Frakt refers 3 times to the "policies," "mechanisms," and "systems" that have constrained health care cost rises in other nations. One assumes he means regulatory policies and mechanisms. Could we have a follow-up article enumerating these?
Third, the revelation that medical administration costs--i.e., insurance company policies and documentation--raise our health care costs (and threaten our sanity) should bolster support for single-payer health care plans.
8
I doubt the numbers will improve anytime soon, with the GOP undercutting the ACA and the ranks of the uninsured are growing again.
As a Canadian, I'm appalled at the justifications and talking points that defend healthcare for profit. A key metric for the overall health of a nation is infant mortality - and the U.S. has the highest rate of all wealthy countries.
While it's wonderful that medical breakthroughs come with higher spending, it's counterproductive if those breakthroughs are unavailable (and entirely unaffordable) to ailing citizens.
96
America's general unwillingness to place a priority on women's healthcare, especially in expanding the care, research and safety around both mothers and children during the birthing (or abortion) process (which stems largely from the rabid politicization of the pro-choice/anti-abortion debate here) is, I suspect, another reason for the U.S.'s unacceptably high rate of infant mortality.
3
When medical care went from a co-op based business model to a for profit/shareholders model, the patient that got the best care was the shareholder. Everybody else was further and further down the totem pole. Forty years later, doctors who for years were revered, are now reviled. Why? Because they seem to have no clue as to what they are doing other than punching a time clock. I cannot tell you how many poor and mediocre physicians I have seen in the last twenty years. They never give you a straight answer, they order tests. I posit that the X-ray must be the bread and butter for the industry. It makes more money for doing so little. When I see my physician these days, I do so with a sense of resignation. I know he is highly trained. And I know his heart is not into his job. Everybody would tell you how lousy the Canadian model of health care is. Is ours any better?
5
Totally agree with your sentence, "When I see my physician these days, I do so with a sense of resignation. " (!!)
There is such high turnover in the system up here, you just get passed around from PA to Nurse Practitioner to an occasional Doc, rarely the same one anymore.
Docs are overscheduled and exhausted, as are all the PAs and ARNPs picking up the pieces. I don't go in until I absolutely have to. ):
1
In other words, the US didn't "ration", which is the single most popular technique to keep costs down.
2
The US rations as much or more than any other wealthy country. In fact, in the early 1990s the Supreme Court declared that health care rationing is okay:
https://www.vox.com/2016/2/11/10966580/america-health-care-rations
2
Insurance companies don't ration healthcare? What world do you live in? They ration it so much that tens of millions of Americans don't have any healthcare at all!
6
Our consumption of healthcare, in terms of number of procedures, is no higher than other developed country. It's the cost per procedure that is the problem.
3
Healthcare for profit is immoral. Other countries recognized this early in the game. We still refuse to recognize that.
16
What you say is ridiculous. Doctors, nurses and other health professionals need high salaries if we are to get good people, and make them work hard....at least in the US.
This is country where nobody works for free, and people decide what line of work to go into based on potential earnings.
1
In reality, the increased salaries of doctors and nurses you make reference to are all part and parcel of an American system that has out of control costs. Doctors need those higher salaries because in order to be a doctor, they have considerably higher costs than most other countries with universal care. For eg. a doctor in the U.S. pays approximately SIX TIMES the amount on malpractice insurance premiums than does his Canadian counterpart and in a clinic environment where multiple insurance companies have to be dealt with, he will pay 5 TIMES the amount in administrative costs. You also have not taken into account that unless the doctor comes from a rich family, upon graduation his/her outstanding student loan obligation will be in the vicinity of $250,000 dollars.
In Canada, there are no tag days for doctors and in the case of nurses, their salaries in Canada are more than competitive than their counterpart in the U.S.
2
@Deus - In the US the average specialist doctor makes $280K a year, after all expenses. These doctors can easily pay off their debt in a few years. By the time they get to their middle 30s, they are really rolling, and they can practice another 30 years.
The Bayh-Dole Act of 1980
Yes 1980,what party what did the US put in the White House?
3
Physician salaries (i am one) , medication prices (how many countries forbid national insurance from negotiating better prices?) competition for technology ( ie. the more mris in an area, the more overusage we find, again a nationalized structure would better allocate based on need not on need to compete). An american culture that assumes that health outcomes can be controlled, and the more treatment the better. And finally living in a society that offers a smaller safety net inevitable leads to more stress related disease.What happenned in the1980s was a push towards more hectic living, and an institutional push to reduce safety net items ( ie tax cuts)
24
Have you considered refunding part of your salary or taking a pay cut? If not, then please remember how many years of unpaid or poorly paid work you did to achieve your position. Our daughter is a neuro-ophthalmologist, 4 years college, 4 years med school, 4 years residency, and 2 years of fellowships. Let’s see, that’s 14 years. Now average her lifetime earnings and see if that seems too expensive. I have looked at this and have concluded she is not overpaid at all.
If we could find a way to train doctors and get them in practice faster and cheaper, then maybe salaries would come down on their own.
6
@TW - Interesting, in many countries student doctors study medicine as undergraduates in college. We could cut off at least 4 years if we put our minds to it.
so as a pediatrician , i ,make around $200k per year.many surgeons/specialists in my area make $5-800k /year. compare these salaries to those paid out in europe.
Denmark general practioners (gps)$109k, specialusts $91k Ireland gps $90k, specialists $143k
UK gps $118k, specialists $150k canada gps $107k,specialists $161k. USA gps $161 gps $230k
the question isn't whether it is fair, the question is why is medical care more expensive here.
I have a friend who is a millionaire who does not want to go to the doctor because there are co-pays with Medicare. There are a lot of nutty people out there.
4
Does your "millionaire" friend realize that with a Medigap policy, he would NOT have any copays? There are plans that for $250-$350 a month, would cover unlimited doctor visits.
1
Insatiable greed is the “market force” driving health care costs, especially with regard to pharmaceuticals.
As we’ve seen as recently as a few days ago with Trumpo’s bait and switch on reigning in prescription drug pricing, don’t expect the federal government to do anything to change the bottom line of Big Medicine so long as the Greedy Oily Party is in control of the agenda in DC.
5
On these issues, Obama did nothing. The ACA did not even ban TV ads for drugs, a simple reform that EVERYONE would have supported.
1
Have they figured in the effect of gun proliferation on life expectancy? After 1980, politicians got more corrupt and willing to accept the NRA's bribes. Most other nations keep much better control of deadly weapons.
11
That is just silly; gun deaths are not a significant contributor -- not compared to things like auto crashes, cancer, diabetes, or opioid overdoses.
1
I can summarize your scholarly dissertation in two sentences.
Our plight is due to our de facto criminal health care system where the health of the citizen is put second to making big Pharma and HMO types billionaires.
Our current (pre ACA) system is don't get sick and/or don't have a bad life event and/or be rich.
116
it is the money, only the money causing these sickening charts. Big Pharma, the Health Care Industry and the Insurance Companies unleashed, charging at will for the benefit of its investors, read the upper decile of the population.
6
What happened after 1980? A growing culture of greed. The rise of the 1%. The hollowing out of the middle class. The ascendant philosophy of the government as the enemy. The rise of evangelicals. No one willing to pay their fair share in taxes. The denigration of intellect and education.
A see Reagan/Republicans in many of what were then only trends.
310
More competition??? When will the neoliberal ideologues admit they have spectacularly lost the battle? When U.S. life expectancy has dropped to 50, wiping out a century of gains? Expanded, improved #MedicareForAll is the only thing that will save us now, and U.S. physicians have now launched an advertising campaign to inform the public:
https://www.commondreams.org/news/2018/05/12/time-single-payer-now-count...
4
There is no competition; once you enter a hospital, it has a vastly different level of knowledge than you and is a monopoly. If you're an inpatient at hospital A and the surgery at hospital B is cheaper -- how are you going to get there? What about the prices of the surgeons, assistant surgeons, anesthesia? They all bill you know. What about radiologists and pathologists? They bill too. And because you don't know the price in advance, you have no leverage when you're in.
5
Billing fraud.
Re-coding each procedure to the maximum reimbursement level regardless of the services actually performed.
NO politician of any party has attacked this enormous cost driver.
Doctors and medical facilities see medicare and private insurers as free money. All they need to do is write in the magic AECOM code. Consumers don’t have access to the codes and little understanding of how they are being abused.
10
Our incredibly inefficient ineffective system is another unintended result of Reagan's deregulation and lack of concern about monopolies. You can't have market forces without a market, and Republicans are happy to rig the game and let competition disappear. Add in the decline of social institutions in America and the subsequent rise of paperwork (created mostly for Republicans more concerned about the corrupt poor than the corrupt rich) and you get a system designed to fail. It's not just too expensive, the profit motive introduces a bad bias in the system against effective care.
5
Unlike social democratic countries ( Scandinavia and Japan), America has a very wide wealth gap. Lots of adverse outcomes correlate ( most causally) with wide wealth gap: infant mortality, mental illness, suicide, teen pregnancy. Instead of a spirit of " we are all in this together ( as America had in WW-II and the Great Depression) now it's " every man for himself". The top 1 % in America now get more care than they need via concierge medicine while the poor get stop gap uncoorinated care at the local hospital ER. Two things need be understood : 1) social democracy is not socialism 2) the big enemies of affordable health care in America are , in order of toxicity and greed : a) Big Insurance b) Big pharma 3) Big hospital conglomerates
119
Health care provider here. This is exactly what I keep saying---the countries who spend less and get more have figured out that "we're all in this together" and "we all do better when we all do better." The mantra here in the US is "every man for himself."
This is true in that those same countries also provide much better education and social supports (paid parental leave, subsidized daycare, etc.) that even things out and make everyone better off, healthier, and happier. As a result, they have less crime, less anxiety (about crime, how to pay for healthcare, how to pay for childcare, how to pay for retirement, etc.) and more equitable, happier, longer lives.
It's not rocket science.
7
Soaring medical expenses and declining life expectancy in the U. S. is the reflection of our society that has been over-driven by the capitalism and the free market philosophy. Oligopoly of the medical business segments such as insurance, pharmaceutical and hospital businesses is the result of natural peaking of the capitalism. In the past, some kind of government intervention such as creation of anti-trust laws prevented this kind of excess. However, Reaganism after the oil shock and the eroding international competition has changed the course. The declining and slowing life expectancy of the Americans is again caused by the excessive capitalism or Reaganism that ignores losers. It is ironical to see Trump Presidency supported by the very people suffering from the excessive capitalism or Reaganism, namely the working-class white people.
18
So what happened in 1980? Ronald Reagan was elected President and right wing conservative policy took over the Federal government. Just sayin'.
11
Except you forget that CONGRESS from 1980 to 1988 was majority Democrat. They didn't have to pass a thing Reagan wanted.
1
No mystery here. Prez Johnson and Leon Panetta promised the AMA their "usual and customary" fees to take Medicare patients. That put taxpayers on the hook for whatever the docs wanted to charge and made medicine Big Money. Greed took it from there.
2
Except that Medicare is one of the systems that controls costs/payments to providers. We are on a 5 year 0% rate increase path right now due to budget reconciliation. With the exception of Part D (drugs) which, under Bush, was the largest giveaway of taxpayer money to big pharma ever. It's the non-regulated market that contributes to excessive health cost inflation, with more limited attention to population outcomes (value for dollars). It has long been known a fully free market model does not work for health care.
16
What percentage of our American health care dollar goes to advertising? And how has that changed over the same time period?
10
Pharmaceuticals spend muchmore advertising an research. They can afford do more research.
2
Blaming devices and prescriptions is like blaming the carpenter's toolbox for a badly executed job. Two points:
1. Every non-discretionary healthcare cost comes out of the tip of a doctor's pen. Whether it is a hospital admission, a prescription for branded or generic drugs, an order for therapy of some sort, etc., physicians order the services. Too many physicians defy best practice standardization and discipline in treating disease and directing people toward wellness, and they are highly susceptible to patients' demands, as a dissatisfied patient is one who could seek care elsewhere, disrupting the physician's revenue flow. This is a strong influence, and physicians often mollify patients by writing costly and unnecessary health orders.
2. Americans are determined to be the unhealthiest people in the developed world. Obesity, sedentary lifestyles, refusing to abide by health guidelines, dietary transgressions, lack of accountability...all in the name of "No one tells me what to do." Simpy superimpose CDC maps of national obesity rates and risk-standardized mortality rates (i.e., the ratio of the number of “predicted” to “expected” deaths), to see our active desire to run up medical costs through our own behavior. Consumers themselves are the cause of the problem.
In the end, we have no one to blame but the medical culture and unrealistic and irresponsible consumer expectations that we have created. Blaming the effects focuses on the wrong points in the dark chain.
2
It is a popular but false belief that Americans are fatter or unhealthier than other people. On obesity rates, we are NO. 4 -- after Australia, New Zealand and ISRAEL of all places -- and all those nations have universal health care. We are not even CLOSE to the highest smoking rates, which I think are in Eastern Europe & Greece -- against, all with universal health care.
1
When our diagnostic clinic was relocated within our hospital in 1981, the service chief made a large point at the opening reception that our prices were too low.
3
In most civilized countries, the practice of medicine is a solid middle class existence, not the gateway to the good life...
11
A lot of us in the gap between involuntary retirement and eligibility for medicare have tried to become cautious consumers of healthcare. It's a first class education in how American medicine doesn't work.
You can not get a price up front for any procedure from support staff. It takes a 1-1 with the actual physician to get a firm price (if that's even possible). Insurance companies don't, in many cases, know if a physician is in or out of network. You have to get the physician's tax ID, and then work your way through layers of the insurance company's customer support organization to get a match up. Each call involves 30 minutes on hold.
Finding the practice that will do an MRI for $1,000 instead of $10,000 can be done, but expect to spend 20-50 hours of your time trying to arrange it.
245
Indeed, this was one of the first thing that came to my mind. The much greater expense for health care here causes people to skip healthcare even when it is needed, which in turn is going to reduce average healthcare in the population. People like myself who have had good healthcare all their careers into retirement and Medicare are just not like everybody. A large fraction of the population struggles to get adequate healthcare because of the costs, and that is going to show up in the statistics.
25
I am a physician and I can't tell you because the price isn't fixed on a medication until it is actually ordered and run against your specific insurance. Apparently everyone's plan is so individualized that there is not one actual 'price' I can memorize and quote and pharmacy can't tell me until I actually RUN the medication. Also, if I order something as urgent vs. routine it dramatically changes the price. Physicians are often kept in the dark on pricing as much as everyone else--health systems are trying to do more to make this not the case but it is WAY too little.
40
The only thing that I see overlooked is Doctor's Disease. This is caused by inadequate or non-transparent testing of new medications and doctors, especially surgeons, not washing their hands.
The inadequate testing of medications has lead to deaths by side effects of both on- and off-label meds. One example is internal bleeding or other symptoms in patients taking NSAIDS, which began in the mid 1990s. Another is the use of Remeron and similar meds in rest homes to quiet aggitated or lively inmates -- It cannot be cleared from the body by elderly kidneys and is contraindicated for any patient over 65 years in age.
A third example is a testerone booster that is prescribed for bone loss in men. It causes, not blood clots, but embolisms ! 30% of embolism patients die immediately ! The other 70% experience significant disruption and medical costs.
Now, on to lack of hand washing by surgeons. Out of seven friends who have had hip replacement, six have experienced infections that lead to long antibiotic medication. The seventh experienced opioid addiction -- she simply quit and went to the ER when withdrawal became acute. All of these incidents must have caused a significant increase in medials costs.
1
There were great technological advances throughout medicin beginning in the 80’s. Not only in big pharma with new drugs, but in laboratory testing, imaging, surgical and non surgical instrumentation, and many other areas.
Doctors and patients could not resist applying all of the new technology to the practice of Medicine despite unproven outcomes. Some of these technologies were marvelous breakthroughs, others were busts, some even causing more harm than good.
Medical reimbursement strategies were not prepared for the new technologies and did not adapt fast enough. These technologies were available to those who could afford them and consequently they benefitted from improved outcomes and longer life expectancy. Without universal health coverage those without health insurance or those who were underinsured, did not.
Those with the highest incomes in the US have access to the best healthcare in the world, but the benchmarks used by the WHO and others reflect the population as a whole and the US suffers by comparison to others that provide universal coverage for all and those that have used technology more evenly and discriminately.
1
Three factors contributed.
California's medical society decided to standardize charges for procedures and asked for volunteers to help quantify medical services. PCPs thought it was not very smart to try to mimic auto body shops and calculate charges for "human repair" in the same fashion. Specialists volunteered in droves - and the RVS Code lists published valued specialist services much more than cognitive services of PCPs. Overnight, surgeons had the potential to bill for several hundred thousands of dollars more than PCPs for about the same time spent with patients.
It was around that period that there was a fear that Medicare will institute price controls, lowering provider reimbursements. AMA advised all its members to raise their fees so that when the Government lowers them they will continue to earn their former income. They raised their charges and Medicare did not institute price controls. Even more surprising, private insurers paid the new and higher reimbursement rates without question.
Keep in mind, health "insurers" are NOT really taking any risk. If costs rise, they increase premiums for the next year to make up for the losses incurred and the large employers followed, paying higher premiums meekly. So, there was no market resistance to the higher reimbursement rates.
7
The price rise wasn't really caused by Medicare replacing the Relative Value Scale (RVS) being replaced by the Resource Based Relative Value Scale (RBRVS), they are both methods of assigning relative valuation to different physician services. But under RVS, Medicare used prevailing charges to determine payment and when physicians thought Medicare was going to institute controls they may have increased prices in anticipation. There then followed a period when prices were basiclly fixed. After that period Medicare instituted RBRVS which is a zero sum game and the total of physician payments is fixed and prices were lowered. The fixed total outlay was subject to the Sustainable Growth Rate, linked to the Gross National Product, which kept total Medicare payout constant for many years despite inflation. At the present time Medicare rates are low enough that many physicians cannot survive on them and refuse Medicare patients.
In the 80s, the 'Greed is Good' meme appeared and people and organizations were increasingly judged on monetary metrics: how much money you make, revenues, profits. I find it amazing that many if not most hospitals are non-profits managed by boards, but affordability is completely ignored. Whom do these boards think they are serving?
14
What are the salaries for serving on these boards? I think that will answer your question....
4
The fundamental flaws remain. We failed to reduce the costly administrative excesses of our fragmented, dysfunctional financing system. We failed to adequately control our excess prices. And we failed to adequately implement and fund social programs that are important to maintaining the health of the nation.
Administrative efficiency and administered pricing could easily be accomplished by enacting and implementing an efficient and equitable health care financing system - a well designed single payer system such as an improved Medicare that covered everyone.
Improving social programs would require a new culture in government that would be effective in replacing our conservative and neoliberal policies that continue to place excess faith and our tax dollars into the hands of the market rentiers. That has made the wealthy wealthier, but has left most of the rest us behind. We can continue denying this, but until we are ready to elect the government we need, we are going to have to continue to live with this reality. People are suffering unnecessarily as a result.
14
Since we get to be theoretical today: In the 80s a growing sense of despair replaced our ever-hopeful America Exceptionalism. For several segments of the American population there was no longer a "morning in America" and they knew it.
This change in social and economic standing exhibited itself in acts of self-neglect like excessive drinking, poor eating, lack of physical exercise and unaddressed depression.
Other people had opportunity for a "normal life" taken away from them: they can't find work or can no longer make the commitment to hold a steady job, they must live at home because they can't leave home, they don't have friends or they can't hold friendships, they are isolated in rural pockets or lead isolated lives, they walked away from spouses, their children or they never had the chance to marry in the first place.
Yes: none of this happened to some people. But enough of it happened to enough people to create downward pressure on our population health. All of these have combined to shorten American lives. (As long as we are being hypothetical.)
9
Reagan was elected in 1980 and with him came a different Republican party.
These were not the Republicans of Eisenhower or even Nixon; they took their philosophy from the Powell Memorandum and were dedicated to re-directing upwards all the value that had accrued to the middle class after WW2 thanks to strong unions, progressive tax rates, an expanding economy and good public education systems.
Everything became a profit center from retirement plans to health care to education etc. Everything was to be looted and the benefits redistributed upwards to the people who were financing the politicians and calling the tunes.
That's what happened.
602
Pat: I agree that Mr. Frakt is ignoring the Republican elephant in the room. If a history book listed one important event from each year, what would be the entry for 1980? The election of Ronald Reagan, obviously. Since then we have had the power corporations on the ascendancy and the corresponding disenfranchisement of individuals; tax cuts for the rich paid for with both deficits and the defunding of societal support for the needy. Result: increasing inequality and decreasing life expectancy.
This is not coincidence, it's correlation.
273
As usual with (D), this leaves out how the growth of entrepreneurship changed the USA.
That is: remove the "Big Dozen" -- Buffett, Gates, Bezos, Larry Ellison, Paul Allen, et al. -- and the data tends to stabilize.
Then again, without them, the (D) would have less to complain about. Of course.
What are you talking about? What growth in entrepreneurship? After all is said and done, after all the lies spewed forth by the Republicans and their propaganda machines, the income distribution has skewed towards the rich while the health and life expectancy of the average American has gone down. All since Reagan. And that is no coincidence
4
I can testify to discoordination with insurance. I help at a small pediatric PT/OT/SLP therapy clinic. Therapists have their resumes on an electronic database called CAQH a requirement of therapists. Three therapists want to start doing Developmental Therapy. Despite the fact they are on CAQH, an insurer has asked them to provide duplicate information to credential them for DT. Each application is ... 43 pages.
4
One has to look back to the late 1960's and the 1970's to see some of the issues, some mentioned by other writers.
Prior to this period, there essentially was the non-profit Blue Cross and Blue Shield system essentially dominated commercial health insurance with 80-90% market share. Most plans were "community rated" meaning that a utility like ConEd was in a community pool along with Sam's pizza.
However, in the 1970s, for profit and mutual insurers figured out they could use aggressive underwriting tools to select the best risk against community rated plans like Blue Cross, Kaiser and Group Health.
Blue Cross reimbursement was basically cost plus and had no deductibles or copayments. For profit plans, had "comprehensive" plans with deductibles and 80% coverage which offset the discounts Blue Cross had due to their cost based contracts.
This began what became a huge risk fragmentation as most insurers sought the healthiest groups. Commercial insurers had much higher costs due to their smaller scale and the fact they used brokers for distribution which alone could add 5% to the cost of a policy.
Risk fragmentation, higher cost commercial plans that paid charges (and eventually got discounts when the PPO movement began), more admin costs all added to the problem.
136
What happened in 1980? For starters, we elected Reagan and the deregulation process began. Then in 1986 the bipartisan Emergency Medical Treatment and Active Labor Act was enacted, which basically meant that hospitals had to treat a large number of non-paying patients with severe conditions and no direct reimbursement. So the result was that the costs were passed on to the paying patients (Medicare and Medicaid costs were more controlled). And the Congress (again in a bipartisan manner) changed the patent laws to give more profit to the drug companies.
102
Deregulation started in the Carter Administration. The Powell memo was taken to heart by both parties representing the overclass.
4
I think that a large part of our lower life expectancy has to do with our terrible lifestyle, starting with a lousy diet full of highly processed food and high in animal products, and including our lack of exercise. The resulting chronic diseases drive increased medical care consumption -- which becomes highly profitable for Big Med. Big Food is moving into other countries, with resulting increases in chronic diseases in these countries as well.
4
Our high costs are primarily due to the salary structures in the US. Highly educated people in every profession, not just medicine, make much higher salaries than the average person. This huge disparity exists in no other country. While the average salary is $37K, there are huge numbers of doctors, lawyers, government officials, stockbrokers, university administrators, etc, etc who make $150-500K.
You won't find this in Germany or Japan. This is why we can't cut costs very easily. Medicine has to have competitive with other professions in order to attract high-powered talent. That means we have to pay our doctors, nurses, and hospital administrators much higher salaries than in any other country. Even the cost of drugs is nearly all the salaries of highly-paid professionals.
9
I believe that 1980 was the year that direct to consumer pharmaceutical advertising started. Have you considered the direct and indirect impact?
In the early years, drugs were not mentioned by name... just symptoms. I imagine that alone increased doctor visits. Once you are in the system, who knows what happens.
11
Monopoly pricing for second- and third-generation "knock-off" drugs, insurance programs that actually pay more for more unnecessary paperwork, and incompatible billing and records-keeping systems contribute enormously to dead end health care --
that is, paying for services that do nothing to extend lives or improve patient conditions.
Not to mention advertising for off-label uses of drugs -- a hidden, high-profit-margin corner of the market that resembles "black market" profiteering in wartime.
Paying something for nothing skews all the averages. After buying the emperor's visible new clothes, America just keeps on buying the clothes that don't exist.
11
Some suggestions for further research-
* The TEFRA act of 1982 changed hospital reimbursement from "cost-plus" to DRG for medicare patients. At the time, health costs were deemed unsustainable. Health care demand was passive in that people sought aid went after becoming ill. Successful hospitals, pharma, and other providers began to operate like businesses. Demand increased for preventive care. Hospitals that didn't hit a 3-5% margin, closed or were bought.
* Cost-shifting from medicare to commercial patients was common, creating multiple "prices" for services. The ratio of medicare to commercial grew but the formula for calculating cost was initially based on commercial experience
*Administrative cost has decreased with technology, at the same time increasing with technology (read EMRs) and additional regulatory burdens but still a small part of the health care spend.
* Most businesses reduce operating costs with experience or volume and gain competitive advantage through price. Our health care model subordinates this although health plans try to negotiate lower fees, when they do the cost shift reappears.
* The growth of for-profit hospitals and demand-generating occurred about this time
* Medical advertising began about this time.
8
The late lamented Uwe Reinhardt pointed this out 20 years ago. It's the costs, stupid. The US consumers simply pay more for the medicines and services they purchase. The only body with the monopoly power to change this is government and all around the world (EXCEPT the US) governments have used this power to cap prices. It's not rocket science.
339
Amazing how that comment ignores the fact that the NHS is about one click from bankruptcy. And is threatened with strikes, yearly.
It's not rocket science, look it up.
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Umm, the NHS is VASTLY underfunded for the same reasons that taxes for the rich go down. That is official Tory policy
@Bing Ding Ow
"Single-payer systems may contract for healthcare services from private organizations (as is the case in Canada) or may own and employ healthcare resources and personnel (as is the case in the United Kingdom). "Single-payer" describes the mechanism by which healthcare is paid for by a single public authority, not the type of delivery or for whom physicians work, which may be public, private, or a mix of both."
NHS is not the only type of government run health care service in the world. And not all of them are threatened with bankruptcy. And when health insurers file bankruptcy the insured are liable for payment and non-coverage. So the private health care insurance sector is not immune to bankruptcy failings.
Its not rocket science, look it up.
Starting around 1980, large companies stopped offering pensions and more people began 401k accounts.
Those companies that provided healthcare also began to increase employee contributions and deductibles.
The investment firms managing these accounts now had large pools of money to invest. Healthcare and drug manufacturers were seen as vehicles for huge profits. And government oversight was seen as an impediment. Regulations and rules were changed in favor of corporations, not people.
Providing care, improving health and life expectancy, are not as important as the return on a dollar. The impact on actual people is not considered.
The cost of a course of drug therapy is about maximum profit, not being affordable to the patient. How quickly can costs be recovered and profits generated.
As long as quality of care remains secondary to profits nothing will change. The current resident of the White house withheld healthcare from his nephew's infant son out of spite. Expect him to do more of the same.
Profit over people is the American way.
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I agree 100% Another big development in the 1980s was the development of for-profit health insurance companies. The main goal was to negotiate lower payment rates with hospitals and doctors. The appetite for big reductions in pay rates year over year was unsustainable for health care providers, and they began to organize into bigger and bigger organizations and networks to regain negotiating leverage. Insurance companies countered with efforts to exclude providers that would not accept the lower payment rates.
The health care providers won this struggle, because consumers would not tolerate narrow panels of providers and therefore insurance companies could not keep leverage. This is the "free market" in health care.
In contrast, original Medicare (without managed care companies) has low costs of administration and published rates that are not formally negotiated. It is big enough that providers have no choice but to participate at lower payment rates. People are highly satisfied with the coverage (but not the growing out of pocket costs, which result from federal reductions in the Medicare budget but high out of pocket cost is no different from private or for profit coverage).
All of us who negotiate managed care contracts know that the real answer to costs is to have single payer coverage.
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Thank you for clarifying that health care providers were forced into consolidation by insurance company demands. That specific point was sort of lost in my rant about UCLA morphing into a behemoth that destroyed community-based hospital-doctor relationships.
With a community hospital in every neighborhood, UCLA was fine as the medical school/specialist hospital center that we only utilized for difficult, rare, and complex care not available at the local hospital (USC has basically stuck to its very different non-profit mission of staffing the county public hospital and serving the low income community within which it resides). But the aggressive actions of the insurance industry forced UCLA to break out of its Westwood neighborhood and spread its brand of network medicine into every community of LA, challenging local hospitals and doctors in ways that didn't end well for many.
I guess it's not really UCLA's fault as it had to become the regional powerhouse it is today to stand up to market forces. On the other side of the inevitable destruction that forced my physician friend into retirement, he and I now prefer its local power to the completely disconnected-from-reality insurance CEOs in some far-flung state trying to nickel and dime all of us to literal death.
"Greed Over People" is the correct term, love.
GOP 1980 - 2018
13
Doctors abilities to "cure" are vastly overrated. Doctors may mitigate for a time but even that is all too limited.
The absolute leader in preventing and halting the spread of disease at low cost and extending life is the lowly plumber.
It has been said that the plumber's wrench, rather than the surgeon's scapel has given us longer, and healthier lives. How true.
16
You are so correct! The power in a plumber's wrench usually affects the water supply of more than one person. When appropriately applied, it has preventive and curative potential. The money saving potential is enormous. Water does not need to be filtered, boiled and stored to prevent illnesses and death. It is also been said that the last significant advance in healthcare was the introduction of vaccines.
That the medical profession and other profiteers persist with currently failing methodology suggests that profit at all costs rules. Sitting at either side of that throne are Lies and Indifference. The longest rope does have an end.
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To the same end, if plumber's can impact infectious disease, we can all prevent the "lifestyle disease". Nutrition and movement are much more effective than medicine in creating a healthy population.
I'd also say that we have come to the point where the next "evolutions" that could expand life expectancy are expensive to implement and develop. The money we spend to develop a cancer drug to help extend the life of a cancer patient for a year or two is probably better spent elsewhere if we want to extend life expectancy in the US.
Also, most of the money we spend on health in the US seems to be spent on preventing the final death of someone who has limited likelihood of returning to a healthy and independent life. My mom, healthy her whole life, only hospitalized when she gave birth, got an aggressive cancer in her 70's and died within a year. Over $100,000 in chemo yielded her a couple extra months of life.
1
Absolutely. Enclosed sewers save more lives than all the physicians in the world.
3
I propose an experiment. Have Medicare and Medicare determine the top drug (by value) which is no longer protected by patent. Then put out a request for bids to companies worldwide to produce a supply of said drug. Award the lowest bidder a contract for 50% of the annual supply, the second lowest 30% and the third 20%. Repeat each year. Quality control must be assured and verified. If this works extend it to the top 10 drugs, by value then the top 50, etc. Oh, and have the justice department alerted to keep an eye out for anti-competitive behaviour by big Pharma.
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Excellent ideas!
But big pharma would scream bloody murder to Congress through their lobbyists and Congress would soon ban the practice, just as they will not allow Medicare to use their large buying power to negotiate drug prices they pay.
Money (to Congressional lobbyists) rules in the USA.
8
Hey, if it were that easy, don't you think it would already be done?
Reality: producing "generics" is much more complex than it looks, to those keyboarding in their basements.
Anyone who thinks they're smarter than the Mumbi crowd, step forward. We're waiting.
2
Sorry to disappoint, but "large" generics have dozens of highly competitive suppliers each, and better players are actually leaving the cutthroat environment since their margins actually go negative - hard to compete against quality shortcuts done by many Indian suppliers (and found during FDA inspections 5 years too late). The issue of generic price gouging is mostly the one for very small drugs, where the expense of setting up the production leaves only 1 or 2 suppliers. My suggestion to both situation would be to contract "big" generics from reputable suppliers which are quite a few (pushing away the seat-of-the-pants operations) at a price affording reliable quality - but make them produce "small" generics at a reasonable cost as a condition for the supply contracts.
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