It's always fascinating to see that even compared to prices you pay as a self-paying patient in Germany (which are already 1.5x - 2x higher than what the "public" insurances, ie. 85% of the population, pay for the same procedures), the prices in the US are about 5x to 10x higher. The standard of care seems to be quite comparable if you look at outcomes, so there must be huge inefficiences in the American system (doctors in Germany are consistently ranked as the highest paid academics, so I guess it cant be doctors' salaries alone).
Chargemaster prices (the non-negotiated price) are ridiculously high in the US. They’re so high that some hospitals will give uninsured patients a break of “half off” without even negotiating.
The reason for this is that chargemaster price is a fake dollar price resulting from a broken incentive structure and process. Here’s a setup:
A hospital is working out a negotiated rate for aggregate services with an insurance company. The insurance company wants to pay less, and they’re willing to put the hospital “in network” and bring their block of customers with them by doing it. But the negotiators on both sides aren’t going to sit and figure out the “right” price of every procedure. That would take forever (and there’s dinner at a Michelin starred restaurant to go to after this deal is done), so they agree that they will just pay some percentage of the chargemaster price, say, 50%.
Over time, the hospital administrators say “we need more money for this” and realize they have a lever. 95% of their customers are paying negotiated rates that are a percentage of the chargemaster price. The percentage is locked in stone, but the chargemaster rate? Yeah. They can change that.
The insurance company cries foul at their Michelin two-star dinner the next month, and the hospital agrees to lower the percentage a little in the next contract. Now the insurer is feeling flush, and the hospital is making about what they were doing before from that 95%. The remaining 5% who were uninsured are hanging upside down and getting shaken for loose change.
The cycle continues, and, eventually, the negotiated percentage drops to something comical, like 12%, but the chargemaster rates have soared. In the end, a pair of Advil “costs” $68 and uninsured patients have nosebleeds from being hung upside down for so long.
But there’s a new restaurant to try out, and someone else’s personal bankruptcy is a small price to pay for no-fuss managed care...
(Note: Marketing and administration accounts for more than a third of health care costs in the US, which is to say that health care bloat and weight due to a multi-player adversarial privatized system accounts for more than 5% of our GDP, so the chargemaster isn’t the only reason for sky high healthcare costs in America.)
This is not that plausible as an analysis of the role of chargemasters.
I agree that the chargemaster prices are fake, but what you are proposing is:
Hospital: "Our insurance partners pay us a fraction x of Chargemaster charge X, so let's make C larger."
The insurer understands the game being played here, just like you do. It's not like the insurer doesn't also realize just like you do that the chargemaster price is fake.
The insurers are not going to say "Oh C got bigger this year? Well, let's pay more!"
More important are failures of competition in the marketplace, especially consolidation on the hospital side (most markets are now served by large hospital systems, so insurers cannot plausibly threaten to exclude hospitals from networks), the lack of exposure of consumers to most of the price, and the lack of incentives on the consumer side to search for cheaper prices (plus a general lack of any information about which facilities might be cheaper).
My understanding is the insurance companies are incented for C to increase as well - under the ACA insurance companies can only have a certain profit margin, so the only way to increase profit is to increase revenue and payouts.
From a personal conversation with an insurance company board member, I’ve been told this isn’t a factor as most aren’t running anywhere close to that line. The bigger factor in his eyes is healthcare providers building local monopolies. I don’t know how true that is, but I wanted to share.
Well he was just shoving the issues under the rug.
In fairness, he's not wrong, and neither is parent. Hospitals companies have local monopolies, which they can use to charge ridiculously high prices. On the other hand, insurance companies do get a kickback of sorts when the hospitals bump prices - the negotiators get compensation based on the dollar amount of savings they can bring from negotiation, so effectively, even if the hospital bumps prices high enough and renegotiates the chargemaster rates to a lower one, while still ensuring a profit for the negotiators, they'll go for it. Bloomberg did a nice write up of it a few years back, but it's now behind pay wall.
Yeah, that’s another good nuance. Ultimately many factors drive hyperinflationary healthcare costs. Everyone’s making money.
I think my takeaway from the whole conversation is that the insurance business can be counterintuitive to outsiders. Salvation may not be as simple as getting rid of them.
Another tidbit is that insurance companies don’t mind being the bad guys. I’m not sure if our focus on that industry blinds us to effective solutions for controlling costs.
I don't think eliminating private insurers is a panacea. I just think that the nature of incentives and negotiation between hospitals and insurers has resulted in plainly ridiculous chargemaster prices that harm uninsured and underinsured patients (including those who are "out of network").
Public disclosure and reputational price-indexing as well as regulation of emergency and regionally-monopolized non-elective care would help a lot, but backing the train up on decades of broken incentives and profit-optimized behavior is no small task.
I'm saying that the hospitals and insurers, while somewhat adversarial at times, are largely aligned in their incentives. Chargemaster prices can drift upwards while negotiated discount rates fall to compensate.
The hospital makes more margin off of people not covered by the insurer, the insurer is largely insulated from the change, and everybody comes away okay... except the uninsured patient who has no negotiating power.
I wonder how much truth there is in the theory that insurers are incentivized to let costs go way up and may be complicit in it. Basically the theory I’ve heard is that Obamacare limited by law the percentage margin that insurers can make as their piece of the pie. So then one of the only easy ways left for them to grow their profits in an absolute sense is to increase the amount of money flowing through the system.
The other factor is that hospitals have wised up over the years and started merging, which turns them into local monopolies and makes insurance companies price-takers.
Before coming to any conclusions on this topic, I highly suggest reading this extremely in-depth analysis on cross-country healthcare spending.[1]
The simple answer is that Americans really do consume significantly more healthcare than Europeans. The most straightforward signature of this is the fact that a much higher proportion of Americans work in the healthcare industry than any other large country. The US also tends to consistently lead on the highest utilization of cutting-edge technology (such as ICDs, insulin infusion pumps, linear accelerators, and small bowel transplant) at any given time.
Cost per inpatient discharge is exactly in line with a regression of European countries against average household disposable income. (The US having nearly double the household disposable income as Western Europe.) Rather than being some signature of American dysfunction, globally we observe hospital bills rising super-linearly with income levels. This strongly suggests that hospital costs primarily rise because of higher intensity of care per encounter.
The strongest counterpoint to this is that despite America's high healthcare consumption, that health outcomes are significantly worse than Europe. In particular in terms of life expectancy. But healthcare economists have known for decades that medicine, on the margin, has virtually zero impact on health.[2] The US is an extremely unhealthy country, especially because of obesity. No level of healthcare would ever be able to counteract that.
But again this disjointed relation between medicine and health is not an American-specific phenomenon. The ratio of healthcare spending between Norway and Spain is about the same as between the US and Norway. Yet Spaniards enjoys significantly longer life expectancies than their Norwegian counterparts.
We pay more but we generally consume less. EDIT: let me add this comparison of health prices across countries from the Health Care Cost Institute. See Table 1:
The US is an obese country, but you will find if you look that obesity rates are similar or worse in (e.g.) Mexico and some Gulf States (I think the UAE though I don't have a source for you).
We are not a wild outlier in terms of measured unhealthiness. Life expectancies here are lower though, despite vastly higher expenditure than other rich countries.
There are important failures on the supply side of the market:
From the OECD, we have fewer hospital beds per capita than most rich countries:
Failures of competition throughout the market (including hospital consolidation) keep prices high. We do basically zero evaluation of cost effectiveness.
> The strongest counterpoint to this is that despite America's high healthcare consumption, that health outcomes are significantly worse than Europe. In particular in terms of life expectancy.
Just look at the life expectancy of France and Germany to disprove your theories.
The big difference between the American healthcare system and the one in these countries is that people don’t have to worry about the bills, which means healthcare providers have a much bigger incentive to learn what cost benefit analysis means.
I'd really encourage you to read through the first link because it goes into very careful detail. But the point is there's nothing unusual about America's high spending given its very high income levels. In particular look at this chart from the source.[1]
Let's use France as a comparison point since you mentioned it. Household disposable income in the US is about 36% higher than France. That's about equivalent to the wealth gap between France and Slovenia. The US spends about 70% more per hospital stay than France, and very similarly that's almost the exact same spending gap between France and Slovenia.
The point being it's easy to ask "why does the US spend more than Western Europe?" But, analogously you should also ask "why does Western Europe spend more than Southern and Eastern Europe"? And the most clear answer is because wealthier countries tend to spend a higher percent of their income on healthcare.
> Household disposable income in the US is about 36% higher than France
I've seen the prices of procedures and drugs in France and in the United States (that is, before insurance, because no-one really worries about the price of healthcare in France given you get reimbursed more the more expensive your procedures are, which is how things are supposed to be), and it's definitely not 36% more expensive. Everything is at least 10 times more expensive.
Hey there. The comment you are replying to specifically addresses this.
I find reading comment threads containing comments that don’t seem to account for the literal assertions made in the previous comment tend to be difficult to follow and quickly degrade.
> The big difference between the American healthcare system and the one in these countries is that people don’t have to worry about the bills, which means healthcare providers have a much bigger incentive to learn what cost benefit analysis means.
Can you go into a bit more detail about how exactly this incentive linkage works?
I think a lot of people are missing one key difference. Healthcare in EU is based on solidarity system where every citizen pays a percentage share of his monthly salary to the medical insurance. So if you earn more, then you will also pay more medical insurance - but you will get the same treatment as others (unless you have some fancy private insurance on top of the regular insurance).
So basically any medical expense is subsided by every citizen in the country indirectly.
I believe this is a completely different way of looking at things than in the US. The average EU citizen doesn't really think that the monthly medical deduction from his salary is just for his use or it's his own insurance, it's only a contribution to the whole system.
This is how progressive taxation works. For some reason, US people happily pay for police, firemen, infrastructure or the military as a necessity of a functioning society but have serious problems considering healthcare in the same group.
Police and fire are paid for by local or state taxes, with some federal outlays via matching grant programs. Cities and states are free to start their own local and state tax funded programs. The only thing getting in the way is the enormous cost!
Taxation in the US is significantly more progressive than in most (if not all) of Europe. In Europe, bulk of tax revenues come from high tax rates on middle class, while in the US, most of the tax revenue is paid by the wealthy. In concrete terms, Americans in top 1% of income distribution pay nearly 40% of all federal income tax, and top 10% pays 70% of all federal income tax. That’s significantly more progressive than all large European countries.
one could make the argument than the benefits of police, firemen, and military scale somewhat proportionately with wealth. people with meaningful assets have a lot to lose if the police stop protecting their property or the US navy can't guarantee relatively safe trade by sea. their house is probably worth more too. a homeless person probably gets hassled by police much more often than protected by them. socialized healthcare mostly benefits people who don't have and/or can't easily afford good insurance.
That's a very American way of thinking. I am totally fine that I contribute with a bigger part and it's used for people that would not be able to afford it.
I don’t know if you realize this, but when you write it this way it seems that you are implying an ‘American way of thinking’ is a morally inferior one.
Right but the biggest country in the EU isn't ~330 million people from about a half-dozen fairly distinct cultures. Remember that the US has cultural representation from many European countries and also quite a few non-European countries.
I'm not suggesting that Italy or Greece or Germany are actually homogeneous culturally but with smaller populations and significantly less immigration than the US I suspect that the variances are smaller and perhaps more surmountable.
Germany's population (83 million) is only about 1/4 of the US and as you go down the list the countries only get smaller.
Saying German doctors are "the highest paid academics" isn't really useful information. How much are they paid? Is it comparable to an American physician? German docs can be the highest paid academics in German by a factor of 10, but if American docs make 3x what any German doc makes it's kind of a moot point.
To do a real analysis you'd need to see a breakdown of where the money goes. What percentage is to a physician's salary, hospital overhead, insurance premiums, etc. for both countries and see where the big disparities are. My guess is, everything is more expensive on the US side, including salaries, and adds up to the big difference in price.
Everything is inflated the whole way in the American system.
Universities overcharge in the US. The medical education costs upwards of $800K if you include the cost of lost opportunity had you gone into a different field and worked those years instead. So doctors need higher salaries. That, combined with idiotic market dynamics around medical supplies, means that all medical costs are higher. That in turn means everyone absolutely needs insurance or risk personal bankruptcy.
You can't waste money on the scale of the US system by simply paying doctors too much. Rather, you need to hire entire departments of nonproductive people - eg billing and administration. When you zoom in, most of these positions look like a necessary function, but systematically they don't need to exist. Take for instance a "nurse navigator", whose entire job is to deal with insurance company rigmaroles - as a patient you're extremely thankful to have them, but their position is actually only necessary due to a corresponding insurance company department (that you're also paying for!) trying to deny you care.
The ultimate problem is this planned economy mandate of "full employment". It is in no individual's interest to declare that their own job is counterproductive, otherwise they'll starve. So they hang on performing in their own little niche, sucking resources out of the system so they personally can continue living a dignified life. We're stuck in a paperclip maximizer, and the healthcare industry is one of the best small-scale illustrations of this.
I believe a reform of the healthcare system should include paying for medical school. Let's offer a deal: You go to med school for free, then you work for the government for a decent professional salary.
You don't need the government to solve this problem, they helped create the problem in the first place. You need to reform your political system to actually make it work.
Indeed, and I think we can also make better use of the "lesser" medical degrees as well. For instance I get most of my primary care from a nurse-practitioner or physicians-assistant. My parents' most beloved primary care "doctor," who is an absolute superstar, is a nurse-practitioner.
Maybe there could be some kind of a continuous work-and-training ladder, where you start as a NP, and move your way up as you get more training and practice. Or you can stop whenever you think you've reached your desired level.
The vast majority of the difference comes from just the raw cost of inpatient and outpatient care. Even if you were to completely zero out the administrative costs per capita, you'd hardly make a dent in bridging the gap.
I am interested to understand what makes the "raw" costs so wildly different.
When my son had an infection in germany, we went to the equivalent of pediatric urgent care and after seeing the nurse, having bloodwork done and a few different 15 minute sessions with the physician we came to the end of the visit with the doctor, they apologized that we had to be charged the full uninsured rate and that a bill would be given to us later that we could use to have our insurance (they could not bill our insurance internationally.) We paid the 50 euros and asked what the total amount would be, assuming that was the co-pay. There was a lot of confusion because the 50 euro wasn't the copay -- it was the full-freight amount. Getting a single 15 minutes with a doctor, let alone the prep with the nurses and bloodwork being rushed would be far more than that in USA.
> I am interested to understand what makes the "raw" costs so wildly different.
There are a number of reasons. One big one is simply that doctors in the US command a much higher salary than their counterparts elsewhere in the world:
Another big reason is that the US is unique in that it's one of the only countries in the world where you get your healthcare through your employer. What we're seeing in healthcare costs is analogous to what you might see happen to airline ticket costs if we all got our air tickets through our employers: the vast majority of us would fly business class, while the unemployed would be simply unable to pay for business class fares out of pocket. Employers (especially medium-to-large businesses) have a much higher purchasing power (and hence, willingness to pay) than individuals.
Now, if you take this behavior and combine it with the fact that health insurers' profit margins are capped by law by percentage, insurers pay more for treatments (which doctors happily accept), charge more to employers (who are generally less price conscious vs individuals), thus bring in more absolute revenue, and therefore more profit because a capped profit percentage of a higher revenue is higher than a capped percentage of lower revenue. It's somewhat counter-intuitive, but the policy combination of an employer mandate and insurance profit cap results in the mother of all local optima.
Disclaimer: I work on health pricing in the US and sometimes adjust claims myself.
> doctors in the US command a much higher salary than their counterparts elsewhere in the world
Yes, but salaries are also linked to huge debts to pay in their first years, a permanent state of fear to be sued by negligence (losing their license and seeing their only possibility of income vanished). It seems that suicide and depression are too common among young students. They also work too many hours in irregular schedules (working in sundays, holidays or passing one on each three weekends at the hospital is not uncommon. This will add a lot of stress for parents with small children trying to having a normal life. And is a emotionally charged work.
... So either you provide a particularly high reward in form of a golden salary, or perhaps nobody would wanted to be a doctor.
Now you're starting to follow the thread to the root cause: onerous medical licensure and onerous medical university accreditation.
In the US, the barrier to become a doctor is higher than it is anywhere else. Nowhere else in the developed world are you forced to do 4 years of undergraduate study unrelated to medicine, followed by 4 years of Medical school, followed by 4 years of residency.
Also, one doesn't require huge debts to pursue a PA or NP degree, but many States disallow PAs and NPs from practicing basic medicine.
Not everyone needs to go through the same level of schooling as a brain surgeon.
That's what I find so depressingly hilarious about the US vs the rest of the developed world [1]: that even when they super-apologetically hit you with the full, no-mercy price, it's less than what you'd way with (already overpriced) insurance in the US.
[1] Well, also developing, but super-low prices aren't as surprising or embarrassing to the US in that case.
> I am interested to understand what makes the "raw" costs so wildly different.
In the US, hospitals lose a lot of money on patients who don't pay at all or pay pennies, and in order to not make a loss at the end of the year they charge those who can pay more money.
Also, insurances have an incentive in having hospitals set high "sticker prices" because then they can claim "higher savings" for their members.
Contrast to that, in Germany as long as a patient has any insurance (and 99.9999% of Germans do) the hospitals and doctors will get their services paid (so no need to overcharge for financial reasons), and both the mandatory insurance scheme and the private insurance companies pay fixed, government-regulated fees (https://de.wikipedia.org/wiki/Einheitlicher_Bewertungsma%C3%... for the government insurance, https://de.wikipedia.org/wiki/Geb%C3%BChrenordnung_f%C3%BCr_... for the private insurance system).
The "administrative costs" in that analysis are misleading. "Administrative costs include spending on running governmental health programs and overhead from insurers but exclude administrative expenditures from healthcare providers." I don't think the blue bar is representative of the "raw cost" of care.
This study says over one-third of all US healthcare costs are administrative.
I want to be able to make a case for a single payer system in the U.S., but I think to be effective it's a comparison of costs and outcomes that needs to be had. In the data linked above, we're told that the 'inpatient and outpatient care' is significantly higher than in 'comparable countries.'
I believe it. But isn't 'inpatient and outpatient care' just about .. everything that goes into a health care system aside from the paper pushing and insurance pieces? And are hospitals really breaking that stuff out ?
Someone in favor of the U.S. system would say, ah hah, that's because we in the U.S. have access to better care, and more sophisticated technology, than in France or Germany, and also we don't have long waiting lists. I don't know the technology claim, but I've seen the wait list claim and I do think it's true when comparing the U.S. with Canada or the UK (the latter two have long waits for essential surgeries compared to the U.S.)
Given that inpatient + outpatient = 100% of the category, I have to agree. Lumping the cost of "Medical Care" into a single metric in a breakdown of spending on, well, medical care, doesn't offer much insight. Showing exactly the same data in 4 different graphing methods doesn't add anything but clutter. The lack of effort honestly makes me question this organization's mission.
I think the most useful bit is the reference to the OECD data source. For those not already aware, OECD has far more detailed data available to browse [0], and heaps of more informative and competent presentations [1].
"Wait times for cancer treatment -- where timeliness can be a matter of life and death -- are also far too lengthy. According to January NHS England data, almost 25% of cancer patients didn't start treatment on time despite an urgent referral by their primary care doctor. That's the worst performance since records began in 2009.
And keep in mind that "on time" for the NHS is already 62 days after referral.
Unsurprisingly, British cancer patients fare worse than those in the United States. Only 81% of breast cancer patients in the United Kingdom live at least five years after diagnosis, compared to 89% in the United States. Just 83% of patients in the United Kingdom live five years after a prostate cancer diagnosis, versus 97% here in America."
Yes, I know Forbes has a bent. And I'm generally in favor of single-payer options and not defending the U.S. However I have seen the Wait Time stat over the years in the context of cancer patients, and this is one data point. Canada is apparently worse.
Five year survival rates don't give you much information, because the US engages in massive over testing. You need to know all cause mortality, and the US does worse here than the UK.
The US over tests people and over treats cancer; that costs a lot of money and isn't pleasant for people but it doesn't make them live longer.
If hypothetical Beth dies age 82 does it matter if she is told she has cancer at age 75 or age 79?
I'm always willing to learn more - do we have a one-stop-shop apples to apples comparison of U.S. vs. UK and other countries' healthcare models with stats and explanations, one that is free from strong biases ? I struggled to find a non-political, but still meaningful comparison data site online via Google.
You're right that it's a useful starting point, but I think that it's even more complicated than "single payer is better".
First of all, it isn't obvious that single payer is the best system, because there are many countries in the world that have exemplary health care systems that are not "single payer". You cited Germany as an example, but Germany doesn't have a single payer system, it has a public-private mix. It's a universal multi-payer system. Netherlands has a purely private universal healthcare system, Switzerland has a purely private universal healthcare system, Australia has a public-private mix (44% choose private), Singapore has universal catastrophic coverage but everything else is driven by savings accounts and private insurance among the upper-middle class, etc etc — Belgium, South Korea (technically "single payer" but only covers 60% of costs, private insurance fills in the gaps), Japan, etc.
From where I sit, the most apples-to-apples A/B test of single-public-payer vs private insurance is actually being run in the US, as we speak. When you turn 65, you have the option to enroll either in "Original Medicare", which is what we usually think of when we talk about "single payer healthcare in America", or you can enroll in Medicare Advantage (aka Medicare "Part C"), where the premiums that would go to the CMS instead go to private insurers like Humana, United, Oscar Health, Aetna, Clover, etc. These plans replace Original Medicare, also cover Part D prescription drug benefits, and often include supplemental benefits that Original Medicare doesn't already cover. There are some interesting findings so far:
- 39% of Medicare beneficiaries are on private Medicare Advantage plans instead of the public "Original Medicare". Because everyone is entitled to "Original Medicare", this is purely voluntary. This number has been growing so rapidly, that we expect by 2025, more seniors to be on a private plan than the public one. There's also great variance by State. In Florida, Pennsylvania, Wisconsin, Michigan, Minnesota, Oregon, Alabama, Hawaii, and Connecticut — nearly 50% of beneficiaries are on Medicare Advantage. By 2022, we expect more seniors in those States to be on a private plan than a public one. https://www.kff.org/medicare/issue-brief/a-dozen-facts-about...
- In Urban areas, Medicare Advantage costs less per capita to administer than Medicare — and that's not including the extra Medicare Part D insurance that you would have to buy if you're on the Original Medicare plan. https://www.commonwealthfund.org/publications/issue-briefs/2... From this same research, public "Original Medicare" is still cheaper in rural areas, but not by a whole lot.
So to make things more complicated, we're not just talking about whether "Medicare For All" is better than the status quo, we also need to litigate if private-insurance driven "Medicare Advantage For All", is even better.
Looking at the article, it's pretty hard to understand what what's actually costing more. "Inpatient and outpatient care" is a pretty enormous bucket and probably accounts for a whole lot of salaries, services, and such of pretty much any job title with "medical" in it.
Admin, does in fact represent the largest % difference... but it's not clear what's grouped into it. I assume it means government departments, insurance firms, external legal/finance services. I don't think the data refers to a salary-bysalary breakdown of costs.
Sometimes it's best to look at these things from the ground up. Doctors, nurses. How many? How much are they paid? Is the diff more or less than mean diff? If no, move on, If yes, dig deeper.
You really can't even rely on price data to tell you much. Most of these markets have a broken or absent price system. The underlying answer though, inevitably will likely be "because they're run differently."
Inpatient care refers to any treatment where the patient is required to be admitted to a hospital or health care facility facility. On the other hand, the OECD defines outpatient care as care that "comprises medical and ancillary services delivered to a patient who is not formally admitted to a facility and does not stay overnight." Thus, studies like this try to break out "inpatient and outpatient care" as an attempt to represent the "real" service in question, while isolating things like administrative costs.
I think outpatient care mean you don't stay in the hospital overnight. So you could have a surgery and leave within an hour in the recovery area and that is outpatient.
Probably some of it but I suspect the lack of limitations on services rendered plays into it as well. If someone in the US wants to see specialists 50 times in a month due to munchausens then they'll just be charged their co-pay each time (in most insurance plans). In Germany I suspect they'd not be allowed to book appointments anymore or would require a gatekeeping referral. Same with expensive drugs that don't help outcomes but are advertised to patients and doctors.
Thats not right. You can easily get an appointment in Germany, even multiple times. If you have a referral, you usually get an appointment earlier than people who directly went to the specialist. However, if you have acute pain you will quickly get an appointment on the same or the next day.
Source: Me. just made the second appointment with a specialist within a week thanks to pain, appointment is tomorrow
In the US on self-referral plans (60% of health plans) you can get an appointment without any acute symptoms and with no delay versus a referral. I'd say that's a fairly large difference in ease of access without probably any impact on patient outcomes.
> In Germany I suspect they'd not be allowed to book appointments anymore or would require a gatekeeping referral.
This is the kind of comment that immediately classifies the commenter as never having lived outside the US and/or not reading anything but US news sources. And with the wilful blindness to how exactly those gatekeeping referrals are present in most every single healthcare plan in the US.
>And with the wilful blindness to how exactly those gatekeeping referrals are present in most every single healthcare plan in the US.
This is only required by HMO plans which cover around 40% of the US population. PPO plans don't have such a requirement.
So please don't call other people willfully blind when you yourself make broad factually incorrect statements. Pot please meet kettle.
edit: Also my statements about Germany are based on comments Germans have made on hacker news regarding their own health plans. So you should really go yell at those Germans for not knowing how their own health system works.
I think this is a bit of an oversimplification; there are places where the out-of-pocket price ends up actually cheaper than the negotiated insurance price, which is mind-boggling to me.
A long time ago, when I was poor and underinsured, I had a medical situation that required imaging. The doctor’s office said they had the machines on prem, but they couldn’t give me any kind of price break. So he sent me to a specialist. Signing in to the specialist, they told me that the cash up front discount was 75%, and that even a hint of having to deal with insurance companies was going to mean a higher effective out of pocket.
Practically any US medical practice is going to have huge staffing overhead for the people who maintain the accurate billing records and wrangle with insurance companies.
I can directly compare with the French system: Doctor has a receptionist, you pay him cash right there on the spot, and he’s very limited in what he can do. E.g. he has to send you to the pharmacy to buy your shots, but he’ll administer them.
When it’s all done, you fill out a crapload of forms, staple all the receipts to the stack, and your employer (via insurance) returns somewhere between 60-80% of it.
I have long maintained that moderate reimbursement for outpatient care would be a huge improvement for the US. At the same time, there’s a fairly large entrenched interest that wouldn’t like this at all.
I wonder if the reported prices are the aggregated total price for treatment? Or is it just a price of an individual procedure, excluding whatever else that normally goes into the treatment, like diagnostics, admin and nurse time, room/facilities expense etc?
Generally, every hospital reported price is different. Many of the prices reported are "all in" service packages, but several also wouldn't include these ancillary charges. Forthcoming price transparency legislation puts more pressure on hospitals/insurance cos to quote these "all-in" bundles. On the Turquoise site, we'll be representing all inclusive bundles with a checkmark + explanation that the provider has verified with us the rate is inclusive of all professional/ancillary charges.
I don't believe any medical professional in Germany has wage exceeding 150k EUR yearly after taxes - doctors in the US sometimes have multiples of that, coincidentally 5x to 10x more is not unusual.
I believe that doctors in the US get paid more than in germany, but 60k seems very very low. Teachers have an income in that range....
Edit: Looking at some german articles, maybe they did not convert from eur to usd, ~80,000-100,000$ (depending on expertise etc) seems more likely for a dr working at a hospital (which is still low imho compared to US salaries...).
You have to keep in mind that med school and the equivalent of premed in germany is completely free. Of course that does not make up for the pay difference completely but it changes the perspective quite a bit imo, since med school in the US is extremely expensive.
Additionally I could totally see doctors being ok with less pay for the trade off of living in a more fair system.
Coincidentally I know one expat here that specifically does not want to return to the US to become a doctor there for that very reason. She specifically does not want to move back because she feels the healthcare system in the US is unfair and she would be profiting off of that system.
And furthermore you have to differentiate between "assistance" doctors (~82k $) and "chef" doctors (~336k $).
(I don't know the comparable titles in the US system)
Both values are taken from the parent's article and converted using Google.
Of course, mostly without serious student debt
I think the difference in wages narrows down with specializations. I linked just the "general practitioner" because I couldn't find an average including all the specializations.
I don't believe that salary income is the complete picture for physicians in the US. There are still a lot of doctors who are also "insider investors" in clinics, diagnostic equipment, and other medical businesses.
It's true that US doctors are paid more (although the gap isn't as big as it used to be). However, pay for US doctors makes up a fairly small portion of overall US medical expenditures (less than 10%). So, you could ask every doctor to work for free and not significantly change costs.
>pay for US doctors makes up a fairly small portion of overall US medical expenditures (less than 10%)
That is likely too low.
The Centers for Medicare and Medicaid Services provides a National Health Expenditure estimate annually. [1]
Physician and clinical services represented $772 billion out of about $3.8 trillion, so more like 20%.
Hospital services are the other big one: about $1.2 trillion.
US physicians are paid terrifically relative to their counterparts almost anywhere else, this is especially true for specialists.
In fact, physicians represent about 15% - 16% of the top 1% of income earners in the US. See table 2 from this paper: https://web.williams.edu/Economics/wp/BakijaColeHeimJobsInco...
which was written using tax return data, not, e.g., self-reported income data.
"Physician and clinical services" includes far more than pay for US doctors -- it's the entire costs for "services provided in establishments operated by Doctors of Medicine (M.D.) and Doctors of Osteopathy (D.O.), outpatient care centers, plus the portion of medical laboratories services that are billed independently by the laboratories". Doctors do not get even close to all of that money paid to them.
> In fact, physicians represent about 15% - 16% of the top 1% of income earners in the US.
This may be accurate, I'm unsure, but it wouldn't change that if US doctors were paid the same as their European counterparts, it would not make a truly significant change in overall US medical spending (this would even be true if doctors did actually make up 20% of medical expenditures, like you assert earlier).
There’s a similar (but smaller) differential for other medical professionals too. But more generally, when I’ve done high-level comparisons of medical spending between the US and Western European countries, it seems like every single cost element is more or less proportionately higher in the US. It seems like basically everyone is spending money in roughly the same proportions, including on things like doctors’ salaries - everything is just scaled up by ~40% to ~100% in the US, depending on which country you compare it to.
And doing so more frequently in the US, so cost is higher but so is rate of consumption, particularly of services and products that make us feel like we have more mastery over outcomes but in fact do not result in better outcomes on the whole.
