Do you consider the amount that the US spends per capita on healthcare relative to other countries for the same standard of care a "failure" of the healthcare industry? Or is there some other reason healthcare "just costs more" here?
Also wondering what you think a solution is - single-payer for better and simpler price negotiations, or some other approach?
My main concern is if we're spending 20% of GDP on something other countries accomplish with 10%, then that's a huge waste, especially in a country with a larger total GDP pool.
Healthcare is such a base layer of the economy, I find comparisons to be extraordinaly difficult between countries. On the most basic level our pathway to becoming a healthcare provider of all sorts is dramatically more expensive and limited than other countries, what healthcare providers are paid is dramatically more than other countries, we invest many times per capita what other countries put into basic medical research, the way are population is taxed is very different than other countries, our patient population is very different from other countries, our expectations are very different from other countries, our scale is dramatically different than other countries, and so on. The US is a singular animal politically in that it is a compact of individual states that especially in regards to healthcare, the federal goverments powers (though it may not seem so at times) are actually quite limited. It's all but impossible to come up with reasonable numerators and denominators for comparison.
They're most obvious with "basic" products like energy and comms - in theory what is delivered is mostly undifferentiated kWh or GB but through the magic of "confusing plans", marketers have succeeded in making comparisons very difficult for regular people.
(You can do it, but you need OCD, a year of billing data and a spreadsheet - which greatly exceeds the cognitive effort most people will invest in choosing a mobile or energy provider).
The US healthcare sector seems to be the largest, most intricate and most successful (in terms of gdp extraction) confusopoly in history.
To be fair, energy isn't just kWh. A Joule delivered during times of peak demand costs more to produce (or has a larger opportunity cost) than a Joule during a lull.
Also a marginal Joule that you can demand at will is different from one that you committed to months in advance.
Similarly for data.
Of course, in practice most plans don't reflect this 'essential' complexity, but are full of accidental complexity to confuse people.
...because the healthcare corporations get congress to sell out citizens. $3.5 BILLION flow through lobbyists every year (all industries). Healthcare being a huge part of that. Congress sells out US citizens & corporations fuel it
Off-topic but "confusopoly" maybe Scott Adams true contribution to human understanding. IIRR he wrote a comic management book and dropped in a throwaway line and invented the term.
Academically this sounds enlightening, but it only takes one cursory walk around a supermarket in the US to see this is unequivocally false. Healthcare is an externality, not a base of anything. From the average customer to the product in the aisle to the marketing - everything is 100% not a direct cost benefit function in terms of healthcare.
Walk around the supermarket that you drive to, hopefully not being maimed or maiming someone else on the way. A ludicrous expenditure of energy to avoid physical activity so that you can buy products to help alleviate the symptoms of the energy expenditure and laziness. Can’t walk, or bike, or take the non-existent public transit. That’s for sure.
I don't think driving is merely to avoid physical expenditure. Driving is a result of rural and suburban living as well as poor urban planning. Lots more people would walk or bike if it was reasonably feasible.
I suspect it's a bit of a chicken/egg problem (based on my opservations from visiting the US). Even in suburban areas there seems to be roads everywhere, often very hard to cross without a car.
Where I live in Europe, the expectation is that the kids will walk or take the bike to school. 95% of the paths they need to travel is covered by walkways (usually separated from the roads, and in many cases with dedicated bike lanes). Everywhere the kids need to cross, there are crosswalks, and every morning before school a team of parents is organized to safeguard these crosswalks.
Meanwhile, driving is slowed down significantly by the efforts above. The roads are underfunded and lines tend to form around the school (some parents still do drive their kids, up to about half when the weather is really bad). But with parents blocking the crosswalk every time a kid is near, bottlenecks do form. Basically, if you're in a car, you're treated as a 2nd rate citizen. :)
Oh, and I suppose one benefit of all this walking is that hospital bills go down. Mostly because of the exercise, but also to some extent due reduction in air polution (which is helped further by most of the remaining cars being electric, most of which, ironically, are of a certain American brand).
Where i live in the suburbs we don't even have sidewalks ffs. I live about 3 blocks from my kids' school, yet they are driven or take the bus to school because kids are not allowed to bike or walk to elementary or middle school, unfortunately.
wow, didn't realize so much of EU can afford electric vehicles. They are more expensive over here in the U.S. - especially compared to a decent used car. Is this a function of the cost of fuel being much higher over there? Or are there subsidies for purchasing electric or something else?
> wow, didn't realize so much of EU can afford electric vehicles. They are more expensive over here in the U.S. - especially compared to a decent used car.
I don't live in the EU, though. You need to move a bit further north and west.
And it's not that electric cars are cheaper here than in the US, rather other cars are taxed at +100% or so (more for "luxery" cars), while electric cars have had low to zero taxes.
Also, fuel has an extra tax of about $1/liter ($3.8/gallon) on top of the normal price (and 25% VAT even on that), meaning even before the current boom, fuel was typically priced around $1.5-$/l (around $5-$7/gallon), and has been approaching $2.5-$3/l (up to about $10/gallon) recently.
Another difference compared to the US is that we have about 25% fewer cars per capita here, despite having about 20% higher nominal GDP per capita than the US (purchasing power of households are lower than in the US, due to taxes and tariffs ). Partly because of car-hostile taxes (except for electric cars) and partly because other means of transportation are subsidized. More of the money is put into buses, trains and sidewalks and less into cars, roads and parking lots.
I'll concede that the comment was vague and relied too heavily on a shared intuition. Though I will admit, the reward became well played dry comedy throughout your sibling comments.
So I'll break down my reasoning a bit. It requires a full blog post to get out, so please forgive the abridged version.
Healthcare is a catch all for all the other problems of society. The top costly conditions in the US are (in order of this barely sourced article): Mental Disorders, Heart Conditions, Trauma-Related Injuries, Diabetes, Cancer, COPD and Asthma.
Every single one of these is plainly racking up unneeded costs by the daily actions of all of us. My quip on the supermarket was a remark on the total view of health (from mental to reproductive care to basic carcinogens to ...).
How many people are mindlessly scrolling on Instagram while performing another task, how many people smell of cigarettes, the marketing of 'sinful goods' (depending on the state), the near impossibility to avoid added sugar in every packaged foodstuff, the number of 'alcohol noses' you can see down a 50ft isle, the parenting of children, the smell of fossil fuel exhaust from the parking lot, the gait of the elderly, injured, or soon-to-be, the accommodations (or lack thereof) for those in wheelchairs and with living assistance, and still the primary food at checkout - And to include everyone in the conversation: think of the anyone working two jobs and has 0 time to prepare fresh food for themselves or anyone else, the eventual cost is in the habitual behaviors made in the constraints of under-compensated labor.... I could keep going and I've left out other observations contributing to other conditions but I think you understand.
The thing I'm trying to say is that there are interventions all over the place - however, the up-front costs (ignoring all else) of a 'double blind randomized trial' for every single one of them to earn the proper authority to define its relative utility to cost is unrealistic at the moment (also most governments do not allow for risk based price of care) - an economic externality.
Couple this externality behavior with a market of near perfect inelasticity for good health (and before someone comments, yes, suicide / assisted euthanasia may not be inelastic in price on this metric) - and you can't say "Healthcare is such a base layer of the economy" - an alternative analysis is "Healthcare is an externality that is priced in a government controlled market"
[Edit] I completely left out the externality of the high reward litigation industry on malpractice and all of the above conditions as evidence of harm - adding pressure on compensation to the highest paid professionals.
Yes, most governments do not allow pricing according to ricks; but, whether insurance will take that risk group and insure them does in fact act as pricing according to risk. An example is diabetes. As if you are not with an elite insurance carrier via elite high income job you have actually not having insurance and dying from diabetes due not being able to afford insulin shots.
It is offset at all by all the workers who are forced to sit their entire shifts? It's probably better on our bodies to stand than to sit for 6 hours at a time, but it starts in schools and ends at desk work. Standing desks are nice, and can help, but not everyone has access to them.
One of the nice things about working from home is that it allows people to escape that kind of environment to a point, but it just enables other types of obsessive micromanagement like "Why hasn't your mouse moved for 15 minutes!" or keeping cameras pointed at you all day long.
What we really need is less micromanaging and an expectation that not everyone is going to be at their desk every minute of the day, but that's a very hard sell in some environments.
> It's probably better on our bodies to stand than to sit for 6 hours at a time, but it starts in schools and ends at desk work.
It definitely isn't, standing puts enormous strains on our bodies. Walking for 6h is much easier and better, but sitting out lying down are much better than just standing.
They're also talking about a population of workers - this includes elderly people with bad hips, bunions, handicapped people who aren't always given proper accommodations, etc.
> our patient population is very different from other countries
> our expectations are very different from other countries
> our scale is dramatically different than other countries
> the way are population is taxed is very different than other countries
do you have evidence to support these claims? what makes the US patient population or their expectations or the US taxation system unique in the world?
Not the OP, but Americans as a whole are very unhealthy (with 42% of the population being obese and over two-thirds being overweight) and culturally have very high expectations of what medicine can do for them, as opposed to making difficult changes to their lifestyle.
A part of the latter is based on the actual superiority of the quality of medical care in this country -- due to the high levels of wealth produced by this (mostly market-oriented) economy and advanced medical technology, doctors can in fact perform miracles here that they cannot elsewhere.
A part of the latter is based on the actual superiority of the quality of medical care in this country...
How is it superior? Sure, some countries fare worse. But folks aren't getting the healthcare they need because of cost, and the results aren't exactly the best in the world. I'm not convinced that "culturally" folks have high expectations either, and sure, you might want to change your lifestyle to lose weight - but at the same time, you might just need medical oversight to do so. Not to mention that a bunch of things medicine helps are not things that lifestyle just fixes.
Yes, folks are being priced out of healthcare, but the healthcare that is being provided is of superior quality than can be found in other countries -- even first world countries with socialized healthcare. I mean it in that narrow sense, that the service that is being delivered is of higher quality.
It sounds like your point is that wider delivery of healthcare would be superior overall. That's fine, but I contend that the best way to achieve that is by increasing the supply of healthcare providers, instead of applying a price ceiling, which leads to shortages (as seen elsewhere on this thread[0]) and quality deterioration.
> e invest many times per capita what other countries put into basic medical research
This is a big thing. I'm in the UK, where healthcare is very socialised, but I very much appreciate the fact that the US invests in making and productionising the next generation of healthcare, which we can then buy in bulk at a discount.
I understand you're the relative expert here, but even so I must disagree with your general thrust.
I've been hospitalized in four different countries. The least sane was America. The sanest was a private hospital in England, but the public hospital in England was fine too. My home country of Canada is sane, reliable, and reliably slow and mediocre bordering on subpar. Cyprus lacked toilet seats, but at least the food was fantastic.
America's healthcare system is bananas. Even trying to come up with a metaphor here is difficult. It's $5k a day stays with Wonderbread, tuna, and bad not-actually-mayo-mayo for lunch. It's well groomed, well respected, monied indentured second and third opinion servants. It's Moloch's own mediation on Moloch[0] sold on the discount rack of the bookstore pharmacy downstairs.
You can think Americans are different. They are not. They move to Canada all the time and we service their bum knees just fine.
You can think Americans do all the medical research in the world. They don't. Plenty comes out of Europe, China, and elsewhere.
You can think your tax code is unique. Ok this one I kinda agree with. It's almost as bananas as your medical system. But it doesn't change the fact that Americans put up with absolute bananaspants insanity for a healthcare system when they're perfectly capable of funding their libraries and roads.
China beats you on scale. And so on.
The basic fact is that Americans have what is essentially a psychopathic medical system at the best of times. One can negotiate with a psychopath, but Kafka returns your offer with a can of stale soup and doesn't even laugh.
If you mean PPP, then the reason is simple. How much a janitor is paid to clean a research lab's washroom doesn't materially affect the quality of the research produced. There are other measures that look at things like papers cited or page rank like algorithms, and on those USA does even worse if I recall correctly.
At the end of the day, though, this is a distraction from the core argument. A valid defence of US healthcare policy is not "but we're good at research." Imagine if China was trying to defend their overbudget and under-effective military by talking up how much they've done for global aeronautical research.
Grandma lost her house because she got kidney stones, but, butterfingers, at least we research stuff! Oh and often times our pharma kills more people than it saves and true justice is never metered out ala opioid epidemic.
There's no reason to come on here and be nasty to someone you've never met because you or some relative of yours had a bad experience.
If it's that big of a deal for you, work to fix it and you can come on here with your credentials and blah blah instead of whining about people who have experience in what they're talking about :)
Civility is a little overrated and what an obnoxiously condescending response to say well go fix it yourself before you talk. Go talk to children like that
About 90% of Americans have medical insurance. Coverage caps were eliminated years ago, and the out-of-pocket maximum is low enough that the medical expenses from a single incident are unlikely to drive middle class people to bankruptcy.
Where bankruptcy becomes an issue is when a medical condition leaves someone unable to work for months. With no income they can burn through savings and credit quickly. Then when they file for bankruptcy of course they have some medical debts, but those medical debts are typically not the primary cause of the bankruptcy and even if the medical debts were eliminated they would still be insolvent.
That's a good point, I may have overstated the issue. However, from what I understand it is not too difficult to find oneself being treated by somebody outside of their insurance network. This could easily lead to a bankruptcy. Furthermore, many do not feel comfortable or confident navigating these byzantine insurance landscapes. This leads to people avoiding medical care regardless of insurance status.
Number one is full price transparency of the whole chain. I work for a medical device company and even the marketing people can't really tell what our stuff costs. There are a ton of middlemen with obscure contracts and very high markups. My ex got one of our devices and I was told by our people that the hospital should have received the device for between 20k-30k (nobody seems to really know) and the hospital charged 80k for the device alone. They also charged another 200k for a one hour surgery with a total hospital stay of six hours.
It's also hard to explain that US patients pay a multiple of the drug price people in other parts of the world pay for the something.
The problem is that if the US wastes 10% of GDP on health care inefficiencies this creates a huge lobby that will fight tooth and mail to keep that money.
The prices as charged in the US regularly make it onto Twitter and Reddit etc where us Europeans wonder how on earth it's possible that something in the US costs $ 800 which is charged at less than $ 100 over here (and then paid by insurance). Same for that $ 30k device being sold for $ 80k.
What we all forget is that nobody is actually paying the US healthcare invoices.
Roughly two options... 1. You have insurance and they negotiated a different (much lower) rate or 2. you don't have insurance and can't pay the amount on the invoice.
In option 2 you either declare bankruptcy and they get nothing or they sell the claim for something like 20% of the invoice to a collections agency.
Not correct. The insurance paid 80k for the device and 300k total for the surgery after one year of fighting almost daily.
Also: if you make a certain amount of money and they hit you with a 100k bill you can't just declare bankruptcy. The court won't allow you to do it because you make too much money.
> you can't just declare bankruptcy. The court won't allow you to do it because you make too much money
Isn't this always the case? My understanding was that bankruptcy is for when you don't have enough income to pay bills, so if you have a bill for any amount but are able to pay it then you wouldn't be allowed to declare bankruptcy
Google search for the McKinsey report on US healthcare spending - I think it was around 2009.
I work in the industry as well and it’s one of the few reports that actually breaks down the spending in a logical way.
They basically adjust US spending by GDP (high GDP countries spend more generally) then compare each category to the OECD average (also adjust by GDP), on a price and volume measure.
The answer is - yes, higher price are a factor, but volume is also a major factor. In hospital spending is actually in line with other countries. Drugs costs more but it doesn’t contribute that much to total spending. In terms of durables (equipment) the US spends less.
The biggest driver? Out patient procedures. Not just price, but Americans get way more out patient procedures done compared to other countries and it accounts for like half of the “excess spend” of the US compared to other countries.
The US is (exaggerating a bit) a nation of obese, sedentary substance abusers. We are sicker on average than other developed countries and thus have a higher demand for healthcare.
We might be able to eke out some minor improvements by tweaking the payment model and eliminating some waste. Those things are worth doing, but they won't fix the fundamental problem. The US won't get healthcare spending down to Japan's levels until Americans start acting like Japanese.
There are some other key factors as well. A large fraction of healthcare spending goes toward treating elderly patients with serious chronic conditions in their last few years of life. Some countries explicitly deny care to such patients because they don't think it's justified on a QALY basis, but Americans seem uncomfortable with rationing on that basis.
And some aspects of the US healthcare system are top notch. For many types of cancers we have the world's best 5-year survival rates. There is a thriving medical tourism business where patients from countries with socialized medicine such as Canada come here to receive rapid treatment instead of waiting for years for something like a hip replacement.
> Do you consider the amount that the US spends per capita on healthcare relative to other countries for the same standard of care a "failure" of the healthcare industry?
That we spend more per capita for approximately the same level of care as most other first world countries is certainly annoying. But sometimes I think we are too focused on that and not putting enough effort into trying to stop the cost from increasing.
I think increasing costs are a more serious problem because the problem of spending so much more than the others is a US problem. That suggests it is just something we are doing wrong, and by making our system more like some of those others we can fix it.
The problem of rising costs also plagues those other countries, and to about the same extent as it does the US. That suggests it is a much harder problem to solve.
Here are some examples of rising costs per capita.
How much costs per capita went up from 2000 to 2018: US 2.3x, Germany 2.1x, France 1.8x, Canada 2.0x, Italy 1.7x, Japan 2.6x, and UK 2.6x.
Costs per capita in 1980, 1990, 2000, 2010, and 2020 divided by 1970 costs:
Data doesn’t make sense. If US costs went up similar to other countries but US is significantly more expensive than other countries today, does it mean costs in US have always been much higher?
Yes (at least as far back as the data at oecd.org goes, which is 1970).
In 1970 US health care spending was $327.0/per capita. France was $192.1, and UK was $124.0. That's 1.7x France and 2.6x UK for the US.
In 2020 it was $11859 for the US, $5468 for France, and $5019 for the UK. That puts 2020 US spending at 2.2x France and 2.4x UK.
From 1970 to 2020 US went up 36x, France 28x, and UK 40x.
It looks like much of the first world has a serious rising health spending problem, with costs rising roughly the same over time everywhere. The US was more expensive long ago, and since the rising costs have been roughly the same the US has stayed more expensive by about the same ratio.
If we could get our spending down to match the rest of the first world, without reducing the level of care, that would be great.
BTW, it is similar if we go by percent of GDP instead of per capita.
US was spending 6.2% of GDP on health in 1970, France 5.2%, and UK 4.0%.
In 2020 that was 18.8% of GDP for the US, 12.2% France, and 12.0% UK.
I’m not the OP and have no deep knowledge, but I’ve often heard cited that the US out-researches other nations, so we incur “R&D” costs for healthcare that other nations use. Eg pharmaceuticals are researched in the US while the patents are used in other nations through a cost structure that doesn’t allow the original researching party to recoup costs.
On-shoring that research also seems to be an advantage -Looking at the astounding amount of research that poured into covid post 2020 would show that we have a huge dormant muscle that can be flexed in unison during an emergency.
I’m not trying to defend pharma companies… they’re generally pretty scummy. But I’m guessing most companies spend more on marketing than R&D. Beyond that, the theory that they need to recoup costs still holds true with this. In fact, a big marketing budget indicates that they’re aggressively trying to sell the drug (maybe to recoup costs?).
Generally in business marketing budgets should generate more sales than they cost (in ideal case), so big budgets doesn’t mean that they’re “wasting” that money that could go elsewhere. If the sale wouldn’t happen without an ad, then that’s a necessary ad.
> If the sale wouldn’t happen without an ad, then that’s a necessary ad
I think that's the core issue here, healthcare and pharmaceuticals have basically inelastic demand. The US is one of only two countries where it's even legal for pharma companies to advertise directly to consumers.
I know in practice they can create demand for products, but that doesn't necessarily seem like a good thing, so I think you could argue that it's still a waste of money even if it does create profit for the company.
There's always complaints about healthcare and probably no perfect system, but a bad one where everyone has coverage seems a lot better than a bad one where everyone doesn't
> if we're spending 20% of GDP on something other countries accomplish with 10%, then that's a huge waste
I don't think that money is necessarily a waste if it goes back into the economy one way or another. There are very few things that are actually a waste, one example is probably flying first class or private jet. If you literally burn money then it's clearly a waste. A part of me thinks the huge cost of healthcare is contributing to more R&D by the big pharma and possibly the reason we're seeing RDNA breakthroughs. Yes a lot of that money also ends up in the pocket of people running the show, but they most likely then invest it with a Blackrock which in turn pushes the money back into the economy in form of private equity, VC funds, etc. For the record I don't like the high healthcare prices and wish US was more similar to other countries in this regard.
Is it really the same standard of care? I would speculate that the standard of care in the US is at least marginally higher than many other developed countries based on my admittedly anecdotal experience, especially if you plug wait times for providers into the calculation (this seems to be the number one complaint that comes from people I've met that have immigrated to the US).
There's many things wrong with US healthcare. But somehow the USA comes up with the the first vaccines for the coronavirus and if you want any sort of complex procedure you travel to the US to get it.
So maybe thats where the extra cost goes? To drive research, and support the infrastructure that creates good to better health outcomes on average vs the rest of the world.
Saying something is a failure just because it costs so much is only looking at one side of the coin.
> But somehow the USA comes up with the the first vaccines for the coronavirus and if you want any sort of complex procedure you travel to the US to get it
This isn't true, the US didn't make the first vaccines, it was created by a German company that partnered with Pfizer for trials/production/distribution[0]. People more often travel outside the US for care, we actually have the second highest amount of people leaving their home country for medical care[1], with the top destinations being in South America [1a].
> creates good to better health outcomes on average vs the rest of the world
This would be nice if true, but we spend more and still have worse outcomes in almost every area[2]. The only things I could actually find that are better here is post-op sepsis and 30-day heart attack survival, but in just about every other area it's more dangerous to get care in the US.
I think the preceding comment was operating on the presumption of linear returns from medical research. Since higher medical costs in the US goes directly towards medical companies, and indirectly to medical research after taxes and dividends and stockbuybacks...
Of course the biggest issue of all time is that germs are evolving to survive our antibacterial soap, we may need to develop a large variety of antibiotics.
As with everything it touches, it's the intrinsic failure of capitalism (ofc success for the capitalists / bourgeoisie). It's the amount of capitalism that defines prices. In every other country the more healthcare is a public matter, the cheaper it is for the people.
Healthcare in the US is definitely not driven by the free market. It is probably one of the most regulated industries. Whatever disfunction you want to call out in US healthcare it is going to be difficult to pin that on the free market.
Free market? Capitalism. I know we're on HN but, say the word? Capitalists take a cut. Shareholders of big pharma, insurance companies and hospitals are why healthcare in the US is expensive. Public sector not being monopolistic is why healthcare in the US is expensive. In France, social security reimburses about 70% of most costs. Cheap private insurance reimburses the rest. About 75% of public hospitals and not for profit. Generic medicine being prescribed is the norm. The state naturally fixes healthcare prices because it's monopolistic on healthcare. Same as all public services.
Non free market? Communism. I know we’re on HN but, say the word?
Of course the US market is highly regulated and so the market is not free to lower prices. Of course the AMA is a racket. Of course needs of certificate are abhorrent.
Given the customer non—coerced access to his preferred provider, and not taking his money and slapping a bunch of regulations on him will of course lower prices and give him better care.
That's right, communism. Social security in France is literally a communist system, founded by a communist minister. Hence why neoliberals want to destroy it.
Also wondering what you think a solution is - single-payer for better and simpler price negotiations, or some other approach?
My main concern is if we're spending 20% of GDP on something other countries accomplish with 10%, then that's a huge waste, especially in a country with a larger total GDP pool.